UNITED STATES – ANTI-DUMPING AND COUNTERVAILING DUTIES ON RIPE OLIVES FROM SPAIN REPORT OF THE PANEL
Document: REPORT OF THE PANEL
Date: 19 November 2021
Document codes: WT/DS577/R
Complainant: EU
Respondent: U.S.
Third parties: Australia, Brazil, Canada, China, India, Japan, Mexico, Russia, Saudi Arabia, Switzerland, Turkey
Dispute stage: Panel
Agreements cited: Art. 1.1(a), 1.1(b), 1.2, 2.1(a), 2.1(b), 2.1(c), 2.4, 10, 14, 15.1, 15.2, 15.5, 19.1, 19.3, 19.4, 22.5, 32.1  Subsidies and Countervailing Measures (SCM)

UNITED STATES – ANTI-DUMPING AND COUNTERVAILING
DUTIES ON RIPE OLIVES FROM SPAIN
REPORT OF THE PANEL
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LIST OF ANNEXES
ANNEX A
PANEL DOCUMENTS
Contents Page
Annex A-1 Working Procedures of the Panel 4
Annex A-2 Additional Working Procedures concerning Business Confidential Information 11
Annex A-3 Communication from the Panel to the parties of 18 September 2020 concerning
certain procedural matters
13
Annex A-4 Additional Working Procedures of the Panel concerning holding a Substantive
Meeting Conducted via Cisco Webex – Adopted on 9 October 2020
14
Annex A-5 Additional Working Procedures of the Panel concerning holding a Substantive
Meeting Conducted via Cisco Webex – Adopted on 30 November 2020
19
Annex A-6 Additional Working Procedures of the Panel: Open Meetings (Delayed Online
Broadcast)
23
Annex A-7 Interim Review 24
ANNEX B
ARGUMENTS OF THE PARTIES
Contents Page
Annex B-1 Integrated executive summary of the arguments of the European Union 49
Annex B-2 Integrated executive summary of the arguments of the United States 61
ANNEX C
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex C-1 Integrated executive summary of the arguments of Brazil 79
Annex C-2 Integrated executive summary of the arguments of Canada 82
Annex C-3 Integrated executive summary of the arguments of Japan 86
Annex C-4 Integrated executive summary of the arguments of Mexico 90
Annex C-5 Integrated executive summary of the arguments of Turkey 93

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CASES CITED IN THIS REPORT
Short Title Full Case Title and Citation
Argentina – Poultry
Anti-Dumping Duties
Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry
from Brazil, , adopted 19 May 2003, DSR 2003:V, p.
1727
Argentina – Textiles
and Apparel
Appellate Body Report, Argentina – Measures Affecting Imports of
Footwear, Textiles, Apparel and Other Items, WT/DS56/AB/R and
Corr.1, adopted 22 April 1998, DSR 1998:III, p. 1003
Australia –
Anti-Dumping
Measures on Paper
Panel Report, Australia – Anti-Dumping Measures on A4 Copy Paper,
WT/DS529/R and Add.1, adopted 28 January 2020
Australia – Apples Appellate Body Report, Australia – Measures Affecting the Importation
of Apples from New Zealand, WT/DS367/AB/R, adopted
17 December 2010, DSR 2010:V, p. 2175
Brazil – Desiccated
Coconut
Appellate Body Report, Brazil – Measures Affecting Desiccated
Coconut, WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, p.
167
Canada – Aircraft

Appellate Body Report, Canada – Measures Affecting the Export of
Civilian Aircraft, WT/DS70/AB/R, adopted 20 August 1999, DSR
1999:III, p. 1377
Canada – Wheat
Exports and Grain
Imports
Appellate Body Report, Canada – Measures Relating to Exports of
Wheat and Treatment of Imported Grain, WT/DS276/AB/R, adopted
27 September 2004, DSR 2004:VI, p. 2739
Chile – Price Band
System
Appellate Body Report, Chile – Price Band System and Safeguard
Measures Relating to Certain Agricultural Products, WT/DS207/AB/R,
adopted 23 October 2002, DSR 2002:VIII, p. 3045 (Corr.1, DSR
2006:XII, p. 5473)
China – Autos (US) Panel Report, China – Anti-Dumping and Countervailing Duties on
Certain Automobiles from the United States, WT/DS440/R and Add.1,
adopted 18 June 2014, DSR 2014:VII, p. 2655
China – Broiler
Products
Panel Report, China − Anti-Dumping and Countervailing Duty
Measures on Broiler Products from the United States, WT/DS427/R
and Add.1, adopted 25 September 2013, DSR 2013:IV, p. 1041
China – Broiler
Products (Article 21.5 –
US)
Panel Report, China − Anti-Dumping and Countervailing Duty
Measures on Broiler Products from the United States – Recourse to
Article 21.5 of the DSU by the United States, WT/DS427/RW and
Add.1, adopted 28 February 2018 DSR 2018:II, p. 839
China – Cellulose Pulp Panel Report, China – Anti-Dumping Measures on Imports of Cellulose
Pulp from Canada, WT/DS483/R and Add.1, adopted 22 May 2017,
DSR 2017:IV, p. 1961
China – GOES Appellate Body Report, China – Countervailing and Anti-Dumping
Duties on Grain Oriented Flat-Rolled Electrical Steel from the
United States, WT/DS414/AB/R, adopted 16 November 2012, DSR
2012:XII, p. 6251
China – GOES Panel Report, China – Countervailing and Anti-Dumping Duties on
Grain Oriented Flat-Rolled Electrical Steel from the United States,
WT/DS414/R and Add.1, adopted 16 November 2012, upheld by
Appellate Body Report WT/DS414/AB/R, DSR 2012:XII, p. 6369
China – HP-SSST
(Japan) / China –
HP-SSST (EU)
Appellate Body Reports, China – Measures Imposing Anti-Dumping
Duties on High-Performance Stainless Steel Seamless Tubes
("HP-SSST") from Japan / China – Measures Imposing Anti-Dumping
Duties on High-Performance Stainless Steel Seamless Tubes
("HP-SSST") from the European Union, WT/DS454/AB/R and Add.1 /
WT/DS460/AB/R and Add.1, adopted 28 October 2015, DSR 2015:IX,
p. 4573

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Short Title Full Case Title and Citation
China – HP-SSST
(Japan) / China –
HP-SSST (EU)
Panel Reports, China – Measures Imposing Anti-Dumping Duties on
High-Performance Stainless Steel Seamless Tubes ("HP-SSST") from
Japan / China – Measures Imposing Anti-Dumping Duties on High-
Performance Stainless Steel Seamless Tubes ("HP-SSST") from the
European Union, WT/DS454/R and Add.1 / WT/DS460/R, Add.1 and
Corr.1, adopted 28 October 2015, as modified by Appellate Body
Reports WT/DS454/AB/R / WT/DS460/AB/R, DSR 2015:IX, p. 4789
China – Raw Materials Appellate Body Reports, China – Measures Related to the Exportation
of Various Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R /
WT/DS398/AB/R, adopted 22 February 2012, DSR 2012:VII, p. 3295
China – X-Ray
Equipment
Panel Report, China – Definitive Anti-Dumping Duties on X-Ray
Security Inspection Equipment from the European Union,
WT/DS425/R and Add.1, adopted 24 April 2013, DSR 2013:III, p. 659
EC – Bananas III Appellate Body Report, European Communities – Regime for the
Importation, Sale and Distribution of Bananas, WT/DS27/AB/R,
adopted 25 September 1997, DSR 1997:II, p. 591
EC – Bed Linen
(Article 21.5 – India)
Panel Report, European Communities – Anti-Dumping Duties on
Imports of Cotton-Type Bed Linen from India – Recourse to
Article 21.5 of the DSU by India, WT/DS141/RW, adopted
24 April 2003, as modified by Appellate Body Report
WT/DS141/AB/RW, DSR 2003:IV, p. 1269
EC – Chicken Cuts Appellate Body Report, European Communities – Customs
Classification of Frozen Boneless Chicken Cuts, WT/DS269/AB/R,
WT/DS286/AB/R, adopted 27 September 2005, and Corr.1, DSR
2005:XIX, p. 9157
EC – Countervailing
Measures on DRAM
Chips
Panel Report, European Communities – Countervailing Measures on
Dynamic Random Access Memory Chips from Korea, WT/DS299/R,
adopted 3 August 2005, DSR 2005:XVIII, p. 8671
EC – Fasteners (China) Appellate Body Report, European Communities – Definitive Anti-
Dumping Measures on Certain Iron or Steel Fasteners from China,
WT/DS397/AB/R, adopted 28 July 2011, DSR 2011:VII, p. 3995
EC – Hormones Appellate Body Report, European Communities – Measures Concerning
Meat and Meat Products (Hormones), WT/DS26/AB/R,
WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, p. 135
EC – Poultry Appellate Body Report, European Communities – Measures Affecting
the Importation of Certain Poultry Products, WT/DS69/AB/R, adopted
23 July 1998, DSR 1998:V, p. 2031
EC – Selected Customs
Matters
Appellate Body Report, European Communities – Selected Customs
Matters, WT/DS315/AB/R, adopted 11 December 2006, DSR 2006:IX,
p. 3791
EC – Tube or Pipe
Fittings
Panel Report, European Communities – Anti-Dumping Duties on
Malleable Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/R,
adopted 18 August 2003, as modified by Appellate Body Report
WT/DS219/AB/R, DSR 2003:VII, p. 2701
EC and certain member
States – Large Civil
Aircraft
Appellate Body Report, European Communities and Certain Member
States – Measures Affecting Trade in Large Civil Aircraft,
WT/DS316/AB/R, adopted 1 June 2011, DSR 2011:I, p. 7
Egypt – Steel Rebar Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel
Rebar from Turkey, WT/DS211/R, adopted 1 October 2002, DSR
2002:VII, p. 2667
EU – Biodiesel
(Argentina)
Appellate Body Report, European Union – Anti-Dumping Measures on
Biodiesel from Argentina, WT/DS473/AB/R and Add.1, adopted
26 October 2016, DSR 2016:VI, p. 2871

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Short Title Full Case Title and Citation
EU – Biodiesel
(Indonesia)
Panel Report, European Union – Anti-Dumping Measures on Biodiesel
from Indonesia, WT/DS480/R and Add.1, adopted 28 February 2018
DSR 2018:II, p. 605
Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation
Regarding Portland Cement from Mexico, WT/DS60/AB/R, adopted
25 November 1998, DSR 1998:IX, p. 3767
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical
and Agricultural Chemical Products, WT/DS50/AB/R, adopted
16 January 1998, DSR 1998:I, p. 9
Indonesia – Chicken Panel Report, Indonesia – Measures Concerning the Importation of
Chicken Meat and Chicken Products, WT/DS484/R and Add.1, adopted
22 November 2017, DSR 2017:VIII, p. 3769
Japan – Alcoholic
Beverages II
Appellate Body Report, Japan – Taxes on Alcoholic Beverages,
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted
1 November 1996, DSR 1996:I, p. 97
Japan – DRAMs (Korea) Appellate Body Report, Japan – Countervailing Duties on Dynamic
Random Access Memories from Korea, WT/DS336/AB/R and Corr.1,
adopted 17 December 2007, DSR 2007:VII, p. 2703
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on
Imports of Certain Dairy Products, WT/DS98/AB/R, adopted
12 January 2000, DSR 2000:I, p. 3
Korea – Pneumatic
Valves (Japan)
Appellate Body Report, Korea – Anti-Dumping Duties on Pneumatic
Valves from Japan, WT/DS504/AB/R and Add.1, adopted
30 September 2019
Korea – Pneumatic
Valves (Japan)
Panel Report, Korea – Anti-Dumping Duties on Pneumatic Valves from
Japan, WT/DS504/R and Add.1, adopted 30 September 2019, as
modified by Appellate Body Report WT/DS504/AB/R
Korea – Stainless Steel
Bars
Panel Report, Korea – Sunset Review of Anti-Dumping Duties on
Stainless Steel Bars, WT/DS553/R and Add.1, circulated to WTO
Members 30 November 2020 [appealed by Korea 22 January 2021]
Mexico – Anti-Dumping
Measures on Rice
Appellate Body Report, Mexico – Definitive Anti-Dumping Measures on
Beef and Rice, Complaint with Respect to Rice, WT/DS295/AB/R,
adopted 20 December 2005, DSR 2005:XXII, p. 10853
Mexico – Corn Syrup Panel Report, Mexico – Anti-Dumping Investigation of High Fructose
Corn Syrup (HFCS) from the United States, WT/DS132/R, adopted
24 February 2000, and Corr.1, DSR 2000:III, p. 1345
Mexico – Olive Oil Panel Report, Mexico – Definitive Countervailing Measures on Olive Oil
from the European Communities, WT/DS341/R, adopted
21 October 2008, DSR 2008:IX, p. 3179
Morocco – Definitive
AD Measures on
Exercise Books
(Tunisia)
Panel Report, Morocco – Definitive Anti-Dumping Measures on School
Exercise Books from Tunisia, WT/DS578/R and Add.1, circulated to
WTO Members 27 July 2021 [appealed by Morocco 28 July 2021]
Morocco – Hot-Rolled
Steel (Turkey)
Panel Report, Morocco – Anti-Dumping Measures on Certain Hot-
Rolled Steel from Turkey, WT/DS513/R and Add.1, adopted
8 January 2020; appeal withdrawn by Morocco as reflected in
Appellate Body Report WT/DS513/AB/R
Russia – Commercial
Vehicles
Appellate Body Report, Russia – Anti-Dumping Duties on Light
Commercial Vehicles from Germany and Italy, WT/DS479/AB/R and
Add.1, adopted 9 April 2018, DSR 2018:III, p. 1167
Thailand – H-Beams Appellate Body Report, Thailand – Anti-Dumping Duties on Angles,
Shapes and Sections of Iron or Non-Alloy Steel and H-Beams from
Poland, WT/DS122/AB/R, adopted 5 April 2001, DSR 2001:VII,
p. 2701

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Short Title Full Case Title and Citation
Thailand – H-Beams Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and
Sections of Iron or Non-Alloy Steel and H-Beams from Poland,
WT/DS122/R, adopted 5 April 2001, as modified by Appellate Body
Report WT/DS122/AB/R, DSR 2001:VII, p. 2741
US – Anti-Dumping and
Countervailing Duties
(China)
Appellate Body Report, United States – Definitive Anti-Dumping and
Countervailing Duties on Certain Products from China,
WT/DS379/AB/R, adopted 25 March 2011, DSR 2011:V, p. 2869
US – Anti-Dumping and
Countervailing Duties
(China)
Panel Report, United States – Definitive Anti-Dumping and
Countervailing Duties on Certain Products from China, WT/DS379/R,
adopted 25 March 2011, as modified by Appellate Body Report
WT/DS379/AB/R, DSR 2011:VI, p. 3143
US – Canadian Pork GATT Panel Report, United States – Countervailing Duties on Fresh,
Chilled and Frozen Pork from Canada, DS7/R, adopted 11 July 1991,
BISD 38S/30
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on
Certain Corrosion-Resistant Carbon Steel Flat Products from Germany,
WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR
2002:IX, p. 3779
US – Carbon Steel
(India)
Appellate Body Report, United States – Countervailing Measures on
Certain Hot-Rolled Carbon Steel Flat Products from India,
WT/DS436/AB/R, adopted 19 December 2014, DSR 2014:V, p. 1727
US – Carbon Steel
(India) (Article 21.5 –
India)
Panel Report, United States – Countervailing Measures on Certain
Hot-Rolled Carbon Steel Flat Products from India – Recourse to
Article 21.5 of the DSU by India, WT/DS436/RW and Add.1, circulated
to WTO Members 15 November 2019 [appealed by the United States
18 December 2019]
US – Certain EC
Products
Appellate Body Report, United States – Import Measures on Certain
Products from the European Communities, WT/DS165/AB/R, adopted
10 January 2001, DSR 2001:I, p. 373
US – Coated Paper
(Indonesia)
Panel Report, United States – Anti-Dumping and Countervailing
Measures on Certain Coated Paper from Indonesia, WT/DS491/R and
Add.1, adopted 22 January 2018, DSR 2018:I, p. 273
US – Continued
Zeroing
Appellate Body Report, United States – Continued Existence and
Application of Zeroing Methodology, WT/DS350/AB/R, adopted
19 February 2009, DSR 2009:III, p. 1291
US – COOL Appellate Body Reports, United States – Certain Country of Origin
Labelling (COOL) Requirements, WT/DS384/AB/R / WT/DS386/AB/R,
adopted 23 July 2012, DSR 2012:V, p. 2449
US – Countervailing
and Anti-Dumping
Measures (China)
Appellate Body Report, United States – Countervailing and Anti-
Dumping Measures on Certain Products from China, WT/DS449/AB/R
and Corr.1, adopted 22 July 2014, DSR 2014:VIII, p. 3027
US – Countervailing
Duty Investigation on
DRAMS
Appellate Body Report, United States – Countervailing Duty
Investigation on Dynamic Random Access Memory Semiconductors
(DRAMS) from Korea, WT/DS296/AB/R, adopted 20 July 2005, DSR
2005:XVI, p. 8131
US – Countervailing
Duty Investigation on
DRAMS
Panel Report, United States – Countervailing Duty Investigation on
Dynamic Random Access Memory Semiconductors (DRAMS) from
Korea, WT/DS296/R, adopted 20 July 2005, as modified by
Appellate Body Report WT/DS296/AB/R, DSR 2005:XVII, p. 8243
US – Countervailing
Measures (China)
Appellate Body Report, United States – Countervailing Duty Measures
on Certain Products from China, WT/DS437/AB/R, adopted
16 January 2015, DSR 2015:I, p. 7
US – Gasoline Appellate Body Report, United States – Standards for Reformulated
and Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996,
DSR 1996:I, p. 3

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Short Title Full Case Title and Citation
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on
Certain Hot-Rolled Steel Products from Japan, WT/DS184/AB/R,
adopted 23 August 2001, DSR 2001:X, p. 4697
US – Lamb Appellate Body Report, United States – Safeguard Measures on
Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and
Australia, WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001,
DSR 2001:IX, p. 4051
US – Large Civil
Aircraft (2nd complaint)
Appellate Body Report, United States – Measures Affecting Trade in
Large Civil Aircraft (Second Complaint), WT/DS353/AB/R, adopted
23 March 2012, DSR 2012:I, p. 7
US – Line Pipe Appellate Body Report, United States – Definitive Safeguard Measures
on Imports of Circular Welded Carbon Quality Line Pipe from Korea,
WT/DS202/AB/R, adopted 8 March 2002, DSR 2002:IV, p. 1403
US – Offset Act (Byrd
Amendment)
Appellate Body Report, United States – Continued Dumping and
Subsidy Offset Act of 2000, WT/DS217/AB/R, WT/DS234/AB/R,
adopted 27 January 2003, DSR 2003:I, p. 375
US – Oil Country
Tubular Goods Sunset
Reviews
Appellate Body Report, United States – Sunset Reviews of
Anti-Dumping Measures on Oil Country Tubular Goods from Argentina,
WT/DS268/AB/R, adopted 17 December 2004, DSR 2004:VII, p. 3257
US – Pipes and Tubes
(Turkey)

Panel Report, United States – Countervailing Measures on Certain Pipe
and Tube Products from Turkey, WT/DS523/R and Add.1, circulated to
WTO Members 18 December 2018 [appealed by the United States
25 January 2019 – the Division suspended its work on
10 December 2019]
US – Softwood Lumber
IV
Appellate Body Report, United States – Final Countervailing Duty
Determination with Respect to Certain Softwood Lumber from Canada,
WT/DS257/AB/R, adopted 17 February 2004, DSR 2004:II, p. 571
US – Softwood Lumber
IV
Panel Report, United States – Final Countervailing Duty Determination
with Respect to Certain Softwood Lumber from Canada, WT/DS257/R
and Corr.1, adopted 17 February 2004, as modified by Appellate Body
Report WT/DS257/AB/R, DSR 2004:II, p. 641
US – Softwood Lumber
VI (Article 21.5 –
Canada)
Appellate Body Report, United States – Investigation of the
International Trade Commission in Softwood Lumber from Canada –
Recourse to Article 21.5 of the DSU by Canada, WT/DS277/AB/RW,
adopted 9 May 2006, and Corr.1, DSR 2006:XI, p. 4865
US – Softwood Lumber
VII
Panel Report, United States – Countervailing Measures on Softwood
Lumber from Canada, WT/DS533/R and Add.1, circulated to
WTO Members 24 August 2020 [appealed by the United States
28 September 2020]
US – Supercalendered
Paper
Panel Report, United States – Countervailing Measures on
Supercalendered Paper from Canada, WT/DS505/R and Add.1,
adopted 5 March 2020, as upheld by Appellate Body Report

US – Tuna II (Mexico) Appellate Body Report, United States – Measures Concerning the
Importation, Marketing and Sale of Tuna and Tuna Products,
WT/DS381/AB/R, adopted 13 June 2012, DSR 2012:IV, p. 1837
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton,
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, p. 3
US – Upland Cotton Panel Report, United States – Subsidies on Upland Cotton,
WT/DS267/R, Add.1 to Add.3 and Corr.1, adopted 21 March 2005, as
modified by Appellate Body Report WT/DS267/AB/R, DSR 2005:II,
p. 299

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Short Title Full Case Title and Citation
US – Washing
Machines
Appellate Body Report, United States – Anti-Dumping and
Countervailing Measures on Large Residential Washers from Korea,
WT/DS464/AB/R and Add.1, adopted 26 September 2016, DSR
2016:V, p. 2275
US – Washing
Machines
Panel Report, United States – Anti-Dumping and Countervailing
Measures on Large Residential Washers from Korea, WT/DS464/R and
Add.1, adopted 26 September 2016, as modified by Appellate Body
Report WT/DS464/AB/R, DSR 2016:V, p. 2505
US – Wheat Gluten Appellate Body Report, United States – Definitive Safeguard Measures
on Imports of Wheat Gluten from the European Communities,
WT/DS166/AB/R, adopted 19 January 2001, DSR 2001:II, p. 717
US – Wool Shirts and
Blouses
Appellate Body Report, United States – Measure Affecting Imports of
Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted
23 May 1997, and Corr.1, DSR 1997:I, p. 323
US – Zeroing (Japan)
(Article 21.5 – Japan)
Appellate Body Report, United States – Measures Relating to Zeroing
and Sunset Reviews – Recourse to Article 21.5 of the DSU by Japan,
WT/DS322/AB/RW, adopted 31 August 2009, DSR 2009:VIII, p. 3441

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EXHIBITS REFERRED TO IN THIS REPORT
Exhibit Short Title (if any) Description/Long title
EU-1 PIDM Memorandum dated 20 November 2017 from
J. Maeder to G. Taverman concerning the decision
memorandum for the preliminary determination in
the countervailing duty investigation of ripe olives
from Spain
EU-2 FIDM Memorandum dated 11 June 2018 from J. Maeder
to G. Taverman concerning the issues and
decision memorandum for the final determination
in the countervailing duty investigation of ripe
olives from Spain
EU-5 Injury Determination USITC, Ripe Olives from Spain, Investigation
Nos. 701-TA-582 and 701-TA-1377 (final),
Publication 4805 (July 2018)
EU-10 Notice of determinations Ripe Olives from Spain: Determinations,
investigation Nos. 701-TA-582 and 731-TA-1377
(final), United States Federal Register, Vol. 83,
No. 147 (31 July 2018), p. 36966
EU-14 Submission by the GOS in
relation to the preliminary
determination
Submission by the Government of Spain in
relation to the preliminary determination
(27 April 2018)
EU-15 GOS's response to
supplemental
questionnaire of
10 January 2017
Government of Spain's response to supplemental
questionnaire (10 January 2017)
EU-17 Agro Sevilla response to
the sourcing questionnaire
(public version)
Agro Sevilla Aceitunas S.Coop. And.'s response to
the USDOC's questionnaire concerning sources of
raw and ripe olives (14 August 2017) (public
version)
EU-18 EC internal convergence
document
European Commission, "Direct payments: the
Basic Payment Scheme from 2015 – Convergence
of the value of payment Entitlements ('Internal
Convergence')" (December 2015)
EU-19 Royal Decree 1075/2014 Ministry of Agriculture, Food and Environment,
Royal Decree No. 1075/2014 of 19 December,
concerning implementation, starting on year
2015, of direct payments to agriculture, farming
and other aid schemes, as well as concerning
management and control of direct payments and
payments to rural development, Official Spanish
Gazette, No. 307 (20 December 2014)
EU-21 Order AAA/544/2015 Ministry of Agriculture, Food and Environment,
Order AAA/544/2015, of March 30th, establishing
the distribution coefficients to be used for
calculation of the initial value of the basic
payment rights to carry out the first assignment
of rights in the 2015 campaign in the event that
the farmer declares surface in more than one
region, Official Spanish Gazette, No. 78, Section I
(1 April 2015) pp. 27642-27643
EU-22 USDOC verification report:
European Commission
Memorandum dated 2 April 2018 concerning the
countervailing duty investigation: ripe olives from
Spain – verification report: European Commission
EU-23 Regulation 73/2009 Council Regulation (EC) No. 73/2009 of
19 January 2009 establishing common rules for
direct support schemes for farmers under the
common agricultural policy and establishing
certain support schemes for farmers, amending
Regulations (EC) No. 1290/2005, (EC)
No. 247/2006, (EC) No. 378/2007 and repealing

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Exhibit Short Title (if any) Description/Long title
Regulation (EC) No. 1782/2003, Official Journal of
the European Union, L Series, No. 30
(31 January 2009), p. 16
EU-24 Regulation 1782/2003 Council Regulation (EC) No. 1782/2003 of
29 September 2003 establishing common rules
for direct support schemes under the common
agricultural policy and establishing certain support
schemes for farmers and amending Regulations
(EEC) No. 2019/93, (EC) No. 1452/2001, (EC)
No. 1453/2001, (EC) No. 1454/2001, (EC)
1868/94, (EC) No. 1251/1999, (EC) No.
1254/1999, (EC) No. 1673/2000, (EEC) No.
2358/71 and (EC) No. 2529/2001, Official Journal
of the European Union, L Series, No. 270
(21 October 2003), p. 1
EU-25 Regulation 1307/2013 Regulation (EU) No. 1307/2013 of the
European Parliament and of the Council of
17 December 2013 establishing rules for direct
payments to farmers under support schemes
within the framework of the common agricultural
policy and repealing Council Regulation (EC)
No. 637/2008 and Council Regulation (EC) No.
73/2009, Official Journal of the European Union,
L Series, No. 347 (20 December 2013), p. 608
EU-26 Regulation 1638/98 Council Regulation (EC) No. 1638/98 of
20 July 1998 amending Regulation No.
136/66/EEC on the establishment of a common
organization of the market in oils and fats, Official
Journal of the European Communities, L Series,
No. 210 (28 July 1998), p. 32
EU-30 Royal Decree 1076/2014 Ministry of Agriculture, Food and Environment,
Royal Decree No. 1076/2014 of 19 December
concerning allocation of basic payment scheme
entitlements of the Common Agricultural Policy,
Official Spanish Gazette, No. 307
(20 December 2014)
EU-31 Newsletter No. 2, Basic
payment entitlement
allocation
Newsletter No. 2, Basic payment entitlement
allocation
EU-32 Order AAA/1747/2016 Ministry of Agriculture, Food and Environment,
Order AAA/1747/2016, of 26 October,
establishing the final regional average values and
the maximum number of basic payment rights,
established by initial allocation, that characterize
each of the regions of the regional
implementation model for the basic payment
scheme, Official Spanish Gazette, No. 268,
Section I (5 November 2016), p. 11361
EU-34 Preliminary determination
on injury
USITC, Ripe Olives from Spain, Investigation
Nos. 701-TA-582 and 731-TA-1377 (Preliminary),
Publication 4718 (August 2017)
EU-36 Aceitunas Guadalquivir
preliminary determination
Memorandum dated 20 November 2017
concerning the preliminary determination
calculations for Aceitunas Guadalquivir, S.L.U.
EU-37 Agro Sevilla preliminary
determination
Memorandum dated 20 November 2017
concerning the preliminary determination
calculations for Agro Sevilla Aceitunas S. Coop.
And.
EU-38 Ángel Camacho
preliminary determination
Memorandum dated 20 November 2017
concerning the preliminary determination
calculations for Ángel Camacho Alimentación S.L.

BCI deleted, as indicated [[***]]

Exhibit Short Title (if any) Description/Long title
EU-39 Agro Sevilla final
determination
Memorandum dated 11 June 2018 concerning the
final determination calculations for Agro Sevilla
Aceitunas S. Coop. And.
EU-40 Ángel Camacho final
determination
Memorandum dated 11 June 2018 concerning the
final determination calculations for Ángel
Camacho Alimentación S.L.
EU-41 Aceitunas Guadalquivir
final determination
Memorandum dated 11 June 2018 concerning the
final determination calculations for Aceitunas
Guadalquivir, S.L.U.
EU-42 (BCI) Agro Sevilla response to
the sourcing questionnaire
Agro Sevilla Aceitunas S. Coop. And. response to
the USDOC's questionnaire concerning sources of
raw and ripe olives (14 August 2017)
EU-43 (BCI) Extract from Agro Sevilla
final calculation data
Extract from Agro Sevilla Aceitunas S. Coop. And.
final calculation data, tab "AS Sales"
(11 June 2018)
EU-44 (BCI) Ángel Camacho response
to the sourcing
questionnaire
Ángel Camacho Alimentación, S.L.'s Olive
sourcing questionnaire response
(14 August 2017)
EU-45 (BCI) Extract from Ángel
Camacho final calculation
data
Extract from Ángel Camacho Alimentación, S.L.
final calculation data, tab SAIS suppliers
(11 June 2018)
EU-47 (BCI) Extract from Aceitunas
Guadalquivir final
calculation data
Extract from Aceitunas Guadalquivir, S.L.U final
calculation data, tab BPS Growers (11 June 2018)
EU-49 19 USC 1677-1 United States House of representatives, Office of
the Law Revision Counsel, United States Code,
Title 19, Section 1677-1, Upstream Subsidies
EU-50 Asociación de
Exportadores e
Industriales de Mesa et al.
v. United States
United States Court of International Trade, Slip
Op. 20-8, Asociación de exportadores e
industriales de Aceitunas de Mesa, Aceitunas
Guadalquivir, S.L.U., Agro Sevilla Aceitunas S.
Coop. And., and Ángel Camacho Alimentación,
S.L. v. United States (17 January 2020)
EU-51 Frozen warmwater shrimp
FIDM
Memorandum dated 12 August 2013 concerning
the final determination in the Countervailing Duty
investigation of certain frozen warmwater shrimp
from the People's Republic of China
EU-52 19 USC 1677-2 Calculation of countervailable subsidies on certain
processed agricultural products, US House of
representatives, Office of the Law Revision
Counsel, United States Code, Title 19,
Section 1677-2
EU-58 Letter to Aceitunas
Guadalquivir on
questionnaire
Letter dated on 4 August 2017 from the USDOC
to Aceitunas Guadalquivir, S.L.U., on
questionnaire on sources of raw and ripe olives
EU-59 Aceitunas Guadalquivir
fourth supplemental
questionnaire response
Fourth supplemental questionnaire response of
Aceitunas Guadalquivir S.L.U., Narrative part
(5 January 2018)
EU-60 Letter from the USDOC on
clarification
Letter dated 27 September 2017 from the USDOC
on Ripe Olives from Spain countervailing duty
investigation: clarification
EU-61 Reporting template for
processors of ripe olives
Reporting template for processors of ripe olives,
attached to the questionnaire on sources of raw
and ripe olives (4 August 2017)
EU-62 Supplemental
questionnaire to Aceitunas
Guadalquivir
Countervailing Duty investigation of ripe olives
from Spain: Supplemental questionnaire to
Aceitunas Guadalquivir, S.L.U.
(21 December 2017)
EU-63 Aceitunas Guadalquivir
response to the sourcing
questionnaire
Aceitunas Guadalquivir, S.L.U. olive sourcing
questionnaire response (14 August 2017)

BCI deleted, as indicated [[***]]

Exhibit Short Title (if any) Description/Long title
EU-64 (BCI) Ángel Camacho revised
olive sourcing data
Ángel Camacho Alimentación, S.L. revised olive
sourcing data (6 October 2017)
EU-65 (BCI) Agro Sevilla revised olive
sourcing data
Agro Sevilla Aceitunas S. Coop. And. revised olive
sourcing data (6 October 2017)
EU-68 Ángel Camacho response
to the sourcing
questionnaire (public
version)
Ángel Camacho Alimentación, S.L. Olive sourcing
questionnaire response (14 August 2017)
EU-69 Ministerial error
memorandum
Memorandum dated 12 July 2018 on Ripe Olives
from Spain: amended final determination of
countervailing duty investigation pursuant to
ministerial error allegation
EU-71 (BCI) Aceitunas Guadalquivir
comments for the final
determination
Aceitunas Guadalquivir S.L.U, Ministerial error
comments for the final determination
(18 June 2018)
EU-76 Extract from Aceitunas
Guadalquivir final
calculation data, tab BPS
Growers
Extract from Aceitunas Guadalquivir final
calculation data, tab BPS Growers (11 June 2018)
EU-77 19 USCFR 351.525 United States Code of Federal Regulations,
Title 19, Section 351.525, Calculation of ad
valorem subsidy rate and attribution of subsidy to
a product
EU-78 Ángel Camacho revised
olive sourcing data (public
version)
Ángel Camacho Alimentación, S.L. Revised Olive
sourcing data (6 October 2017)
EU-79 Agro Sevilla revised olive
sourcing data (public
version)
Agro Sevilla Aceitunas S. Coop. And. Revised
Olive sourcing data (6 October 2017)
EU-80 Remand Redetermination USDOC, final results of Remand Redetermination,
Asociación de Exportadores e Industriales de
Aceitunas de Mesa, Aceitunas Guadalquivir,
S.L.U., Agro Sevilla Aceitunas S. Coop. And., and
Ángel Camacho Alimentación, S.L. v.
United States (29 May 2020)
USA-4 Government of
Spain's prehearing brief
Government of Spain's prehearing brief for the
final phase in the investigation on ripe olives from
Spain, Investigation Nos. 701-TA-582 and
731-TA-1377 (17 May 2018)
USA-5 Report accompanying
Government of
Spain's prehearing brief
Government of Spain's report carried out by
AGRIBUSINESS INTELLIGENCE-INFORMA for the
final phase of the investigation on ripe olives from
Spain, Investigation Nos. 701-TA-582 and
731-TA-1377 (17 May 2018)
USA-6 Letter to Agro Sevilla on
questionnaire
Letter dated 4 August 2017 from the USDOC to
Agro Sevilla Aceitunas S. Coop. And. regarding
questionnaire on sources of raw and ripe olives
USA-7 Letter to Ángel Camacho
on questionnaire
Letter dated 4 August 2017 from the USDOC to
Ángel Camacho Alimentación, S.L. regarding
questionnaire on sources of raw and ripe olives
USA-9 Congressional record
S8787-01
133 Congressional record S8787-01
(26 June 1987)
USA-14 Letter to Aceitunas
Guadalquivir regarding
questionnaire to
unaffiliated suppliers
Letter dated 7 September 2017 from the USDOC
to Aceitunas Guadalquivir, S.L.U. regarding
questionnaire to unaffiliated suppliers
USA-18 Letter to Agro Sevilla
regarding verification of
questionnaire responses
Letter dated 2 February 2018 from the USDOC to
Agro Sevilla Aceitunas S. Coop. And regarding
verification of questionnaire responses

BCI deleted, as indicated [[***]]

Exhibit Short Title (if any) Description/Long title
USA-19 Letter to Ángel Camacho
regarding verification of
questionnaire responses
Letter dated 2 February 2018 from the USDOC to
Ángel Camacho Alimentación S.L. regarding
verification of questionnaire responses
USA-20 Case brief of petitioner in
Countervailing Duty
Investigation of Ripe
Olives from Spain
(23 April 2018)
Case brief of petitioner in countervailing duty
investigation of ripe olives from Spain
(23 April 2018)
USA-21 Letter to Aceitunas
Guadalquivir regarding
verification of
questionnaire responses
Letter dated 9 February 2018 from the USDOC to
Aceitunas Guadalquivir, S.L.U. regarding
verification of questionnaire responses
USA-22 Aceitunas Guadalquivir
verification report
Memorandum dated 22 March 2018 regarding the
verification of the questionnaire responses of
Aceitunas Guadalquivir, S.L.U.
USA-24 Rebuttal brief Rebuttal Brief of ASEMESA, Agro Sevilla Aceitunas
S. Coop. And., Ángel Camacho Alimentación, S.L.,
and Aceitunas Guadalquivir S.L.U. (8 May 2018)
USA-29 Definition of "access" from
The Oxford English
Dictionary
Oxford Dictionaries online, definition of "access"
USA-33 Commission Implementing
Regulation (EU) 2016/181
Commission Implementing Regulation (EU)
2016/181 of 10 February 2016 imposing a
provisional anti-dumping duty on imports of
certain cold-rolled flat steel products originating
in the People's Republic of China and the
Russian Federation, Official Journal of the
European Union, L Series, No. 37
(12 February 2016), p. 1
USA-34 Commission Regulation
(EC) 896/2007

Commission Regulation (EC) No. 896/2007 of
27 July 2007 imposing a provisional anti-dumping
duty on imports of dihydromyrcenol originating in
India, Official Journal of the European Union,
L Series, No. 196 (28 July 2007), p. 3
USA-35 Commission Regulation
(EC) 1611/2003
Commission Regulation (EC) No. 1611/2003 of
15 September 2003 imposing provisional
anti-dumping duties on imports of certain
stainless steel cold-rolled flat products originating
in the United States of America, Official Journal of
the European Union, L Series, No. 230
(16 September 2003), p. 9

BCI deleted, as indicated [[***]]

ABBREVIATIONS USED IN THIS REPORT
Abbreviation Description
Anti-Dumping Agreement Agreement on Implementation of Article VI of the
General Agreement on Tariffs and Trade 1994
Aceitunas Guadalquivir Aceitunas Guadalquivir, S.L.U.
Agro Sevilla Agro Sevilla Aceitunas S. Coop. And.
Ángel Camacho Ángel Camacho Alimentación, S.L.
BCI Business confidential information
BPS Basic Payment Scheme – Direct Payment
CAP Common Agricultural Policy
COMOF Common Organization of Markets in Oils and Fats
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of
Disputes
GATT 1994 General Agreement on Tariffs and Trade 1994
GOS Government of Spain
GP Basic Payment Scheme – Greening
SCM Agreement Agreement on Subsidies and Countervailing Measures
SPS Single Payment Scheme
USCIT United States Court of International Trade
USDOC United States Department of Commerce
USITC United States International Trade Commission
Vienna Convention Vienna Convention on the Law of Treaties, Done at Vienna,
23 May 1969, 1155 UNTS 331; 8 International Legal Materials 679
WTO World Trade Organization

BCI deleted, as indicated [[***]]

1 INTRODUCTION
1.1 Complaint by the European Union
1.1. On 28 January 2019, the European Union requested consultations with the United States
pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes (DSU), Article 30 of the Agreement on Subsidies and Countervai ling Measures
(SCM Agreement), Article 17 of the Agreement on Implementation of Article VI of the
General Agreement on Tariffs and Trade 1994 (Anti -Dumping Agreement), and Article XXIII of the
General Agreement on Tariffs and Trade 1994 (GATT 1994) with respect to the measures and claims
set out below.1
1.2. Consultations were held on 20 March 2019 but failed to resolve the dispute.
1.2 Panel establishment and composition
1.3. On 16 May 2019, the European Union requested the establishment of a panel pursuant to
Article 6 of the DSU with standard terms of reference.2 At its meeting on 24 June 2019, the Dispute
Settlement Body (DSB) established a panel pursuant to the request of the European Union in
document WT/DS577/3, in accordance with Article 6 of the DSU.3
1.4. The Panel's terms of reference are the following:
To examine, in the light of the relevant provisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by the European Union in
document WT/DS577/3 and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements.4
1.5. On 8 October 2019, the European Union requested the Director -General to determine the
composition of the panel, pursuant to Article 8.7 of the DSU . On 18 October 2019,
the Director-General accordingly composed the Panel as follows:
Chairperson: Mr Daniel Moulis

Members: Mr Martin Garcia
 Ms Charis Tan

1.6. Australia, Brazil, Canada, China, India, Japan, Mexico, the Russian Fede ration,
the Kingdom of Saudi Arabia, Switzerland , and Turkey notified their interest in participating in the
Panel proceedings as third parties.
1.3 Panel proceedings
1.3.1 General
1.7. After consultation with the parties on 5 December 2019, the Panel adopted its
Working Procedures5, Additional Working Procedures on Business Confidential Information (BCI) 6,
and timetable on 6 January 2020. The Panel revised its timetable during the panel proceedings in
light of subsequent developments.7
1.8. The European Union submitted its first written submission on 27 January 2020, and the
United States submitted its first written submission on 17 March 2020. On 26 March 2020, the Panel

1 Request for consultations by the European Union, WT/DS577/1 (European Union's consultation
request).
2 Request for the establishment of a panel by the European Union, WT/DS577/3
(European Union's panel request).
3 DSB, Minutes of the meeting held on 24 June 2019, WT/DSB/M/430.
4 Constitution note of the Panel, WT/DS577/4.
5 See Annex A-1.
6 See Annex A-2.
7 The timetable was updated and revised on 13 January, 21 July, 29 October 2020, and 9 June 2021.

BCI deleted, as indicated [[***]]

postponed the original dates for the first substantive meeting due to the imposition of various
restrictions on gatherings and international travel in relation to the COVID-19 pandemic. To facilitate
its continued work on the dispute, on 18 May 2020 the Panel posed written questions to the parties
and third parties concerning certain factual and legal issue s, pursuant to its authority under
paragraph 9(1) of the Working Procedures of the Panel and Article 13 of the DSU. The Panel received
the parties ' and certain third parties ' responses to these questions on 10 June 2020. On
21 July 2020, the Panel requested the parties to comment on certain legal and factual issues raised
by the parties' 10 June 2020 responses and received the parties' comments on 8 September 2020.
1.9. In light of the continuation of the restrictions imposed on gatherings and international travel
in relation to the COVID -19 pandemic, the Panel determined that it would still not be possible to
hold the first substantive meeting fully in person at the WTO pr emises within a reasonable
timeframe. Accordingly, after several rounds of consultations with the parties, on
18 September 2020 the Panel decided to hold the first substantive meeting virtually through the
Cisco Webex platform, with the possibility for limited participation on the WTO premises.8 The Panel
decided to proceed in this manner after careful consideration of the circumstances at hand. Since it
did not appear likely that the parties and the Panel would be able to meet in person at the
WTO premises in the foreseeable future, the Panel considered that conducting the first substantive
meeting virtually was a reasonable and secure alternative that would comply with the requirements
of the DSU, preserve the parties ' due process rights, and avoid furthe r delay in the proceedings. 9
For the purpose of conducting the first substantive meeting, and after consulting with the parties,
the Panel adopted Additional Working Procedures of the Panel Concerning Holding a Substantive
Meeting Conducted via Cisco Webe x on 9 October 2020.10 These procedures stipulated how the
meeting would be conducted and set out certain technical and security requirements. In organizing
the meeting , the Panel made its best effort s to accommodate the technological and logistical
concerns raised by the parties. The Panel held the first substantive meeting with the parties on
19 and 22 October 2020. The third -party session of the first substantive meeting took place on
20 October 2020. On 29 October 2020, the Panel posed an additional set of written questions to the
parties. The Panel received the parties ' responses to these questions on 12 November 2020. The
parties submitted their second written submissions on 10 December 2020.
1.10. Due to the continuing restrictions imposed on gatherings and international travel in relation
to the COVID-19 pandemic, the Panel further determined that it would not be possible to hold the
second substantive meeting in person within a reasonable timeframe. Therefore, after consultations
with the parties, the Panel decided to hold the second substantive meeting in a virtual format with
the possibility for limited participation on the WTO premises. For the purpose of this meeting, after
consulting with the parties, the Panel adopted Additional Working Procedures of the Panel Concerning
Holding a Substantive Meeting Conducted via Cisco Webex on 30 November 2020.11 In organizing
the meeting, the Panel again made its best efforts to accommodate the technological and logistical
concerns raised by the partie s. The Panel held its second substantive meeting with the parties on
3 and 4 February 2021. On 11 February 2021, the Panel posed a further set of written questions to
the parties. The Panel received the parties' responses to these questions on 25 February 2021, and
comments from the parties on these responses on 11 March 2021. The Panel posed a final set of
written questions on 5 March 2021 and received responses on 26 March 2021, and comments on
these responses on 13 April 2021.
1.11. At the request of the parties, the Panel's meetings with the parties were opened to the public.
Due to the continuing restrictions imposed on gatherings and international travel , and after

8 The virtual format allowed parties and third parties to participate in the meeting remotely through the
Cisco Webex platform, while at the same time leaving open the possibility for a limited number of delegates to
attend the meeting on the WTO premises.
9 In this regard, Article 3.3 of the DSU contemplates the prompt settlement of disputes while Article 12
of the DSU provides panels with flexibility in terms of the procedures that govern the panel process. The
European Union agreed that the Articles 12.1 and 12.2 of the DSU provide panels with flexibilities in terms of
organising the panel process, provided that the principle of due process is respected. The United States did not
consider that the proposed virtual format would be adequate to protect the parties' rights under the DSU
because, among other things, capital-based delegates could not attend in person, thus preventing the
contemporaneous oral exchange of views either amongst members of the delegation of the United States, or
with the Panel or the European Union.
10 See Annex A-4.
11 See Annex A-5.

BCI deleted, as indicated [[***]]

consulting with the parties, the Panel decided to webcast audio recordings of the meetings .12
A portion of the Panel's meeting with the third parties was also opened to the public.13
1.12. On 9 June 2021, the Panel issued the descriptive part of its Report to the parties. The Panel
issued its Interim Report to the parties on 7 July 2021. On 19 August 2021, following a joint request
by the parties, the Panel postponed the issuance of its final report until 16 September 2021. On
16 September 2021, following an additional request by the parties, the Panel further postponed the
issuance of its final report until 3 November 2021.The Panel issued its Final Report to the parties on
3 November 2021.
1.3.2 Preliminary ruling on the Panel's terms of reference
1.13. With its first written submission on 17 March 2020, the United States requested a preliminary
ruling pursuant to paragraph 4 of the Panel's Working Procedures that claims under Article 15.4 of
the SCM Agreement and Article 3.4 of the Anti -Dumping Agreement are outside the Panel 's terms
of reference, because those claims were not identified in the European Union's request for the
establishment of a panel.14
1.14. At the Panel's invitation, on 20 May 2020, the European Union submitted a written response
to the United States' request for a preliminary ruling.15
1.15. On 18 September 2020, the Panel informed the parties of its decision to deny the
United States' request.16 The Panel's underlying reasoning in relation to the
United States' preliminary ruling request is set out in section 7.4.1 below.
1.3.3 Request to address certain aspects of the USDOC's Remand Redetermination of
29 May 2020
1.16. On 2 July 2020, the European Union requested to address in its remaining submissions certain
aspects of the Final Results of Remand Redetermination, Asociación de Exportadores e Industriales
de Aceitunas de Mesa, Aceitunas Guadalquivir, S.L.U. (Aceitunas Guadalquivir ), Agro Sevilla
Aceitunas S. Coop. And. (Agro Sevilla), and Ángel Camacho Alimentación, S.L. (Ángel Camacho)
v. United States issued by the United States Department of Commerce (USDOC) on 29 May 2020
(Remand Redetermination). The Remand Redetermination did not exist at the time of establishment
of the Panel.
1.17. At the Panel 's invitation, on 10 July 2020, the United States commented on the
European Union's request.17
1.18. On 18 September 2020, the Panel informed the parties of its decision to grant the
European Union's request.18 The Panel's underlying reasoning in relation to the
European Union's request is set out in section 7.2.1 below.
2 FACTUAL ASPECTS: THE MEASURES AT ISSUE
2.1. The measures at issue in the present dispute concern countervailing and anti -dumping duties
that the United States imposed in connection with its investigations concerning imports of ripe olives
from Spain. In particular, the European Union's panel request refers to the following:
a. Ripe Olives from Spain: Amended Final Affirmative Countervailing Duty Determination and
Countervailing Duty Order, 83 FR 37469, 1 August 2018;

12 Additional Working Procedures of the Panel: Open Meetings (Delayed Online Broadcast), Annex A-6.
13 Canada consented to having audio recordings of their statements shared with the public. The Panel
also provided the audience with written copies of the parties' and Canada's statements, and written copies of
the parties' responses to the Panel's questions at the meeting.
14 United States' first written submission, paras. 19-27.
15 European Union's response to the United States' preliminary ruling request.
16 Panel's communication of 18 September 2020, Annex A-3.
17 United States' response to the European Union's request (10 July 2020).
18 Panel's communication of 18 September 2020, Annex A-3.

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b. Ripe Olives from Spain: Antidumping Duty Order, 83 FR 37467, 1 August 2018;
c. Ripe Olives from Spain: Final Affirmative Countervailing Duty Determination, C-469-818,
DOC, 11 June 2018, 83 FR 28186, 18 June 2018;
d. Ripe Olives from Spain: Final Affirmative Determination of Sales at Less Than Fair Value,
A-469-817, DOC, 11 June 2018, 83 FR 28193, 18 June 2018; and
e. Ripe Olives from Spain, Investigation Nos . 701-TA-582 and 731 -TA-1377 (Final),
United States International Trade Commission (USITC), Publication 4805, July 2018.
2.2. The Panel also accepted the European Union's request19 to address certain aspects of the
USDOC's Remand Redetermination of 29 May 2020, reflected in the following document:
a. USDOC, Final Results of Remand Redetermination , Asociación de Exportadores e
Industriales de Aceitunas de Mesa, Aceitunas Guadalquivir, S.L.U., Agro Sevilla Aceitunas
S. Coop. And., and Ángel Camacho Alimentación, S.L. v. United States (29 May 2020).
2.3. The European Union also challenges "as such" Section 771B of the Tariff Act of 1930, relating
to the calculation of countervailable subsidies on certain processed agricultural products.20
3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1. The European Union requests the Panel to find that the USDOC and the USITC acted
inconsistently with the United States' obligations under the Anti-Dumping Agreement, the
SCM Agreement, and the GATT 1994.
3.2. With respect to the USDOC's determination of de jure specificity, the European Union claims
that the USDOC acted inconsistently with:
a. Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement by failing to examine the eligibility
conditions governing the Single Payment Scheme (SPS), Basic Payment Scheme – Direct
Payment (BPS), and Basic Payment Scheme – Greening (GP ) programmes and to
demonstrate that those conditions explicitly limited access to the subsidy to certain
enterprises21;
b. Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement by finding that the SPS, BPS, and
GP programmes are de jure specific because the assistance provided to olive growers was
tied to the production of olives22;
c. Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement by grounding its de jure specificity
analysis on the Common Organization of Markets in Oils and Fats (COMOF ) programme,
which was no longer in force, and building a link between that programme and the amount
of assistance provided under the BPS and GP programmes, when the record evidence
demonstrated no direct correlation between the current and past programmes23;
d. Articles 2.1, 2.1(b), and 2.4 of the SCM Agreement by failing to analyse whether the
criteria governing the eligibility for, and the amount of, the SPS, BPS, and GP programmes
complied with the requirements of Article 2.1(b) of the SCM Agreement24;

19 See section 1.3.3 above.
20 Section 771B is codified in 19 USC 1677-2, (Exhibit EU-52).
21 European Union's first written submission, paras. 208-209.
22 European Union's first written submission, para. 227.
23 European Union's first written submission, paras. 240 and 246.
24 European Union's first written submission, paras. 279-280.

BCI deleted, as indicated [[***]]

e. Articles 2.1, 2.1(a), 2.1(b), and 2.4 o f the SCM Agreement by failing to base its de jure
specificity findings on positive evidence and to provide reasoned and adequate
explanations for those findings25; and
f. Article 1.2 of the SCM Agreement by determining that the BPS and GP programmes are
countervailable subsidies and subjecting them to Part V of the SCM Agreement without
properly demonstrating that they were specific.26
3.3. With respect to the USDOC's determinations attributing subsidies granted to raw olive growers
to ripe olive processors, the European Union claims that the USDOC acted inconsistently with:
a. Article VI:3 of the GATT 1994 and Articles 10, 19.1, 19.3, 19.4 , and 32.1 of the
SCM Agreement by failing to carry out a pass -through analysis for relevant arm's length
transactions for the ripe olive processors under investigation, and imposing countervailing
duties that went beyond offsetting the subsidy amount and were neither appropriate nor
accurately determined27; and
b. Article VI:3 of the GATT 1994 and Articles 10, 19.1, 19.3, 19.4 , and 32.1 of the
SCM Agreement "as such ", because Section 771B requires the USDOC to impose a
countervailing duty on a processed agricultural product in the absence of an analysis of
whether and to what extent any benefit passed -through from the raw input product,
thereby mandating an approach that goes beyond offsetting a subsidy and in which the
USDOC is unable to ensure an appropriate duty amount in each case or an accurate duty
amount.28
3.4. With respect to the USITC's injury determination, the European Union claims that the USITC
acted inconsistently with:
a. Articles 15.1 and 15.2 of the SCM Agreement, and Articles 3.1 and 3.2 of the
Anti-Dumping Agreement, by undertaking an analysis of the volume of ripe olives from
Spain that was not objective and not based on positive evidence . In particular, because
the USITC:
i. based its analysis on an artificial market "segmentation" of the domestic industry that
was not explained, meaningless and arbitrary and in contradiction to the USITC's own
determinations29;
ii. only considered "volume effects" in the artificial retail "segment" and n either for the
industry as a whole nor for the two other "segments"30; and
iii. improperly extend ed conclusions concerning the "volume effect" in the retail
"segment" to the domestic industry as a whole without any evidentiary basis.31
b. Articles 15.1 and 15.2 of the SCM Agreement, and Articles 3.1 and 3.2 of the
Anti-Dumping Agreement, because the USITC did not consider a "volume effect" within
the meaning of Article 15.2 of the SCM Agreement and Article 3.2 of the
Anti-Dumping Agreement32;
c. Articles 15.1 and 15.2 of the SCM Agreement, and Articles 3.1 and 3.2 of the
Anti-Dumping Agreement, by undertaking an analysis of the price effects of ripe olives
from Spain that was not objective and not based on positive evidence . In particular,
because the USITC:

25 European Union's first written submission, para. 329.
26 European Union's first written submission, para. 330.
27 European Union's first written submission, para. 386.
28 European Union's first written submission, paras. 419-421.
29 European Union's first written submission, paras. 465 and 492.
30 European Union's first written submission, paras. 465 and 511.
31 European Union's first written submission, paras. 465 and 517.
32 European Union's first written submission, paras. 465 and 525.

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i. based the analysis of the price effects of ripe olives from Spain on an artificial market
"segmentation" of the domestic industry that was meaningless, arbitrary , and in
contradiction to the USITC's own determinations33;
ii. only considered price effects in the retail "segment" and not at the level of the domestic
industry as a whole34;
iii. improperly extended its conclusions concerning the consideration of price effects in
the retail "segment" to the domestic industry as a whole35; and
iv. concluded, without supporting evidence, that underselling by subject imports resulted
in a loss of market share in the retail sector by the domestic industry.36
d. Articles 15.4 and 15.5 of the SCM Agreement, and Articles 3.4 and 3.5 of the
Anti-Dumping Agreement, as a consequence of each of the above alleged violations
concerning the USITC's volume analysis and price effects analysis37;
e. Articles 15.1 and 15.4 of the SCM Agreement, and Articles 3.1 and 3.4 of the
Anti-Dumping Agreement, by undertaking an analysis of the consequent impact of ripe
olives from Spain on the domestic industry that was not objective and not based on
positive evidence.38 In particular, because the USITC:
i. carried out its impact analysis with respect to the retail "segment", and neither with
respect to the industry as a whole, nor with respect to the two other "segments"39;
ii. failed to find a "volume effect" in its volume analysis that could have had a
"consequent" impact on the domestic industry40;
iii. failed to find a price effect with respect to the industry as a whole that could have had
a "consequent" impact on the domestic industry41;
iv. improperly extended the impact finding for "volume effects" in the retail "segment" to
the industry as a whole without any evidentiary basis42; and
v. improperly extended the impact finding for " price effects" in the retail "segment" to
the industry as a whole without any evidentiary basis.43
f. Article 15.5 of the SCM Agreement, and Article 3.5 of the Anti-Dumping Agreement, as a
consequence of each of the above alleged violations concerning the USITC 's impact
analysis44;

33 European Union's first written submission, paras. 531 and 538.
34 European Union's first written submission, paras. 531 and 550.
35 European Union's first written submission, paras. 531 and 556.
36 European Union's first written submission, para. 543; second written submission, para. 157. This
argument is not presented in a separate section of the European Union's first and second written submissions,
as are the European Union's other arguments. The European Union confirmed, however, in response to
questions from the Panel, that this was a distinct claim. (European Union's 25 February 2021 response to Panel
question No. 15, para. 106).
37 In relation to the USITC's volume analysis, see European Union's first written submission, paras. 493,
512, 518, 560, 564, 600, and 610. In relation to the USITC's price effects analysis, see ibid. paras. 539, 551,
557, 560, 564, 600, and 610.
38 As noted above, the Panel denied the United States' request for a preliminary ruling that the
European Union's claims under Article 15.4 of the SCM Agreement and Article 3.4 of the
Anti-Dumping Agreement are outside the Panel's terms of reference. (See section 1.3.2 above).
39 European Union's first written submission, paras. 560 and 572.
40 European Union's first written submission, paras. 560 and 581.
41 European Union's first written submission, paras. 560 and 588.
42 European Union's first written submission, paras. 560 and 592.
43 European Union's first written submission, paras. 560 and 595-596.
44 European Union's first written submission, paras. 565, 573, 582, 589, 593, 597, 600, and 610.

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g. Articles 15.1 and 15.5 of the SCM Agreement, a nd Articles 3.1 and 3.5 of the
Anti-Dumping Agreement, by undertaking a causation analysis that was not objective and
not based on positive evidence. In particular, because the USITC:
i. failed to carry out a causation assessment with respect to the domestic industry as a
whole45; and
ii. failed to separate and distinguish the injurious effects of the contraction of US demand
and of non-subject imports from the injurious effects of Spanish imports.46
3.5. With respect to the calculation of the subsidy and countervailing duty rate for mandatory
respondent Aceitunas Guadalquivir, the European Union claims that the USDOC acted inconsistently
with:
a. Article VI:3 of the GATT 1994 and Articles 10, 19.1, 19.3, 19 .4, and 32.1 of the
SCM Agreement by basing the calculation of the amount of subsidy and the countervailing
duty rate on Aceitunas Guadalquivir 's overall purchases of raw olives, rather than on
Aceitunas Guadalquivir's purchases of raw olives processed into ripe olives47;
b. Article 12.1 of the SCM Agreement by failing to notify Aceitunas Guadalquivir that the
USDOC required information regarding the respondent's volume of purchases of raw olives
that were processed into ripe olives, which would be used in the determination of
Aceitunas Guadalquivir's final subsidy rate48;
c. Article 12.8 of the SCM Agreement by failing to disclose to Aceitunas Guadalquivir, before
making a final determination, that the volume of purchases of raw olives processed into
ripe olives was an essential fact under consideration49; and
d. Article VI:3 of the GATT 1994 and Articles 10, 19.1, 19.3, 19.4 , and 32.1 of the
SCM Agreement by calculating the "all others" rate of countervailing duties imposed on
exporters of olives that are not individually investigated, based in part on the calculation
of the amount of subsidy for Aceitunas Guadalquivir.50
3.6. The European Union further requests, pursuant to Article 19.1 of t he DSU, that the Panel
recommend that the United States bring its measures into conformity with its WTO obligations.
3.7. The United States requests that the Panel reject the European Union's claims in this dispute in
their entirety.51
4 ARGUMENTS OF THE PARTIES
4.1. The arguments of the parties are reflected in their executive summaries, provided to the Panel
in accordance with paragraph 23 of the Working Procedures adopted by the Panel (see Annexes B-1
and B-2).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The arguments of Brazil, Canada, Japan, Mexico, and Turkey are reflected in their executive
summaries, provided in accordance with paragraph 26 of the Working Procedures adopted by the
Panel (see Annexes C-1 t o C -5). Australia, China, India, the Russian Federation,
the Kingdom of Saudi Arabia, and Switzerland did not submit written or oral arguments to the Panel.

45 European Union's first written submission, paras. 600 and 615.
46 European Union's first written submission, paras. 600 and 638.
47 European Union's first written submission, paras. 666 and 706-711.
48 European Union's first written submission, paras. 712 and 716-718.
49 European Union's first written submission, paras. 724 and 728.
50 European Union's first written submission, para. 730.
51 United States' first written submission, para. 337.

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6 INTERIM REVIEW
6.1. On 7 July 2021, the Panel issued its Interim Report to the parties. On 21 July 2021, the
European Union and the United States submitted their written requests for review. On 28 July 2021,
the parties submitted comments on the other parties' written requests for review.
6.2. The parties' requests made at the interim review stage as well as the Panel's discussion and
disposition of those requests are set out in Annex A-7.
7 FINDINGS
7.1 General principles regarding treaty interpretation, the applicable standard of review,
and burden of proof
7.1.1 Treaty interpretation
7.1. Article 3.2 of the DSU provides that the dispute settlement system serves to clarify the existing
provisions of the covered Agreements "in accordance with customary rules of interpretation of public
international law". It is generally accepted that the principles codified in Articles 31 and 32 of the
Vienna Convention are such customary rules.52
7.2. Article 17.6(ii) of the Anti -Dumping Agreement also provides that if a panel finds that a
provision of the Anti -Dumping Agreement admits of more than one permissible interpretation, it
shall uphold a measure that rests upon one of those interpretations.
7.1.2 Standard of review
7.3. This dispute concerns claims raised by the European Union under the GATT 1994, the
SCM Agreement, and the Anti -Dumping Agreement. Article 11 of the DSU sets out a general
standard of review for panels, providing, in relevant part, that:
[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 the relevant covered Agreements.
7.4. The obligation to conduct an "objective assessment" has been found to require panels to
evaluate whether the competent authorities provided a "reasoned and adequate explanation" as
to (a) how the evidence on the record supported its factual findings; and (b) how those factual
findings supported the overall determination.53 Panels and the Appellate Body have understood this
standard to mean that a panel may not undertake a de novo review of the evidence or substitute its
judgment for that of the investigating authority. A panel must limit its examination to the e vidence
that was before the investigating authority during the investigation and must consider all such
evidence submitted by the parties to the dispute.54 At the same time, a panel must not simply defer
to the conclusions of the investigating authority; a panel's examination of those conclusions must
be "in-depth" and "critical and searching". 55 We agree with these findings, and do not understand
the parties to take a different view.

52 Appellate Body Report, Japan – Alcoholic Beverages II, DSR 1996:1, p. 104.
53 Appellate Body Reports, US – Countervailing Duty Investigation on DRAMS, para. 186; US – Lamb,
para. 103.
54 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, paras. 187-188. See also
Panel Reports, US – Softwood Lumber VII, para. 7.5; US – Pipes and Tubes (Turkey), para. 7.4; US – Coated
55 Appellate Body Reports, US – Softwood Lumber VI (Article 21.5 – Canada), para. 93; US – Lamb,
paras. 106-107. See also Panel Reports, US – Softwood Lumber VII, para. 7.4; US – Pipes and Tubes (Turkey),

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7.5. In addition to the obligation to conduct an objective assessment under Ar ticle 11 of the DSU,
in disputes concerning anti -dumping measures , Article 17.6(i) of the Anti -Dumping Agreement
provides that:
[I]n 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[.]
7.6. Although the SCM Agreement does not contain a similar provision, Members have declared that
disputes arising from anti -dumping and countervailing duty measures should be resolved in a
consistent manner.56 Likewise, the parti es have argued that the Panel should apply a consistent
approach in resolving the claims at issue in this dispute, arguing, furthermore, that there is no
conflict between Article 17.6(i) of the Anti -Dumping Agreement and Article 11 of the DSU. 57
We share t he parties' views about the absence of conflict between Article 11 of the DSU and
Article 17.6(i) of the Anti-Dumping Agreement, and we will conduct our review of the merits of the
European Union's claims accordingly.
7.1.3 Burden of proof
7.7. The general principles applicable to the allocation of the burden of proof in WTO dispute
settlement require that a party claiming a violation of a provision of a WTO Agreement must assert
and prove its claim .58 Therefore, the European Union bears the burden of demonstrating th at the
challenged measures are inconsistent with the GATT 1994, the SCM Agreement, and the
Anti-Dumping Agreement. A complaining party will satisfy its burden when it establishes
a prima facie case, namely a case which, without effective refutation by the defending party,
requires a panel as a matter of law to rule in favour of the complaining party.59 Each party asserting
a fact should provide proof thereof.60
7.2 The European Union's claims concerning the USDOC's de jure specificity findings in
the ripe olives countervailing duty investigation
7.2.1 The European Union's request to address the USDOC's Remand Redetermination as
it relates to its original de jure specificity findings
7.8. As part of the judicial review proceedings in the United States Court of Internat ional Trade
(USCIT), the USDOC's original determination of de jure specificity in the ripe olives countervailing
duty investigation was remanded to the USDOC to conduct "further proceedings" and address the
USCIT's opinion that the USDOC 's findings had "not been sufficiently explained because [the
USDOC] did not provide an interpretation of the statute in reaching its determination based on the
record".61 In the Remand Redetermination, the USDOC "further explain[ed] its interpretation of
section 771(5A)(D)(i) of the [Tariff Act of 1930] for the de jure specificity finding", "affirm[ed] the
finding that [the USDOC] made in the Final Determination that the BPS provides benefits that are
de jure specific to olive growers", and "made no change s to the Amended Final Determination and
Countervailing Duty Order with this [remand] redetermination".62 The Remand Redetermination was
issued on 29 May 2020, after the establishment of the Panel in this proceeding.63

56 Declaration on Dispute Settlement Pursuant to the Agreement on Implementation of Article VI of the
General Agreement on Tariffs and Trade 1994 or Part V of the Agreement on Subsidies and Countervailing
Measures.
57 European Union's 8 September 2020 response to Panel question No. 5(a), para. 167;
United States' 8 September 2020 response to Panel question No. 5(a), para. 60.
58 Appellate Body Report, US – Wool Shirts and Blouses, DSR 1997:1, p. 337.
59 Appellate Body Report, EC – Hormones, para. 104.
60 Appellate Body Report, US – Wool Shirts and Blouses, DSR 1997:1, p. 335.
61 Remand Redetermination, (Exhibit EU-80), pp. 1-2.
62 Remand Redetermination, (Exhibit EU-80), pp. 2 and 50. (emphasis original)
63 On 18 June 2021, the European Union informed the Panel of a USCIT remand decision of
17 June 2021 in connection with the USDOC's finding of de jure specificity contained in the Remand
Redetermination, submitting the 17 June 2021 remand decision as Exhibit EU-81. After hearing the

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7.9. In a letter of 2 July 2020, the European Union requested the Panel to grant it permission to
address in its submissions the USDOC 's Remand Redetermination, as it related to the
USDOC's original findings of de jure specificity. The European Union argues that it is entitled to
address the Remand Redetermination because: (a) the terms of its panel request are broad enough
to bring it within the scope of the Panel's terms of reference; (b) the Remand Redetermination does
not change the essence of the original measures identified in its panel request; and (c) consideration
of the Remand Redetermination is necessary to secure a positive resolution to the dispute.64
7.10. The United States maintains that the European Union has failed to explain how its panel
request should be understood to encompass the USDOC's Remand Redetermination as a measure
at issue. Although the European Union's panel request refers to "any amendments, supplements,
extensions, replacement measures, renewal measures and implementing measures", the
United States argues that the European Union does not explain in what way the
Remand Redetermination amends, supplements, extends, renews, or implements the measures at
issue. The United States further contends that the European Union does not identify why that
additional explanation contained in the Remand Redetermination does not constitute a changed,
different measure, and that the European Union has also not demonstrated how a failure to make
findings on the Remand Redetermination would undermine any findings and recommendation made
in relation to the original measures in existence at the time of the Panel's establishment.65
7.11. A panel's terms of reference are defined by Articles 6.2 and 7.1 of the DSU. Pursuant to
Article 7.1, a panel must "examine … the matter referred to the DSB" in the complaining
party's panel request and "make such findings as will assist the DSB in making the recommendations
or in giving the rulings provided for" in the covered agr eements identified in the complaining
party's panel request. In turn, Article 6.2 stipulates that a panel request must, inter alia, identify
the specific measures at issue and provide a brief summary of the legal basis of the complaint .66
These requirements together constitute the "matter referred to the DSB" and form the basis of a
panel's terms of reference under Article 7.1 of the DSU.67
7.12. We agree with previous panel and Appellate Body reports that Article 6.2 of the DSU does not
categorically preclude the inclusion within a panel's terms of reference of measures that come into
existence after the panel establishment is requested.68 Rather, there may be circumstances in which
it is necessary for a Panel to review measures enacted after its establishment so that it can make
the findings and recommendations necessary to resolve the matter in dispute. This may include, for
example, a measure that amends a measure that is explicitly identified in a panel request, without
changing the essence of that original measure.69
7.13. The Remand Redetermination is not expressly identified in the text of the
European Union's panel request, since it did not exist at the time that the European Union filed its
panel request. The European Union's panel request identifies , inter alia, the following measures,
which were in existence at the relevant time:
[Countervailing] and [Anti-Dumping] duty orders issued on 1 August 2018 by the
US Department of Commerce ( [US]DOC) and applicable as from the same date,
following final determinati ons by the [US]DOC and by the US International Trade
Commission (ITC)[.]70

parties' views, the Panel informed the parties of its decision not to accept the European Union's submission of
Exhibit EU-81, because of the Panel's view that there was insufficient cause to do so under paragraph 5(1) of
the Panel's Working Procedures, and because of the lateness of the European Union's submission and the
imminent planned issuance of the interim report. (Panel's communications of 24 June 2021 and 29 June 2021).
64 European Union's letter of 2 July 2020, pp. 1-2.
65 United States' letter of 10 July 2020, paras. 8-11.
66 Appellate Body Report, US – Carbon Steel, para. 125.
67 Appellate Body Report, Guatemala – Cement I, para. 72.
68 Appellate Body Reports, US – Zeroing (Japan) (Article 21.5 – Japan), paras. 121 and 125; EC –
Chicken Cuts, paras. 156-159; and Chile – Price Band System, paras. 126-144; Panel Report, US – Washing
Machines, paras. 7.248-7.249.
69 Appellate Body Reports, Chile – Price Band System, paras. 126-144; EC – Chicken Cuts,
paras. 156-159.
70 European Union's panel request, p. 1. (fns omitted)

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7.14. We note, however, that the European Union's panel request also refers to "any amendments,
supplements, extensions, replacement measures, renewal measures and implementing measures".71
In our view, these terms are sufficiently broad to cover the challenged aspect of the
Remand Redetermination because we consider the USDOC's Remand Redetermination supplements
and reaffirms its original de jure specificity findings . In this regard, we note that the
USDOC's analytical approach to the question of specificity in the Remand Redetermination remains
fundamentally unchanged and its findings and analysis are not based on any new evidence
introduced during the remand proceeding.72 The USDOC's Remand Redetermination does not modify
the USDOC's original findings and does not alter the essence of the reasoning set out in the
preliminary and final issues and decision memoranda. In these circumstances, we consider that the
Remand Redetermination is covered by our terms of reference, despite not existing at the time that
this Panel was established . In addition, we share the European Union's view that given its close
connection with the original findings, our consideration of the European Union's submissions with
respect to the Remand Redetermination would assist the resolution of the specific claims in this
dispute.
7.15. For these reasons, we decided to gra nt the European Union's request to address in its
submissions the USDOC's 29 May 2020 Remand Redetermination with respect to the matter of
de jure specificity, on the basis that the Remand Redetermination is a measure or is part of the
measure that is before the Panel in this dispute.
7.2.2 The European Union's claims under Articles 2.1, 2.1(a), and 2.4 of the
SCM Agreement
7.2.2.1 Introduction
7.16. In its preliminary and final issues and decision memoranda, the USDOC found that subsidies
provided to olive growers under the European Union's Common Agricultural Policy (CAP) Pillar I, the
BPS and GP programmes, as implemented by the Government of Spain (GOS), were de jure
specific.73 The USDOC's determinations were grounded in its understanding of the subsidy
calculation rules under the BPS. The USDOC found these rules expressly referred to and incorporated
the criteria used to determine subsidy amounts under two predecessor programmes – the SPS and
COMOF programmes, with the latter being considered to have provided crop -specific subsidies to
olive growers.74 The USDOC found that under the BPS programme, subsidy amounts for eligible
farmers were determined based upon amounts of assistance received by olive growers under the
predecessor SPS programme; and , in turn, that subsidy amounts provided under the
SPS programme were based upon amounts of assistance received by olive growers under the
COMOF programme, which the USDOC characterized as a programm e that provided
production-based de jure specific subsidies to olive growers. In short, the USDOC found that the
subsidies provided to olive growers under the BPS and GP programmes75 were de jure specific
because the subsidy calculation rules resulted in annual grant amounts that were directly related to,
and continued to retain, the de jure specificity of the grants provided to olive growers under the
COMOF programme.76 The USDOC further explained and elaborated upon its original findings in the
Remand Redetermination , and affirmed the finding that the BPS and GP programmes provided
benefits that were de jure specific to olive growers.

71 European Union's panel request, p. 2.
72 The USDOC's Remand Redetermination concerning its original de jure specificity findings is discussed
in detail below.
73 PIDM, (Exhibit EU-1), pp. 24-25; FIDM, (Exhibit EU-2), p. 36.
74 PIDM, (Exhibit EU-1), pp. 23-27; FIDM, (Exhibit EU-2), pp. 32-36; and Remand Redetermination,
(Exhibit EU-80), pp. 48-50.
75 In analysing the GP programme, the USDOC considered that "a farmer who is entitled to a grant
under the [BPS programme] is eligible for [GP] grants if the farmer undertakes agricultural practices beneficial
for the climate and the environment"; that farmers of permanent crops (such as olives) are entitled to the
GP programme "ipso facto"; and that "[t]he grant amount [under the GP programme] is a ratio established
annually by the national authority and the ratio is usually 50 percent of the [BPS] grant amount". (PIDM,
(Exhibit EU-1), p. 25). In light of these considerations, we understand the USDOC's findings concerning the
GP programme are linked to and dependent upon its findings concerning the BPS programme, so we will assess
the USDOC's de jure specificity findings accordingly.
76 FIDM, (Exhibit EU-2), p. 36.

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7.17. The European Union claims that the USDOC's de jure specificity findings with respect to the
BPS programme, and consequently also the GP programme, are inconsistent with the
United States' obligations under Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement. According to
the European Union, the USDOC 's finding of de jure specificity in re lation to the BPS and
GP programmes is inconsistent with Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement because, in
its view, the key determinant of whether "access" to a subsidy is explicitly limited to certain
enterprises, within the meaning of Article 2.1(a), is a programme 's eligibility criteria (which the
USDOC allegedly did not examine in establishing specificity of the SPS, BPS, and GP programmes),
not the formula applied to calculate the amounts of subsidy available to eligible enterprises.
7.18. The European Union also claims that the USDOC 's determination is inconsistent with
Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement because the USDOC wrongly concluded that the
BPS programme retained the de jure specificity of olive-grower-specific subsidies bestowed under
the COMOF programme. The European Union advances multiple arguments in support of this aspect
of its claims, including that the USDOC's determination (i) was not based on the legislation pursuant
to which the countervailed subsidies were provided, but rather on the rules governing access to
subsidies under the COMOF programme , which is no longer in force ; (ii) erroneously found that
assistance under the SPS, BPS, and GP programmes was tied to th e production of olives;
(iii) misconstrued or did not account for certain features of the relevant calculation and eligibility
rules; and (iv) was not based on positive evidence or a reasoned and adequate explanation, in the
light of the United States' obligations under the above-mentioned provisions of the SCM Agreement.
We examine the merits of the European Union's claims in the sections that follow.
7.2.2.2 Whether the USDOC was entitled under Article 2.1(a) of the SCM Agreement to
determine de jure specificity based on rules governing the amount of a subsidy
7.19. The first question we address is whether the USDOC was entitled under the terms of
Article 2.1(a) of the SCM Agreement to find that the BPS and GP programmes provided de jure
specific subsidies based on the rules for calculating subsidy amounts, as opposed to the criteria
governing the eligibility for subsidies under those programmes. In essence, the European Union
argues that it follows from the terms of Article 2.1(a) that a de jure specificity finding must be based
on the eligibility criteria for a subsidy, and not on the rules governing the amounts of subsidy
available to eligible enterprises. 77 The United States, however, argues that a finding that the
eligibility criteria of a subsidy programme explicitly limit access to a subsidy to certain enterprises
is not the only way to establish de jure specificity under the terms of Article 2.1(a). For the
United States, an explicit limitation on access to a subsidy can manifest in different ways, including
as a limitation on the amounts available under a subsidy programme.78
7.20. We start by reviewing the text of Article 2.1(a) of the SCM Agreement, which provides:
In order to determine whether a subsidy, as defined in paragraph 1 of Article 1, is
specific to an enterprise or industry or group of enterprises or industries (referred to in
this Agreement as "certain enterprises") within the jurisdiction of the granting
authority, the following principles shall apply:
Where the granting authority, or the legislation pursuant to which the
granting authority operates, explicitly limits access to a subsidy to certain
enterprises, such subsidy shall be specific.
7.21. The European Union argues that the terms "access to a subsidy" found in Article 2.1(a) must
be understood to mean that the central focus of a determination of de jure specificity is the criteria
defining eligibility for a subsidy, as eligibility is what ultimately determines whether an entity has a

77 European Union's first written submission, paras. 190-191, 196, and 203-204; 10 June 2020 response
to Panel question No. 2, paras. 2-13; 8 September 2020 response to Panel question No. 1(a), para. 16;
opening statement at the first meeting of the Panel, para. 6; 12 November 2020 response to Panel question
No. 2, paras. 3 and 11-13; and second written submission, para. 13.
78 United States' 10 June 2020 response to Panel question No. 2, paras. 3-8; 8 September 2020
response to Panel question No. 1(a), paras. 1-2; opening statement at the first meeting of the Panel,
paras. 13-14; 12 November 2020 response to Panel question No. 2, paras. 9-10; second written submission,
para. 8; and opening statement at the second meeting of the Panel, para. 4.

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right to receive "access" to a subsidy.79 The European Union draws support for its interpretation of
Article 2.1(a) from parts of the Appellate Body report in US – Anti-Dumping and Countervailing
Duties (China), including the Appellate Body's statement that " the focus of the inquiry [under
Article 2.1(a)] is on whether certain enterprises are eligible for the subsidy, not on whether they in
fact receive it".80
7.22. The United States maintains that the text of Article 2.1(a) does not prescribe a particular form
that a limit on "access" must take. While the United States accepts that such a limit may be found
in the criteria determining eligibility for a subsidy, it also considers that the criteria determining the
eligibility for certain amounts of a subsidy could be an explicit limitation on access to a subsidy.81 In
the view of the United States, a limit based on distinctions that differentiate the amount of subsidies
that certain enterprises are eligible to receive vis-à-vis other enterprises could similarly differentiate
the right or opportunity to benefit from or to use a subsidy. 82 The United States argues that the
Appellate Body's statement from US – Anti-Dumping and Countervailing Duties (China), which the
European Union relies upon, does not preclude the possibility of making de jure specificity findings
that are not based solely on eligibility criteria. This is because, according to the United States, the
Appellate Body's reference to "eligibility" in the statements relied upon by the European Union, was
merely shorthand for saying "qualified to access". Thus, the United States maintains that the
Appellate Body's statement that "the focus of the inquiry is on whether certain enterprises are
eligible for the subsidy, not on whether they in fact receive it", should not be understood to suggest
that "access" in Article 2.1(a) means "eligibility".83 In the view of the United States, if the drafters
of the SCM Agreement had intended that the word "access" should be exclusively understood to
mean "eligibility", they would have used that word instead of "access", in the same way that the
word "eligibility" is explicitly used in the text of Article 2.1(b).84
7.23. Canada broadly agrees with the European Union, arguing that "access to a subsidy" refers to
eligibility for a subsidy, not to distinctions that affect the amount of subsidy that an enterprise will
receive.85 According to Canada, this understanding is supported by the fact that Article 2.1(a) does
not refer to "amount of subsidy", unlike other provisions of the SCM Agreement.86
7.24. Mexico also shares the European Union's views, arguing that the expression "explicitly limits
access to a subsidy to certain enterprises" is necessarily linked to eligibility criteria for granting a
subsidy. Mexico sees nothing in the text of Article 2.1(a) of the SCM Agreement suggesting that a
subsidy may be specific when access is generalized but distinctions exist in relation to the amounts
granted.87
7.25. We note that both the European Union and the United States agree that the ordinary meaning
of the word "access" includes the "right or opportunity to benefit from or use a system or service".88
We do not see anything inherent in this meaning, or in the terms of Article 2.1(a) more broadly, to
suggest that the existence of an explicit limitation on access to a subsidy must be determined solely
based on the eligibility criteria for any subs idy under a particular programme. Article 2.1(a) does
not, for example, prescribe that any particular feature of the legislation pursuant to which the
granting authority operates must be examined or be the source of an explicit limitation on access to
a subsidy. On the contrary, the analysis that is called for under Article 2.1(a) simply focuses on the
granting authority, or the legislation pursuant to which the granting authority operates, without
further precision or qualification. In our view, this suggests that in principle any one or more aspects
of the legislation pursuant to which the granting authority operates may potentially – and depending
upon the facts – serve to demonstrate the existence of an explicit limitation on "access" to a subsidy.

79 European Union's 10 June 2020 response to Panel question No. 2, paras. 2-9.
80 European Union's first written submission, para. 207; 10 June 2020 response to Panel question No. 2,
paras. 12-13 (both referring to Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China),
para. 368). See also Appellate Body Report, US – Carbon Steel (India), para. 4.368.
81 United States' 10 June 2020 response to Panel question No. 2, paras. 3-6.
82 United States' 10 June 2020 response to Panel question No. 2, para. 5.
83 United States' 10 June 2020 response to Panel question No. 8, fn 32.
84 United States' 10 June 2020 response to Panel question No. 2, para. 6.
85 Canada's third-party response to Panel question No. 2, para. 2.
86 Canada's third-party response to Panel question No. 2, para. 3.
87 Mexico's third-party response to Panel question No. 2, p. 2.
88 European Union's 10 June 2020 response to Panel question No. 2, para. 4;
United States' 10 June 2020 response to Panel question No. 2, para. 5 (both quoting Definition of "access"
from The Oxford English Dictionary, (Exhibit USA-29)).

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What matters under Article 2.1(a) is that the granting authority, or the legislation pursuant to which
the granting authority operates, is shown to limit explicitly access to a subsidy. To this extent , we
do not understand Article 2.1(a) to preclude the possibility of a finding of de jure specificity based
on the rules governing the calculation of subsidy amounts available under a programme. However,
at the same time, because the rules governing the calculation of the amount of a subsidy may not
be the only feature of a subsidy programme bearing upon "the right or opportunity to benefit from
or use" a subsidy, a finding of de jure specificity that ignores other relevant features of the subsidy
programme would not be well-founded. Thus, although Article 2.1(a) does not exclude the possibility
of grounding a finding of de jure specificity on the criteria or conditions governing the amount of a
subsidy, any such reliance must not be selective in the light of other relevant de jure features of the
subsidy programme.
7.26. Turning to the immediate context of Article 2.1(a), we note that Article 2.1(b) of the
SCM Agreement provides as follows:
Where the granting authority, or the legislation pursuant to which the granting authority
operates, establishes objective criteria or conditions[2] governing the eligibility for, and
the amount of, a subsidy, specificity shall not exist, provided that the eligibility is
automatic and that such criteria and conditions are strictly adhered to. The criteria or
conditions must be clearly spelled out in law, regulation, or other official document, so
as to be capable of verification.
2 Objective criteria or conditions, as used herein, mean criteria or conditions which are neutral,
which do not favour certain enterprises over others, and which are economic in nature and
horizontal in application, such as number of employees or size of enterprise.
7.27. The first sentence of Article 2.1(b) prescribes inter alia that specificity shall not exist where
the granti ng authority, or the legislation pursuant to which the granting authority operates,
establishes objective criteria or conditions governing the eligibility for, and the amount of, a subsidy.
Thus, like Article 2.1(a), Article 2.1(b) directs scrutiny towards the granting authority or the
legislation pursuant to which the granting authority operates. However, in contrast to the principle
set out in Article 2.1(a), which describes when a subsidy "shall be specific", Article 2.1(b) identifies
when "specificity shall not exist".
7.28. In our view, the overlapping subject matter and binary nature of the purpose of the principles
set out in Articles 2.1(a) and 2.1(b) suggest that they operate simultaneously. Under this reading
of the two provisions, an indication of non-specificity under Article 2.1(b) would normally imply that
the granting authority, or the legislation pursuant to which the granting authority operates, could
not be found to explicitly limit access to a subsidy to certain enterprises, within t he meaning of
Article 2.1(a). The fact that the rules governing the eligibility for, and the amount of, a subsidy do
not favour certain enterprises over others (within the meaning of footnote 2 of the
SCM Agreement) would normally suggest that access to th at subsidy was not explicitly limited to
certain enterprises. Likewise, facts that would normally signal an absence of non-specificity, within
the meaning of Article 2.1(b), could also drive a conclusion of specificity under Article 2.1(a). This
could arise, for example, when the rules governing the eligibility for a subsidy are not neutral and
favour certain enterprises (within the meaning of footnote 2).
7.29. The European Union's position implies that a determination of specificity under Article 2.1(a)
cannot be based on only a finding that the rules governing the amount of a subsidy are not neutral
and favour certain enterprises over others (within the meaning of footnote 2). While we understand
the European Union to accept that such a factual scenario would establish an absence of
non-specificity within the meaning of Article 2.1(b), the European Union does not consider it would
be a sufficient basis to find the existence of an explicit limitation on access to a subsidy, under the
terms of Article 2.1(a).
7.30. On balance, w e are not convinced by the European Union's submission. We see no textual
basis in the relevant provisions to limit the potential legal relevance of such evidence to a showing
of the absence of non -specificity under Article 2.1(b) alone. Ra ther, in our view, the fact that
Article 2.1(b) refers to rules governing the eligibility for, as well as the amount of, a subsidy,
suggests that evidence of both factors may be important when considering the question of specificity
under Article 2.1(a), given that both provisions direct scrutiny towards the same subject -matter,
which is the granting authority or the legislation pursuant to which a granting authority operates.

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Thus, in our assessment, Article 2.1(b) serves as important contextual support for an interpretation
of Article 2.1(a) that does not preclude the legal possibility of establishing de jure specificity based
on an "access" limitation found in the rules governing the amount of a subsidy provided un der a
subsidy programme.
7.31. We next examine Article 2.1(c) of the SCM Agreement, which provides as follows:
If, notwithstanding any appearance of non -specificity resulting from the application of
the principles laid down in subparagraphs (a) and (b), there are reasons to believe that
the subsidy may in fact be specific, other factors may be considered. Such factors
are: use of a subsidy programme by a limited number of certain enterprises,
predominant use by certain enterprises, the granting of disproportionat ely large
amounts of subsidy to certain enterprises, and the manner in which discretion has been
exercised by the granting authority in the decision to grant a subsidy. In applying
this subparagraph, account shall be taken of the extent of diversification of economic
activities within the jurisdiction of the granting authority, as well as of the length of time
during which the subsidy programme has been in operation.89
7.32. Article 2.1(c) prescribes that specificity may arise in situations where, notwithstanding any
appearance of non -specificity resulting from the application of the principles in
subparagraphs (a) and (b), there are reasons to believe that the subsidy may in fact be specific,
based on a consideration of other factors, including "the granting of disproportionately large amounts
of subsidy to certain enterprises". In our view, the fact that the drafters of the SCM Agreement
explicitly envisaged the possibility of finding de facto specificity in situations where an otherwise
neutral calculation methodology is applied in a manner that results in the granting of
disproportionately large amounts of subsidy to certain enterprises, indicates that they did not intend
to exclude a finding of de jure specificity under Article 2.1(a) when the legislation pursuant to which
a granting authority operates expressly provides for exactly the same outcome by establishing rules
governing the amount of a subsidy that favour certain enterprises over others. Accordingly, we find
that Article 2.1(c) also supports the view that an explicit limitation on access to a subsidy for the
purpose of Article 2.1(a) might well be found in the rules governing the amount of a subsidy, not
only the criteria governing the eligibility for a subsidy.
7.33. Thus, in the light of the above considerations, we find that Article 2.1(a) of the
SCM Agreement does not preclude reliance on criteria or conditions governing the amount of a
subsidy to establish that access to a subsidy is explicitly limited to certain enterprises, within the
meaning of that provision. We emphasize, however, that because the rules governing the calculation
of the amount of a subsidy may not be the only feature of a subsidy programme bearing upon "the
right or opportunity to benefit from or use" a subsidy, a finding of de jure specificity that ignores
other relevant features of the subsidy programme would not be well -founded. Thus, although
Article 2.1(a) does not exclude the possibility of grounding a finding of de jure specificity on the
criteria or conditions governing the amount of a subsidy, any such reliance must not be selective in
the light of other relevant de jure features of the subsidy programme. Accordingly, we find that the
European Union has failed to establish that the United States acted inconsistently with Articles 2.1
and 2.1(a) of the SCM Agreement merely because the USDOC based its findings of de jure specificity
in the ripe olives countervailing duty investigation on the rules in the relevant subsidy programmes
governing the calculation of the amounts of subsidies available to eligible enterprises.
7.2.2.3 The USDOC's conclusion that the BPS and GP programmes retained the inherent
de jure specificity of the subsidies provided under the COMOF programme
7.2.2.3.1 The USDOC's reliance on facts pertaining to past subsidy programmes
7.34. As already noted, in the Remand Redetermination , the USDOC further explained and
elaborated upon the findings of de jure specificity made in the final determination, and affirmed the
finding that the BPS and GP programmes provided benefits that were de jure specific to olive
growers. In part 1 of the analysis of the Remand Redetermination, the USDOC recalls the main
elements of its findings. After explaining that its findings concerned the "programs implemented
pursuant to the European Union's Common Agricultural Policy (CAP), which provided subsidies to
olive growers, particularly under the Basic Payment Scheme (BPS)", the USDOC notes a

89 Fn omitted.

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consideration that lies at the centre of its de jure specificity determination – namely, that the
"manner in which Spain implemented the BPS as it relates to the provision of, and the amount of
benefits to, olive growers relied heavily of [sic] the provision of benefits under two predecessor
programs: the [COMOF programme] … and the Single Payment Scheme (SPS)".90 The USDOC then
briefly describes how the alleged de jure specific nature of the subsidies provided to olive growers
under the COMOF programme, was "preserved" through the operation of the SPS programme and
"retained" in the BPS programme by virtue of its subsidy amount calculation rules. At the end of this
section, the USDOC recalls and explains the summary of the analysis set out i n its earlier
determinations as follows:
[The USDOC]'s analysis is summarized:
In summary, the annual grant amount provided to olive farmers under BPS is based on
the annual grant amount provided to olive farmers under SPS. The grant amount
provided to olive farmers under SPS is based on the average grant amount olive farmers
received in 1999 through 2002 under the [COMOF programme] . The grant amount
provided in 1999 through 2002 to eligible farmers, which included olive farmers, was
based on the type of crop grown and the production value created from the
crop. Therefore, the annual grant amount provided under BPS {is} based on annual
grant amounts that were crop -specific, thus the grant amounts received by olive
growers under BPS in 2016 are directly related to the grant amount only olive growers
received under the [COMOF programme].91
This analysis was the basis of [The USDOC]'s finding that the BPS provided subsi dies
that are de jure specific to olive growers. Because : the [COMOF programme] was
available only to olive growers (i.e., access to its benefits was "expressly limited" to the
olive sector); the SPS calculated the grant amount based on data regarding the type of
crop, and the volume and value of production collected under the [COMOF programme]
(i.e., preserving the limited access to benefits available to the olive sector under the
[COMOF programme]); and, by law, access to the SPS grants provided the found ation
of the BPS subsidy payments, the BPS retained the de jure specificity inherent in the
[COMOF programme].92
7.35. These passages reveal that the USDOC determined that the BPS subsidies were de jure
specific because it found that, as a matter of law, BPS subsidy payments were fundamentally based
on grants provided under the SPS programme, which in turn, were derived from olive -specific
payments made under the COMOF programme.
7.36. The parties agree that a de jure specificity finding, within the meaning of Article 2.1(a), must
be grounded in the "legislation pursuant to which the granting authority operates" or the acts of the
granting authority itself. 93 On reading the USDOC 's preliminary and final issues and deci sion
memoranda, as well as the Remand Redetermination, it is apparent that the USDOC's findings were
aimed at understanding whether the grants provided to farmers under the BPS programme pursuant
to Regulation 1307/2013 94, as implemented by the GOS in Roya l Decree 1075/2014 95 and
Royal Decree 1076/2014 96, were de jure specific.97 The USDOC 's determinations reveal that its
examination of these instruments was informed by how, in the USDOC's view, they integrated as a
matter of law certain aspects of two predecessor subsidy programmes. The USDOC proceeded in
this way because it found that the BPS subsidy calculation rules, as implemented by the GOS,

90 Remand Redetermination, (Exhibit EU-80), p. 6. (emphasis added)
91 Remand Redetermination, (Exhibit EU-80), pp. 8-9 (referring to PIDM, (Exhibit EU-1), p. 24)
(fn omitted). The final issues and decision memorandum contains similar language. (FIDM, (Exhibit EU-2),
p. 36).
92 Remand Redetermination, (Exhibit EU-80), p. 9.
93 European Union's first written submission, para. 235 (quoting Appellate Body Report, US – Large Civil
Aircraft (2nd complaint), para. 748, explaining that the source of any limitation is the legislation pursuant to
which the granting authority operates, or the granting authority itself); United States' 10 June 2020 response
to Panel question No. 2, paras. 4 and 8.
94 Regulation 1307/2013, (Exhibit EU-25).
95 Royal Decree 1075/2014, (Exhibit EU-19).
96 Royal Decree 1076/2014, (Exhibit EU-30).
97 PIDM, (Exhibit EU-1), pp. 20-21; FIDM, (Exhibit EU-2), pp. 34-35; and United States' first written
submission, para. 53.

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expressly relied upon particular aspects of those programmes to determine subsidy amounts
available to eligible farmers. Among the passages from the USDOC's determinations that we believe
confirm this understanding are the following from the Remand Redetermination:
To determine access to payments under th e BPS, and the criteria or conditions
governing the eligibility for, and the amount of the subsidy, the BPS legislation expressly
refers to prior legislation and incorporates by reference the eligibility criteria from the
prior legislation. An examination of the prior legislation explicitly referenced in and
incorporated by the BPS demonstrates a linkage between eligibility for the crop-specific
payments provided under the prior legislation and the current payments provided under
the BPS. This link continued to entrench limited access and favored the olive industry.
… The legislation governing the BPS program may not have explicitly stated that it
intended to benefit olive growers; however, the BPS program expressly references prior
legislation that dictates the access to and amount of BPS payments that, by law,
provides expressly limited access to subsidies to olive growers. The SPS and
BPS programs, by law, rely on "historical" reference periods to preserve the benefit
amounts provided to growers of certain crops under predecessor programs. The GOS,
as required by legislation, relied on volume, value, and area data, and prior subsidy
amounts that were developed on a product-specific basis for the purpose of determining
the amount of the subsidies provided to olive growers under the SPS, thereby preserving
access to the subsidy that was expressly limited under the [COMOF programme] .
Similarly, the GOS once again, by law, relied on a historical reference period to
determine benefits under the BPS program, and t herefore, once again, by law,
entrenched benefits received under these past programs on a crop -specific basis. By
designing two consecutive benefit schemes in this manner, the express terms of the
legislation pursuant to which the GOS operates demonstrate that the GOS administers
the current BPS payments to limit access to certain benefits to a subsector of the
Spanish agricultural industry, olives.98
7.37. We recall that Article 2.1(a) of the SCM Agreement provides that "where the granting
authority, or the legislation pursuant to which the granting authority operates, explicitly limits access
to a subsidy to certain enterprises, such subsidy shall be specific". Apart from its focus on the action
of the "granting authority" and the "legislation" pursuant to which it operates, Article 2.1(a) does
not refer to any particular facts or factors that may or may not be taken into account in order to
make a finding of de jure specificity. Neither does it prescribe a particular methodolog y that must
be followed. Thus, we do not see in the terms of Article 2.1(a) any per se prohibition on the relevance
and consideration of facts pertaining to a past subsidy programme no longer in force for the purpose
of determining de jure specificity. On the contrary, we agree in this respect with the United States
that a reading of Article 2.1(a) that would preclude the possibility of taking such information into
account might create an exception (which the United States referred to as "a loophole") for subsidy
programmes that favour certain enterprises based on explicit access limitations found in earlier laws
or regulations or ones no longer in force .99 Thus, in our view, it follows from the absence of any
limitation in the text of Article 2.1(a) that an investigating authority is entitled to review and rely
upon any fact it considers relevant to identifying and understanding whether the actions of the
"granting authority" in providing the subsidy under investigation or the "legislation" pursuant to
which it operates, explicitly limit "access" to a subsidy to certain enterprises.
7.38. In the ripe olives investigation, the USDOC 's determination of de jure specificity concerned
subsidies provided under the BPS and GP programmes, as implemented by the GOS. 100 The
USDOC's factual finding that the BPS rules governing the amount of sub sidy available to eligible
farmers explicitly referred to and incorporated certain features of the SPS programme (and through
the SPS programme, the COMOF programme) was central to its de jure specificity determination. In
our view, the USDOC did not act inconsistently with Article 2.1(a) simply because its determination
was dependent upon how certain alleged features of past subsidy programmes were relied upon and

98 Remand Redetermination, (Exhibit EU-80), pp. 48-49.
99 United States' 10 June 2020 response to Panel question No. 4, para. 18.
100 FIDM, (Exhibit EU-2), p. 12. See also United States' second written submission, para. 17, explaining
that "it was the BPS Programs that during the period of investigation conferred countervailable subsidies to
olive growers" and that "the USDOC countervailed subsidies for the same programs (i.e., the
BPS Programs) for which it made its determination of de jure specificity".

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integrated into the countervailed subsidy programme . Moreover, we do not share the
European Union's view that in order to properly base its de jure specificity finding upon such
information, the USDOC was required to follow the particular analytical approach or methodology
the European Union advances.101 As already noted, Article 2.1(a) imposes no limits on the facts an
investigating authority is entitled to rely upon; and it prescribes no particular analytical approach or
methodology that must be followed in assessing those facts. Thus, in our view, the USDOC was
entitled to rely on the combination of facts and particular analytical approach it considered relevant
to answer the question it was investigating – whether the BPS and GP programmes, as implemented
by the GOS, explicitly limited access to a subsidy to certain enterprises.
7.39. Having said that, a separate matter is whether the USDOC's findings in relation to the content
and meaning of the BPS programme as implemented by the GOS (including as regards the allegedly
referenced and incorporated features of past programmes) were properly supported by the facts,
and whether the USDOC reasonably and adequately explained how those findings show that the
BPS programme explicitly limited access to the subsidy under investigation to certain enterprises.
On these questions, the European Union argues that the USDOC's factual findings and explanations
fell short of the required standard. The United States argues that through some of these allegations
the European Union seeks the Panel to conduct a de novo review of the USDOC's factual findings,
which is inconsistent with the Panel 's standard of review. 102 In accordance with our standard of
review under Article 11 of the DSU 103, we address the European Union's specific criticisms in the
sections that follow by evaluating whether the USDOC provided a reasoned and adequate
explanation as to how the evidence on the record supported its factual findings and how those factual
findings supported the overall determination.
7.2.2.3.2 The USDOC's alleged finding that the SPS, BPS, and GP subsidies were de jure
specific to olive growers because they were coupled (or tied) to the production of olives
7.40. One of the main aspects of the USDOC 's de jure specificity determination contested by the
European Union is the USDOC's repeated finding that the BPS, GP, and SPS subsidies to "olive
growers" are de jure specific. The European Union argues that the various manifestations of these
statements in the USD OC's determinations demonstrate that the USDOC considered that the SPS
and BPS/GP subsidies were tied to continued olive production, revealing an erroneous understanding
of the operation of the two programmes.104 According to the European Union, the USDOC's findings
contradict the positive evidence on the record showing that the subsidies under both programmes
were not limited to olive growers, and were not tied to production, as there was neither a legal
obligation on recipients to continue growing the same crops grown before the entry into force of the
programmes, nor any requirement to grow any crop at all, in order to be eligible for assistance. 105
Accordingly, the European Union argues that the USDOC's de jure specificity findings misconstrue
the relevant legal instruments, and for this reason are inconsistent with Articles 2.1, 2.1(a), and 2.4
of the SCM Agreement.106
7.41. The United States denies that the USDOC's determinations of de jure specificity were based
on findings that subsidy payments to olive growers were tied to olive production in the period of
investigation. According to the United States, the USDOC's determinations were grounded in the fact

101 European Union's 10 June 2020 response to Panel question No. 4, para. 34, arguing that if an
investigating authority wants to determine that a subsidy programme "A" is de jure specific on the basis of a
past programme "B" that is no longer in force, it will have to (i) demonstrate that the legislation governing
programme "A" explicitly limits access to the subsidy to those undertakings that were eligible under
programme "B"; and (ii) conclude that programme "B" was in itself specific and explain why it reached that
finding.
102 Including the ones discussed in sections 7.2.2.3.4, 7.2.2.3.5, 7.2.2.3.6, and 7.2.2.3.8 below.
(United States' first written submission, para. 86).
103 See section 7.1.2 above.
104 European Union's first written submission, paras. 211 and 216; 10 June 2020 response to Panel
question No. 9, para. 51; opening statement at the first meeting of the Panel, paras. 12 and 20; second
written submission, paras. 35-36 and 40; and 11 March 2021 comments on the
United States' 25 February 2021 response to Panel question No. 2, para. 10.
105 European Union's first written submission, paras. 218-225; 10 June 2020 responses to Panel
question No. 6, para. 39, and No. 10, paras. 55-56; 8 September 2020 response to Panel question No. 1(c),
paras. 52-54; opening statement at the first meeting of the Panel, paras. 13 and 53-54; and 25 February 2021
response to Panel question No. 3, paras. 22-23.
106 European Union's first written submission, para. 227; opening statement at the first meeting of the
Panel, para. 26.

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that the limit on access to subsidies provided under the COMOF programme, which favoured olive
growers, continued to determine access to subsidies and subsidy amounts under the SPS and
BPS/GP programmes.107 While the United States acknowledges that the USDOC 's determination
identified a connection between the SPS/ BPS subsidy recipients and olive production, the
United States points out that this was only historic olive production during the COMOF programme
reference period, not olive production during the operat ion of the BPS programme.108 The
United States argues, furthermore, that the focus of the USDOC's de jure specificity findings (i.e. the
"certain enterprises" within the meaning of Article 2.1(a) identified in the USDOC's determinations)
were holders of ent itlements whose value derived from assistance received under the COMOF
programme, whether olive growers or not.109 In particular, the United States asserts that the USDOC
found the BPS subsidies were de jure specific because access to a "discrete component of the BPS
Programs – i.e., entitlement values from historic olive production -based subsidies – was limited to
farmers on lands that qualified them for these entitlements".110
7.42. In our view, when considered in isolation, two passages from the USDOC's preliminary issues
and decision memorandum identified by the European Union suggest that the USDOC did, in fact,
find that the BPS subsidies were de jure specific to olive growers because they were tied to
contemporaneous olive production. In particular:
We further preliminarily determine that the grants provided under [the BPS programme]
are specific within the meaning of section 771(5A)(D)(i) of the Act because the crop
type determines the grant amounts provided under this program due to the direct
reliance on the grant amounts provided under previous programs, which based grant
amounts on the crop type. As such, the [BPS programme] is specific to olive growers.
… Given that the assistance provided to olive growers is grante d because they are
growing olives, we preliminarily determine that the assistance is tied to the production
of olives, according to 19 CFR 351.525(b)(5).111
7.43. We note, however, that the European Union does not point to any equivalent statements
made in the USDOC's final issues and decision memorandum. Nevertheless, according to the
European Union, the fact that the USDOC confirmed its preliminary determination in the conclusions
reached in its final determination demonstrates that the USDOC continued to hold the same view.112
The European Union finds support for this submission in the following passages from the
USDOC's final issues and decision memorandum113:
As we explained in the Preliminary Determination, our finding of de jure specificity is
based on the manner in which Spain implemented the Pillar I programs with reference
to the operations of its two predecessor programs, the [SPS programme] and the
[COMOF programme], and the manner in which the amount of assistance was
determined under these two programs. The earliest of these programs, the [COMOF
programme], was in place from 1999 through 2003, and provided production aid in the

107 United States' first written submission, para. 57; 10 June 2020 responses to Panel question No. 1,
question No. 1(c), paras. 11-14; opening statement at the first meeting of the Panel, paras. 5-6; and
12 November 2020 response to Panel question No. 1, para. 2.
108 United States' first written submission, paras. 63-64 and 100; 8 September 2020 response to Panel
question No. 1(c), para. 14; opening statement at the first meeting of the Panel, paras. 11 and 21-24;
12 November 2020 response to Panel question No. 5, paras. 18-19; second written submission, paras. 21 and
27; opening statement at the second meeting of the Panel, para. 3; and 25 February 2021 response to Panel
question No. 2, paras. 4-10.
109 United States' 10 June 2020 responses to Panel question No. 6, para. 24, No. 7, para. 26, and No. 8,
statement at the first meeting of the Panel, paras. 21-23; and 12 November 2020 response to Panel question
No. 5, para. 18.
110 United States' second written submission, para. 28. See also United States' 8 September 2020
responses to Panel question No. 1(c), paras. 11-13, and No. 1(d), para. 16; 12 November 2020 responses to
Panel question No. 1, para. 6, and No. 5, paras. 18-19 and 22; and opening statement at the second meeting
of the Panel, paras. 11 and 15.
111 PIDM, (Exhibit EU-1), p. 24. (emphasis added)
112 European Union's first written submission, paras. 213-215.
113 European Union's first written submission, paras. 213-215.

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form of annual grants to farmers on the basis of type of crop and the volume of
production.
… Because the [COMOF programme] provided benefits on a de jure specific basis, the
benefits provided under the SPS retained the de jure specificity inherent in the
[COMOF programme].
…
In summary, the annual grant amounts provided to olive farmers under [the
BPS programme] and [the GP programme] derive from the amount of SPS grants that
were provided to each farmer in 2013. As explained above, the calculation of the grant
amount under SPS retains the de jure specificity inherent in the [COMOF programme].
Therefore, the annual grant amounts provided under [the BPS programme] and [ the
GP programme] in 2016 are directly related to, and continue to retain the de jure
specificity of, the grants provided to olive growers under the [COMOF programme].114
7.44. The European Union places particular emphasis on the last part of the first passage
reproduced above, where the USDOC explains that "aid" was provided "on the basis of type of crop
and the volume o f production", as well as the USDOC's statements in the two following passages
where it concludes that SPS benefits "retained the de jure specificity inherent" in the
COMOF programme, and that BPS payments "continue to retain the de jure specificity" of the COMOF
programme. We note, however, that the statement from the first passage refers directly to the
COMOF programme, and not the BPS or GP programme. Moreover, we do not understand the
statements about the retention and continuation of the specificity inherent in the COMOF programme
to indicate that the USDOC was of the view that the BPS and SPS subsidies were de jure specific to
olive growers because those subsidies were tied to olive production, in the same way as the
COMOF programme subsidies. Rather, the USDOC statements reflect its view that the BPS and
SPS subsidies were de jure specific because they derived from the crop-specific COMOF programme
assistance. As such, we do not understand the above passages to mean that the USDOC concluded
that the BPS, SPS, and GP subsidies were de jure specific to olive growers because assistance
received under those programmes was tied to olive production during the operation of the
BPS programme.
7.45. The United States argues that "the final determination is clear in identifying that the 'certain
enterprises' under Article 2.1(a) are holders of entitlements whose value derived from the
[COMOF programme]".115 The United States finds support for this submission in the following specific
observation made by the USDOC in the final issues and decision memorandum, which we quote
below in its context and emphasize in italics:
As the EC points out, when the SPS program was implemented in Spain, the aid provided
to farmers was converted into "entitlements," rights to receive payments, that were
linked to land area and completely decoupled from production. That is, under SPS, the
amount of the payment is dependent on the annual activation of the entitlement, and
is not dependent on the type or volume of crop produced.116
7.46. The United States argues that the italicized text reveals how "the final determination reflected
how the BPS Programs kept, from the [COMOF programme], the conditions that limited access to
those subsidies as a discrete component of entitlement payments, whether the entitlement holders
continued to grow olives or did something else".117 We note, however, that the passage cited by the
United States discusses the SPS programme, not the BPS programme. Moreover, in our view, the
statement the United States relies upon does not support the view that the USDOC found that
SPS subsidies were de jure specific to holders of entitlements whose value derived from the
COMOF programme, whether or not olive growers. In this regard, we note that the only explicit
statement of the USDOC's de jure specificity findings with respect to the SPS programme is found
in the USDOC's preliminary issues and decision memorandum, which provides as follows:

114 FIDM, (Exhibit EU-2), pp. 32, 33, and 36. (fns omitted; emphasis added)
115 United States' opening statement at the first meeting of the Panel, para. 21.
116 FIDM, (Exhibit EU-2) p. 33. (fn omitted; emphasis added)
117 United States' opening statement at the first meeting of the Panel, paras. 22-23.

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We further preliminarily determine that the grants provided under [the SPS] program
are specific within the meaning of section 771(5A)(D)(i) of the Act because the crop
type determines the grant amounts provided under this program due to th e direct
reliance on the grant amounts provided under previous programs, which based grant
amounts on the crop type. As such, the [SPS] program is specific to olive growers.
… Given that the assistance provided to olive growers is granted because they are
growing olives, we preliminarily determine that the assistance is tied to the production
of olives, according to 19 CFR 351.525(b)(5).118
7.47. Rather than demonstrating that the USDOC found that the SPS subsidies were de jure specific
to any farmers with entitlements based on the COMOF programme, these USDOC conclusions (which
are identical to the USDOC statements we have quoted above in relation to the BPS and
GP programmes) suggest that the USDOC did, in fact, find that the SPS subsidies were de jure
specific to olive growers because they were tied to contemporaneous olive production.
7.48. More generally, the United States argues that the USDOC finding that "certain enterprises"
for the purpose of Article 2.1(a) were holders of entitlements whose value derived from the
COMOF programme, whether or not olive producers, is evident in the USDOC's preliminary and final
determinations.119 However, in making this submission, the United States does not point120 to any
specific statement or conclusion in the USDOC's preliminary or final determinations that explains the
de jure specificity finding in these terms. Rather, referring to four pages in the USDOC's final issues
and decision memorandum, the United States argues that the USDOC's analysis "identified that
(i) the [COMOF programme] conferred subsidies based on historic olive production and (ii) the
SPS Program and BPS Programs preserved the conditions that limited access to those subsidies as
a discrete component of entitlement payments, whether the holders of those entitlements continued
olive production or replaced that production".121
7.49. We agree that when read in its totality, the analysis set out in the four pages of the
USDOC's final issues and decision memorandum and other record evidence suggests that the USDOC
understood that subsidies provided under the SPS, BPS, and GP programmes were not tied to olive
production during the period of operation of the SPS programme or the BPS programme. Thus, for
example, the USDOC observed in its verification report that:
To receive an income grant [under the SPS programme], the farmer must annually
"activate" the entitlements and the number of eligible hectares through an application
process. The farmer's current production or lack of production was not a factor in the
process or evaluation of a farmer's application for an income grant under SPS.
…
To be eligible for assistance under the BPS and [GP] programs, a recipient has to be an
"active" farmer, meaning that the farmer maintains the land in arable condition. There
are no production requirements.122
7.50. That the USDOC recognized that the BPS subsidies were not tied to contemporaneous olive
production is also evident in the manner in which the USDOC responded to arguments about the
"decoupled" nature of the programme made by the European Commission, the GOS, and the
respondents:
Despite the arguments from the EC, the GOS, and the respondents, that because the
BPS programs provide benefits that have been decoupled from production, they are not

118 PIDM, (Exhibit EU-1), p. 27. (emphasis added)
119 United States' 8 September 2020 response to Panel question No. 1(c), para. 11.
120 Except for the statement from the FIDM that "under SPS, the amount of the payment is dependent
on the annual activation of the entitlement, and is not dependent on the type or volume of crop produced",
which, as we have explained, does not support the United States' argument.
121 United States' 8 September 2020 response to Panel question No. 1(c), para. 11. See also
United States' opening statement at the first meeting of the Panel, paras. 21-26; 12 November 2020 response
to Panel question No. 5, paras. 18-22; and second written submission, para. 28.
122 USDOC verification report: European Commission, (Exhibit EU-22), pp. 2-3. (emphasis added)

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specific, we continue to find that the reliance on earlier assistance programs that were
specific to determine the amounts of assistance under the current program, renders
specific the benefits under the BPS programs.123
7.51. In our view, the first set of quoted s tatements from the verification report reveals that the
USDOC explicitly recognized that "production was not a factor" for being eligible to receive
SPS payments, and that "no production requirements" were attached to eligibility for the
BPS subsidies. In the second of the quoted passages, the USDOC did not deny the assertion that
the BPS subsidies were "decoupled from production". Rather, the USDOC explained that the reason
for its finding of specificity was the "reliance on earlier assistance programs tha t were specific to
determine the amounts of assistance" under the BPS programme.
7.52. When considered in the light of the USDOC's other statements concerning the nature of the
payments made under the COMOF programme (e.g. "the [COMOF programme] provided annual
payments only to producers of oilseed crops, including olives"), and the relationship between these
payments and the SPS/BPS programmes, it is reasonable to infer that the USDOC did not find that
the SPS and BPS subsidies were de jure specific on a consideration that assistance under these
programmes was tied to contemporaneous olive production. Rather, the USDOC's finding was that
the SPS, BPS, and GP subsidies were specific because the assistance was tied to olive production in
the historic period when olive growers received payments under the COMOF programme. Thus,
notwithstanding the statements the European Union has pointed to suggesting the contrary, we
believe that when read as a whole, the USDOC's determination is not based on a finding that the
SPS, BPS, and GP subsidies were de jure specific because they were tied to contemporaneous olive
production.
7.53. In contrast, the USDOC's preliminary and final determinations do not support the
United States' submission that the USDOC found t he "certain enterprises" for the purpose of
Article 2.1(a) to be holders of entitlements whose value derived from the COMOF programme ,
whether or not olive growers. As already noted, the United States has not pointed to any specific
statements in those determinations presenting the USDOC's findings in those terms; and we do not
see how that conclusion can be inferred from a reading of the totality of the USDOC's analysis.
7.54. The United States argues that the Remand Redetermination is "straightforward in identifying
the group of enterprises" under the BPS and GP programmes, and refers to the following italicized
statements to support its position124:
As has been discussed at length elsewhere in this redetermina tion, in identifying that
the value of entitlements under the BPS incorporates the value of olive production per
hectare (in that it relies on the calculation of benefits provided under the SPS), as
recorded under the [COMOF programme], the BPS continues t o treat the agricultural
sector on a non-uniform basis and thus limits access to certain benefits to olive growers.
Specifically, farmers on lands that produced olives during the reference period continue
to have limited access to entitlement values, and therefore benefit amounts, that retain
the historical difference, relative to other farmers on other lands, that was inherent in
the crop-specific subsidies provided under the [COMOF programme]. Thus, we find that
this program is de jure specific to olive growers within the meaning of
section 771(5A)(D)(i) of the Act.125
7.55. According to the United States, th e italicized text in the above passage reveals how the
USDOC "correctly observed" that by "in corporating the value of prior olive production into the
entitlements under the BPS Programs, the BPS Programs are specific to olive growers".126 In our
view, this submission is difficult to reconcile with the United States' position that the "certain
enterprises" identified in the USDOC 's determinations were farmers whose BPS entitlement values
were derived from historical olive production, whether they grew olives or not. Nevertheless, we
believe it is a correct characterization of the USDOC 's determination, as in the very next sentence
at the end of the quoted passage the USDOC concludes its analysis by finding that "this program is

123 FIDM, (Exhibit EU-2), p. 36.
124 United States' opening statement at the first meeting of the Panel, para. 24. See also
United States' 12 November 2020 response to Panel question No. 5, para. 21.
125 Remand Redetermination, (Exhibit EU-80), pp. 58-59. (emphasis added)
126 United States' opening statement at the first meeting of the Panel, para. 24. (emphasis added)

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de jure specific to olive growers".127 Indeed, essentially the same conclusion about the alleged
limited access to the SPS and BPS subsidies afforded to olive growers can be found in other parts of
the USDOC's Remand Redetermination, including in the following passages:
[T]he SPS program preserved the access of olive farmers to the assistance previously
available to them, on a de jure specific basis, under the [COMOF programme][.]128
[U]nder the SPS, access to a subsidy based on [COMOF programme] subsidies was
expressly limited to olive growers[.]129
Information provided by the GOS and the EU indicated that access to, and the amount
of, benefits provided to olive growers under the BPS, as a matter of law, relied for
reference on the provision of benefits under the SPS and, in turn, access to and the
amount of benefits provided to olive growers under the SPS was determined by
reference to the benefits provided under the [COMOF programme].130
[The USDOC] found that, as a result of the actions of the GOS and the EU in
implementing the program, BPS subsidies were not uniformly available across the
agricultural sector in Spain because access to the BPS subsidy for olive growers was, as
a matter of law, based on eligibility for assistance provided under the
[COMOF programme], which expressly limited access to olive growers.131
An examination of the prior legislation explicitly referenced in and incorporated by the
BPS demonstrates a linkage between eligibility for the crop-specific payments provided
under the prior legislation and the current payments provided un der the BPS. This link
continued to entrench limited access and favored the olive industry.132
By designing two consecutive benefit schemes [ i.e. the SPS and BPS programmes] in
this manner, the express terms of the legislation pursuant to which the GOS operates
demonstrate that the GOS administers the current BPS payments to limit access to
certain benefits to a subsector of the Spanish agricultural industry, olives.133
7.56. We note, moreover, that the sentence the United States relies upon from the above quoted
passage in paragraph 7.54 of the USDOC's Remand Redetermination be gins with the word
"[s]pecifically".134 In our view, this suggests that its contents is intended to elaborate and clarify the
statements made in the preceding sentence. That sentence explains in general terms why the
USDOC considers that "the BPS … limits access to certain benefits to olive growers".
7.57. Thus, we read the statement that "farmers on lands that produced olives during the
[COMOF programme] reference period continue to have limited access to entitlement values" as the
USDOC's elaboration of why it considered that BPS subsidies were limited to olive growers. In our
view, this understanding of the USDOC's statement is consistent with the following USDOC
observation made using very similar terms elsewhere in the Remand Redetermination:
The SPS and BPS programs, by law, rely on "historical" reference periods to preserve
the benefit amounts provided to growers of certain crops under predecessor programs.
The GOS, as required by legislation, relied on volume, value, and area data, and prior
subsidy amounts that were developed on a product -specific basis for the purpose of
determining the amount of the subsidies provided to olive growers under the SPS,

127 Remand Redetermination, (Exhibit EU-80), p. 59. (emphasis added)
128 Remand Redetermination, (Exhibit EU-80), p. 8. (emphasis added)
129 Remand Redetermination, (Exhibit EU-80), p. 16. (emphasis added)
130 Remand Redetermination, (Exhibit EU-80), p. 15. (emphasis added)
131 Remand Redetermination, (Exhibit EU-80), p. 15. (emphasis added)
132 Remand Redetermination, (Exhibit EU-80), pp. 48-49. (emphasis added)
133 Remand Redetermination, (Exhibit EU-80), p. 49. (emphasis added)
134 We observe that the adverb "specifically" means "[i]n a specific or definite form or manner", or "[i]n
something of the same kind". (Oxford Dictionaries online, definition of "specifically"
https://www.oed.com/view/Entry/186003 (accessed 13 August 2021), adv., meanings 2 and 3).

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thereby preserving access to the subsidy that was expressly limited under the
[COMOF programme].135
[T]he entitlement values under the BPS for those farmers that grow olives retain the
historical difference, relative to other farmers, that was inherent in the
[COMOF programme].136
7.58. Accordingly, we do not understand the statement the United States relies upon to
demonstrate that the USDOC found that the "certain enterprises", for the purpose of Article 2.1(a),
are farmers whose entitlement values were derived from historical olive production, irrespective of
whether they are olive growers or not. Rather, although not always expressed in exactly the same
terms, we find that the USDOC's de jure specificity determination is best understood as a fi nding
that the BPS subsidies were de jure specific to olive growers because "access to, and the amount of,
benefits provided to olive growers under the BPS, as a matter of law, relied for reference on the
provision of benefits under the SPS and, in turn, access to and the amount of benefits provided to
olive growers under the SPS was determined by reference to the benefits provided under the
[COMOF programme]".137 Thus, we find that the USDOC determined that the SPS, BPS, and
GP subsidies were de jure specific to olive growers, not because they were tied to the production of
olives during the operation of the SPS and BPS programmes (as the European Union argues), but
rather because, according to the USDOC, the SPS, BPS, and GP subsidies available to olive growers
were tied to historical olive production during the COMOF programme reference period.
7.2.2.3.3 Entitlement values under the BPS programme for new farmers, farmers holding
transferred entitlements, and farmers no longer growing olives
7.59. The European Union argues that the USDOC's finding of the existence of a direct correlation
between, on the one hand, the amounts of assistance provided to olive growers under the BPS/GP,
programmes and on the other hand, the amounts of assistance provided under the SPS and
COMOF programmes, is erroneous and ignores relevant aspects of the record evidence
demonstrating that no such direct correlation exists.138 According to the European Union, the USDOC
overlooked the following features of the relevant subsi dy regime: (i) the rules governing the
allocation and calculation of the value of payment entitlements of new farmers from the national
reserve; (ii) the possibility of obtaining payment entitlements by transfer139 from one or more other
farmers; and (iii) the fact that a previously active olive farmer was entitled to receive assistance
regardless of whether that farmer continued to produce olives.140 The European Union submits that
these alleged errors of appreciation demonstrate that the USDOC's determination of de jure
specificity was not reasonably and adequately explained, and that it was grounded on an erroneous
factual basis, and, therefore, is inconsistent with Articles 2.1, 2.1(a), and 2.4 of the
SCM Agreement.141
7.60. The United States argues that the USDO C appropriately factored into its analysis the
operational link between the BPS and GP programmes, and the subsidies provided under the SPS
and COMOF programmes.142 The United States argues that the investigation record did not contain
evidence of any assistance received under the BPS and GP programmes based on entitlements from
the national reserve or transferred entitlements. 143 Moreover, according to the United States, the
fact that entitlements could have been transferred does not sever the reliance on the
COMOF programme that Spain elected to incorporate into the SPS programme, and by extension,

135 Remand Redetermination, (Exhibit EU-80), p. 49. (emphasis added)
136 Remand Redetermination, (Exhibit EU-80), p. 18. (emphasis added; original emphasis omitted)
137 Remand Redetermination, (Exhibit EU-80), p. 15 (emphasis added). For a similar explanation, see
also FIDM, (Exhibit EU-2), p. 36.
138 European Union's first written submission, paras. 241-246.
139 E.g. via inheritance, lease, purchase, or gift. (European Union's 25 February 2021 response to Panel
question No. 7, para. 58).
140 European Union's first written submission, para. 245; 10 June 2020 response to Panel question
No. 10, paras. 58-60; opening statement at the first meeting of the Panel, paras. 28 and 37;
12 November 2020 response to Panel question No. 8, para. 42; and 25 February 2021 response to Panel
question No. 3, paras. 22-23.
141 European Union's first written submission, paras. 240 and 246; opening statement at the first
142 United States' first written submission, para. 68.
143 United States' 12 November 2020 response to Panel question No. 4, para. 16.

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the successor BPS and GP programmes, as "only the legacy entitlement holders could apply for and
receive the subsidy amounts reserved for that class of certain enterprises".144
7.61. We recall that the USDOC determined that subsidies provided to olive growers under the
BPS programme were de jure specific because it found that "access to, and the amount of, benefits
provided to olive growers under the BPS, as a matter of law, relied for reference on the provision of
benefits under the SPS and, in turn, access to and the amount of benefits provided to olive growers
under the SPS was determined by reference to the benefits provided under the
[COMOF programme]".145 The USDOC arrived at this conclusion after examining the operation of the
BPS programme, including the rules governing the calculation of payment amounts. In its
preliminary issues and decision memorandum, the USDOC explained its understanding of these rules
in the following terms:
The calculation begins with determining an "initial value," as instructed by Council
Regulation (EC) 1307/2013 Article 26 and implemented by Royal Decree 1076/2014.
Under Regulation (EU) 1307/2013, Article 26 (3) states that the initial value is
{a} fixed percentage of the value of the entitlements, including special
entitlements, which the farmer held on the date of submission of his
application for 2014 under the single payment scheme, in accordance with
Regulation (EC) No 73/2009, shall be divided by the number of payment
entitlements he is alloc ated in 2015, excluding those allocated from the
national or regional reserves in 2015.
The Spanish regulations regarding the implementation of BPS, Royal Decree 1076/2014,
state that
{f}or the calculation of the initial unitary value, the level of payment s
received in the 2014 campaign, before deduction and exclusions,
corresponding to the aid schemes paid in that campaign, amounts of which
remain uncoupled or are partially or totally decoupled from 2015 onwards,
shall be taken as a reference. These amount s correspond to the single
payment scheme as a decoupled payment … [.]
Based on these regulations, a region's value is the initial value multiplied by an
adjustment coefficient divided by the number of hectares with entitlement values. These
regulations also state that the initial value is based on the amounts provided under SPS,
the annual grant-to-farmer program in place prior to the implementation of the BPS in
2015. These regulations also state that the adjusted coefficient incorporates into the
equation the amount of payments received in 2014 under SPS. Therefore, the value that
is divided by the number of eligible hectares to determine each region's value is based
on the amount that farmer received per hectare in 2014 under SPS.146

144 United States' 12 November 2020 response to Panel question No. 4, para. 17; first written
submission, para. 72. We note that the United States also argues that it is similarly irrelevant whether a farmer
may have switched some or all of the production to a different crop, as the group of enterprises for the
purposes of the USDOC's specificity analysis was the holders of entitlements whose entitlement values derived
from the assistance during the COMOF programme reference period, whether olive growers or not.
(United States' opening statement at the first meeting of the Panel, para. 25; 10 June 2020 response to Panel
question No. 6, para. 24). For reasons explained in section 7.2.2.3.2 of this Report, we have rejected this
characterization of the USDOC's determination, finding instead that the USDOC concluded that BPS subsidies to
olive growers were de jure specific because "access to, and the amount of, benefits provided to olive growers
under the BPS programme, as a matter of law, relied for reference on the provision of benefits under the SPS
and, in turn, access to and the amount of benefits provided to olive growers under the SPS was determined by
reference to the benefits provided under the [COMOF programme]". (Remand Redetermination,
(Exhibit EU-80), p. 15).
145 Remand Redetermination, (Exhibit EU-80), p. 15.
146 PIDM, (Exhibit EU-1), pp. 20-21. (emphasis original; fns omitted)

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7.62. The USDOC went on to explain its understanding of how payment amounts to olive farmers
were determined under the SPS programme, by reference to the COMOF programme, and how under
the COMOF programme payments were crop specific. It then concluded:
In summary, the annual grant amount provided to olive farmers under BPS is based on
the annual grant amount provided to olive farmers under SPS. The grant amount
provided to olive farmers under SPS is based on the average grant amount olive farmers
received in 1999 through 2002 under the [COMOF] program. The grant amount provided
in 1999 through 2002 to eligible farmers, which included olive farmers, was based on
the type of crop grown and the production value created from the crop. Therefore, the
annual grant amount provided under BPS are based on annual grant amounts that were
crop specific, thus the grant amounts received by olive growers under BPS in 2016 are
directly related to the grant amount only olive growers received under [the COMOF]
program. All respondents and many of the olive growers that supply them, received
benefits under this program during the [period of investigation].147
7.63. The USDOC's final issues and decision memorandum confirmed its preliminary findings and
repeated much of the analysis set out in the preliminary issues and decision memorandum verbatim,
including the above-quoted excerpts from Article 26.3 of Regulation 1307/2013 and Royal Decree
1076/2014148, and similarly explained:
Based on these regulations, a region's value is the initial value multiplied by an
adjustment coefficient divided by the number of hectares with entitlement values. These
regulations also state that the initial value is based on the amounts provided under SPS.
These regulations also state that the adjusted coefficient incorporates into the equation
the amount of payments received in 2014 under SPS. Therefore, the value that a farmer
received per hectare in 2014 under SPS is used in calculating each region's value.
…
In summary, the annual grant amounts provided to olive farmers under [ the
BPS programme] and [the GP programme] derive from the amount of SPS grants that
were provided to each farmer in 2013. As explained above, the calculation of the grant
amount under SPS retains the de jure specificity inherent in the [COMOF programme].
Therefore, the annual grant amounts provided under [ the BPS programme] and [ the
GP programme] in 2016 are directly related to, and continue to retain the de jure
specificity of, the grants provided to olive growers under the [COMOF programme].149
7.64. In the Remand Redetermination, the USDOC explained and elaborated its earlier
determinations, expressing the same understanding of the rules governing the calculation of t he
BPS payment entitlements:
In its implementation of the BPS, the GOS, just as it did with the SPS program, [ sic]
the eligibility criteria that limited access to benefits provided under the
[COMOF programme] were incorporated as a matter of law and embedded the historical
differences in crop entitlement amounts among different agricultural products. As a
result, farmers who received larger relative amounts of assistance under SPS continue
to receive larger amounts of assistance under BPS. Therefore, the en titlement values
under the BPS for those farmers that grow olives retain the historical difference, relative
to other farmers, that was inherent in the [COMOF programme].150
As explained above, benefits under the BPS were by law based on the benefits provided
under the predecessor programs, which preserved the eligibility criteria for access to
benefits provided under the [COMOF programme] and the historical differences in crop
entitlement amounts among different agricultural products.151

147 PIDM, (Exhibit EU-1), p. 24.
148 FIDM, (Exhibit EU-2), pp. 34-35.
149 FIDM, (Exhibit EU-2), pp. 35-36. (fns omitted)
150 Remand Redetermination, (Exhibit EU-80), p. 18. (emphasis original)
151 Remand Redetermination, (Exhibit EU-80), p. 19.

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To determine access to payments under the BPS, and the criteria or conditions
governing the eligibility for, and the amount of the subsidy, the BPS legislation expressly
refers to prior legislation and incorporates by reference the eligibility criteria from the
prior legislat ion. An examination of the prior legislation explicitly referenced in and
incorporated by the BPS demonstrates a linkage between eligibility for the crop-specific
payments provided under the prior legislation and the current payments provided under
the BPS. This link continued to entrench limited access and favored the olive industry.
…
The legislation governing the BPS program may not have explicitly stated that it
intended to benefit olive growers; however, the BPS program expressly references prior
legislation that dictates the access to and amount of BPS payments that, by law,
provides expressly limited access to subsidies to olive growers. The SPS and
BPS programs, by law, rely on "historical" reference periods to preserve the benefit
amounts provided to growers of certain crops under predecessor programs. The GOS,
as required by legislation, relied on volume, value, and area data, and prior subsidy
amounts that were developed on a product-specific basis for the purpose of determining
the amount of the subsidies provided to olive growers under the SPS, thereby preserving
access to the subsidy that was expressly limited under the [COMOF programme].
Similarly, the GOS once again, by law, relied on a historical reference period to
determine benefits under th e BPS program, and therefore, once again, by law,
entrenched benefits received under these past programs on a crop -specific basis. By
designing two consecutive benefit schemes in this manner, the express terms of the
legislation pursuant to which the GOS operates demonstrate that the GOS administers
the current BPS payments to limit access to certain benefits to a subsector of the
Spanish agricultural industry, olives.152
7.65. The European Union argues that the USDOC 's analysis and findings reflect a "simplistic"
understanding of the BPS programme that misdescribes, and fails to properly account for the rules
governing the allocation and calculation of the value of payment entitlements, including with respect
to new farmers, farmers possessing transferred entitlem ents, and farmers no longer growing
olives.153 We agree with the European Union that the USDOC's analysis and findings did not examine
and properly account for record evidence that was relevant and important to understand how, as a
matter of law, entitlement values were determined under the BPS programme.
7.66. We note that under the relevant terms of the BPS programme, as implemented by Spain,
annual assistance in the form of direct payments was available in the period 2015 -2020 to any
"farmer" activating payment entitlements obtained through one or more of the following
avenues: (a) "first allocation" in 2015; (b) allocation from the national or regional reserves; or
(c) transfer of entitlements with or without land. 154 The BPS programme defines a "farmer" as any
natural or legal person undertaking "an agricultural activity", including not only production, rearing
and growing of agricultural products, but also "maintaining an agricultural area in a state which
makes it suitable for grazing or cultivation" or "carrying out a minimum activity, defined by Member
States, on agricultural areas naturally kept in a state suitable for grazing or cultivation". 155 Thus,
direct payments under the BPS programme were not conditioned on a requirement to produce or to
grow any crop. Rather, to qualify for direct payments, a "farmer" must have obtained entitlements
through any one or more of the above three ways, and those entitlements must have been
activated.156

152 Remand Redetermination, (Exhibit EU-80), pp. 48-49.
153 European Union's first written submission, para. 245; 10 June 2020 response to Panel question
No. 10, paras. 58-60; opening statement at the first meeting of the Panel, paras. 28 and 37;
12 November 2020 response to Panel question No. 8, para. 42; and 25 February 2021 responses to Panel
question No. 3, paras. 22-23, and No. 7, paras. 58-61.
154 Regulation 1307/2013, (Exhibit EU-25), Articles 21.1 and 32.
155 Regulation 1307/2013, (Exhibit EU-25), Articles 4.1(a), 4.1(c), and 9.
156 To activate payment entitlements, a farmer must submit an aid application on an annual basis by a
due date, declaring the amount of payment entitlements the farmer holds together with the corresponding
number of eligible hectares. (Regulation 1307/2013, (Exhibit EU-25), Articles 32 and 33).

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7.67. Although the USDOC recognized that the BPS subsidies to olive growers were not tied to
contemporaneous olive production157, the relevance to its findings of the legal possibility of obtaining
entitlements through any one or more of the three methods prescribed in the BPS programme is not
examined in its deter minations. The USDOC's analysis is focused on the rules for calculating the
value of entitlements prescribed in Article 26 of Regulation 1307/2013 and Spanish Royal Decree
1076/2014, which implemented the BPS programme. According to the USDOC, these rules prescribe
that the starting point of the calculation (the "initial value" ) was a function of the value of
SPS entitlements held by the relevant farmer. We note, however, that the value of entitlements
obtained from the "national or regional reserves" was determined under a different set of provisions
of Regulation 1307/2013 and Spanish Royal Decree 1076/2014. E ntitlements obtained from the
national or regional reserves were available to all qualifying farmers, but were to be used, as a
matter of priority, to facilitate the participation of young farmers and farmers commencing their
agricultural activity.158 In Spain, the per unit value of entitlements from the national reserve for new
or young farmers was set at the average value of all payment ent itlements in the region of such
farmer in the year of allocation. 159 This indicates that, as a matter of law, the BPS programme
prescribed that the value of BPS payments to young and new farmers (including, potentially, new
olive growers) was not directly tied to the value of SPS entitlements. The BPS programme, therefore,
provided for the possibility that the value of entitlements obtained by such farmers would not be
derived from the value of previously held SPS entitlements. In our view, the absence of an y
discussion or assessment of this feature of the BPS programme in the USDOC's analysis undermines
the USDOC's determination that BPS payments to olive growers were de jure specific because
"access to, and the amount of, benefits provided to olive growers under the BPS programme, as a
matter of law, relied for reference on the provision of benefits under the SPS".160
7.68. Turning to the BPS calculation rules, we note that after quoting Article 26(3) of the
BPS programme in its preliminary issues and decision memorandum, the USDOC referred to a
passage from Royal Decree 1076/2014. According to the USDOC, the regulations revealed that "the
initial value is based on the amounts provided under SPS", leading the USDOC to conclude that "the
amount of assistance provided under [ the BPS programme] and [the GP programme], is based on
the annual grant amount provided per hectare under SPS".161 However, the full text of the passage
from Royal Decree 1076/2014 quoted by the USDOC reve als that, as implemented by Spain, the
value of entitlements was to be determined not only as a function of payments received under the
SPS programme:
For the calculation of the initial unitary value, the level of payments received in the
2014 campaign, be fore deductions and exclusions, corresponding to the aid schemes
paid in that campaign, amounts of which remain uncoupled or are partially or totally
decoupled from 2015 onwards, shall be taken as a reference. These amounts correspond
to the single payment scheme as a decoupled payment and a certain percentage of the
payments received for the suckler cow premium and the supplementary premium for
the suckler cow, payments received on the basis of the national program for the
promotion of crop rotations in dry agricultural land, payments received on the basis of
the national program for the promotion of tobacco quality and payments received on
the basis of the national program for the promotion of cotton quality, as payments that
become decoupled in the new period.162

157 See para. 7.52 above.
158 Regulation 1307/2013, (Exhibit EU-25), Article 30.6. See also Royal Decree 1076/2014,
(Exhibit EU-30), Article 24.
159 Article 26.1 of Royal Decree 1076/2014, (Exhibit EU-30), which provides that the value of such
payment entitlements "will correspond to the average regional value of the entitlements in the year of
allocation", and that "[t]he regional average value shall be calculated by dividing the regional ceiling
corresponding to the basic payment for the year of allocation, by the total number of entitlements allocated for
that region". The regional average values are set out in Order AAA/1747/2016, (Exhibit EU-32). See also
Regulation 1307/2013, (Exhibit EU-25), Article 30.8; and GOS's response to supplemental questionnaire of
10 January 2017, (Exhibit EU-15), pp. 32-42, reproducing the relevant Spanish rules concerning payment
entitlements from the national reserve and explaining that "the main difference with the normal
BPS programme is that the value of the entitlements generated by the National Reserve if from the beginning
the average value of the region where the entitlements is [sic] allocated". See also Newsletter No. 2, Basic
payment entitlement allocation, (Exhibit EU-31).
160 Remand Redetermination, (Exhibit EU-80), p. 15. (emphasis added)
161 PIDM, (Exhibit EU-1), pp. 20-21.
162 Royal Decree 1076/2014, (Exhibit EU-30), pp. 3-4. (emphasis added)

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7.69. This accords with the European Union's assertion that Article 26.6 of Regulation 1307/2013
and Article 13 of Royal Decree 1076/2014 established that the payment amounts to be taken into
account for the purpose of calculating the "initial value" of BPS entitlements included not only
payments made under the SPS programme in 2014, but also payments made in the same year
pursuant to a number of previously coupled aid schemes. For Spain, t he previously coupled
payments were defined as 51.32% of the suckler cow premium, the rain -fed rotation programme
premium, the cotton quality premium, and the tobacco quality premium . In our view, these
provisions reveal that the value of BPS payments could be determined based on payments received
under programmes other than the SPS programme. The USDOC's determinations do not discuss the
relevance of this aspect of the BPS calculation rules to its finding of de jure specificity, even despite
the fact that during the investigation, the GOS provided the USDOC with information showing that
the BPS payments for one of the mandatory respondents or its unaffiliated supplier was determined
taking into account payments received under the natio nal programme for the promotion of cotton
quality.163 Nevertheless, we do not find the absence of any discussion of this feature of the
BPS programme in the USDOC's determination to undermine the USDOC's findings of de jure
specificity because, ultimately, as already noted, the USDOC's findings were driven by the view that
the availability of COMOF programme-based payments via the SPS programme was, as a matter of
law, limited to olive growers. The fact that olive growers may have received BPS payments for
non-olive growing activities under different programmes does not undermine the USDOC's position.
7.70. We note, furthermore, that while the relevant BPS calculation rules envisage that the value
of SPS entitlements would be used to establish the "initial value" of a farmer's BPS entitlements, the
corresponding rules of the SPS programme did not prescribe that the value of all such entitlements
for olive growers were to be necessarily determined with reference to the COMOF programme.
7.71. Assistance under the SPS programme was available to any "farmer" holding entitlements
obtained (a) during the relevant reference period under at least one of several prior support schemes
(which included the COMOF programme) ; (b) by transfer or inheritance ; or ( c) from the national
reserve.164 This means that under the calculation rules of the BPS programme, the "initial value" of
entitlements of a farmer that received assistance under the SPS programme was, at least in part165,
a function of the value of entitlements received via one or more of the above three methods. Thus,
any SPS-based entitlements used to determine the "initial value" of an olive farmer's entitlements
under the BPS programme do not appear to have been limited, as a matter of law, to those obtained
through the operation of the COMOF programme. This is because it was legally possible for an olive
farmer to obtain SPS entitlements by other means – namely, via transfer from a farmer of other
products, or from the national reserve.
7.72. When an SPS entit lement was obtained by transfer, the original source of that entitlement
could have been a support programme other than the COMOF programme, as in addition to olives,
the previously existing support schemes relevant for establishing the initial value of th e payment
entitlements under the SPS programme included programmes providing assistance for arable crops,
potato starch, grain legumes, rice, seeds, beef and veal, milk and milk products, sheepmeat and
goatmeat, dried fodder, cotton, tobacco, hops, sugar beet, cane and chicory used for the production
of sugar or inulin syrup, and bananas .166 This suggests that, as a matter of law, the "initial value"
of an olive grower's BPS entitlements could have been derived from non-COMOF programme-based
SPS entitlements previously obtained via transfer from, for example, a cotton farmer. Conversely,
the "initial value" of the BPS entitlements of a farmer that did not grow olives (for example, a grower

163 European Union's first written submission, fn 101 (referring to GOS's response to supplemental
questionnaire of 10 January 2017, (Exhibit EU-15), point A.2, p. 18).
164 Regulation 1782/2003, (Exhibit EU-24), Article 33. Under the SPS programme, a newcomer could
obtain a payment entitlement either from the reserve (Regulation 1782/2003, (Exhibit EU-24), Article 42.3;
Regulation 73/2009, (Exhibit EU-23), Article 41.2), or by transfer (lease, sale, or inheritance) within the same
member State (Regulation 1782/2003, (Exhibit EU-24), Article 46; Regulation 73/2009, (Exhibit EU-23),
Article 43). According to the European Union, since Spain did not implement the SPS programme on a regional
basis (unlike the BPS programme, as explained below), a farmer could sell, buy, or rent SPS entitlements and
activate them in any eligible hectare in Spain. (European Union's 25 February 2021 response to Panel question
No. 7, paras. 63-64).
165 We recall that under the BPS programme, as implemented by Spain, the "initial value" of
entitlements was to be determined not only as a function of 2014 SPS payments, but also payments made in
the same year pursuant to a number of previously coupled aid schemes.
166 Regulation 1782/2003, (Exhibit EU-24), Article 37 and Annex VI. See also European Union's first
written submission, para. 79.

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of citrus fruits ) could have also been derived from COMOF programme-based SPS entitlements
previously transferred from an olive grower. 167 In our view, these considerations suggest that the
BPS programme did not legally tie the "initial value" of BPS entitlements for olive growers to the
value of SPS entitlements derived from the COMOF programme assistance. While COMOF
programme-based SPS entitlements may have served, as a matter of fact, as the basis for calculating
the value of an olive grower's BPS entitlements, the BPS programme does not make this a legal
requirement. Rather, when considered in the light of the relevant SPS rules discussed above, the
BPS programme appears to leave open the possibility that the "initial value" of an olive grower's BPS
entitlements could be determined as a function of SPS entitlements that were not derived from the
COMOF programme. Likewise, when considered in the light of the same SPS rules, the BPS
programme also seems to envisage that COMOF programme -based SPS entitlements could be
enjoyed by any farmer (not only olive growers) that had previously obtained those entitlements via
transfer under the SPS programme. In our view, these considerations suggest that the BPS
programme did not legally limit the class of farmers that may benefit from the COMOF
programme-based SPS programme, and by extension, BPS entitlements to olive growers. However,
this aspect of the rules governing the allocation and calculation of BPS entitlements was not
discussed or examined in the USDOC's determination of de jure specificity.168
7.73. The United States argues that the fact that entitlements could have been bought, rented, or
inherited does not sever the reliance on the COMOF programme that Spain elected to incorporate
into the SPS programme, and by extension, the successor BPS programme.169 As already noted,
however, the fact that COMOF programme -based SPS entitlements could be transferred under the
SPS programme to farmers that did not grow olives suggests that access to, and the amount of,
BPS entitlements derived from COMOF programme -based SPS entitlements was not legally limited
to olive growers. Moreover, the fact that it was open under the SPS programme for olive farmers to
obtain entitlements derived from non -COMOF progra mmes by way of transfer, suggests that
BPS payments to the same olive farmers could be derived from programmes other than the COMOF
programme.
7.74. Finally, we recall that to qualify for BPS assistance, a farmer was not required to produce any
agricultural product. The same is true for assistance under the SPS programme, which defined a
"farmer" as any natural or legal person undertaking "an agricultural activity", including not only
production, rearing and growing of agricultural products, but also "maintaining the land in good

167 While the United States argues that only the holders of legacy entitlements based on historic olive
production subsidies could apply for and receive the subsidy amounts reserved for that class of certain
enterprises (United States' 11 March 2021 comments on the European Union's 25 February 2021 response to
Panel question No. 7, para. 36), nothing in the SPS or BPS rules limits such transfers to transactions between
olive growers, making a transfer between an olive grower and a citrus fruits grower possible, as a matter of
SPS or BPS legislation (subject to the rule that under the BPS programme in Spain, transfer is allowed within a
region). Such transfer would, in turn, provide the citrus fruits grower with access to the subsidy amounts
based on COMOF-related assistance, altering the scope of such access, contrary to the
United States' argument.
168 In our view, the same holds true in the context of the possibility to transfer payment entitlements
under the BPS programme. The relevant BPS rules, as implemented by Spain, provide that BPS entitlements
may be transferred (via sale, lease, or any other form foreseen by law) with or without land to any active
farmer within the same region (as defined by Spain for the purpose of implementing the BPS programme). This
indicates that, as a matter of law, an olive grower's BPS entitlements could have been obtained via transfer
from a non-olive grower (provided that the two farmers are in the same region). Conversely, the value of
BPS entitlements of a farmer that did not grow olives could have been derived from COMOF-based assistance,
if transferred from an olive grower in the same region (assuming that the olive grower held COMOF-based
SPS entitlements and subsequently obtained BPS entitlements via first allocation, meaning that the value of
such BPS entitlements could, theoretically, be traced back to the COMOF programme). In our view, these
considerations also suggest that the BPS legislation did not legally tie the value of BPS entitlements for olive
growers to assistance received under the COMOF programme. While COMOF-based assistance may have been,
as a matter of fact, the basis for calculating the value of an olive grower's SPS entitlements, and, in turn, this
SPS assistance may have been the basis for calculating the value of an olive growers' BPS entitlements, the
BPS legislation did not make this a legal requirement. The fact that it was legally possible to transfer any
potentially existing COMOF-SPS-based entitlements to non-olive farmers under the BPS programme, suggests
that the BPS programme did not explicitly limit access to the COMOF-based payments to olive growers. Other
farmers could have obtained and benefited from such entitlements by transfer in the same way as olive
growers holding the same entitlements. (Regulation 1307/2013, (Exhibit EU-25), Article 34; Royal Decree
1076/2014, (Exhibit EU-30), Article 28. See also European Union's first written submission, paras. 111(b) and
148, and fn 94; and 25 February 2021 response to Panel question No. 7, para. 60).
169 United States' first written submission, para. 72.

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agricultural and environmental condition". 170 Pursuant to the relevant legislation, SPS and
BPS assistance was not conditioned on the production of any agricultural product. This indicates
that, as a matter of law, it was entirely possible for a "farmer" to benefit from
COMOF programme-based entitlements derived from prior olive production, even if it no longer
produced olives during the period of operation of the relative programmes (either because, for
example, it switched to growing a different crop or decided to pursue other qualifying farming
activities). This is yet another feature of the relevant rules that suggests that the BPS programme
did not, as a matter of law, limit the potential to benefit from COMOF programme-based entitlements
to olive growers.
7.75. In our view, the above-examined features of the rules governing the allocation and calculation
of BPS entitlements for new olive farmers, farmers with entitlements obtained via transfer under the
SPS programme, and farmers holding COMOF programme -based SPS entitlements no longer
producing olives, were relevant to the USDOC's determination of de jure specificity and should have
formed part of the USDOC's analysis. The fact that the calculation rules specified that the value of
BPS entitlements for new farmers (including, potentially new olive farmers) obtained from the
national reserve were to be based on the average value of payments to farmers in the same region
(not the value of SPS entitlements), indicates that, as a matter of law, BPS payments to olive farmers
were not tied to the historical COMOF programme -based olive production. That the respondents or
their unaffiliated suppliers in the USDOC's investigation may not have been "new farmers" and may
not have received payments from the Spanish national reserve, as a matter of fact171, does not
mean that the BPS programme legally tied access to, and the amounts of, BPS payments for olive
growers to COMOF programme-based SPS entitlements. Likewise, the fact that it was legally possible
to transfer COMOF programme-based SPS entitlements to non-olive farmers under the
SPS programme, suggests that the calculation rules of the BPS programme did not explicitly limit
access to the COMOF programme-based portion of a BPS payment to olive growers. Other farmers
could have obtained such entitlements by transfer under the SPS programme and then subsequently
benefited from those under the BPS programme in the same way as olive growers holding the same
entitlements. Finally, because crop production was not a precondition for a farmer to receive
BPS payments, it was also legally possible for a far mer that obtained COMOF programme-based
SPS entitlements during the operation of the SPS programme to continue to benefit from those
entitlements even if no longer producing olives in the BPS period.
7.76. In conclusion, therefore, we find that the USDOC did not properly examine and account for
the above-mentioned features of the rules governing the allocation and valuation of BPS entitlements
in its determination of de jure specificity.
7.2.2.3.4 The USDOC's rejection of arguments concerning the "convergence" factor
7.77. The European Union argues that in establishing a link between the grant amounts under the
SPS and BPS/GP programmes, the USDOC improperly rejected arguments concerning the annual
adjustment of the value of each BPS payment entitlement to ensure convergence between farmers
within Spanish regions .172 According to the European Union, the fact that the BPS programme
prescribed annual adjustments to achieve such convergence, when considered in the light of the
other rules affecting the allocation and calculation of BPS entitlements, shows that there was only a
remote connection between the BPS and SPS programmes (and the COMOF programme) payments,
thereby undermining the USDOC's determination of de jure specificity.173 The European Union
maintains that the logic of the USDOC's view that the application of the convergence factor could
not alter its finding of de jure specificity, simply because the initial value of an olive
farmer's entitlement may have been derived from the SPS and the COMOF programmes, necessarily
implies that such payments must always be de jure specific, regardless of the level of adjustment
applied to harmon ize them and distance them from the previous "coupled" payments. 174 The

170 Regulation 1782/2003, (Exhibit EU-24), Articles 2(a), 2(c), and 5; Regulation 73/2009,
(Exhibit EU-23), Articles 2(a), 2(c), and 6.
171 United States' 12 November 2020 response to Panel question No. 4, paras. 16-17; 11 March 2021
comments on the European Union's 25 February 2021 response to Panel question No. 7, para. 34.
172 European Union's first written submission, paras. 245, 247, and 296. "Spanish regions" refer to
50 regions defined by Spain for the purpose of implementing the BPS programme.
173 European Union's first written submission, para. 245; 25 February 2021 response to Panel question
No. 3, para. 20 (referring to the European Union's first written submission, paras. 105-106, 124-128, and
145-147).
174 European Union's first written submission, paras. 248-251.

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European Union argues that the USDOC's findings with respect to the issue of convergence were
results-oriented and did not reflect the assessment of an objective and unbiased investigat ing
authority.175 Accordingly, the European Union claims that the USDOC's determination of de jure
specificity was, to this extent, inconsistent with Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement.
7.78. The United States argues that the European Union mischaracterizes the USDOC's findings.
According to the United States, the USDOC did not find that de jure specificity could never be
removed by application of the convergence factor, and explained why it found unavailing the
arguments concerning the convergence factor. 176 The United States refers to the
USDOC's explanations and argues that it would have been premature for the USDOC to find that the
application of the convergence factor eliminated the differences in assistance carried over from the
COMOF programme for the period of investigation (from 1 January 2016 to 31 December 2016),
since the convergence of the amounts of payment entitlements has been taking place over
five stages from 2015 to 2019.177 The United States further argues that, in light of the convergence
method implemented by Spain, the convergence factor will not result in the complete elimination of
the differences in the amounts of assistance , and that Spain's choice of the convergence approach
"underscores" that the BPS programme in Spain has not eliminated the de jure specificity of the
COMOF programme.178
7.79. The USDOC first discussed the application of the convergence factor in the final issues and
decision memorandum when responding to interested party arguments:
Moreover, we find unavailing the arguments that the application of a convergence factor
over time is eliminating the disparities in payments among recipients and, therefore,
the possibility of finding the assistance specific to oliv e growers. We understand that
the application of the convergence factor results in adjustments to individual payments
to bring them closer to an average over time by reducing the highest payments and
increasing the lowest payments. However, the convergence factor is applied to
payments to olive growers that retain the specificity inherent in the
[COMOF programme]. Therefore, while any adjustments resulting from convergence
may ultimately affect the final amount of assistance, the grant amounts awarded to
farmers under the BPS program are still based on, and thus retain, the de jure specificity
of prior programs as explained above.179
7.80. In the Remand Redetermination, the USDOC recalled and elaborated its explanations
concerning the convergence factor as follows:
Although the convergence factor was intended to bring the value of assistance to each
farmer closer to the regional averages, it will not completely eliminate the differences
in assistance. The BPS, as developed by the EU, gave Member States options for h ow
to effect convergence; Spain elected not to use a flat rate multiplied by the number of
eligible hectares, but rather elected to use the convergence step that it recognized
would gradually reduce, but would not eliminate, the disparity in grant amounts.
[The USDOC] found unavailing the argument that the application of a convergence
factor eliminated the possibility of finding the assistance specific to olive growers.180
The application of several adjustment factors, including the convergence factor and the
across-the-board budgetary reduction cited by the GOS, seeks to align all
farmers' payments with a regional average. However, as we did in the Final
Determination, we continue to find parties' arguments on this matter to be unavailing.
The GOS's explanation only serves to highlight the fact that even through the end of
the operation of the BPS in its current form, at the end of 2019, there will continue to

175 European Union's first written submission, paras. 294-296 and 329; opening statement at the first
meeting of the Panel, paras. 62 and 75.
176 United States' first written submission, paras. 74 and 94; 11 March 2021 comments on the
European Union's 25 February 2021 response to Panel question No. 3, para. 10.
177 United States' first written submission, para. 74; 11 March 2021 comments on the
European Union's 25 February 2021 response to Panel question No. 3, para. 10. See also United States' first
written submission, para. 94.
179 FIDM, (Exhibit EU-2), p. 36.
180 Remand Redetermination, (Exhibit EU-80), fn 60.

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be broad disparities in the assistance provided to farmers under the BPS. Farmers whose
payments a re above the average will have their payments reduced over time by
30 percent; farmers whose payments are less than 60 percent of the average will have
their payments increased over time to reach the 60 percent target. In application,
farmers who historica lly received the highest payments will continue to receive the
highest payments (which, although even when reduced by the full 30 percent applicable,
could remain well above the target of 60 percent of the average), and farmers who
historically received the lowest payments will continue to receive the lowest payments,
capped at 60 percent of the average. We continue to find that these factors support our
conclusion in the Final Determination, and in this redetermination, that access to the
subsidy for olive growers is limited such that the BPS program is de jure specific.181
7.81. Before addressing the merits of the European Union's complaint against the
USDOC's findings, we first set out our understanding of the convergence process operating in Spain.
In short, Ar ticle 25 of Regulation 1307/2013, as implemented in Spain by Article 16 of
Royal Decree 1076/2014, required that the initial value of BPS entitlements were to be adjusted
over time with a view to bringing them closer to average regional values. 182 Spain chose to apply
the "tunnel model" of convergence183, which sought to ensure that payment entitlements above and
below a regional average would respectively decrease and increase over time towards that average.
Through this mechanism, entitlements with an initi al unit value lower than 90% of the regional
average value in 2019184 were to increase, in five equal steps beginning in 2015 185, by a total of
one-third of the difference between their initial value and 90% of the regional average in that year.186
Thus, for example, for a regional average value of 100 EUR/ha., a farmer holding payment
entitlements with an initial value of 60 EUR/ha. would see the value of those entitlements gradually
increase in five equal steps by a total of 10 EUR/ha. (one -third of the difference between 90% of
the regional average value – i.e. 90 EUR/ha. – and the initial value of the farmers' entitlements),
resulting in the following annual increases:
Table 1: Annual increases of entitlements
2015 2016 2017 2018 2019
62 EUR/ha. 64 EUR/ha. 66 EUR/ha. 68 EUR/ha. 70 EUR/ha.
Source: Hypothetical calculation based on Newsletter No. 2, Basic payment entitlement allocation,
(Exhibit EU-31), example No. 1.
7.82. The increase in payments to effect this convergence was to be financed by reductions in the
initial value of entitlements above the regional average, with the maximum deduction for such
entitlements capped at 30%.187 Thus, in the context of the same example set out above, a farmer
holding payment entitlements with an initial value above 100 EUR/ha would see the value of those
entitlements decrease, by no more than 30%, in order to finance the increase of entitlement
values.188

181 Remand Redetermination, (Exhibit EU-80), pp. 66-67, where the USDOC responded to comments of
the GOS on the draft redetermination. (fns omitted)
182 Regulation 1307/2013, (Exhibit EU-25), Article 25; Royal Decree 1076/2014, (Exhibit EU-30),
Article 16.
183 European Union's first written submission, para. 125 and fn 104 (referring to EC internal
convergence document, (Exhibit EU-18)).
184 The regional average values are set out in Order AAA/1747/2016, (Exhibit EU-32). See also
European Union's first written submission, para. 139.
185 Regulation 1307/2013, (Exhibit EU-25), Article 25.8; Royal Decree 1076/2014, (Exhibit EU-30),
Article 16. See also European Union's first written submission, paras. 127 and 146.
186 Regulation 1307/2013, (Exhibit EU-25), Article 25.4; Royal Decree 1076/2014, (Exhibit EU-30),
Article 16. See also European Union's first written submission, paras. 126 and 146. Moreover, the relevant
rules also prescribed that no payment entitlement in 2019 could have a unit value below 60% of the average
regional unit value of the payment entitlements in 2019, thereby guaranteeing a minimum convergence
regardless of the difference between the initial payments and the regional average. (Regulation 1307/2013,
(Exhibit EU-25), Article 25.4; Royal Decree 1076/2014, (Exhibit EU-30), Article 16).
187 For a specific (hypothetical) example of an upward convergence, see European Union's first written
submission, paras. 127 and 146 (referring to Regulation 1307/2013, (Exhibit EU-25), Article 25.7; and
Royal Decree 1076/2014, (Exhibit EU-30), Article 16).
188 For a specific (hypothetical) example of a downward convergence, see Newsletter No. 2, Basic
payment entitlement allocation, (Exhibit EU-31), example No. 2.

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7.83. We note that the focus of the European Union's criticism of the USDOC's findings with respect
to convergence is the USDOC's alleged view that the prescribed adjustments were applied to an
entitlement value that was, in the first place, tied to historic olive productio n under the
COMOF programme, thereby continuing the alleged de jure specificity of that programme, regardless
of the adjustment. In our view, however, this would not be an accurate characterization of the
reasons underlying the USDOC's rejection of the arguments concerning the convergence factor.
7.84. In the final issues and decision memorandum the USDOC not only identified the alleged
existence of a continued connection between entitlement values and the COMOF programme,
notwithstanding the convergence process, but it also recognized that adjustments would not lead to
equality of payments – only convergence towards a regional average. This, we believe, follows from
the USDOC's stated understanding of the impact of the application of the convergence factor to
individual payments, which we recall was that it would "bring them closer to an average over time
by reducing the highest payments and increasing the lowest payments". 189 This USDOC
understanding was elaborated in the Remand Redetermination, where the USDOC ex plained that
under the convergence model implemented by Spain differences in the amounts of assistance would
not be completely eliminated by 2019. In particular, the USDOC found that: (a) the application of
the convergence factor " will not completely elimi nate the differences in assistance "190; (b) "Spain
elected not to use a flat rate multiplied by the number of eligible hectares, but rather elected to use
the convergence step that it recognized would gradually reduce, but would not eliminate, the
disparity in grant amounts"191; and (c) "at the end of 2019, there will continue to be broad disparities
in the assistance provided to farmers under the BPS".192 To the extent that these USDOC statements
reveal that it considered the convergence process in Spain was not designed to completely eliminate
disparities between BPS payments, we find them to accurately reflect the rules governing the
convergence process, as implemented by Spain.
7.85. Thus, we find that the logic underlying the USDOC's rejection of the arguments concerning
the convergence factor was not simply that BPS payments to olive growers continued to be based
on the SPS and the COMOF programmes, irrespective of adjustments. Although the USDOC made a
statement to this effect in its findings, it also pointed out that the convergence process, as
implemented by Spain, would not result in equivalence or removal of disparities in payments, which
in the case of olive growers relative to other farmers the USDOC considered resulted from an alleged
connection with the COMOF programme. In our assessment, it was the combination of both
considerations that led the USDOC to dismiss the arguments concerning the impact of the
convergence process on the "specificity" of BPS payments. We note, furthermore, that the USDOC
expressed no opinion about whether any other type of convergence model 193 could potentially
remove the disparities it found to result from the way BPS payments were calculated in Spain. Thus,
we do not agree with the European Union's submission that the logic of the USDOC findings implies
that it was of the view that BPS payments will always be de jure specific, regardless of the level of
adjustment applied to harmonize them.
7.2.2.3.5 The USDOC's analysis and findings with respect to the "regional rate"
7.86. The European Union argues that additional errors in the USDOC's appreciation of the legal
framework of the BPS programme that affected its findings of de jure specificity can be found in the
USDOC's analysis and findings with respect to the "regional rate". According to the European Union,
the USDOC's finding that a "regional rate" was "used to determine the value of each h ectare of
farmland's 'basic payment entitlement'" reveals a "serious misunderstanding" of the functioning of
the BPS programme, because under the BPS programme, the value of the payment entitlements
depends upon the amount of support received by a farmer in the previous period, and is not tied to
any "regional rate".194 Moreover, the European Union maintains that the USDOC was also incorrect
when it found that " each basic payment entitlement amount will be weighted by the regional
reference value to which it corresponds", because the European Union asserts that the regional

189 FIDM, (Exhibit EU-2), p. 36. (emphasis added)
190 Remand Redetermination, (Exhibit EU-80), fn 60.
191 Remand Redetermination, (Exhibit EU-80), fn 60.
192 Remand Redetermination, (Exhibit EU-80), p. 66.
193 The European Union explains that Regulation 1307/2013, (Exhibit EU-25) allows member States to
choose between three different convergence models: the flat rate from 2015, the flat rate by 2019, and the
tunnel model (implemented by Spain). (European Union's first written submission, para. 125 and fn 103
(referring to EC internal convergence document, (Exhibit EU-18))).
194 European Union's first written submission, paras. 301-302.

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coefficient only applies when a farmer has lands in different regions to distribute the total value
among those regions. 195 The European Union argues that these alleged errors of appreciati on
demonstrate that the USDOC's determination was not reasonably and adequately explained, and
that it was grounded on an erroneous factual basis and, therefore, inconsistent with Articles 2.1,
2.1(a), and 2.4 of the SCM Agreement.196
7.87. The United States maintains that the European Union's submissions concerning the
USDOC's statements with respect to the regional coefficient do not undermine the
USDOC's determination. The United States notes that the USDOC did not, in its final determination,
elaborate upon the application of the regional coefficient in the circumstances where a farmer's lands
are located in more than one region. However, according to the United States, such a distinction
does not change the fact that the amount of assistance under the BPS programme is related to the
de jure specific assistance allegedly provided under the COMOF programme .197 The United States
furthermore submits that even though the regional coefficient was not applied for every farmer, it
was nevertheless "1" for permanent crops such as olives, implying that even where it did come into
play, "it would effect no reduction, and guarantees, in the assistance allocated to olive growers".198
7.88. The European Union's submissions concern the italicized text in the following passages of the
USDOC's determination, as set out in the preliminary and final issues and decision memoranda:
To create each region, Spain used "the agricultural district, as a geographical reference
unit … known by the agricultural sector, in which municipalities with similar agronomic
characteristics are grouped together " as an administrative criterion. Each
region's territorial definition is based on "their productive potential and the productive
orientation determined in the 2013 campaign …" and this "productive orientation " is
categorized as "rainfed land, irrigated land, permanent crops and permanent pastures."
Olive groves are considered permanent crops. This territorial definition determines each
region's "regional rate," which is used to deter mine the value of each hectare of
farmland's "basic payment entitlement." Because of this, each basic payment
entitlement amount will be weighted by the regional reference value to which it
corresponds.199
Each region has shared agronomic characteristics an d a territorial definition based on
its "productive potential and the productive orientation determined in the 2013
campaign … ." This "productive orientation" is categorized as "rainfed land, irrigated
land, permanent crops and permanent pastures;" olive groves are considered
permanent crops. This territorial definition determines each region's "regional rate,"
which is used to determine the value of each hectare of farmland's "basic payment
entitlement." As a result, each basic payment entitlement amount is weighted by the
regional reference value to which it corresponds.200
7.89. As the European Union asserts, Article 14.2(b) of the Spanish Royal Decree 1076/2014 and
Order AAA/544/2015 together explain that a farmer's BPS payments would be multiplied by a
relevant coefficient in situations where a farmer declares areas in more than one region.201
The purpose of applying this coefficient was not to determine the intrinsic value of a
farmer's entitlements, but rather to allocate a farmer's total eligible payments between the different
regions in which it holds land, based on objective and non -discriminatory criteria. This coefficient,
described by the USDOC as the "regional rate" and the "regional reference value", was not used to
determine "each hectare o f farmland's 'basic payment entitlement'"; nor was it used to weight a
farmer's basic payment entitlement. Accordingly, the above -quoted USDOC's findings with respect
to the role played by the "regional coefficient" are factually incorrect.

195 European Union's first written submission, para. 304.
196 European Union's first written submission, para. 329; opening statement at the first meeting of the
Panel, para. 76.
197 United States' first written submission, para. 96.
198 United States' first written submission, para. 96.
199 PIDM, (Exhibit EU-1), pp. 19-20. (emphasis added; fns omitted)
200 FIDM, (Exhibit EU-2), p. 34. (emphasis added; fns omitted)
201 European Union's first written submission, paras. 303-304 (referring to Royal Decree 1076/2014,
(Exhibit EU-30), Articles 14.2(a) and 14.2(b); and Order AAA/544/2015, (Exhibit EU-21)).

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7.90. The United States argues that these alleged errors in the USDOC's factual assessment do not
undermine its ultimate determination. In our view, however, the following paragraphs from the
explanation of the USDOC's original findings in the Remand Redetermination suggest th at the
USDOC did, in fact, rely upon its appreciation of the role of the "regional rate" in the calculation of
BPS payments:
In implementing the BPS, Spain used the data collected under the SPS to create
50 agricultural regions to facilitate payments. Each region was assigned a rate based
on its productive potential and its productive orientation ( i.e., rainfed, irrigated,
permanent crops, and permanent pasture). Olive groves are considered "permanent
crops" and this designation is factored into the calcula tion of the regional rate, which,
in turn, is used to determine each hectare of farmland 's "basic payment entitlement"
and whether, and to what extent, a farmer was eligible to receive grants under the BPS.
Thus, [the USDOC] concluded that the regional variations in BPS payments were a result
of the use of the historical regional data that had been used to calculate the crop-specific
subsidy payments under the SPS. [The USDOC]'s analysis is summarized:
In summary, the annual grant amount provided to olive farmers under BPS
is based on the annual grant amount provided to olive farmers under SPS.
The grant amount provided to olive farmers under SPS is based on the
average grant amount olive farmers received in 1999 through 2002 under
the [COMOF programme]. The grant amount provided in 1999 through
2002 to eligible farmers, which included olive farmers, was based on the
type of crop grown and the production value created from the
crop. Therefore, the annual grant amount provided under BPS {is} based
on annual grant amounts that were crop-specific, thus the grant amounts
received by olive growers under BPS in 2016 are directly related to the
grant amount only olive growers received under the
[COMOF programme].202
7.91. In the first of the above -quoted paragraphs, the USDOC recalled its findings with respect to
the role played by the "regional rate" in the calculation of BPS payments. The USDOC explained that
the "regional rate" was established using data collected under the SPS programme, and that it was
used to determine BPS payments. The USDOC similarly explained that BPS payments varied by
region because they were the " result of the use of historical regional data … used to calculate the
crop-specific subsidy payments under the SPS". The USDOC then quoted a summary of its original
"analysis", from which it can be inferred that the USDOC was of the view that SPS payments were
"crop-specific" because they were "based on the average amount olive farmers received … under
the [COMOF programm e]". Thus, we understand the USDOC to have found in this passage that
BPS payments were determined through the application of a "regional rate" based on data used to
calculate SPS payments, which derived from and was used to determine the crop-specific payments
made under the COMOF programme. The USDOC in this way established a connection between the
"regional rate" (which it had found was used to determine BPS payments) and the crop -specific
payments made under the COMOF programme, thereby supporting its u ltimate conclusion that the
BPS rules governing the calculation of payment amounts continued the inherent de jure specificity
of the COMOF programme. Accordingly, while we recognize that the USDOC's determination of
de jure specificity was also based on ot her considerations203, we find that the USDOC's erroneous
factual findings with respect to the role of the "regional rate" in the calculation of BPS payments
were also relied upon, and to this extent, detract from the USDOC's determination of de jure
specificity.
7.92. Finally, a s already noted, in responding to the European Union's submissions the
United States observes that in cases in which the "regional rate" was applied, "it would effect no
reduction, and guarantees, in the assistance allocated to olive growers" because it was set at a value

202 Remand Redetermination, (Exhibit EU-80), pp. 8-9. (fns omitted)
203 As we discussed above, the USDOC's de jure specificity determination is best understood as a finding
that the BPS subsidies were de jure specific to olive growers because "access to, and the amount of, benefits
provided to olive growers under the BPS, as a matter of law, relied for reference on the provision of benefits
under the SPS and, in turn, access to and the amount of benefits provided to olive growers under the SPS was
determined by reference to the benefits provided under the [COMOF programme]." (Remand Redetermination,
(Exhibit EU-80), p. 15 (emphasis added)). See para. 7.58 above.

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of "1" for permanent crops such as olives .204 However, the European Union's criticism of the
USDOC's determination does not c oncern any USDOC consideration of the potential effect of the
application of the "regional rate" on BPS payments to olive farmers holding entitlements across
different regions. Rather, the European Union's complaint concerns the USDOC's findings with
respect to the prescribed role of the "regional rate" in the calculation of a farmer 's BPS payments,
which we have found were not supported by record evidence. The United States has not explained
how the potential effect of the application of the "regional rate" to olive farmers holding entitlements
across different regions shows that the USDOC's reliance on erroneous factual findings with respect
to the prescribed role of the "regional rate" in the calculation of a farmer's BPS payments supports
its determination of de jure specificity.
7.93. In conclusion, therefore, we find that the USDOC erred, as a matter of fact, when it found
that the "regional rate" under the BPS programme, as implemented by Spain, was to be "used to
determine the value of each hectare of farmland's 'basic payment entitlement'" and that "each basic
payment entitlement amount will be weighted by the regional reference value to which it
corresponds".205 Furthermore, we find that the USDOC relied upon these erroneous factual findings
to support its determination of de jure specificity.
7.2.2.3.6 The USDOC's alleged finding concerning differences in BPS payments based on
"the amount of grant money the different regions received under the SPS"
7.94. Another alleged error of factual appreciation the European Union identifies in the
USDOC's determination of de jure specificity concerns the following passage about the implications
of the BPS subsidy calculation rules for two farms of the same size locate d in different regions of
Spain from the USDOC's preliminary issues and decision memorandum:
The application to receive grants under the [BPS programme] and [the GP programme]
includes the total entitlement value for the farm and this determines the amount of
assistance the farmer will receive under these two BPS subprograms. To calculate a
farm's total entitlement value, the number of hectares is multiplied by that
location's regional value. In summary, two farms of the same size can have two different
total entitlement values if there is a historical difference in the amount of grant money
the different regions previously received under SPS.206
7.95. The European Union argues that the emphasized statement is factually incorrect because
payments under the SPS programme were granted to individual farmers, not regions, and because
there was no such notion as "SPS regions" under that programme. 207 Moreover, according to the
European Union, differences in BPS payments made to farmers operating in different BPS regions
resulted, "in the first place ", from the application of the "weighting coefficient", which was itself
determined based on the contribution of the productive orientation of a region to the Spanish
national agricultural income , and not any differences in payments made to "SPS regions".208 The
European Union claims that these alleged errors of appreciation demonstrate that the
USDOC's determination was not reasonably and adequately explained, and that it was grounded on
an errone ous factual basis and, therefore, inconsistent with Articles 2.1, 2.1(a), and 2.4 of the
SCM Agreement.209
7.96. The United States argues that the European Union's assertion regarding payments under the
SPS programme being granted to farmers and not regions does not contradict the USDOC's findings.
According to the United States, the European Union's argument fails to recognize that the differing
payments received by farmers under the SPS programme resulted from the payments available
under the predecessor program mes, and that the differing payments to farmers under the
SPS programme could lead to different BPS entitlement values for farms in different regions, even
if the regions themselves were not designated as separate regions until the BPS and

204 United States' first written submission, para. 96.
205 FIDM, (Exhibit EU-2), p. 34.
206 PIDM, (Exhibit EU-1), p. 21. (emphasis added; fns omitted)
207 European Union's first written submission, para. 309; opening statement at the first meeting of the
Panel, fn 35 and paras. 67-68; and second written submission, para. 22.
208 European Union's first written submission, para. 310 (referring to Order AAA/544/2015,
(Exhibit EU-21)).
209 European Union's first written submission, para. 329; opening statement at the first meeting of the
Panel, para. 76.

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GP programmes.210 Furthermore, according to the United States, the European Union does not
explain how the fact that the "weighting coefficient" represents the contribution of the productive
orientation of a region to the national agricultural income in Spain undermines the USDOC's findings.
The United States argues that such consideration is irrelevant for a de jure specificity analysis under
Article 2 of the SCM Agreement.211
7.97. We agree with the European Union that the record evidence 212 shows that payments under
the SPS programme were granted to farmers, and not regions, and that Spain did not implement
the SPS programme on a regional basis. Thus, the USDOC's reference to "grant money the different
regions previously received under SPS", would be factually incorrect if it were intended to mean that
SPS payments were made to regions or that the SPS programme was implemented on a regional
basis. In this respect, we note that the USDOC's discussion of the calculation of SPS payments,
which immediately followed the section of t he preliminary issues and decision memorandum
containing the above -quoted statement, identifies farmers, not regions, as the recipients of
SPS payments. For example, when discussing the operation of one of the relevant rules governing
the calculation of payments under the SPS programme, the USDOC states:
Once the value per hectare was determined using this calculation, a farmer would apply
for an amount of aid equal to the number of hectares multiplied by the value of each
hectare. … The average of four yea rs of this total payment is the referenced amount
used as the basis for the calculated amount under the SPS annual grant-to-farmer
program. The individual, calculated BPS annual grant -to-farmer amount derives from
the amount of SPS grants were [sic] provided to each farmer in 2013.213
7.98. We note, moreover, that the USDOC modified the contested statement in the final decision
and issues memorandum, when it replaced the reference to " grant money the different regions
previously received under the SPS" with "assistance provided in the different regions previously
received under the SPS":
Therefore, two farms of the same size can have two different total entitlement values if
there is an historical difference in the amount of assistance provided in the different
regions previously received under SPS.214
7.99. In our view, this statement does not suggest that the USDOC considered SPS payments were
made to regions. Furthermore, the USDOC's discussion in the final issues and decision memorandum
of how payments wer e calculated under the SPS programme confirms that it understood that
SPS payments were made to farmers, and nothing in that discussion indicates that the USDOC
considered the SPS programme to be implemented by Spain on a regional basis. For instance, the
USDOC observed that:
As the EC points out, when the SPS program was implemented in Spain, the aid provided
to farmers was converted into "entitlements," rights to receive payments, that were
linked to land area and completely decoupled from production. That is, under SPS, the
amount of the payment is dependent on the annual activation of the entitlement, and
is not dependent on the type or volume of crop produced. Crucially, however, the
amount of each farmer's payment was calculated as a percentage of the average annual
grant payments previously provided over a reference period.215
7.100. Finally, we note that in the Remand Redetermination the USDOC quoted and relied upon the
contested statement from the preliminary issues and decision memorandum to justify its finding that

210 United States' first written submission, para. 97 (referring to the USDOC's statement in the FIDM,
(Exhibit EU-2), pp. 35-36, that "two farms of the same size can have two different total entitlement values if
there is an historical difference in the amount of assistance provided in the different regions previously
received under SPS").
211 United States' first written submission, para. 98.
212 This evidence includes not only the rules of the SPS programme itself, but also a submission of the
GOS in which it was explained that "[i]n Spain, the decision taken by the agricultural authorities was to apply
the SPS as a historical model (and not a regional one)". (Submission by the GOS in relation to the preliminary
determination, (Exhibit EU-14), p. 12).
213 PIDM, (Exhibit EU-1), pp. 22-23. (emphasis added)
214 FIDM, (Exhibit EU-2), pp. 35-36. (emphasis added)
215 FIDM, (Exhibit EU-2), p. 33. (emphasis added; fns omitted)

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the BPS subsidies were not uniformly available across the agricultural sector, and therefore, could
not be "non-specific" within the meaning of the US domestic law.216 However, we do not understand
the USDOC's reliance upon the contested statement in this context to reflect a change in the
USDOC's view about who were the recipients of SPS payments. Indeed, elsewhere in the
Remand Redetermination the USDOC's discussions of the relevant rules explicitly recognize that
SPS payments were made to farmers.217
7.101. In conclusion, we find that while on its own the contested statement from the
USDOC's preliminary issues and decision memorandum could be interpreted to mean that the
USDOC (erroneously) found that SPS payments were made to regions, when the same statement is
considered in the light of the USDOC's surrounding analysis, the modification made to the relevant
statement in the final issues and decision memorandum, as well as the discussion of the
SPS programme in the Remand Redetermination, we are not convinced that it should be understood
in that way. Rather, in the light of the totality of the USDOC's discussion of the rules governing the
calculation of SPS payments, we find that the USDOC understood that SPS payments were made to
farmers and that Spain d id not implement the SPS programme on a regional basis, unlike the
BPS programme. Having reached this conclusion, we do not believe it is necessary to address the
European Union's additional argument in support of its claims that differences in SPS payment s
resulted, "in the first instance", from application of the "weighting coefficient" and not different
payments made to SPS regions, because we have ultimately found that the USDOC did not make
the latter finding.
7.2.2.3.7 The USDOC's findings with respect to the SPS programme
7.102. Similarly to its complaint against the USDOC 's determination of de jure specificity with
respect to the BPS and GP programmes, the European Union maintains that the USDOC's finding of
the existence of a direct correlation between the amounts of assistance provided to olive growers
under the SPS programme and the COMOF programme is erroneous , and ignores certain relevant
aspects of the record evidence demonstrating that no such direct correlation exists. According to the
European Union, the USDOC allegedly overlooked the following features of the relevant subsidy
regime: (i) the fact that subsidy amounts were, as a matter of law, based on the "global" amount of
support provided under multiple prior programmes, not only on assistance under the
COMOF programme; (ii ) the possibility of obtaining payment entitlements by transfer or by
inheritance; (iii) the fact that a previously active olive farmer was entitled to receive assistance
regardless of whether that farmer continued to produce olives; and (iv) the fact that support was
available to new farmers via the national reserve.218 The European Union submits that these alleged
errors of appreciation demonstrate that the USDOC's determination of de jure specificity was not
reasonably and adequately explained, was grounded on an erroneous factual basis, and, therefore,
is inconsistent with Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement.
7.103. The United States argues that the European Union's arguments do not undermine the
USDOC's conclusion that the SPS subsidies to olive growers were de jure specific in light of the
reference to the COMOF programme. 219 The United States argues that the fact that entitlements
could have been transferred does not sever the reliance on the COM OF programme that Spain
elected to incorporate into the SPS programme.220 Furthermore, according to the United States,
despite the fact that other factors contributed to the calculation of the amount of support available
under the SPS programme, nevertheless the amount of support was related to the support received

216 Remand Redetermination, (Exhibit EU-80), p. 18 and fn 62, where the USDOC explains: "[a]s [the
USDOC] concluded in the investigation, the result of the application of the legislatively preserved methodology
regarding access to, and the distribution of, benefits was that 'two farms of the same size can have two
different total entitlement values if there is a historical difference in the amount of grant money the different
regions previously received under SPS.'"
217 See, e.g. Remand Redetermination, (Exhibit EU-80), p. 16, where the USDOC states that "the SPS
grant amounts were based on the amount of grants provided under the [COMOF programme] that were
available only to olive growers, thereby entrenching the crop-specific nature of the subsidy under the
[COMOF programme] into the criteria for determining the assistance that a farmer would be eligible to receive
under the SPS". (emphasis added)
218 European Union's first written submission, paras. 79-80 and 244; opening statement at the first
meeting of the Panel, paras. 28 and 37; 10 June 2020 response to Panel question No. 10, para. 55;
12 November 2020 response to Panel question No. 8, para. 43; and 25 February 2021 responses to Panel
question No. 3, paras. 9-11, and No. 7, para. 65.
219 United States' first written submission, para. 71.

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under the de jure specific COMOF programme.221 Finally, the United States also argues that the rules
for calculating the amount of support available from the national reserve were not on the
USDOC's record, and therefore were not among the "information and arguments" within the meaning
of Article 12.2 of the SCM Agreement upon which the USDOC could base its determination.222
7.104. As noted in paragraph 7.58 of this Report, the USDOC determined that the SPS subsidies
were de jure specific to olive growers because it found those subsidies to be legally tied to historic
olive production under the COMOF programme. In the preliminary issues and decision memorandum,
the USDOC described the relationship between the COMOF and the SPS programmes in the following
manner:
To determine the SPS entitlement per hectare value, the calculation relied on a
"referenced amount." Th is referenced amount was the average of the total payment
amounts under the annual grant-to-farmer program in place from 1999-2002, which for
olive growers was the [COMOF programme].223
7.105. Similarly, in the final issues and decision memorandum, the USDOC explained:
As the EC points out, when the SPS program was implemented in Spain, the aid provided
to farmers was converted into "entitlements," rights to receive payments, that were
linked to land area and completely decoupled from production. That is, under SPS , the
amount of the payment is dependent on the annual activation of the entitlement, and
is not dependent on the type or volume of crop produced. Crucially, however, the
amount of each farmer's payment was calculated as a percentage of the average annual
grant payments previously provided over a reference period. In the case of olives and
olive oil, this reference period was from 1999 through 2002, when the
[COMOF programme] was in operation. Because the [COMOF programme] provided
benefits on a de jure specific basis, the benefits provided under the SPS retained the
de jure specificity inherent in the [COMOF programme].224
7.106. Finally, in the Remand Redetermination, the USDOC explained the relationship between the
SPS and COMOF programmes in, inter alia, the following terms:
[T]he SPS benefits were based on the value of each hectare in a farm, which was
determined using the average amount of grants provided to that area from 1999
through 2002 (i.e., when the [COMOF programme] was in operation). … [T]he SPS grant
amounts were based on the amount of grants provided under the [COMOF programme]
that were available only to olive growers, thereby entrenching the crop -specific nature
of the subsidy under the [COMOF programme] into th e criteria for determining the
assistance that a farmer would be eligible to receive under the SPS. In this manner, the
value of the grants provided under the [COMOF programme] (the access to which was
expressly limited to the olive sector) was preserved in calculating the grants paid under
the SPS. Thus, under the SPS, access to a subsidy based on the [COMOF programme]
subsidies was expressly limited to olive growers.225
7.107. We recall that the rules governing the allocation and valuation of entitlements under t he
SPS programme did not prescribe that the value of all such entitlements for olive growers were to
be determined with reference to the COMOF programme.226 Entitlements under the SPS programme
could be obtained in one of three ways: (a) as a result of receiving assistance under at least one of
several prior support schemes (which included the COMOF programme) 227; ( b) by transfer or

221 United States' first written submission, para. 71.
222 United States' 11 March 2021 comments on the European Union's 25 February 2021 response to
Panel question No. 7, para. 37.
223 PIDM, (Exhibit EU-1), p. 22.
224 FIDM, (Exhibit EU-2), p. 33. (fns omitted)
225 Remand Redetermination, (Exhibit EU-80), p. 16. (fn omitted)
226 See paras. 7.70-7.72 above.
227 Regulation 1782/2003, (Exhibit EU-24), Article 33. See also European Union's first written
submission, para. 70(b).

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inheritance228; or (c) from the national reserve.229 Thus, an olive farmer's entitlements do not appear
to have been limited, as a matter of law, to those obtained through the operation of the
COMOF programme, as it was legally possible for an olive farmer to obtain SPS entitlements by other
means – namely, via transfer from a farmer of other products, or potentially from the nationa l
reserve.230
7.108. The European Union argues that the USDOC's assessment was "simplistic" because,
inter alia, it ignored that the amount of support available to a farmer under the SPS programme was
based on the global amount of support granted during the reference period, and not exclusively on
the COMOF programme.231 In this regard, the European Union asserts that i f during the reference
period a farmer was growing several crops (and not only olives), the farmer 's entitled amount of
assistance under the SPS programme would not be based exclusively on assistance received under
the COMOF programme , but would also take into account past assistance receive d under other
crop-specific programmes.232 In the United States' view, this possibility does not affect that , in the
case that a farmer was growing olives during the reference period, the amount of SPS support would
be related to the support received under the de jure specific COMOF programme.233
7.109. We note that there is no discussion in the USDOC's determinations of the relevance to its
findings of the possibility that an olive farmer's SPS payments may have been based on assistance
received for non -olive growing activities under programmes other than the COMOF programme.
However, we do not u nderstand the USDOC to have ignored this possibility. Indeed, the USDOC
appears to have recognized that SPS entitlements of farmers producing different crops would be
based on non -COMOF programmes.234 Thus, we do not find the absence of any discussion of th is
feature of the SPS programme in the USDOC's determination to undermine the USDOC's findings of
de jure specificity because, ultimately, as already noted, the USDOC's findings were driven by the
view that the availability of COMOF programme -based payments were, as a matter of law, limited
to olive growers. The fact that olive growers may have received SPS payments for non-olive growing
activities under different programmes does not undermine the USDOC's position.
7.110. Turning to the possibility of transfer, we recall that when an SPS entitlement was obtained
by transfer, the original source of that entitlement could have been a support programme other than
the COMOF programme, as in addition to olives, the previously existing support schemes falling
within the scope of the SPS programme included programmes providing assistance for arable crops,
potato starch, grain legumes, rice, seeds, beef and veal, milk and milk products, sheepmeat and
goatmeat, dried fodder, cotton, tobacco, hops, sugar beet, cane and chicory used for the production
of sugar or inulin syrup, and bananas .235 This suggests that , as a matter of law, an olive
grower's SPS entitlements could have been obtained via transfer from, for example, a cotton farmer,
and therefore would have derived from non-COMOF-programme-based assistance. Conversely, the
value of SPS entitlements of a farmer that did not grow olives (for example, a grower of citrus
fruits) could have been derived from COMOF programme-based assistance and transferred from an
olive grower. In our view, these considerations suggest that the SPS programme did not legally tie

228 Regulation 1782/2003, (Exhibit EU-24), Article 46; Regulation 73/2009, (Exhibit EU-23), Article 43.
According to the European Union, since Spain did not implement the SPS programme on a regional basis
(unlike the BPS programme, as explained below), a farmer could sell, buy, or rent SPS entitlements and
activate them in any eligible hectare in Spain. (European Union's first written submission, para. 83;
25 February 2021 response to Panel question No. 7, para. 64).
229 Regulation 1782/2003, (Exhibit EU-24), Article 42.3; Regulation 73/2009, (Exhibit EU-23),
Article 41.2. See also European Union's first written submission, paras. 70(b) and 83; and 25 February 2021
response to Panel question No. 7, para. 63.
230 The extent to which the USDOC possessed relevant information about the rules governing the precise
calculation of entitlement values potentially available to olive growers from the Spanish national reserve is
discussed in more detail below. (See paras. 7.112-7.114 below).
231 European Union's first written submission, para. 244.
232 European Union's first written submission, para. 80 (referring to Submission by the GOS in relation
to the preliminary determination, (Exhibit EU-14), pp. 12-13; and GOS's response to supplemental
questionnaire of 10 January 2017, (Exhibit EU-15), p. 18).
233 United States' first written submission, para. 71.
234 See e.g. PIDM, (Exhibit EU-1), p. 22 and fn 116, where the USDOC explains that "[the] referenced
amount was the average of the total payment amounts under the annual grant-to-farmer program in place
from 1999-2002, which for olive growers was the [COMOF] program", and that "[o]ther products [than olives]
used an average of payments received during 2000-2002".
235 Regulation 1782/2003, (Exhibit EU-24), Article 37 and Annex VI. See also European Union's first
written submission, para. 79.

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the value of SPS entitlements for olive growers to the assistance received under the
COMOF programme. While COMOF programme -based assistance may have been, as a matter of
fact, the basis for calculating the value of an olive grower's SPS entitlements, the SPS programme
did not make this a legal requirement. Rather, when considered in the light of the relevant SPS rules
concerning the possibility of transferring entitlements, the SPS programme appears to leave open
the possibility that the value of an olive grower's SPS entitlements could be a function of
non-COMOF-programme-based historical assistance. Likewise, the SPS programme also seems to
envisage that COMOF programme -based assistance could have been the basis of the
SPS entitlements of any farmer (not only olive growers) if obtained via transfer. In our view, these
considerations suggest that the SPS programme did not legally limit the class of farmers that may
benefit from COMOF programme -based entitlements to olive growers. However, this aspect of the
rules governing the allocation and calculation of SPS entitlements was not discussed or examined in
the USDOC's determination of de jure specificity.
7.111. The United States argues that the fact that entitlements could have been bought, rented, or
inherited does not sever t he reliance on the COMOF programme that Spain elected to incorporate
into the SPS programme.236 As already noted, however, the fact that COMOF programme -based
SPS entitlements could be transferred under the SPS programme to farmers that did not grow olives
suggests that the access to, and the amount of SPS payments derived from COMOF-based assistance
was not legally limited to olive growers. Moreover, the fact that olive farmers could have obtained
entitlements under the SPS programme derived from non-COMOF-programme-based assistance by
way of transfer, suggests that SPS payments to the same olive farmers could be, as a matter of law,
derived from programmes other than the COMOF programme.
7.112. We furthermore recall that to qualify for SPS assistance, a farmer wa s not required to
produce any agricultural product. As already explained, this indicates that, as a matter of law, it was
entirely possible for a "farmer" to benefit from COMOF programme-based entitlements derived from
prior olive production, even if it no longer produced olives during the period of operation of the
SPS programme (either because, for example, it switched to growing a different crop or decided to
pursue other qualifying farming activities). This is yet another feature of the relevant rules that
suggests that the SPS programme did not, as a matter of law, limit the potential to benefit from
COMOF programme -based entitlements to olive growers. While the USDOC recognized that the
amount of support under the SPS programme is not dependent on the type or volume of production,
the USDOC did not explain why this consideration would be irrelevant or would not undermine its
de jure specificity findings.
7.113. Finally, we note that it was also possible for new farmers (including new olive farmers) to
obtain SPS entitlements from the national reserve. The establishment of the national reserve and
its intended purpose was set out in Article 42 of Regulation 1782/2003, which provided inter alia as
follows:
1. Member States shall, after any possible reduction un der Article 41(2), proceed to a
linear percentage reduction of the reference amounts in order to constitute a national
reserve. This reduction shall not be higher than 3 %.
…
3. Member States may use the national reserve to grant, in priority, reference
amounts to farmers who commence their agricultural activity after 31 December 2002,
or in 2002 but without receiving any direct payment in that year, according to objective
criteria and in such a way as to ensure equal treatment between farmers and to avoid
market and competition distortions.237
7.114. We understand from these provisions that new farmers (including new olive farmers) could,
as a matter of law, receive payments from the national reserve, which was to be constituted with
the proceeds of a 3% reduction in SPS payments that would otherwise be made to farmers holding
entitlements. This information was before the USDOC. However, as the United States points out, the
rules governing the precise calculation of payments from the Spanish national reserve for new

236 United States' first written submission, para. 72.
237 Regulation 1782/2003, (Exhibit EU-24), Article 42.

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farmers (including new olive farmers) was not before the USDOC.238 This means that the information
necessary to determine the extent to which such payments to new olive farmers may or may not
have been tied to payments received by olive farmers during the COMOF programme reference
period was not in the USDOC's possession.
7.115. Thus, with the exception that olive growers may have held SPS entitlements based on the
global amount of support (and not only COMOF programme -related assistance) and the possibility
of obtaining entitlements from the national reserve, we find that the above -examined features of
the rules governing the allocation and calculation of SPS payments for farmers with SPS entitlements
obtained via transfer, and farmers holding COMOF programme -based entitlements no longer
producing olives, were relevant to the USDOC's determination of de jure specificity. The fact that it
was legally possible to transfer COMOF programme-based entitlements to non-olive farmers under
the SPS programme suggests that the SPS programme did not explicitly limit access to the
COMOF programme-based payments to olive growers. Other farmers could have obtained and
benefited from such entitlements by transfer in the same way as olive growers holding the same
entitlements. Moreover, because crop production was not a precondition for a farmer to receive
SPS payments, it was also legally possible for a farmer that obtained assistance under the
COMOF programme to continue to receive SPS payments based on that assist ance even if such
farmer was no longer producing olives in the SPS period.
7.116. In conclusion, we find that the USDOC did not properly examine and account for the
above-mentioned features of the rules governing the allocation and valuation of SPS entitlements in
its determination of de jure specificity.
7.2.2.3.8 The USDOC's findings with respect to the COMOF programme
7.117. The European Union argues that the USDOC's analysis and statements with respect to the
COMOF programme could not objectively serve as the "foundation" of the USDOC's de jure specificity
findings with respect to the SPS and BPS programmes, because the USDOC never actually
determined that the COMOF programme was de jure specific, but rather only stated that it "would
find" the COMOF programme to be de jure specific.239 The European Union maintains that the
USDOC's reliance on this "would-be-finding" with respect to the COMOF programme reveals that the
USDOC's de jure specificity findings in relation to the SPS and BPS programmes were not based on
a reasoned and adequate explanation and, to this extent, were inconsistent with Articles 2.1, 2.1(a),
and 2.4 of the SCM Agreement.240 In addition, the European Union argues that the
USDOC's explanation of the calculation of assistance under the COMOF programme was factually
incorrect, thereby rendering the USDOC's findings inconsistent with Article 2.4 of the
SCM Agreement.241
7.118. The United States does not deny that the USDOC did not make a separate finding of
specificity in relation to the COMOF programme under the US law. However, according to the
United States, a separate de jure specificity determination with respect to the COMOF p rogramme
would have been meaningless and unnecessary, because (i) Article 2.1(a) of the SCM Agreement
does not require an investigating authority to make separate specificity findings for each legal
instrument that falls within the scope of the " the legisl ation" at issue, but only requires such
determination with respect to the subsidy programme as defined in Article 1.1 of the
SCM Agreement; and (ii) the COMOF programme was not the programme that conferred subsidies
during the period of investigation.242

238 United States' 11 March 2021 comments on the European Union's 25 February 2021 response to
Panel question No. 7, para. 37 (referring to European Union's 25 February 2021 response to Panel question
No. 7, para. 65).
239 European Union's first written submission, paras. 282-289; opening statement at the first meeting of
the Panel, para. 62.
240 European Union's first written submission, para. 329; 10 June 2020 response to Panel question
No. 4, para. 34; and opening statement at the first meeting of the Panel, para. 76.
241 European Union's first written submission, paras. 315 and 329.
242 United States' first written submission, para. 90; 10 June 2020 response to Panel question No. 5,
para. 21.

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7.119. We note that in the final issues and decision memorandum, the USDOC began its response
to the interested parties' comments with respect to its preliminary determination of de jure
specificity by highlighting the relevance of the COMOF programme subsidies to its overall findings:
We continue to find, for purposes of this final determination, that assistance provided
under the CAP Pillar I programs Basic Payment Scheme (BPS) and [the GP programme]
is de jure specific and, therefore, countervailable. As we expla ined in the Preliminary
Determination, our finding of de jure specificity is based on the manner in which Spain
implemented the Pillar I programs with reference to the operations of its
two predecessor programs, the Single Payment Scheme and the [COMOF programme],
and the manner in which the amount of assistance was determined under these
two programs. The earliest of these programs, the [COMOF programme], was in place
from 1999 through 2003, and provided production aid in the form of annual grants to
farmers on the basis of type of crop and the volume of production. Both olive oil and
table olives were specifically identified as products eligible to receive production aid
under this program, and the payments provided during this period were based on
whether the olives were used to produce olive oil or table olives. Specifically, the
payment for hectares that grew olives for olive oil production used the equation
"132.25/100kg" to calculate the value of the payment per hectare; the payment for
hectares that grew olives to produce table olives used a different calculation, in which
the ratio of 100 kg of processed table olives was equal to 11.5 kg of olive oil eligible for
production aid. Once the value per hectare was determined using this calculation, a
farmer would apply for aid in the amount of the number of hectares multiplied by the
value of each hectare.243
7.120. The USDOC then went on to make the statements that are the focus of the
European Union's submissions:
We recognize that the [COMOF programme] is no longer in operation and ceased
providing benefits to olive growers in 2003, and we are not rendering a decision
regarding whether the assistance provided under this program was specific under
section 771(5A) of the Act. However, because the amount o f assistance provided to
olive farmers and the methodology for determining it under this program forms the
foundation for determining the amount of assistance provided to olive farmers under
the successor programs SPS and CAP Pillar I BPS and [the GP programme], it is
necessary to evaluate the specificity of this program separately. In doing so, we
consider that, because the [COMOF programme] provided annual payments only to
producers of oilseed crops, including olives, we would find this program to be de jure
specific, as explained in further detail below.244
7.121. As the European Union asserts, the USDOC explained in this paragraph that it would not be
making a finding of specificity in relation to the COMOF programme under domestic law. However,
the same passage also reveals that the USDOC considered that it "would find" the
COMOF programme de jure specific because it "provided annual payments only to producers of
oilseed crops, including olives". The USDOC then proceeds to explain that:
[T]he amount of each farmer's payment [under the SPS programme] was calculated as
a percentage of the average annual grant payments previously provided over a
reference period. In the case of olives and olive oil, this reference period was from 1999
through 2002, when the [COMOF programme] was in operation. Because the
[COMOF programme] provided benefits on a de jure specific basis, the benefits provided
under the SPS retained the de jure specificity inherent in the [COMOF programme].245
7.122. Thus, after stating that it "would fin d" the COMOF programme de jure specific under the
US law because of the crop -specific focus of its payments, the USDOC expressly stated that the
COMOF programme "provided benefits on a de jure specific basis". The USDOC repeated this view

243 FIDM, (Exhibit EU-2), pp. 32-33. (emphasis added; fns omitted)
244 FIDM, (Exhibit EU-2), p. 33. (emphasis added)
245 FIDM, (Exhibit EU-2), p. 33. (fn omitted)

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in multiple parts of the Remand Redetermination, including in the following passages where it
explained:
[The COMOF programme] provided benefits on a de jure specific basis because access
to the subsidy was expressly limited to olive growers. The benefits provided under this
program were calculated with a rate of Euros per kilogram of a farmer 's production of
olives for oil and olives for table olive production (different rates were applied to olives
for oil and olives for table olive production). This value is unique to, and only accessed
by, farms that grow olives.
…
[T]he SPS grant amounts were based on the amount of grants provided under the
[COMOF programme] that were available only to olive growers, thereby entrenching the
crop-specific nature of the subsidy under the [COMOF programme] into the criteria for
determining the assistance that a farmer would be eligible to receive under the SPS.
In this manner, the value of the grants provided under the [COMOF programme] (the
access to which was expressly limited to the olive sector ) was preserved in calculating
the grants paid under the SPS.246
7.123. We note that the European Union does not assert that interested parties had argued in the
underlying investigation that the histo rical COMOF programme subsidies were not de jure specific
within the meaning of Article 2.1(a) of the SCM Agreement. Neither does the European Union make
that submission in these proceedings. Thus, we understand the European Union's complaint to focus
on the absence of a formal specificity finding under the US law, and the implications of this for the
consistency of the USDOC's determination with the United States' obligations under Articles 2.1,
2.1(a), and 2.4 of the SCM Agreement.
7.124. In our view, the above excerpts demonstrate that the USDOC did, in fact, evaluate and
express a position with respect to the specificity of the COMOF programme. While the USDOC did
not render a formal decision under domestic law , we consider that the USDOC nevertheless
established to its satisfaction the existence of all of the factual elements that it believed would have
enabled it to find the COMOF programme subsidies de jure specific for the purpose of the
USDOC's subsequent establishment of the alleged "operational link" between the COMOF, SPS, and
BPS/GP programmes. In other words, the USDOC considered that it had made sufficient
factual findings with respect to the COMOF programme to satisfy itself that the subsidies available
under the COMOF programme would be de jure specific under its domestic legislation, had it been
required to make such a finding as a matter of domestic law.
7.125. Finally, we turn to the European Union's submission regarding the factual accuracy of the
USDOC's findings concerning the ca lculation of assistance under the COMOF programme.247
According to the European Union, the USDOC's explanation that "[o]nce the value per hectare was
determined [under the COMOF programme] a farmer would apply for an aid equal to the number of
hectares mult iplied by the value of each hectare" 248 is factually erroneous. The European Union
explains that the support under the COMOF programme was provided in proportion to production
quantity, and not in terms of an amount or value per hectare. 249 The United States has not
specifically responded to this criticism of the USDOC's COMOF programme explanations.
7.126. We agree with the European Union that the USDOC's explanation of the calculation of the
COMOF programme assistance is factually inaccurate. The relevant rule, which was on the record of
the USDOC's investigation, prescribes that the amount of COMOF programme assistance was to be

246 Remand Redetermination, (Exhibit EU-80), pp. 15-16.
247 European Union's first written submission, para. 315.
248 European Union's first written submission, para. 315 (quoting the language from PIDM,
(Exhibit EU-1), p. 22, and noting that FIDM, (Exhibit EU-2), contains similar language). FIDM, (Exhibit EU-2),
with respect to COMOF provides that "[o]nce the value per hectare was determined using this calculation, a
farmer would apply for aid in the amount of the number of hectares multiplied by the value of each hectare".
(FIDM, (Exhibit EU-2), p. 33).
249 European Union's first written submission, para. 315.

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calculated on the basis of production quantities.250 The relevant calculation did not establish a "value
per hectare", as stated in the USDOC's final issues and decision memorandum.
7.2.2.3.9 Conclusion regarding the USDOC 's findings that the BPS and GP programmes
retained the inherent de jure specificity of the subsidies provided under the
COMOF programme
7.127. In the light of the foregoing analysis, we conclude as follows:
a. The European Union has not demonstrated that the USDOC acted inconsistently with
Article 2.1(a) of the SCM Agreement because its determination of de jure specificity was
dependent upon how certain alleged features of past subsidy programmes no longer in
force were relied upon and integrated into the BPS programme.251
b. The European Union has not demonstrated that the USDOC's determinations of de jure
specificity with respect to the BPS, GP, and SPS programmes were inconsistent with
Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement because, c ontrary to the
European Union's assertion, the USDOC did not find the BPS, SPS, and GP subsidies to
be de jure specific to olive growers as a result of being coupled or tied to olive
production. Rather, the USDOC determined that the SPS, BPS, and GP subsidies were
de jure specific to olive growers, because, according to the USDOC, the SPS, BPS, and
GP subsidies ava ilable to olive growers were tied to historical olive production during
the COMOF programme reference period.252
c. The European Union has demonstrated that the USDOC's determination of de jure
specificity was inconsistent with Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement
because:
i. The USDOC did not properly examine and account for the rules governing the
allocation and valuation of BPS entitlements with respect to new farmers, farmers
holding entitlements transferred under the SPS programme, and farmers no
longer growing olives. To this extent, we find that the USDOC's determination of
de jure specificity was not based on a reasoned and adequate explanation of why
access to the BPS subsidie s was explicitly limited to olive growers, within the
meaning of Articles 2.1 and 2.1(a), and was not clearly substantiated on the basis
of positive evidence, as required by Article 2.4.253
ii. The USDOC relied upon erroneous factual findings with respect to fu nction and
role of the so -called "regional rate" to support its determination of de jure
specificity. To this extent, we find that the USDOC's determination of de jure
specificity was not based on a reasoned and adequate explanation of why access
to the BPS subsidies was explicitly limited to olive growers, within the meaning
of Articles 2.1 and 2.1(a), and was not clearly substantiated on the basis of
positive evidence, as required by Article 2.4.254
iii. The USDOC did not properly examine and account for the ru les governing the
allocation and valuation of SPS entitlements with respect to farmers with
SPS entitlements obtained via transfer, and farmers holding
COMOF programme-based entitlements no longer producing olives. To this
extent, we find that the USDOC's determination of de jure specificity was not
based on a reasoned and adequate explanation of why access to the SPS subsidies
was explicitly limited to olive growers, within the meaning of Articles 2.1 and

250 Regulation 1638/98, (Exhibit EU-26), Article 5.1, provides that "[t]he aid shall be granted to olive
growers on the basis of the quantity of olive oil they actually produce".
251 See para. 7.37 above.
252 See para. 7.52 above.
253 See paras. 7.74-7.75 above.
254 See para. 7.93 above.

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2.1(a), and was not clearly substantiated on the ba sis of positive evidence, as
required by Article 2.4.255
d. The European Union has demonstrated that the USDOC's determination of de jure
specificity was inconsistent with Article 2.4 of the SCM Agreement because the
USDOC's determinations of de jure specificity with respect to the SPS and
BPS/GP programmes was not clearly substantiated on the basis of positive evidence, to
the extent that those determinations relied upon the explanation that "[o]nce the value
per hectare was determined [under the COMOF programme] a farmer would apply for
an aid equal to the number of hectares multiplied by the value of each hectare" 256,
which was factually inaccurate.257
e. The European Union has not demonstrated that the USDOC's determinations of de jure
specificity with respect to the BPS, GP, and SPS programmes were inconsistent with
Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement because:
i. Contrary to the European Union's submissions, the USDOC's rejection of the
arguments concerning the appli cation of the convergence factor under the
BPS programme was supported by record evidence, and to this extent,
reasonably and adequately explained and based on clearly substantiated positive
evidence.258
ii. The totality of the USDOC's discussion of the rules g overning the calculation of
SPS payments reveals that the USDOC correctly understood that SPS payments
were made to farmers and that Spain did not implement the SPS on a regional
basis.259
iii. In the absence of any suggestion on the part of the European Union that the
historical COMOF programme subsidies were not de jure specific, the lack of a
formal specificity finding under the US law does not undermine the
USDOC's determinations of de jure specificity with respect to the SPS and
BPS programmes, given that the USDOC considered it had made sufficient factual
findings with respect to the COMOF programme to satisfy itself that the subsidies
available under the COMOF programme would be de jure specific under its
domestic legislation, had it been required to make such a finding as a matter of
domestic law.260
7.128. Finally, we note that in addition to the alleged inconsistencies we have addressed above, the
European Union argues that a number of the USDOC's other findings and explanations are
incoherent and inconsistent, sometimes plainly contradictory, not based on positive evidence on the
record, or in cases they are, the content of that evidence is misinterpreted. 261 According to the
European Union, the contested USDOC 's explanations contain either logical errors 262 or errors of
appreciation or misrepresentations of the legal framework of the subsidy programmes at issue. 263

255 See paras. 7.115-7.116 above.
256 European Union's first written submission, para. 315 (quoting the language from PIDM,
(Exhibit EU-1), p. 22, and noting that FIDM, (Exhibit EU-2), contains similar language). FIDM, (Exhibit EU-2),
with respect to COMOF provides that "[o]nce the value per hectare was determined using this calculation, a
farmer would apply for aid in the amount of the number of hectares multiplied by the value of each hectare".
(FIDM, (Exhibit EU-2), p. 33).
257 See para. 7.126 above.
258 See para. 7.85 above.
259 See para. 7.101 above.
260 See paras. 7.123-7.124 above.
261 European Union's first written submission, para. 281.
262 The alleged "logical error" not addressed elsewhere in this Report concerns certain considerations
regarding the decoupled nature of SPS and BPS assistance. (European Union's first written submission,
paras. 290-292 and 298; opening statement at the first meeting of the Panel, para. 62 and fn 33).
263 The alleged "errors of appreciation" not addressed elsewhere in this Report concern (a) data used by
Spain for regional implementation of the BPS programme (European Union's first written submission,
para. 299); (b) determination of the regional value under the BPS programme (ibid. paras. 305-306); (c) the
notion of the "adjusted coefficient" (ibid. paras. 307-308); (d) the notion of value of entitlement per hectare
(ibid. paras. 311-313); (e) the USDOC's explanations concerning the Aid to Olive Groves programme

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The European Union argues that these alleged errors demonstrate that the USDOC's determination
was not reasonably and adequately explained, and that it was grounded on an erroneous factual
basis and, therefore, is inconsistent with Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement.264
7.129. According to the United States, the European Union's arguments variously mischaracterize
or take out of context the USDOC's analysis of the de jure specificity of the programmes at issue.265
With respect to certain alleged errors of appreciation or misrepresentations of the re levant legal
framework, the United States argues that even accepting the European Union's allegations would
not undermine the USDOC's finding that the BPS and GP programmes are de jure specific.266
7.130. Having found that the USDOC's de jure specificity findings are inconsistent with Articles 2.1,
2.1(a), and 2.4 of the SCM Agreement for the reasons explained above, we do not consider it
necessary for achieving a positive solution to this dispute to address the remaining
European Union's arguments267 in support of its claims under Articles 2.1, 2.1(a), and 2.4 of the
SCM Agreement.
7.2.3 The European Union's claims under Articles 2.1, 2.1(b), and 2.4 of the
SCM Agreement
7.131. The European Union claims that the USDOC's determinations of de jure specificity in its final
issues and decision memorandum and the Remand Redetermination are inconsistent with
Articles 2.1, 2.1(b), and 2.4 of the SCM Agreement because the USDOC (i) failed to explore or
properly evaluate whether the eligibility and subsidy calculation criteria under the SPS, BPS , and
GP programmes were non-specific, within the meaning of Article 2.1(b) of the SCM Agreement; and
(ii) ignored record evidence showing that this was the case.268
7.132. The United States argues that the eligibility criteria under the SPS, BPS, and GP programmes
did not satisfy the non-specificity requirements of Article 2.1(b) of the SCM Agreement269, and that,
in any case, even assuming arguendo that the eligibility criteria of those programmes were b ased
on objective criteria and conditions, the criteria governing the amount of the subsidies nevertheless
inherently favoured olive growers, therefore precluding a finding of non-specificity.270
7.133. We note that the USDOC made no explicit findings in its preliminary and final determinations
on the extent to which the SPS and BPS subsidies were "non -specific" within the meaning of the
functional equivalent of Article 2.1(b) of the SCM Agreement under US law. The USDOC did,
however, discuss and examine this possibility in the Remand Redetermination making the following
findings:
The grant amounts under SPS were not based on the total value of a farm 's overall
production, or given a flat rate based only on the size of the farm in hectares, or a
combination of the t wo, or any other neutral or objective criteria pursuant to
section 771(5A)(D)(ii) of the Act. Instead, the SPS grant amounts were based on the
amount of grants provided under the [COMOF programme] that were available only to
olive growers, thereby entrench ing the crop -specific nature of the subsidy under the
[COMOF programme] into the criteria for determining the assistance that a farmer would

(ibid. paras. 316-318); and (f) the USDOC's alleged consideration of existence of a legal requirement to
continue olive production (ibid. paras. 319-329). See also European Union's first written submission,
para. 298; and opening statement at the first meeting of the Panel, para. 62 and fn 35.
264 European Union's first written submission, para. 329.
265 United States' first written submission, para. 87.
266 See e.g. United States' first written submission, paras. 95-96 and 98. In response, the
European Union submits that, even admitting for the sake of argument that some of the alleged errors and
contradictions taken individually might not be fatal, the number of them, taken together, demonstrates that
the USDOC "failed to understand [the legislation governing the programmes at issue] or gave a biased
description of its operation". (European Union's opening statement at the first meeting of the Panel, para. 64).
267 See fns 262-263 above.
268 European Union's first written submission, paras. 271-280; 10 June 2020 response to Panel question
No. 3, para. 26; opening statement at the first meeting of the Panel, paras. 44 and 49-60; 12 November 2020
response to Panel question No. 9, paras. 96-104; and 11 March 2021 comments on the
United States' 25 February 2021 response to Panel question No. 5, paras. 11-14.
269 United States' first written submission, paras. 81 and 84.
270 United States' first written submission, paras. 82-84; second written submission, para. 27.

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be eligible to receive under the SPS. In this manner, the value of the grants provided
under the [COMOF programme] (the access to which was expressly limited to the olive
sector) was preserved in calculating the grants paid under the SPS. Thus, under the
SPS, access to a subsidy based on the [COMOF programme] subsidies was expressly
limited to olive growers. In impleme nting the SPS, the GOS and the EU developed a
system that applied conditions that were not neutral or objective such that [the USDOC]
can consider the program to be not specific under section 771(5A)(D)(ii) of the Act; if
a farm produced a product that received certain amounts of assistance prior to the
implementation of SPS, those amounts were factored into, and therefore preserved in,
the calculation of the grant amounts to which farmers had access under the SPS. In this
way, the SPS did not apply unif orm treatment across the agricultural sector; olive
growers continued to benefit as they had, relative to other sub -sectors of the
agricultural sector, under the [COMOF programme], under which access to the subsidy
was expressly limited to olive growers.
In implementing the BPS, the GOS again legislatively implemented a methodology
regarding the distribution of benefits that relied on the access to grants provided under
the SPS, not on any other neutral or objective criteria such as the total value of all crops
produced on a farm, the area of the farm, the farmer's farm income, etc., to determine
the access to grants to provide under the BPS. … [The USDOC] is required to evaluate
this evidence, pursuant to 19 CFR 351.502(d), in examining whether there is uni form
treatment in the provision of benefits across the agriculture sector. [The USDOC] can
find a subsidy to the agricultural sector to be not specific only if there is record evidence
of such uniform treatment, or record evidence of neutral and objective criteria pursuant
to section 771(5A)(D)(ii) of the Act. … In its implementation of the BPS, the GOS, just
as it did with the SPS program, the eligibility criteria that limited access to benefits
provided under the [COMOF programme] were incorporated as a m atter of law and
embedded the historical differences in crop entitlement amounts among different
agricultural products. As a result, farmers who received larger relative amounts of
assistance under SPS continue to receive larger amounts of assistance under BPS.
Therefore, the entitlement values under the BPS for those farmers that grow olives
retain the historical difference, relative to other farmers , that was inherent in the
[COMOF programme].271
7.134. The USDOC provided additional explanations of its de jure specificity findings, including as
regards its consideration of "non -specificity", in responding to certain comments made about the
consistency of the draft Remand Redetermination with relevant provisions of US law. In particular,
the USDOC explained as follows:
[The USDOC] also undertakes the analysis of de jure specificity based upon the
language set forth in section 771(5A)(D)(ii) of the [of the Tariff Act of 1930 ]. Under
clause (ii) of section 771(5A)(D) of the Act, where the authority providing the subs idy
(or the legislation pursuant to which the authority operates), establishes "objective
criteria or conditions" governing the eligibility for, and the amount of the subsidy, the
subsidy is not specific as a matter of law. These criteria are if : eligibility is automatic,
the criteria or conditions for eligibility are strictly followed, and the criteria or conditions
are clearly set forth in the relevant statute, regulation, or other official document so as
to be capable of verification. The statute states that "the term 'objective criteria or
conditions' means criteria or conditions that are neutral and that do not favor one
enterprise or industry over another. " The [Statement of Administrative Action
Accompanying the Uruguay Round Agreements Act (SAA)] states that clause (ii ) is a
corollary of the de jure test. Under clause (ii), a subsidy would not be de jure specific
merely because it was bestowed pursuant to certain eligibility criteria; however, "the
objective criteria or conditions must be neutral, and not favor certain enterprises or
industries over another."
Therefore, in our analysis of whether the BPS program is de jure specific, consistent
with the explicit statutory language and SAA language, [the USDOC] analyzed whether
the legislation pursuant to which the GOS operates in administering this su bsidy
expressly limited access to the subsidy as a matter of law and whether the criteria or

271 Remand Redetermination, (Exhibit EU-80), pp. 16-18. (emphasis original; fns omitted)

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conditions for eligibility set forth in the legislation of this subsidy are neutral and do not
favor one enterprise or industry over another. Under the statute, in the context of an
agricultural program such as BPS, the analysis and the application of the term
"expressly limits " necessarily involve an examination pursuant to both
section 771(5A)(D(i) and (ii ) because both clauses (i ) and (ii ) focus on the criteria
governing access to the subsidy and define the test for de jure specificity.[157]
…
To determine access to payments under the BPS, and the criteria or conditions
governing the eligibility for, and the amount of the subsidy, the BPS legislation expressly
refers to prior legislation and incorporates by reference the eligibility criteria from the
prior legislation. An examination of the prior legislation explicitly referenced in and
incorporated by the BPS demonstrates a linkage between eligibility for the crop-specific
payments provided under the prior legislation and the current payments provided under
the BPS. This link continued to entrench limited access and favored the olive industry.
Thus, the statutory definition of de jure specificity set f orth under 771(5A)(D)(i ) and
(ii) is met.272
157 In most instances of de jure specificity, clause (ii) need not be referenced because the language
in the legislation creating the subsidy clearly does not include "objective criteria or conditions," as
defined by the statute, e.g., the legislation enacting the program provides subsid ies solely to the
iron and steel industry, the high tech industry, or to state -owned enterprises, etc. Here, we are
investigating an agricultural program, and 19 CFR 351.502(d) provides that agricultural subsidies
will not be specific, either de jure or de facto, solely because the subsidy is limited to the
agricultural sector. As explained in this redetermination, for the agricultural exception to apply,
the agricultural subsidy program must include all agricultural products and there must be uniform
treatment across all agricultural products. Therefore, the clause (ii) corollary of the de jure
specificity test is critical for agricultural subsidies when it may not be necessary for examining
subsidies to industries that do not have a regulatory exception for specificity.
7.135. We understand from the above passages that the USDOC's analysis of whether the SPS and
BPS subsidies were "non-specific", within the meaning of Section 771(5A)(D)(ii) of the United States
Tariff Act of 1930, was intertwined with, and inheren tly dependent upon, its findings of de jure
specificity under Section 771(5A)(D)(i). The USDOC's rejection of the "non -specificity" of the
SPS and BPS subsidies was driven by its finding that payments under those schemes were explicitly
linked, as a matter of law, to crop -specific payments made under the COMOF programme. Having
already concluded that this aspect of the USDOC's findings is inconsistent with the
United States' obligations under Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement for multiple
reasons, we do not believe it is necessary for the purpose of achieving a positive solution to this
dispute to make additional findings concerning the consistency of the USDOC's "non-specificity"
analysis and findings with Article 2.1(b) of the SCM Agreement. Indeed, given that the
USDOC's "non-specificity" analysis and findings are intrinsically based on the same alleged facts the
USDOC relied upon to support its finding of de jure specificity, which we have found in some cases
were not properly established or reasonably and adequately explained, we do not see how making
additional findings under Article 2.1(b) of the SCM Agreement would assist the parties in this
dispute. Accordingly, we decline to make findings with respect to the merits of the
European Union's claims under Articles 2.1, 2.1(b), and 2.4 of the SCM Agreement.
7.2.4 The European Union's claim under Article 1.2 of the SCM Agreement
7.136. The European Union claims that the United States acted inconsistently with its obligations
under Article 1.2 of the SCM Agreement because the USDOC determined that the BPS and
GP programmes are countervailable subsidies and subjected them to Part V of the SCM Agreement,
without properly demonstrating that they were specific.273 The United States argues that the USDOC
substantiated its de jure specificity determination concerning the BPS and GP programmes on the
basis of positive evidence, and asks the Panel to reject the European Union's consequential claim
under Article 1.2 of the SCM Agreement.274

272 Remand Redetermination, (Exhibit EU-80), pp. 47-49.
273 European Union's first written submission, para. 330.
274 United States' first written submission, para. 101.

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7.137. Having found that the USDOC's de jure specificity findings are inconsistent with Articles 2.1,
2.1(a), and 2.4 of the SCM Agreement, we do not consider it necessary to achieve a positive
resolution of this dispute to address the European Union's claim under Article 1.2 of the
SCM Agreement.275
7.3 The European Union's claims in relation to Section 771B of the Tariff Act of 1930 and
its application in the ripe olives countervailing duty investigation
7.138. In its preliminary and final determinations in the Spanish ripe olive s countervailing duty
investigation, the USDOC determined that the benefit arising from subsidies granted to raw olive
growers in Spain could be attributed to three investigated exporting Spanish ripe olive producers.276
The USDOC attributed the benefit of such subsidies over relevant arm's length transactions between
upstream raw olive growers and downstream ripe olive producers, in the full amount of the financial
contribution made to the growers, based on a specific provision in the US law, Section 771B of the
Tariff Act of 1930 (Section 771B). In short, Section 771B requires the USDOC to attribute the benefit
arising from a subsidy granted to a raw agricultural product that is used as an input for a processed
product if the following two criteria are met : (i) the demand for the prior stage product is
"substantially depend ent" on the demand for the latter stage processed product; and (ii ) the
processing operation adds only "limited value" to the raw commodity.
7.139. The European Union claims that Section 771B is "as such" inconsistent with Article VI:3 of
the GATT 1994 and Articles 10, 19.1, 19.3, 19.4, and 32.1 of the SCM Agreement. In essence, the
European Union alleges that under Section 771B the USDOC is required to impermissibly presume
that where a subsidy is conferred on an upstream agricultural product in arm's length transactions
between unrelated entities a benefit will also have been conferred indirectly to a downstream
processor.277 The European Union also claims that the USDOC 's application of Section 771B to
relevant arm's length transactions in the ripe olive investigation was inconsistent with these same
provisions. The United States argues that each of the European Union's claims fails because the
European Union misunderstands the relevant WTO obligations, the meaning of Section 771B, and
its application in the underlying investigation.278
7.140. We begin by examining the merits of the European Union's claims concerning Section 771B
"as such", before turning to its claims concerning the application of Section 771B in the ripe olives
investigation. We understand the European Union's complaint in both cases to concern the question
of pass-through in situations involving arm's length transactions between unrelated entities, and not
transactions that are not at arm's length or transactions between related parties.279
7.3.1 The European Union's complaint against Section 771B of the Tariff Act of 1930
"as such"
7.141. The European Union alleges that Section 771B is "as such" inconsistent with the
United States' obligations under Article VI:3 of the GATT and various provisions of the
SCM Agreement because it improperly mandates an approach by the USDOC with respect to benefit
that excludes the carrying out of a proper pass-through analysis.280
7.142. The European Union maintains that Article VI:3 of the GATT 1994 and Articles 10 and 32.1
of the SCM Agreement contain an obligation to co nduct a pass -through analysis for downstream
products281 and specifically, an analysis of "whether and to what extent the price of the input product

275 See e.g. Panel Report, US – Carbon Steel (India) (Article 21.5 – India), para. 7.203.
276 See section 7.3.2 below for further details.
277 European Union's first written submission, paras. 334-336, 346, 357, 361-363, 369, 377, 380,
400-401, 414-415, and 417.
278 United States' first written submission, paras. 102 and 104.
279 The European Union acknowledges that a different US legal provision not at issue in this dispute
(19 CFR §351.525(b)(6)) governs corporations with cross-ownership and therefore applies for transactions that
are not at arm's length. Section 19 CFR 351.525(b)(6)(iv) applies in situations where two or more corporations
exist and where one corporation can use or direct the individual assets of the other corporation(s) in essentially
the same ways it can use its own assets. (European Union's first written submission, para. 404 (referring to
19 USCFR 351.525, (Exhibit EU-77))).
280 See, e.g. European Union's first written submission, paras. 335 and 387-418.
281 European Union's first written submission, paras. 336-357.

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is lowered vis-à-vis the alleged indirect beneficiary as a result of the subsidy".282 The European Union
submits that full pass-through cannot be presumed without undertaking the appropriate analysis.283
The European Union acknowledges that Article VI:3 and the SCM Agreement do not set out a specific
methodology for th e pass-through analysis that must be followed in all cases. Nevertheless, the
European Union considers that an examination of a decrease in the level of prices for the input
product resulting from any subsidy granted to the input producers provides the only appropriate
method for the analysis, as the purpose of a pass-through test should be to determine whether and
to what extent the subsidies granted to the input product have passed -through to the downstream
product.284 The European Union, however, does not consider the question of whether a price
comparison constitutes the only appropriate method to assess pass -through is determinative for
resolving its claim.285
7.143. In addition to its claims under Article VI:3 of the GATT 1994 and Articles 10 and 32.1 of the
SCM Agreement, the European Union also claims that Section 771B is inconsistent with Articles 19.1,
19.3, and 19.4 of the SCM Agreement. The European Union contends that Section 771B is also "as
such" inconsistent with Articles 19.3 and 19.4 because Section 771B mandates an approach under
which the USDOC is unable to ensure an "appropriate duty amount in each case" or an "accurate"
duty amount, as is required by these provisions. 286 Section 771B would also consequently violate
Article 19.1.287
7.144. The United States argues that the European Union has failed to establish that Section 771B
is inconsistent with its obligations under the GATT 1994 and the SCM Agreement, and argues that,
in order for the European Union to show otherwise, it must demonstrate that the law itself does not
allow the United States to act in accordance with its WTO obligations. For the United States, this
may be established by demonstrating that a law necessarily results in a violation of its obligations or
does not allow the USDOC to act in accordance with the United States' obligations.288 The
United States contends that the European Union's legal interpretation lacks any basis in the text or
negotiating history of the GATT 1994 or the SCM Agreement and is not supported by prior
WTO dispute settlement reports. The United States argues that a plain reading of Article VI:3
demonstrates that there is no obligation to use a specific methodology to calculate the benefit
conferred by the subsidy found to exist, much less a specific pass-through methodology. Moreover,
based on this understanding, the United States contends that the European Union errs by insisting
that a pass-through analysis must involve an analysis of price differentiation.289
7.145. The United States argues that the European Union's claims under Article 19 of the
SCM Agreement as well as Articles 10 and 32.1 of the SCM Agreement should also be rejected
because they are entirely dependent on the European Union's Article VI:3 claim.290 The
United States further maintains that the provisions of Article 19 of the SCM Agreement do not
impose substantive requirements with respect to an investigating authority 's calculation and
determination of a countervailing duty rate but are "concerned with the primarily ministerial function
of imposing and collecting [countervailing duties ] once those duties are already calculated and
determined in accordance with the obligations imposed by the preceding articles of the
SCM Agreement".291

282 European Union's first written submission, para. 372.
283 European Union's first written submission, paras. 333-334 and 407-408.
284 European Union's first written submission, para. 407; 10 June 2020 response to Panel question
No. 14, paras. 90 and 92; and opening statement at the first meeting of the Panel, para. 87. Moreover, the
European Union submits that the GATT panel in US – Canadian Pork has already previously established that the
two conditions of Article 771B do not represent the factors that need to be assessed in order to examine
whether benefit has passed-through. (See, e.g. European Union's first written submission, para. 372 (referring
to GATT Panel Report, US – Canadian Pork, para. 4.10)).
285 See, e.g. European Union's second written submission, para. 75.
286 European Union's first written submission, paras. 386 and 420.
287 Article 19.1 of the SCM Agreement requires an investigating authority to make a final determination
of the amount of the subsidy and a final determination of injury prior to imposing a countervailing duty in
accordance with the provisions of Article 19 of the SCM Agreement.
288 United States' 25 February 2021 response to Panel question No. 9, paras. 35-37.
289 United States' first written submission, paras. 105-113.
290 United States' first written submission, paras. 108-123 and 132; 12 November 2020 responses to
Panel question No. 12, para. 41, and No. 15, paras. 46-49.
291 United States' 12 November 2020 response to Panel question No. 15, para. 46. (emphasis original)

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7.146. We agree with past panel and Appellate Body reports that in order for an "as such" challenge
against a provision of domestic legislation to succeed, the complaining Member must establish that
the relevant provision of domestic law requires the responding Member to violate its obligations
under the relevant covered agreement or otherwise restricts, in a material way, the responding
Member's discretion to act in a m anner that is consistent with those obligations .292 Guided by this
standard, we will review the merits of the European Union's "as such" claims in the sections that
follow, by first identifying and considering the legal requirements for conducting a pass -through
assessment that is consistent with the relevant provisions of the GATT and the SCM Agreement, and
then by determining whether Section 771B requires the USDOC to act inconsistently with those
requirements or whether it materially restricts any USDOC d iscretion to act consistently with the
same requirements.
7.3.1.1 Legal requirements for conducting a pass-through analysis
7.147. There is no disagreement between the parties that where a producer of the upstream input
product operates at arm's length from the producer of the downstream product produced using the
upstream input, an investigating authority is required, under Article VI:3 of the GATT 1994 and
Article 10 of the SCM Agreement, to establish that the benefit of the subsidy provided directly in
respect of the u pstream product has been passed -through to the downstream product in order to
levy countervailing duties on imports of the downstream product.293 The parties also agree that there
is no prescribed methodology in either of these provisions for assessing pass -through.294 Thus, we
understand the parties to accept that investigating authorities retain a degree of discretion with
respect to how to determine the existence and extent of the pass-through of indirect subsidies. We
share the parties' views on all these points.
7.148. We note that Article VI:3 of the GATT 1994 provides as follows:
No countervailing duty shall be levied on any product of the territory of any contracting
party imported into the territory of another contracting party in excess of an amount
equal to the estimated bounty or subsidy determined to have been granted, directly or
indirectly, on the manufacture, production or export of such product in the country of
origin or exportation, including any special subsidy to the transportation of a particular
product. The term "countervailing duty" shall be understood to mean a special duty
levied for the purpose of offsetting any bounty or subsidy bestowed, directly, or
indirectly, upon the manufacture, production or export of any merchandise.
7.149. Article 10 of the SCM Agreement and footnote 36 provide:
Members shall take all necessary steps to ensure that the imposition of a countervailing
duty[36] on any product of the territory of any Member imported into the territory of
another Member is in accordance with the provisions of Article VI of GATT 1994 and the
terms of this Agreement. Countervailing duties may only be imposed pursuant to
investigations initiated and conducted in accordance with the provisions of
this Agreement and the Agreement on Agriculture.295
36 The term "countervailing duty" shall be understood to mean a special duty levied for the purpose
of offsetting any subsidy bestowed directly or indirectly upon the manufacture, production or export
of any merchandise, as provided for in paragraph 3 of Article VI of GATT 1994.

292 See, e.g. Appellate Body Reports, US – Oil Country Tubular Goods Sunset Reviews, para. 172; EU –
293 See, e.g. European Union's 10 June 2020 response to Panel question No. 14, para. 92 ("the
EU acknowledges that an authority in principle has discretion regarding its method of
analysis.") The United States maintains that Article 14 of the SCM Agreement further supports its position that
no particular methodology is required for determining whether a benefit has passed-through to a downstream
producer. In this respect, the United States refers to the chapeau of Article 14, which establishes "guidelines"
to be followed in calculating the benefit to a recipient. (United States' 12 November 2020 response to Panel
question No. 18, para. 52 (referring to Appellate Body Reports, US – Softwood Lumber IV, paras. 91-92;
Japan– DRAMs (Korea), para. 191; and Panel Report, US – Anti-Dumping and Countervailing Duties (China),
para. 11.55)).
294 See, e.g. European Union's first written submission, paras. 341-357; opening statement at the first
meeting of the Panel, para. 79; and United States' first written submission, paras. 109-113.
295 Fn omitted.

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7.150. The first sentence of Article VI:3 establishes that no countervailing duty shall be levied on
any imported product in excess of an amount equal to the subsidy determined to have been granted,
directly or indirectly, on the manufacture, production, or export of that product. The second sentence
of Article VI:3 as well as footnote 36 to Article 10 define a countervailing duty as a special duty
levied for the purpose of offsetting any subs idy bestowed, directly or indirectly, upon the
manufacture, production, or export of any merchandise. We agree with past panels and the
Appellate Body that it follows from a combined reading of these two provisions that Members are
entitled to offset "indirect" subsidization by imposing duties on imported products that benefit from
subsidies conferred on "upstream" companies and products.296 In our view, it also follows from the
terms of Article VI:3 and, in particular, the requirement not to apply a countervailing duty in excess
of the estimated amount of subsidy determined to have been granted on the imported product, that
an importing Member is not entitled to simply presume that a subsidy bestowed on an input product
passes through, in total or in part, t o the processed imported product. Rather, an investigating
authority must work out, as accurately as possible, how much of the subsidy has flowed indirectly
from an input product to the downstream product, to ensure that any countervailing duty imposed
on the downstream product is not in excess of the total amount of subsidies bestowed on the
investigated product. To this end, an investigating authority must take into account all relevant facts
and circumstances to ensure that a countervailing duty is not i mposed in excess of the estimated
subsidy. Thus, we agree with the Appellate Body that countervailing duties may not be applied on
any amount of a subsidy that has not been found to have passed-through to the imported product.297
We find this understanding to be consistent with the views of the GATT panel in US – Canadian Pork,
which considered Canadian claims under Article VI:3 of the GATT 1947 with respect to the
application of Section 771B in a USDOC countervailing duty investigation of subsidies granted to
imports of fresh, chilled, and frozen pork from Canada.298
7.151. Having said that, we note that neither Article VI:3 nor Article 10 of the SCM Agreement
prescribe that a particular methodology must be followed to perform a pass-through analysis where
one is required. To this extent, investigating authorities have a certain amount of discretion in
evaluating whether and to what extent the benefit of a subsidy provided directly to a producer of an
upstream product has passed -through to the downstream product produced by an unrelated
enterprise (an indirect subsidy). The parties in this dis pute disagree, however, as to how that
discretion can be exercised, and, in particular, as to the kind of considerations and factors that must,
at a minimum, be included in a determination of the existence and extent of pass-through.
7.152. The European Union ack nowledges that Article VI:3 and the SCM Agreement do not
prescribe a specific methodology to assess pass -through. Nonetheless the European Union argues
that, in the case of input subsidies, only an assessment of whether the purchase price of the input
product has been lowered via "a price comparison of some sort" 299 can allow an investigating
authority to meaningfully assess whether pass -through of benefit has occurred. 300 For the
European Union, such an approach would be consistent with the meaning of "benef it" in
Article 1.1(b) of the SCM Agreement. In this regard, the European Union submits that the
determination of "benefit" seeks to identify whether the financial contribution has made the recipient
"better off" than it would otherwise have been, absent th at contribution.301 Accordingly, for the

296 Appellate Body Report, US – Softwood Lumber IV, para. 140 ("[t]he phrase 'subsid[ies]
bestowed … indirectly', as used in Article VI:3, implies that financial contributions by the government to the
production of inputs used in manufacturing products subject to an investigation are not, in principle, excluded
from the amount of subsidies that may be offset through the imposition of countervailing duties on the
processed product" (emphasis original)). See also Panel Reports, US – Softwood Lumber IV, para. 7.91; US –
Upland Cotton, para. 7.1180; and Mexico – Olive Oil, paras. 7.137-7.139.
297 The Appellate Body in US – Softwood Lumber IV found that only the amount by which an indirect
subsidy granted to producers of inputs flows through to the processed product, together with the amount of
subsidy bestowed directly on producers of the processed product, may be offset through the imposition of
countervailing duties. (Appellate Body Report, US – Softwood Lumber IV, paras. 140-141).
298 GATT Panel Report, US – Canadian Pork, para. 4.6 ("Article VI:3 stipulates that a countervailing duty
levied on any product shall not exceed an amount equal to the subsidy granted directly or indirectly on the
production of 'such product'. According to this clear wording, the United States may impose a countervailing
duty on pork only if a subsidy has been determined to have been bestowed on the production of pork; the
mere fact that trade in pork is affected by the subsidies granted to producers of swine is not sufficient.")
299 European Union's 10 June 2020 response to Panel question No. 14, para. 92.
300 European Union's first written submission, paras. 372 and 408; 10 June 2020 response to Panel
301 European Union's second written submission, para. 77. See also Appellate Body Report, Canada –
Aircraft, para. 157.

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European Union, in order to determine whether a downstream product has benefited from the
subsidies provided to an unrelated producer of the upstream input product, an assessment of
whether the purchase price of the input product has been lowered relative to "market" prices would
be appropriate. Finally, the European Union maintains that other considerations may also be relevant
to the assessment, such as an evaluation of the concentration of the relevant markets, the market
power of the different producers and processors, or the extent of national or international
competition.302
7.153. The United States emphasizes that Article VI:3 of the GATT 1994 and the SCM Agreement
are silent as regards the methodology for evaluating indirect subsidization. For the United States, this
silence means that an investigating authority has discretion to decide how it should conduct a
pass-through analysis in a particular factual circumstance.303 The United States further argues that
the European Union's focus on a price comparison is unsupported by prior WTO dispute settlement
reports or the negotiating history of the GATT 1994 or the SCM Agreement, neither of which specify
a methodology or indicate how an investigating authority should determin e whether and to what
extent a benefit is conferred to a downstream producer.304
7.154. In our view, the discretion afforded to an investigating authority under Article VI:3 for the
purpose of establishing the pass-through of subsidies is not unfettered. As already noted, pursuant
to Article VI:3 an investigating authority is required to analyse to what extent direct subsidies on
inputs may have indirectly flowed to the processed investigated product where the respective
producers operate at arm's length and which therefore may be included in the determination of the
estimated total amount of subsidies bestowed on the investigated product. In our assessment, this
means that an investigating authority must provide an analytical basis for its findings of the existence
and extent of pass-through that takes into account facts and circumstances that are relevant to the
exercise and that are directed to ensuring that any countervailing duty imposed on the downstream
product is not in excess of the total amount of subsidies bestowed on the investigated product. 305
Thus, we do not understand an investigating authority's discretion in evaluating the pass-through of
subsidies under Article VI:3 to be so wide as to permit it to exclude any consideration of facts and
circumstances that may be relevant to the very analysis that it must perform.
7.155. Finally, we note the parties' disagreement about the role of the prices of a subsidized input
product in a pass -through analysis, and the United States' objection to what it considers
would be a "one -size-fits-all" approach to assessing pass -through.306 Despite the
European Union's characterization of input price comparisons as the only meaningful way to assess
pass-through, we do not consider that any findings on our part with respect to this matter are
necessary to achieve a positive solution to the parties' dispute. Accordingly, we will proceed to
consider the European Union's claims guided by the understanding of the requirements of
Article VI:3 and Article 10 we have set ou t above, namely, that an investigating authority must
provide an analytical basis for its findings of the existence and extent of pass -through that takes
into account facts and circumstances that are relevant to that exercise. The pass -through of a

302 The European Union observes, for instance, that if the producers of the raw agricultural product
could export their products internationally, this would reduce dependency on the domestic market.
(European Union's first written submission, paras. 408 and 410-411; 12 November 2020 response to Panel
question No. 12, para. 116).
303 United States' first written submission, paras. 105-110 and 113 (quoting Panel Report, EC – Bed
Linen (Article 21.5 – India), para. 6.87): "[t]he provisions of the GATT 1994 and the SCM Agreement are silent
on this issue. The EU seeks to fill that silence with a specific, methodological obligation. However, this silence
cannot be so filled. Rather, '[t]he most logical conclusion to be drawn from this silence is that the choice … is
up to the investigating authority' regarding how a pass-through analysis should be conducted in a particular
factual circumstance." (fn omitted)
304 United States' first written submission, paras. 128-130 (referring to Appellate Body Report, US –
Softwood Lumber IV, paras. 143 and 154; and GATT Panel Report, US – Canadian Pork, paras. 4.8-4.10).
305 Contrary to the United States' assertions, we find this conclusion to be consistent with views
expressed by Members during the Uruguay Round about the need to investigate further in cases where the
market price is suspected of being unduly influenced by the subsidy on the input in question.
(United States' first written submission, para. 127; GATT, Uruguay Round-Group of Negotiations on
Goods-Negotiating Group on Subsidies and Countervailing Measures-Subsidies and Countervailing Measures,
Note by the Secretariat, MTN.GNG/NG10/W/4, p. 17).
306 The United States submits that a requirement to determine whether a decrease in the level of prices
for the input product resulted from any subsidy granted to the input producers might lead to a situation where
it would be impossible to countervail an indirect subsidy if a price differential could not be observed.
(United States' first written submission, para. 127).

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subsidy must be shown to exist by determining the extent to which subsidies on input products may
have been indirectly bestowed upon the processed investigated products. In the sections that follow,
we will examine the merits of the European Union's complaint by considering whether Section 771B
requires the USDOC to act in a manner inconsistent with these obligations, and if not, whether it
materially restricts any USDOC discretion to act consistently with the same requirements.
7.3.1.2 Legal characterization of the operation of Section 771B of the Tariff Act of 1930
7.156. We next evaluate the European Union's claim that Section 771B requires the USDOC to
impermissibly presume pass -through of any subsidies granted to an upstream raw agricultural
product to the downstream processed product in all cases where the producer of the raw agricultural
product and the processor enter into arm's length transactions and the two conditions in
Section 771B are met.307
7.157. Section 771B of the Tariff Act of 1930 provides as follows:
In the case of an agricultural product processed from a raw agricultural product in
which –
(1) the demand for the prior stage product is substantially dependent on the demand
for the latter stage product, and
(2) the processing operation adds only limited value to the raw commodity,
countervailable subsidies found to be provided to either producers or processors of the
product shall be deemed to be provided with respect to the manufacture, production,
or exportation of the processed product.308
7.158. The USDOC is directed to apply Section 771B in countervailing duty investigations involving
an "agricultural product processed from a raw agricultural product ". Section 771B stipulates that
countervailable subsidies found to have been provided to the raw agricultural p roduct "shall be
deemed" to be provided to the agricultural processed product, when two cumulative factual
circumstances exist: first, when the demand for the prior stage product is substantially dependent
on the demand for the latter stage product ; and second, when the processing operation adds only
limited value to the raw commodity . In this way, Section 771B instructs the USDOC to find that
subsidies have been provided to the manufacture, production, or exportation of the processed
product when the two p rescribed factual circumstances are fulfilled and without reference to, or
consideration of, any other factors.
7.159. The European Union contends that the use of the auxiliary term "shall" in Section 771B
signifies that Section 771B is a mandatory provision. Accordingly, the European Union contends that
the USDOC has no margin of discretion in determining the amount of the subsidy that can be said
to have passed through to the downstream product when the factual circumstances contained in
Section 771B are fulfilled. For the European Union, this is confirmed from the determination in the
underlying ripe olives investigation and in previous USDOC determinations involving
Section 771B.309
7.160. At the core of its claim, the European Union considers that the two factual circumstances
described in Section 771B – first, concerning whether demand for the input substantially depends
on demand for the processed product, and second, whether processing adds only limited value – are
alone inapt for determining the existence and precise amount of pass-through as required under the
applicable legal standard. The European Union argues that Section 771B requires the USDOC to
deem the full amount of subsidies granted to a raw agricultural product to have been granted to the
processed product in all cases without considering any other factors, meaning that the USDOC must
presume that the full amount of benefit passes through to the indirect subsidy recipient without any

307 European Union's first written submission, paras. 334-336, 346, 357, 361-363, 369, 377, 380,
400-401, 414-415, and 417.
308 19 USC 1677-2, (Exhibit EU-52).
309 European Union's first written submission, paras. 414-418. See also FIDM, (Exhibit EU-2), p. 43; and
Frozen warmwater shrimp FIDM, (Exhibit EU-51), p. 43.

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analysis of the precise benefit amount that passes through.310 The European Union argues that such
a presumption violates the requirements of Article VI:3 of the GATT 1994 and Article 10 of the
SCM Agreement. Hence, the European Union maintains that every application of Section 771B by
the USDOC will necessarily lead to a violation of the applicable WTO provisions.311
7.161. We understand the United States' defence of Section 771B to rest on two main lines of
argument. First, the United States argues that the legal justification for Section 771B derives from
inherent flexibilities in the GATT 1994 and SCM Agreement, which do not prescribe or prohibit any
specific methodology to determine pass -through.312 Second, the United States argues that the
two factual circumstances contained in Section 771B are on their own appropriate for establishing
pass-through in the context of the special commercial and economic circumstances facing agricultural
input products used to process downstream products. 313 The United States maintains that
Section 771B thus "provides a basis to make a finding attributing benefit to a downstream product,
in the way that the 'pass-through' concept has been understood".314
7.162. As we have discussed above 315, Article VI:3 of the GATT 1994 and Article 10 of the
SCM Agreement do not prescribe a particular methodology for determining pass-through. However,
whatever methodology is chosen, an investigating authority must analyse to what extent subsidies
on inputs may be included in the determination of the total amount of subsidies be stowed upon
processed products. This must be done to ensure that countervailing duties are not applied in an
amount that is in excess of the estimated subsidy determined to have been granted to the
investigated product. Therefore, to ensure compliance with the requirements of Article VI:3 of the
GATT 1994 and Article 10 of the SCM Agreement, an investigating authority must take into account
facts and circumstances that may be relevant to that determination and is not entitled to exclude
from its determination factors that are potentially relevant.316
7.163. The United States considers that Section 771B provides an appropriate alternative method
in the context of raw agricultural commodities in light of the special commercial and economic
circumstances present in markets for such commodities, namely that these markets are
systematically chara cterized by "perfect competition". In such markets, where products are
undifferentiated and market-entry is unrestricted, the United States contends that producers of the
raw products have no choice but to accept the prevailing market price, rendering them "price takers"
that are unable to charge a price higher than the price a processor could obtain from another
homogenous producer (which may or may not be subsidized). In these circumstances, the
United States argues that market prices could not be used to determine whether the benefit of a
subsidy granted to the upstream raw input producer has passed-through to a downstream processor
because there would be no price differentiation. Thus, the United States argues that, because a raw
agricultural commodity is often devoted completely to the production of a processed product and a
product processed from a raw agricultural commodity is often produced substantially from the raw

310 The European Union submits that the question of whether an input subsidy passes through may
depend on an array of factors affecting the competitive conditions in the market for the input product,
including the level of concentration or fragmentation of the market on the seller and purchaser side, the
market power of the different producers and processors, the existence of cooperatives or other joint
representative bodies yielding market power via input producers, or the extent of national or international
competition. The European Union submits that the two criteria in Section 771B may, at best, contribute to
assessing the likelihood of pass-through benefit. However, the European Union argues that a likelihood of
pass-through does not "establish", "find", or "determine" the existence of pass-through of benefit as required
under the relevant provisions. (European Union's first written submission, paras. 407-408; second written
submission, paras. 71-72; 12 November 2020 response to Panel question No. 12, para. 116; and
11 March 2021 comments on United States' 25 February 2021 response to Panel question No. 9, para. 36).
311 European Union's first written submission, paras. 22, 335, and 390.
312 United States' first written submission, paras. 109-132; 12 November 2020 response to Panel
question No. 10, para. 36.
313 United States' first written submission, paras. 135-140.
314 United States' first written submission, para. 135; see also opening statement at the first meeting of
the Panel, para. 34; and 12 November 2020 response to Panel question No. 10, para. 36.
315 See section 7.3.1.1 above.
316 We note that the GATT panel in US – Canadian Pork held the view that the words in Article VI:3 "to
determine" and "estimated", as well as the practices of the contracting parties under that provision, indicated
that the decision as to the existence of a subsidy must result from an examination of all relevant
facts. (GATT Panel Report, US – Canadian Pork, para. 4.8).

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product, whenever these two circumstances exist a subsidy that affects the production of the raw
product necessarily affects trade in the product.317
7.164. The United States' explanation is reflected in the legislative history of the enactment of
Section 771B, which the United States has cited in this dispute. 318 As discussed in the
US Congressional record, in conducting a pass-through assessment for components used to produce
finished manufactured products, the USDOC applies a different "upstream subsidies" test , as
contained in Section 1677-1(b) of US law (Section 771A of the Tariff Act of 1930).319 Pursuant to
that test, the USDOC enquires into whether the subsidy bestows a "competitive benefit" on the
manufactured product under investigation. A competitive benefit is found where the price paid for
the input product is determined to have been lower than would otherwise be paid in an arm's length
transaction with another seller.320 The Congressional record excerpt shows that when Section 771B
was enacted this type of test was considered to be incompatible with the nature of agricultural
commodity markets, under the view that the price of products sold on a commodity basis would be
essentially the same for all commodities sold at a given time in a given market. 321 Thus, it was
argued that if Section 1677-1(b) were applied in the investigation of agricultural commodities, the
USDOC would be unable to detect whether a subsidy has passed -through based on a price
differentiation test, preventing the USDOC from countervailing those subsidies, and thereby
"permit[ting] wholesale circumvention"322 of US countervailing duty laws.
7.165. The European Union disagrees with the United States' contention that agricultural
commodities a re systematically characterized by "perfect competition ". The European Union
contends that certain agricultural markets may "at best, display certain features "323 inherent to a
perfectly competitive market, but that often conditions required for a perfectly competitive market
do not exist in the agricultural sector. In this respect, the European Union submits that there are
typically a limited number of buyers and sellers for many agricultural products, wherein cooperatives
often exercise significant seller power over purchasers and there are constraints on entry and exit
into the market.324 The European Union further submits that the United States' "perfect competition"
argument was rejected by the GATT panel in US – Canadian Pork.325
7.166. We are not convinced that input producers always will be "price takers" in all markets for all
raw agricultural products falling within the scope of Section 771B. In this regard, we share the view
of the European Union that it is reasonable to believe that variations may exist in the competitive
conditions of different product markets, including in those for raw agricultural commodities, such
that any given market may or may not be perfectly competitive. While the two factual circumstances
identified in Section 771B may be relevant to an examination of whether a subsidy to a raw
agricultural product has passed-through to a processed agricultural product, the probative value of
those factors will, in our view, depend upon the specific facts of the situation in question, including
the nature of the specific market for the input product at issue and all of the conditions of competition
in that market.
7.167. Section 771B does not leave open the possibility for the USDOC to consider factors that may
be affecting the market for the investiga ted product other than those Section 771B lists explicitly.
For example, another factor could be the degree to which raw input sellers face pricing pressure – a
feature the United States submits is systematically present in markets for all raw agricultural
commodities. Likewise, Section 771B does not envisage that the USDOC should consider the market
power of the different producers and processors, or the extent to which national or international
competition could potentially affect the reliability of input product pricing. On the contrary,

317 United States' first written submission, para. 139 (referring to Congressional record S8787-01,
(Exhibit USA-9), p. S8815); 12 November 2020 response to Panel question No. 11, paras. 38-39.
318 United States' first written submission, paras. 136-137 (referring to Congressional record S8787-01,
(Exhibit USA-9), pp. S8814-S8815).
319 19 USC 1677-1, (Exhibit EU-49).
320 Congressional record S8787-01, (Exhibit USA-9), p. S8815.
321 Congressional record S8787-01, (Exhibit USA-9), p. S8815.
322 Congressional record S8787-01, (Exhibit USA-9), p. S8815.
323 European Union's second written submission, para. 65.
324 The European Union submits that the US raw olive market provides an example of a market that is
not perfectly competitive due to the fact that it has only two olive purchasers and prices are negotiated on
behalf of growers by the Olive Growers Council. (European Union's second written submission, para. 65).
325 European Union's second written submission, para. 63 (referring to GATT Panel Report, US –
Canadian Pork, para. 3.15).

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Section 771B requires the USDOC to make a determination of pass -through in the absence of any
consideration of whether such facts and circumstances may be relevant to a showing of
pass-through. To this extent, Section 771B operates as if perfect market conditions exist, as a matter
of fact, in all cases involving investigated raw agricultural input products and downstream processed
products. Section 771B, therefore, shuts out any consideration of the circumstances of any specific
case other than the two circumstances that are mandated. Circumstances that are non -mandatory
from the perspective of Section 771B are not able to be considered by the investigating authority,
meaning that Section 771B limits the investigating auth ority's analysis of the factual extent of any
pass-through.
7.168. Because Section 771B instructs the USDOC to make a determination of pass-through in the
absence of any consideration of such potentially relevant factors, we consider that Section 771B
directs the USDOC to presume the existence of pass-through between raw and processed agricultural
products whenever the two factual circumstances it prescribes are established. We furthermore note
that Section 771B directs the USDOC to simply "deem" countervailable subsidies found to have been
provided to upstream producers of the raw agricultural product to have passed-through to the
downstream processed product.326 We understand this to mean that there is no possibility for the
USDOC to attribute to the downstream processed product anything less than the full amount of the
subsidies provided to upstream producers of the raw agricultural product.327 We do not see how an
evaluation of the two factual circumstances in Section 771B alone would provide a basis to calculate
with any precision the degree or the extent of pass -through. Thus, not only does Section 771B
require the USDOC to presume the existence of pass -through when the two designated factual
circumstances are present, it also effectively requires the USDOC to treat the full amount of any
countervailable subsidy provided to a raw agricultural input as if it had passed -through to th e
investigated processed product.
7.169. We have found above that under the terms of Article VI:3 of the GATT 1994 and Article 10
of the SCM Agreement, an investigating authority is required to establish the existence and extent
of indirect subsidization (i.e. pass-through of a benefit) taking into account facts and circumstances
that are relevant to that exercise. An investigating authority is not entitled to exclude from its
determination of pass -through factors that are potentially relevant to its determination and to
proceed on the basis of a presumption of indirect subsidization. Accordingly, for these reasons, we
find that Section 771B is inconsistent with Article VI:3 of the GATT and Article 10 of the
SCM Agreement because it does not leave open the possibility for the USDOC to consider other
factors affecting the market for the investigated product.
7.3.1.3 Conclusion
7.170. We conclude, for the reasons set forth above, that Section 771B is as such inconsistent with
the United States' obligations under Article VI:3 of the GATT 1994 and Article 10 of the
SCM Agreement because it requires the USDOC to presume that the entire benefit of a subsidy
provided in respect of a raw agricultural input product passes through to the downstream processed
agricultural product, based on a consideration of only the two factual circumstances prescribed in
that provision, without leaving open the possibility of taking into account any other factors that may
be relevant to the determination of whether there is any pass-through and, if so, its degree.
7.171. In addition to its claims under Article VI:3 of the GATT 1994 and Article 10 of the
SCM Agreement, we recall that the European Union also grounds its claims against Section 771B
under Articles 19.1, 19.3, 19.4, and 32.1 of the SCM Agreement. The European Union argues that
the USDOC acted inconsistently with Article 19.1 by imposing countervailing duties in the absence
of a final determination of the existence and amount of a subsidy; with Article 19.3 by failing to levy
countervailing duties in "appropriate amounts in each case"; and with Article 19.4 by levying
countervailing duties in excess of the amount of the subsidy found to exist .328 We understand the
factual basis for each of these claims to be the same as the basis for the European Union's claims

326 19 USC 1677-2, (Exhibit EU-52).
327 The United States has not argued that Section 771B leaves the USDOC with any discretion to
attribute less than the full amount of subsidies found to have been provided to upstream producers.
328 See, e.g. European Union's first written submission, para. 341.

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under Article VI:3 of the GATT 1994 and Article 10 of the SCM Agreement.329 The European Union
also makes a claim under Article 32.1 that is consequential in nature. 330 Having found that the
Section 771B of the Tariff Act of 1930 is "as such" inconsistent with Article VI:3 of the GATT 1994
and Article 10 of the SCM Agreement, we do not consider it necessary to make additional findings
with respect to violations of other provisions contained in the SCM Agreement in the same factual
circumstances. We therefore decline to make further findings as to whether Section 771B is also
inconsistent with Articles 19.1, 19.3, 19.4, and 32.1 of the SCM Agreement.
7.3.2 The European Union's challenge concerning the USDOC's application of
Section 771B in the Spanish ripe olives countervailing duty investigation
7.172. The European Union claims that in applying Section 771B in the underlying ripe olives
investigation, the USDOC acted inconsistently with Article VI:3 of the GATT 1994 and Articles 10,
19.1, 19.3, 19.4 , and 32.1 of the SCM Agreement. Not unlike its submissions with respect to its
complaint against Section 771B "as such", the European Union argues that the USDOC acted
inconsistently with the United States' WTO obligations in the underlying Spanish ripe olives
investigation because it improperly presumed the attribution of the full amount of the benefit of the
subsidies provided to raw olive producers for rel evant arm's length transactions with ripe olives
processors, without undertaking the requisite analysis. 331 The United States argues that the
European Union has failed to demonstrate that the USDOC acted inconsistently with its obligations in
applying Section 771B in the underlying investigation.
7.173. We first recall the USDOC's determination of the attribution of benefit in the underlying
investigation and thereafter assess whether this determination was inconsistent with the applicable
legal standard set forth in section 7.3.1.1 above.
7.3.2.1 The USDOC's determination of benefit in the Spanish ripe olives countervailing
duty investigation
7.174. In its preliminary and final determinations in the Spanish ripe olive s countervailing d uty
investigation, the USDOC found that subsidies granted to growers of raw olives in Spain could be
attributed to three investigated ripe olive producers, Agro Sevilla, Ángel Camacho, and Aceitunas
Guadalquivir.332 In each case , the transactions between th e growers and the producers were
confirmed to have been carried out at arm 's length with unaffiliated companies. 333 In making its
determination, the USDOC found that both factual circumstances identified in Section 771B were
established.334 Regarding the first factual circumstance, the USDOC found that the demand for the
prior stage product is substantially dependent on the demand for the latter stage product. 335

329 European Union's first written submission, paras. 382-383 and 420-421. The United States contends
that the European Union's claims under Article 19 "appear entirely dependent" on its claim under Article VI:3 of
the GATT 1994. (United States' first written submission, para. 108).
330 Article 32.1 provides: "[n]o specific action against a subsidy of another Member can be taken except
in accordance with the provisions of GATT 1994, as interpreted by this Agreement."
331 See, e.g. European Union's first written submission, paras. 332 and 334.
332 Agro Sevilla preliminary determination, (Exhibit EU-37), p. 2; Agro Sevilla final determination,
(Exhibit EU-39); Ángel Camacho preliminary determination, (Exhibit EU-38), p. 2; Ángel Camacho final
determination, (Exhibit EU-40); Aceitunas Guadalquivir preliminary determination, (Exhibit EU-36), p. 2; and
Aceitunas Guadalquivir final determination, (Exhibit EU-41), pp. 2-3.
333 Agro Sevilla response to the sourcing questionnaire (public version), (Exhibit EU-17), answers to
questions 1, 6, and 8 and exhibit 2; Extract from Agro Sevilla final calculation data, (Exhibit EU-43 (BCI));
Ángel Camacho response to the sourcing questionnaire (public version), (Exhibit EU-68), answers to
questions 1, 6, and 8 and exhibit 2; Extract from Ángel Camacho final calculation data, (Exhibit EU-45 (BCI));
Aceitunas Guadalquivir response to the sourcing questionnaire, (Exhibit EU-63), answers to questions 1, 6, and
8 and exhibit 2; and Extract from Aceitunas Guadalquivir final calculation data, (Exhibit EU-47 (BCI)).
334 See the text of Section 771B in para. 7.157 above.
335 The USDOC found that the percentage of raw olives that are used to produce table olives (including
ripe olives) of 8% was "substantial" and therefore concluded that the demand for raw olives is "dependent"
upon demand for table olives. (PIDM, (Exhibit EU-1), pp. 15-16; FIDM, (Exhibit EU-2), pp. 21-22). The
respondents to the investigation subsequently challenged the USDOC's analysis before the USCIT. On
17 January 2020 the USCIT held that the USDOC had applied an impermissible interpretation of the term
"substantially dependent" under Section 771B and had deviated from its past practice without adequate
explanation in determining that the demand for raw olives is "substantially dependent" on the demand for
table olives. The USCIT therefore remanded this aspect of the analysis to the USDOC for further consideration.
The USCIT upheld the USDOC's finding under the second criterion of Section 771B that the processing of raw

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Regarding the second factual circumstance, the USDOC found that the value for processing raw
olives into subject merchandise "represents a limited value added to the raw commodity" and further
found that "irrespective of the relationship between cost and value, the processing operation does
not change the essential character of the olive ".336 Accordingly, t he USDOC stated that it was
"attributing … the benefits received by olive growers … under Section 771B of the Act".337 The USDOC
affirmed its findings in the final determination.338
7.3.2.2 Whether the USDOC's determination of benefit in the Spanish ripe olive
investigation complied with the applicable legal standard
7.175. As reflected in its preliminary and final determinations, the USDOC made its determination
of pass -through for three mandatory respondents Agro Sevilla, Ángel Camacho and Aceitunas
Guadalquivir based on an evaluation of the two factual circumstances set out in Section 771B,
without consideration of any other potentially relevant information relating to the market or the
competitive conditions affecting the inve stigated product. We have found above that Section 771B
is inconsistent as such with Article VI:3 of the GATT 1994 and Article 10 of the SCM Agreement,
because it directs the USDOC to presume the existence of pass-through between raw and processed
agricultural products, whenever the two factual circumstances it prescribes are established , and to
avoid consideration of additional factors that may potentially be relevant. We found this inconsistent
with the obligations in Article VI:3 and Article 10 to establ ish the existence and extent of indirect
subsidization (i.e. pass-through) taking into account facts and circumstances that are relevant to
that exercise. As we already explained, this follows from the operation of the law itself. In view of
this, we find the USDOC's determination in the ripe olives investigation to be inconsistent with
Article VI:3 and Article 10 for the same reasons that Section 771B is inconsistent "as such" with
those same provisions.
7.3.2.3 Conclusion
7.176. We conclude, for the reasons set forth above, that through the application of Section 771B
of the Tariff Act of 1930 in the Spanish ripe olives investigation the United States acted inconsistently
with its obligations under Article VI:3 of the GATT 1994 and Article 10 of the SCM Agreement to
establish the existence and extent of indirect subsidization ( i.e. pass-through) taking into account
all relevant facts and circumstances.
7.177. As we noted above in respect of the European Union's "as such" claims, the European Union
also raises claims under Articles 19.1, 19.3, 19.4, and 32.1 of the SCM Agreement concerning the
USDOC's determination of benefit in the Spanish ripe olives investigation. The factual basis for each
of these claims appears to be the same as the basis for the European Union's claims under
Article VI:3 of the GATT 1994 and Article 10 of the SCM Agreement. In light of this, we do not
consider it necessary to make additional findings about whether the same factual circumstances give
rise to violations of other provisions contained in the SCM Agreement and therefore decline to make
further findings under Articles 19.1, 19.3, 19.4, and 32.1 of the SCM Agreement.
7.4 The USITC's affirmative final injury determination
7.178. In this section we will address the European Union's challenge to the USITC's affirmative
final injury determination concerning dumped and subsidized ripe olives from Spain
(Injury Determination).339 The European Union claims that the Injury Determination was

olives into ripe olives adds only limited value. (Asociación de Exportadores e Industriales de Mesa et al.
v. United States, (Exhibit EU-50), pp. 18-40). On 29 May 2020, the USDOC issued a remand redetermination
reaffirming its initial findings. (Remand Redetermination, (Exhibit EU-80), p. 24).
336 PIDM, (Exhibit EU-1), p. 16; FIDM, (Exhibit EU-2), pp. 22-24. The USDOC observed the record
evidence showing a 3% value for processing the raw input. (PIDM, (Exhibit EU-1), p. 16).
337 Agro Sevilla preliminary determination, (Exhibit EU-37), p. 2; Ángel Camacho preliminary
determination, (Exhibit EU-38), p. 2; and Aceitunas Guadalquivir preliminary determination, (Exhibit EU-36), p. 2.
No changes occurred in the final determinations. (Agro Sevilla final determination, (Exhibit EU-39); Ángel
Camacho final determination, (Exhibit EU-40); and Aceitunas Guadalquivir final determination, (Exhibit EU-41)).
338 FIDM, (Exhibit EU-2), p. 26.
339 Injury Determination, (Exhibit EU-5). See also Notice of determinations, (Exhibit EU-10); and
Preliminary determination on injury, (Exhibit EU-34).

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inconsistent with Articles 3.1, 3.2, 3.4, and 3.5 of the Anti-Dumping Agreement, and Articles 15.1,
15.2, 15.4, and 15.5 of the SCM Agreement.340
7.179. This section will first explain the rationale of our decision to deny the United States' request
for a preliminary ruling that the European Union's claims under Article 3.4 of the
Anti-Dumping Agreement and Article 15.4 of the SCM Agreement are outside the Panel 's terms of
reference.341 We will then address t he European Union's request that the Panel ma ke adverse
inferences concerning the United States' failure to provide certain information requested by the
Panel.342
7.180. Thereafter, we will review the European Union's allegation that the consideration of
customer groups in the USITC's volume and price effects analyses constituted a "segmented
analysis" of the ripe olive market that was inconsistent with Articles 3.1 and 3. 2 of the
Anti-Dumping Agreement and Articles 15.1 and 15.2 of the SCM Agreement.343 We will then consider
the European Union's specific challenges to the USITC's analyses of volume, pri ce effects, impact,
and causation. The European Union alleges each of these component parts of the injury investigation
was inconsistent with relevant provisions of Article 3 of the Anti-Dumping Agreement and Article 15
of the SCM Agreement.344 Finally, we will address certain consequential arguments made by the
European Union.345
7.181. We note that the European Union alleges that each of its arguments establishes a violation
of both Article 3 of the Anti-Dumping Agreement and Article 15 of the SCM Agreement. As the
terminology and structure of the relevant provisions of Article 3 of the Anti-Dumping Agreement and
Article 15 of the SCM Agreement are substantially similar, we understand these to contain the same
substantive obligations for the purpose of the European Union's claims.346 This is consistent with the
approach the parties have adopted in presenting their positions in this dispute.347
7.4.1 The United States' request for a preliminary ruling that claims under Article 15.4 of
the SCM Agreement and Article 3.4 of the Anti-Dumping Agreement are outside the
Panel's terms of reference
7.182. In its first written submission the United States requested the Panel to preliminarily rule that
the European Union's claims under Article 15.4 of the SCM Agreement and Article 3.4 of the
Anti-Dumping Agreement are outside the Panel's terms of reference, arguing that neither claim was

340 European Union's panel request, p. 2; first written submission, sections VI-VII; and second written
submission, sections IV-V.
341 See Annex A-5. See also United States' first written submission, paras. 19-27.
342 European Union's 25 February 2021 comments on United States' 4 February 2021 letter, paras. 5-6
and 13. See also European Union's second written submission, para. 86.
343 European Union's first written submission, paras. 466-493 and 532-539; second written submission,
paras. 101-124 and 153.
344 European Union's first written submission, sections VII(B)(2-4), VII(C)(2-3), and VII(D-E); second
written submission, sections V(B)(2-4), V(C)(2-3), and V(D-E).
345 In relation to the USITC's volume analysis, see European Union's first written submission,
paras. 493, 512, 518, 560, 564-565, 600, and 610. In relation to the USITC's price effects analysis, see
European Union's first written submission, paras. 539, 551, 557, 560, 564-565, 600, and 610.
346 We agree with the observation by the Appellate Body in US – Offset Act (Byrd Amendment) that,
with respect to provisions of the Anti-Dumping Agreement and the SCM Agreement with identical terminology
and structure, there is a strong interpretive presumption that the provisions set out the same substantive
obligations. (Appellate Body Report, US – Offset Act (Byrd Amendment), para. 268). The European Union has
claimed parallel violations of Articles 3.1, 3.2, 3.4, and 3.5 of the Anti-Dumping Agreement and Articles 15.1,
15.2, 15.4, and 15.5 of the SCM Agreement. Articles 3.1, 3.2, and 3.5 of the Anti-Dumping Agreement and
Articles 15.1, 15.2, and 15.5 of the SCM Agreement are substantially identical except that those under the
Anti-Dumping Agreement concern dumped imports while those under the SCM Agreement concern subsidized
imports. Article 3.4 of the Anti-Dumping Agreement and Article 15.4 of the SCM Agreement also contain
certain differences, however these are not significant for the issues raised by the European Union. On this
basis, unless otherwise indicated, we treat the obligations contained in Articles 3.1, 3.2, 3.4, and 3.5 of the
Anti-Dumping Agreement as the same as those contained in Articles 15.1, 15.2, 15.4, and 15.5 of the
SCM Agreement.
347 See, e.g. European Union's first written submission, para. 436; and United States' first written
submission, paras. 168-171.

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identified in the European Union's consultations request or panel request.348 This request was based
on the argument that the European Union raised a series of arguments in its first written submission
contending that the USITC's injury determination is inconsistent with both Article 15.4 and
Article 3.4,349 even though t hese provisions are not explicitly mentioned in either the
European Union's request for consultations 350 or panel request. 351 The European Union's panel
request contains the following language in relation to the USITC's injury determination:
The EU is concerned that [the challenged] measures appear to be inconsistent with:
Article VI:3 of the GATT 1994, and Articles 15.1, 15.2 and 15.5 of the
SCM Agreement, as a consequence of one or both of the preceding [bases]
and because, in any event, the [US]ITC did not properly factor into the
determination of injury the evolution in the volume of subsidized imports,
or the effect of the subsidised imports on prices, and did not demonstrate
the required causal relationship between subsidized imports and injury to
the domestic industry, also taking into account non-attribution factors. The
injury determination is not based on positive evidence and does not involve
an objective examination of the volume of the subsidized imports and their
effects on prices, and the consequent impact on the domestic producers.
Moreover, in the absence of relevant information, which was redacted from
the report of the [US]ITC, the US did not disclose all relevant information
as required under Article 22.5 of the SCM Agreement, including during the
consultations. For the same reasons, the dumping meas ures appear to be
inconsistent with Articles VI:1 and VI:2 of the GATT 1994, and Articles 3.1,
3.2 and 3.5, and Article 12.2.2 of the Anti-Dumping Agreement.352
7.183. Thus, with respect to claims raised under Article 15 of the SCM Agreement and Article 3 of
the Anti-Dumping Agreement, the European Union's panel request explicitly mentions Articles 15.1,
15.2, and 15.5 and Articles 3.1, 3.2, and 3.5, but does not mention Article 15.4 or Article 3.4.353
7.184. The United States argues that the European Union's panel re quest identifies the specific
aspects of the USITC's analysis that are alleged to be inconsistent. According to the United States,
these aspects are "specifically that 't he [USITC] did not properly factor into the determination of
injury the evolution in the volume of subsidized imports, or the effect of the subsidised [sic] imports
on prices, and did not demonstrate the required causal relationship between subsidized imports and
injury to the domestic industry, also taking into account non -attribution fact ors.'"354 The
USITC's injury determination in respect of dumping is alleged to be inconsistent for the same
reasons.355
7.185. The United States argues, however, that the European Union's panel request does not
identify a claim under either Article 15.4 of the SCM Agreement or Article 3.4 of the
Anti-Dumping Agreement, and further does not raise any arguments with respect to the economic
factors to be considered during an examination of the impact of dumped/subsidized imports on the
domestic industry, i.e. those factors contained in Article 15.4 and Article 3.4. Thus, the United States
considers that the European Union's legal claims with respect to injury are limited to its assertion

348 United States' first written submission, section II. In its first written submission, the European Union
advances a number of claims under Article 15.4 and Article 3.4 in relation to the USITC's volume analysis and
price effects findings, as well as an alleged failure by the USITC to examine the impact of the dumped and
subsidized imports on the domestic industry as a whole. We understand that the United States' preliminary
ruling request concerns all claims that are alleged in connection with Article 15.4 and Article 3.4.
349 See, e.g. European Union's first written submission, paras. 558-596.
350 European Union's consultation request, p. 2.
351 European Union's panel request, p. 2.
352 European Union's panel request, p. 2.
353 The European Union's request for consultation similarly mentions claims in respect of Articles 15.1,
15.2, and 15.5 and Articles 3.1, 3.2, and 3.5, but does not explicitly mention Article 15.4 or Article 3.4.
(European Union's consultation request, p. 2).
354 United States' first written submission, para. 24 (quoting European Union's panel request, p. 2).
355 United States' first written submission, para. 24.

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set out in its request for the establishment of a panel, to the exclusion of claims under Article 15.4
and Article 3.4.356
7.186. The European Union acknowledges that its panel request does not specify either Article 15.4
or Article 3.4, and that normally, compliance with Article 6.2 of the DSU requires that only the
specific provisions mentioned in the panel request may fall within the panel's terms of reference.
Notwithstanding that, the European Union argues that the circumstances permit validly including
claims in connection with Article 15.4 and Article 3.4 within the panel's terms of reference, and that
this is consistent with the approach followed by prior panels . As its main contention, the
European Union argues that the narrative language of its panel request clearly states that the
European Union takes issue with the fact that the USITC did not carry out an objective examination
of the "consequent impact" on the domestic producers. According to the European Union, the
reference to the examination of impact logically cannot constitute a stand -alone claim under
Article 15.1 or Arti cle 3.1, but necessarily presupposes a claim under Article 15.4 and Article 3.4
because those provisions speak to the examination of impact.357 This, says the European Union, is
due not only to the fact that the term "impact" appears in Article 15.1 and Article 3.1, as well as in
Article 15.4 and Article 3.4, but also because Article 15.1 and Article 3.1 provide " overarching
general guidance"358, while Article 15.4 and Article 3.4 contain the "specific guidance" concerning
the impact examination.359
7.187. The European Union rejects the United States' contention that the lack of a reference in the
narrative of its panel request to the USITC's consideration of the economic factors during its
examination of impact means that the European Union's claims should be limited . In this respect,
the European Union argues that there is no requirement in Article 6.2 of the DSU to set out
arguments in a panel request. In any event, the European Union maintains that its Article 15.4 and
Article 3.4 claims are not directed at the USITC's consideration of the economic factors but instead
challenge "the overall impact analysis" carried out by the USITC.360
7.188. Finally, the European Union argues that its Article 15.4 and Article 3.4 claims rely on "the
same legal reasoning" that form the basi s of its claims under Article 15.2 and Article 3.2, and
therefore the United States would not be prejudiced by the inclusion of the
European Union's Article 15.4 and Article 3.4 claims.361
7.189. We recall that a panel's terms of reference are defined by Articles 6.2 and 7.1 of the DSU.
Pursuant to Article 7.1, a panel is "[t]o examine … the matter referred to the DSB" by the
complaining party's panel request and "to make such findings as will assist the DSB in making the
recommendations or in giving the rulings pr ovided for" in the covered agreement(s) related to the
complaining party's claims. Article 6.2 of the DSU states as relevant:
The request for the establishment of a panel 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.
7.190. We share the views of past panel and Appellate Body reports that the terms of Article 6.2
establish that a complainan t must satisfy two key requirements in its panel request, namely, the

356 United States' first written submission, para. 25.
357 European Union's response to the United States' preliminary ruling request, para. 24.
358 The European Union does not consider relevant the fact that its panel request excludes a general
reference to either Article 15 or Article 3 under the view that Article 15.1 and Article 3.1, respectively,
constitute overarching provisions comparable to a reference to Article 15 or Article 3.
(European Union's response to the United States' preliminary ruling request, para. 18).
359 European Union's response to the United States' preliminary ruling request, para. 24 (referring to
Panel Report, Egypt – Steel Rebar, para. 7.102). The European Union also argues that there is a further "close
relationship and interlink" between Articles 15.5 and 15.4, and Articles 3.5 and 3.4, as evident from language
in Article 15.5 and Article 3.5 (which are identified in its panel request) requiring an investigating authority to
demonstrate that subsidized/dumped imports are, "through the effects of subsidies/dumping as set forth in
paragraphs 2 and 4", causing injury. The European Union argues that this provides further support that its
Article 15.4 and Article 3.4 claims fall within the Panel's terms of reference. (European Union's response to the
United States' preliminary ruling request, para. 19).
360 European Union's response to the United States' preliminary ruling request, para. 29.
361 European Union's response to the United States' preliminary ruling request, para. 27.

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"identification of the specific measures at issue", and "the provision of a brief summary of the legal
basis of the complaint (or the claims)".362 The two elements together constitute the "matter referred
to the DSB" and form the basis for the Panel's terms of reference under Article 7.1 of the DSU. These
requirements are therefore central to the establishment of a panel's jurisdiction.363 The panel
request also serves a due process function, providing the respondent and third parties notice as to
the nature of the complainant's case364, enabling them to respond accordingly.365 We agree with the
Appellate Body that a panel must therefore determine whether the panel request, read as a whole
and as it existed at the time of filing 366, is "sufficiently clear" or "sufficiently precise" , based on an
"objective examination" of the same.367
7.191. In order to "provide a brief summary of the legal basis of the complaint", the panel request
must set out the claims so as to "present the problem clearly".368 We do not understand the parties
to disagree with the view that a "claim" in this context is an allegation "that the respondent party
has violated, or nullified or impaired the benefits arising from, an identifi ed provision of a
particular agreement"369; and that "arguments", by contrast, are statements put forth by a
complaining party "to demonstrate that the responding party's measure does indeed infringe upon
the identified treaty provision".370 Whether such a brief summary is "sufficient to present the problem
clearly" is to be assessed on a case -by-case basis, keeping in mind the nature and scope of the
provisions of the covered agreements alleged to have been violated.371
7.192. Having carefully consi dered the parties' arguments as well as the relevant language
contained in the European Union's panel request, the Panel considers that, in citing Article 15.1 of
the SCM Agreement and Article 3.1 of the Anti -Dumping Agreement, and in referring to certain
language contained in Article 15.1 and Article 3.1 to make an "objective examination of … the
consequent impact of [subsidized/dumped] imports on domestic producers of such products", the
European Union has provided a brief summary of the legal basis of the complaint sufficient to meet
the minimum requirements of Article 6.2 of the DSU, with respect to claims under Article 15.4 of the
SCM Agreement and Article 3.4 of the Anti-Dumping Agreement.
7.193. Article 15 of the SCM Agreement and Article 3 of the Anti -Dumping Agreement govern the
determination of injury and causation in countervailing and anti -dumping proceedings in almost
identical terms. There is undoubtedly a close normative relationship between the different
subparagraphs within each set of these provisions, which together operate to establish the relevant
legal framework and disciplines for investigating authorities to follow when conducting an injury and
causation analysis. Within this framework, we consider that Article 15.1 and Article 3.1 each function
as an overarching provision that is directly linked with the more detailed obligations set forth in

362 Appellate Body Report, US – Carbon Steel, para. 125.
363 Appellate Body Reports, EC and certain member States – Large Civil Aircraft, paras. 639-640
(referring to Appellate Body Reports, Guatemala – Cement I, paras. 72-73; US – Carbon Steel, para. 125;
US – Continued Zeroing, para. 160; US – Zeroing (Japan) (Article 21.5 – Japan), para. 107; and Australia –
Apples, para. 416); US – Countervailing and Anti–Dumping Measures (China), para. 4.6; and Brazil –
Desiccated Coconut, DSR 1997:1, p. 186.
364 Appellate Body Reports, Brazil – Desiccated Coconut, DSR 1997:1, p. 186; US – Carbon Steel,
para. 126; and EC and certain member States – Large Civil Aircraft, para. 640.
365 Appellate Body Reports, Brazil – Desiccated Coconut, DSR 1997:1, p. 186; Chile – Price Band
366 Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 642.
367 Appellate Body Reports, EC – Bananas III, para. 142; EC and certain member States – Large Civil
Anti-Dumping Measures (China), para. 4.8; US – Oil Country Tubular Goods Sunset Reviews, para. 169; and
US – Zeroing (Japan) (Article 21.5 – Japan), para. 108. Parties' subsequent submissions and statements,
therefore, cannot "cure" defects in panel requests. (Appellate Body Reports, China – Raw Materials, para. 220;
EC – Bananas III, para. 143; EC and certain member States – Large Civil Aircraft, para. 787; US – Carbon
Steel, para. 127; and US – Countervailing and Anti-Dumping Measures (China), para. 4.9).
368 Appellate Body Report, EC – Selected Customs Matters, para. 167.
369 Appellate Body Report, Korea – Dairy, para. 139.
370 Appellate Body Report, Korea – Dairy, para. 139. A panel request need not, however, include
arguments seeking "to demonstrate that the responding party's measure does indeed infringe upon the
identified treaty provision". A party's arguments may be presented and clarified over the course of the
proceeding. (Appellate Body Report, Korea – Dairy, para. 139 (referring to Appellate Body Reports,
371 Appellate Body Report, US – Countervailing Measures (China), para. 4.9.

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provisions such as Article 15.4 and Article 3.4372, and the inquiries foreseen under the
subparagraphs that follow serve as elements of a single, overall analysis addressing the question of
whether subsidized or dumped imports are causing injury. 373 In light of this, there is a distinct
possibility that a claim under Article 3.1 and Article 15.1 may need to be resolved by assessing
compliance with a more spe cific provision, such as Article 15.4 and Article 3.4, in respect of
assessing the WTO -consistency of an investigating authority's examination of impact. Indeed, in
prior disputes, panels have shared this view, finding that a claim of inconsistency with Ar ticle 15.1
or Article 3.1 will not normally be made or resolved independently of other provisions of Article 15
or Article 3, respectively. 374 We therefore consider that by referring to both Article 15.1 and
Article 3.1 and stating that the Injury Determination "does not involve an objective examination
of … the consequent impact on the domestic producers "375, the European Union's panel request
signals to the United States the likelihood that the European Union intended to pursue a claim in
respect of Article 15.4 and Article 3.4, and that compliance with those articles was necessarily
concomitant with the claims under Article 15.1 and Article 3.1 respectively, as specifically adverted
to in the panel request by the use of the words "consequent impact".376
7.194. We further disagree with the United States that the European Union's panel request should
be understood as limiting the European Union's complaint to the Injury Determination in respect of
the volume of subsidized imports or the effect of the subsidized/dumped imports on prices and the
assessment of causation. 377 As we have noted, while flagging concerns with these aspects of the
USITC's Injury Determination, the panel request also states that the Injury Determination "does not
involve an objective examination of … the consequent impact on the domestic producers". In making
its argument the United States fails to acknowledge this additional language in the
European Union's panel request. We also disagree that the absence of any reference to economic
factors to be considered during an examination of the impact of dumped/subsidized imports on the
domestic industry precludes the possibility of addressing claims in relation to Article 15.4 and
Article 3.4, as there may be other considerations relevant to the examination of impact that could
form the basis for a claim under either provision.378
7.195. For the reasons set forth above, we therefore conclude that in citing Article 15.1 of the
SCM Agreement and Article 3.1 of the Anti-Dumping Agreement, and in referring to certain language
contained in Article 15.1 and Article 3.1 to make an "objective examination of … the consequent
impact of [subsidized/dumped] imports on domestic producers of such products ", the

372 We note that the Appellate Body made a similar observation in the context of Article 3 of the
Anti-Dumping Agreement. (Appellate Body Report, US – Carbon Steel (India), para. 4.580).
373 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), para. 5.141. See also
Appellate Body Reports, Korea – Pneumatic Valves (Japan), para. 5.193; and Russia – Commercial Vehicles,
para. 5.54.
374 Panel Report, China – Cellulose Pulp, para. 7.13. See also Panel Report, Korea – Pneumatic Valves
(Japan), para. 7.33. Certain panels have found that Article 15.1 and Article 3.1 can be infringed independently
of obligations in other subparagraphs under Article 15 or Article 3. (Panel Reports, Morocco – Hot-Rolled Steel
(Turkey), paras. 7.146, 7.151, and 7.219 (finding that Article 3.1 can be violated independently when an
erroneous act or omission, such as an erroneous finding that the domestic industry in question is
unestablished, taints the overall injury analysis); Argentina – Poultry Anti-Dumping Duties, paras. 7.283-7.286
(finding a stand-alone violation of Article 3.1 of the Anti-Dumping Agreement, and further determining that it
did not have to examine the part of the same claim concerning Article 3.4); and EC – Countervailing Measures
on DRAM Chips, fn 218 (stating that an investigating authority may act inconsistently with Article 15.1 if it
lacks positive evidence and has not examined the evidence before it objectively)).
375 Emphasis added.
376 We note in Thailand – H-Beams, the panel similarly found references in the panel request to the
language "positive evidence", "objective examination" and "enumerated factors such as import volume, price
effects, and the consequent impact of such imports on the domestic industry", met the minimum requirements
of Article 6.2 DSU with respect to the complainant's claims under Articles 3.1, 3.2, and 3.4 of the
Anti-Dumping Agreement, even though the panel request did not explicitly list these specific provisions. The
panel request referred to Article 3 of the Anti-Dumping Agreement generally. (Panel Report, Thailand –
H-Beams, para. 7.36; see also Appellate Body Report, Thailand – H-Beams, para. 90).
377 United States' first written submission, para. 24 (referring to European Union's panel request, p. 2).
378 For instance, in Morocco – Hot-Rolled Steel (Turkey), the panel concluded that the Turkish
investigating authority acted inconsistently with Articles 3.1 and 3.4 of the Anti-Dumping Agreement, inter alia,
by disregarding the captive market in its injury analysis. (Panel Report, Morocco – Hot-Rolled Steel (Turkey),
paras. 7.223, 7.262, 7.278, and 7.288). In China – Cellulose Pulp, the panel found that Canada had failed to
establish that China's investigating authority's examination of the impact was inconsistent with Articles 3.1 and
3.4 of the Anti-Dumping Agreement, because it failed to objectively examine the domestic industry's market
share. (Panel Report, China – Cellulose Pulp, paras. 7.113, 7.126, and 7.138).

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European Union has provided a brief summary of the legal basis of the complaint sufficient to meet
the minimum requirements of Article 6.2 of the DSU with respect to claims under Article 15.4 of the
SCM Agreement and Article 3.4 of the Anti-Dumping Agreement.
7.4.2 The European Union's request that the Panel make ad verse inferences concerning
the United States' failure to provide certain information requested by the Panel
7.196. Throughout these proceedings the Panel has had access to only the public version of the
Injury Determination. This document redacts certain informa tion that was deemed confidential by
the USITC in the investigation. In its first written submission, the European Union indicated that it
expected the United States to provide it and the Panel with an unredacted version of the
USITC's determination so that the Panel, the European Union, and third parties, if they so requested,
would be able to verify the factual basis upon which the United States determined, in particular,
injury and causation in the underlying administrative proceedings.379
7.197. Following the f irst substantive meeting, the Panel requested the United States to provide
certain redacted information.380 The United States informed the Panel that the requested information
was subject to an administrative protecti ve order under domestic law that require d authorization
from relevant parties to disclose. 381 The United States stated it was seeking such authorization. 382
The United States did not ultimately provide the Panel with the requested information, but instead
supplied several tables depicting trends r elated to the requested data. 383 The European Union
subsequently requested the Panel to draw adverse inferences from the United States' failure to
provide the requested information.384 Notwithstanding this, the European Union maintains that the
resolution of its arguments does not depend on the Panel having access to the redacted
information.385
7.198. Following the second substantive meeting, the Panel posed supplemental questions to the
United States addressing certain issues affected by an absence of unredacted d ata.386 In response
to these supplemental questions, the United States made a number of factual clarifications. 387 The
European Union was provided with an opportunity to comment on the United States' factual
statements and did not challenge their accuracy.388
7.199. We recall that Article 13.1 of the DSU provides:
Each panel shall have the right to seek information and technical advice from any
individual or body which it deems appropriate. However, before a panel seeks such
information or advice from any individual or body within the jurisdiction of a Member it
shall inform the authorities of that Member. A Member should respond promptly and
fully to any request by a panel for such information as the panel considers necessary

379 European Union's first written submission, para. 424.
380 29 October 2020 Panel question No. 40 (requesting the unredacted version of Injury Determination,
(Exhibit EU-5), tables II-1, III-4, III-8, IV-2, IV-5, IV-6, IV-7, IV-8, and C-1).
381 United States' 12 November 2020 response to the Panel question No. 40, paras. 82-84.
382 United States' 12 November 2020 response to the Panel question No. 40, para. 84.
383 United States' letter to the Panel dated 4 February 2021 (providing revised public versions of Injury
Determination, (Exhibit EU-5), tables IV-6, IV-7, IV-8, and C-1).
384 European Union's 25 February 2021 comments on United States' 4 February 2021 letter, paras. 5-6
and 13. See also European Union's 13 April 2021 comments on the United States' 26 March 2021 responses to
385 European Union's 25 February 2021 comments on United States' 4 February 2021 letter, para. 4; see
also European Union's second written submission, para. 85 (stating that "the EU emphasizes that the success
of the EU's claims and the resolution of this dispute does not hinge on the receipt of the BCI requested by the
Panel").
386 5 March 2021 Panel questions.
387 United States' 26 March 2021 responses to Panel questions Nos. 1-4.
388 European Union's 13 April 2021 comments on the United States' 26 March 2021 response to Panel
questions. We note that the European Union contested the United States arguments in response to questions
Nos. 1, 2(a), 2(g)-(h), 3, and 4. The European Union's comment in relation to the United States' responses to
questions Nos. 2(b)-(f) was in each case that it had no observations, although noting that "[t]he fact that the
EU has no observations does not signify agreement with the US's statements". We do not understand the
European Union to challenge the factual statements made by the United States, however, although the
European Union clearly does in certain circumstances challenge the arguments made by the United States on
the basis of those factual statements.

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and appropriate. Confidential information which is provided shall not be revealed
without formal authorization from the individual, body, or authorities of the Member
providing the information.
7.200. Article 13.1 of the DSU thus allows a Panel to request information "from any individual or
body which it deems appropriate" and indicates that a "Member should respond promptly and fully
to any request by a panel". We agree with prior panel and Appellate Body reports that Article 13.1
grants discretionary authority to panels to seek information from relevant sources. 389 We further
agree that as part of its objective assessment of the facts under Article 11 of the DSU a panel is
entitled to draw adverse inferences from a party's refusal to provide information.390
7.201. Taking into account the course of events described above, we decline to draw adverse
inferences from the United States' failure to provide the requested redacted information in full. First,
we note that the United States clarified a number of factual issues in response to questions from the
Panel following the second substantive meeting.391 The accuracy of these factual statements has not
been challenged by the European Union, and the United States' clarifications are of assistance to us
in resolving certain issues in dispute between the parties. 392 Second, the European Union has
explained that additional factual information is not necessary, in its view, to make out its claims in
relation to the Injury Determination.393 For these reasons, we decline the European Union's request
to draw adverse inferences from the United States' failure to provide the Panel with the requested
information.
7.4.3 The USITC's analysis of customer groups in its examination of volume and price
effects under Articles 3.1 and 3.2 of the Anti -Dumping Agreement and Articles 15.1 and
15.2 of the SCM Agreement
7.202. The European Union puts forward two lines of argument challenging the USITC's analysis of
customer groups in its examination of volume and price effects . The European Union first argues
that the USITC's examination of the volume and price effects of ripe olives from Spain was based on
a "segmented analysis" of customer groups in the ripe olive market that was "arbitrary, meaningless
and in contradiction to the USITC's own determinations".394 Second, the European Union argues that
the USITC's consideration of customer groups was inappropriate because an "authority cannot define
the domestic industry in a non-segmented manner and then carry out an injury analysis on the basis
of a segmented industry".395 The European Union thus claims that the Injury Determination was not
based on an objective examination of positive evidence in violation of Articles 3.1 and 3.2 of the
Anti-Dumping Agreement and Articles 15.1 and 15.2 of the SCM Agreement.396
7.203. The United States argues that the USITC did not conduct a "segmented analysis", but rather
based its injury analysis on data pertaining to the ripe olive market as a whole.397 In relation to the
European Union's second argument, the United States responds that prior WTO dispute settlement

389 See, e.g. Appellate Body Report, Argentina – Textiles and Apparel, para. 84.
390 See, e.g. Appellate Body Report, US – Wheat Gluten, paras. 172-173.
391 United States' 26 March 2021 response to Panel questions; European Union's 13 April 2021
comments on the United States' 26 March 2021 response to Panel questions.
392 See discussion of these factual statements in paras. 7.267-7.275 and fn 585 below. We note that in
one instance there is a conflict between certain factual statements in the European Union's first written
submission in the context of its arguments regarding causation, and the factual clarifications on that point
made by the United States in its comments to the European Union's 26 March 2021 reply to Panel questions on
13 April 2021. As this statement was made in the United States' comments, the European Union did not have
an opportunity to respond. As discussed below, we do not consider that the relevant factual issue would affect
our finding, and thus have not sought additional comments from the parties. (See discussion below,
para. 7.315).
393 European Union's second written submission, para. 85; 25 February 2021 comments on letter from
394 European Union's first written submission, para. 465.
395 European Union's second written submission, para. 102. See also European Union's first written
submission, paras. 497-502; and second written submission, para. 162.
396 European Union's first written submission, paras. 465, 492-493, and 538-539.
397 United States' first written submission, paras. 164-180 and 207-208; second written submission,
paras. 46-60.

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reports that the European Union relies upon to support its claims clearly allow for a consideration of
market segments.398
7.204. We examine the merits of the European Union's claims in the sections that follow.
7.4.3.1 Whether the USITC conducted a "segmented analysis" of volume and price effects
that was inconsistent with Articles 3.1 and 3.2 of the Anti -Dumping Agreement and
Articles 15.1 and 15.2 of the SCM Agreement
7.205. The European Union argues that the USITC's examination of the volume and price effects of
ripe olives from Spain was based on a "segmented analysis" of customer groups in the ripe olive
market that was "arbitrary, meaningless and in contradiction to the USITC's own determinations".399
The European Union maintains that "only the domestic industry as a whole"400 was relevant for the
USITC's analysis because ripe olives are a "homogenous product"401 purchased by " all customer
groups interchangeably".402 The European Union asserts that the USITC's examination of volume
and price effects was based on this allegedly arbitrary "segmentation" and was thus not an objective
examination based on positive evidence in violation of Articles 3.1 and 3.2 of the
Anti-Dumping Agreement and Articles 15.1 and 15.2 of the SCM Agreement.403
7.206. The United States responds that the USITC did not conduct a "segmented analysis", but
rather based its injury analysis on data pertaining to the ripe olive market as a whole. 404 The
United States maintains that the USITC 's examination of trends concerning retailers, distributors ,
and institutional/food processors was objective and based on positive evidence.405
7.207. In the Injury Determination the USITC determined that ripe olives were gene rally sold to
purchasers categorized as retailers, distributors, and institutional/food processors. 406 The USITC
described t hese customer groups as "channels of distribution". 407 The USITC prepared d ata
concerning sales and market share of domestic, Spanish , and other imported ripe olives based on
sectors defined by each customer group. 408 The USITC then examined t rends relating to these
customer groups, particularly retailers, in its injury analysis.
7.208. In the analysis that follows w e will refer to "customer gro ups" or "channels of distribution"
interchangeably as indicating the set of purchasers categorized by the USITC as retailers,
distributors, and institutional/food processors (e.g. the "retail customer group" or the "retail channel

398 United States' first written submission, para. 173 (referring to Appellate Body Report, US –
Hot-Rolled Steel, para. 204; and European Union's first written submission, para. 499).
399 European Union's first written submission, para. 465. See also European Union's first written
submission, paras. 466-493 and 532-539; and second written submission, paras. 101-124 and 153.
The European Union variously alleges the USITC's examination of customer groups was "arbitrary"
(e.g. European Union's first written submission, paras. 465, 467, 469, and 492), "meaningless"
(e.g. European Union's first written submission, paras. 465, 467, 472, and 476), "in contradiction to the
USITC's own determinations" (e.g. European Union's first written submission, paras. 465 and 492; second
written submission, paras. 104 and 106), "artificial" (e.g. European Union's first written submission, paras. 465
and 476), "makes no sense" (e.g. European Union's first written submission, paras. 467 and 472),
"superfluous" (e.g. European Union's first written submission, para. 472), and "not supported by evidence on
the record" (European Union's second written submission, para. 104; see also ibid. para. 106). We understand
these various allegations are different ways of articulating the European Union's argument that the
USITC's consideration of customer groups was not based on an objective examination of positive evidence. We
therefore do not consider it necessary to respond to each of these allegations individually, but rather address
them collectively by responding to the substantive arguments put forward by the European Union.
400 European Union's first written submission, para. 483. (emphasis omitted)
401 European Union's first written submission, para. 466.
402 European Union's first written submission, para. 468 (emphasis omitted); see also ibid. paras. 462,
474, and 536.
403 European Union's first written submission, paras. 492 and 538.
404 United States' second written submission, paras. 46-48.
405 United States' first written submission, paras. 166-167 and 189. See also United States' first written
submission, paras. 164-180; and second written submission, paras. 46-54.
406 Injury Determination, (Exhibit EU-5), e.g. pp. 14-15.
407 Injury Determination, (Exhibit EU-5), e.g. pp. II-1-3 and table II-1.
408 Injury Determination, (Exhibit EU-5), e.g. tables II-1 and IV-6-8.

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of distribution"). We will also refer to "sector" as the subsection of the whole market defined by sales
to a particular customer group (e.g. the "retail sector").
7.209. Before addressing the European Union's substantive complaint, we briefly review Articles 3.1
and 3.2 of the Anti -Dumping Agreement, and Articles 15.1 and 15.2 of the SCM Agreement.
Article 3.1 and Article 15.1 provide that:
A determination of injury for purposes of Article VI of GATT 1994 shall be based on
positive evidence and involve an objective examination of both (a ) the volume of the
[dumped or subsidized] imports and the effect of the [dumped or subsidized] imports
on prices in the domestic market for like products, and (b ) the consequent impact of
these imports on domestic producers of such products.
In our view "positive evidence" must be evidence that is affirmative, objective, and capable of
credibly supporting the injury determination. 409 To be "objective", an investigating
authority's examination must be impartial and supported by reasoning that is coherent and internally
consistent.410 We consider the obligation to conduct an objective examination based on positive
evidence in Article 3.1 and Article 15.1 to be an overarching requirement that applies to every aspect
of an injury determination.
7.210. Article 3.2 and Article 15.2 set forth more detailed requirements relating to the examination
of the volume of the dumped or subsidized imports and their effect on prices in the domestic market
of the like product. Article 3.2 and Article 15.2 provide:
With regard to the volume of the [dumped or subsidized] imports, the investigating
authorities shall consider whether there has been a significant increase in [dumped or
subsidized] imports, either in absolute terms or relative to production or consumption
in the importing Member. With regard to the effect of the [dumped or subsidized]
imports on prices, the investigating authorities shall consider whether there has been a
significant price undercutting by the [dumped or subsidized] imports as compared with
the pri ce 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.
We observe that Article 3 and Article 15 do not direct investigating authorities to address parts,
sections, or seg ments of a market in a particular way when undertaking an injury investigation.
In our view, the absence of guidance in this respect indicates that an investigating authority has
discretion to examine parts, sections, or segments of a market as the investigating authority deems
appropriate. An analysis of parts, sections, or segments of a market must, nonetheless, be based
on an objective examination of positive evidence.
7.211. We note, further, that t he term "segmented analysis" is not contained in Articles 3.1 and
3.2, or Articles 15.1 and 15.2, or any other provision of the Anti -Dumping Agreement or the
SCM Agreement. In our view the rights and obligations contained in Articles 3.1 and 3.2, and
Articles 15.1 and 15.2, thus apply equally to a determination of injury that is labelled as involving a
"segmented analysis", as to one that is not so characterized.411 We acknowledge that there may be

409 We base this understanding on the ordinary meaning of "positive", which includes "admitting no
question; stated, express, definite, precise; emphatic" and "providing support for a particular hypothesis,
esp[ecially] one concerning the presence or existence of something". (Oxford Dictionaries online, definition of
"positive" https://www.oed.com/view/Entry/148318?rskey=3r7q5h&result=1&isAdvanced=false#eid (accessed
7 July 2021), adj., meaning A.I.2 and A.II.4.c).
410 We base this understanding on the ordinary meaning of "objective", which includes "not influenced
by personal feelings or opinions in considering and representing facts; impartial, detached". (Oxford
Dictionaries online, definition of "objective"
https://www.oed.com/view/Entry/129634?redirectedFrom=objective#eid (accessed 7 July 2021), adj.,
meaning 8.a).
411 In support of its argument the European Union refers to the Appellate Body Report US – Hot-Rolled
Steel. (European Union's first written submission, paras. 450-454). This report discusses circumstances under
the Anti-Dumping Agreement in which investigating authorities may "examine a domestic industry by part,
sector or segment". (Appellate Body Report, US – Hot-Rolled Steel, para. 204). The Appellate Body does not

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determinations that would be usefully described as involving a "segmented analysis", and that such
a description could assist a panel's assessment of the consistency or otherwise of that determination
with Article 3 and Article 15.412 It is our understanding that the European Union describes the Injury
Determination as involving a "segmented analysis" because the USITC did not just examine trends
at the level of the market as a whole, but also examined trends in relation to certain customer
groups. However, in the circumstances of the current dispute, we do not consider it is useful to
describe the Injury Determination as a "segmented analysis" merely because the USITC analysed
trends in different customer grou ps. We consequently do not adopt the
European Union's characterization of the Injury Determination as a "segmented analysis" for the
purpose of reviewing the merits of its claims .413 We will instead focus our examination in this
section on the European Union's substantive complaint that the USITC 's examination of customer
groups was, in the context of the ripe olives market, not based on an objective examination of
positive evidence.
7.212. Turning to the European Union's substantive argument, in our view t he customer groups
examined by the USITC were not, as the European Union alleges, "meaningless"414 or "arbitrary".415
Rather, the customer groups were based on unique purchasers and distinct products, and with each
customer group holding different levels of importance for the domestic industry and importers of
Spanish ripe olives. The USITC identified that ripe olives were generally sold to retailers, distributors,
and institutional/food processors.416 These customer groups were composed of unique purchasers.417
For example, the USITC identified that retailers included firms such as Walmart and Kroger, while
institutional/food processors included restaurants, schools, and commercial food processors.418 The
USITC also collected pricing data on institutional and retail products with distinct packaging
characteristics.419 For example, the drained weight of institutional pricing products per can or pouch
was between 33-55 ounces, substantially larger than the drained weight of retail pricing products of
between 2.25-2.26 ounces.420 Furthermore, it is clear that the three customer groups had different
levels of importance for the domestic industry and importers of Spanish ripe olive s. In relation to
Spanish ripe olives, the USITC noted that as a "share of total reported shipments between 2015 and
2017, U.S. importers' U.S. commercial shipments of ripe olives from Spain ranged from 79.7 percent
to 88.8 percent for distributors, 7.3 percent to 17.0 percent for retailers, and 3.3 percent to
4.0 percent for institutional/food processors". 421 In contrast, the USITC noted that "[d]omestically
produced ripe olives were largely sold to retailers over the [period of investigation]".422 This evidence
establishes that the customer groups identified by the USITC were not "arbitrary, meaningless and
in contradiction to the USITC's own determinations".423 Rather, there was a credible basis of facts
for the construction of each customer group. We thus consider that the customer groups examined
by the USITC were not arbitrary but based on positive evidence.
7.213. The European Union also alleges that the USITC failed to explain the relevance of the
different customer groups in the sections of the Injury Determination titled "Demand Conditions",
"Supply Conditions", and "Substitutability and Other Conditions".424 However, the Panel notes that
each of these customer groups and their general purchasing patterns are clearly identified in the

indicate in this report that the term "segmented analysis" has a particular legal meaning under the
Anti-Dumping Agreement. (Appellate Body Report, US – Hot-Rolled Steel, paras. 193-206).
412 We also do not consider the fact that the term "segmented analysis" has been used descriptively by
a number of prior panels means that the term has any particular legal meaning under the
Anti-Dumping Agreement or SCM Agreement. (See, e.g. Panel Report, China – X-Ray Equipment, para. 7.187).
413 The European Union asserts that "the USITC invents a so-called 'segmentation' of the domestic
industry along customer groups". (European Union's first written submission, para. 460). The USITC does not,
in fact, use this terminology in its report.
414 European Union's first written submission, para. 467.
415 European Union's first written submission, para. 467.
416 Injury Determination, (Exhibit EU-5), e.g. pp. 14-15.
417 United States' second written submission, para. 83; 8 September 2020 response to Panel question
No. III(a), para. 29.
418 Injury Determination, (Exhibit EU-5), p. 14.
419 Injury Determination, (Exhibit EU-5), pp. 19-20 and fn 112.
420 Injury Determination, (Exhibit EU-5), fn 112.
421 Injury Determination, (Exhibit EU-5), fns 68 and 105.
422 Injury Determination, (Exhibit EU-5), p. 14.
423 European Union's first written submission, para. 465.
424 European Union's first written submission, paras. 483-486 (referring to Injury Determination,
(Exhibit EU-5), pp. 15-17).

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section of the Injury Determination titled "Demand Conditions ".425 Furthermore, the
USITC's explanation made it re asonably clear that the customer groups were based on unique
purchasers and distinct products, and that each customer group held different levels of importance
for the domestic industry and importers of Spanish ripe olives .426 We thus find that the USITC
reasonably explained the relevance of the customer groups and reject the
European Union's argument to the contrary as unpersuasive.
7.214. We are further of the view that the relative uniformity of ripe olives does not establish that
the USITC's examination of customer groups was not objective. The European Union contends that
the examination of customer groups was not objective because ripe olives are a homogenous product
purchased interchangeably by all customer groups. 427 We note that the USITC found ripe olives t o
be a relatively uniform product, concluding that despite differences in size and presentation, "all ripe
olives within the scope were at least somewhat interchangeable, and were perceived to be the same
product by market participants".428 Similarly, the USITC found that domestically produced ripe olives
and those from Spain had a "high degree of substitutability".429 Beyond observing these statements
by the USITC, we do not consider it necessary to make findings as to the extent of substitutability
and product differentiation in the ripe olives market. 430 This is because our conclusion does not
depend on the exact degree to which ripe olives are substitutable or differentiated. The
European Union's argument is premised on the view tha t the USITC "could not 'segment ' the
industry by distribution channel" because all ripe olives are a homogenous product that "compete
with each other across the three distribution channels and hence across the entire industry".431 The
European Union argues on this basis that the examination of customer groups was not objective
because "the only conceivable purpose of the USITC's 'segmentation' was to artificially create a
volume effect".432 The European Union does not, however, allege that the USITC selectively collected
data from particular customer groups or that the three customer groups do not collectively reflect
the whole market. On the contrary, the Injury Determination makes clear that the USITC gathered
data from domestic processors and importers on t heir commercial shipments across all
three customer groups.433 An objective examination of trends in these three customer groups would
thus be consistent, in aggregate, with an examination of the whole market. We do not think that the
"only conceivable purp ose" for an investigating authority to examine customer groups collectively
accounting for the whole market would be to artificially construct volume changes and price effects.
Rather, an objective investigating authority could reasonably choose to examine trends within these
customer groups to ascertain whether there are any pertinent volume changes or price effects not
apparent from the aggregate data. Even if ripe olives were perfectly homogenous, we do not consider
that the USITC's examination of customer groups would establish by itself a lack of objectivity , as
the three customer groups analysed by the USITC collectively account for the whole ripe olives
market. We thus reject the European Union's argument that the uniformity of ripe olives as a product
establishes that the USITC's analysis of customer groups was not based on an objective examination
of positive evidence.
7.215. We note that our conclusion is consistent with the observations of the panel in Mexico – Corn
Syrup concerning an investigating authority's examination of market segments. The European Union
maintains that the panel's findings in Mexico – Corn Syrup imply that there must "be conditions of
competition that are different per segment in order for the segmentation to serve as [a] valid basis
for the injury analysis".434 We do not agree with the European Union's interpretation of that report.
The Mexico – Corn Syrup dispute concerned anti-dumping duties imposed by Mexico against imports
of high-fructose corn syrup from the United States. In that case the Mexican investigating authority
defined the domestic like product as sugar, and the domestic industry as "manufacturers of cane

425 Injury Determination, (Exhibit EU-5), pp. 14-15.
426 See para. 7.212 above.
427 European Union's first written submission, paras. 466-468.
428 Injury Determination, (Exhibit EU-5), p. 7 (adopting the findings of the Preliminary determination on
injury, (Exhibit EU-34), p. 8).
429 Injury Determination, (Exhibit EU-5), p. 17.
430 United States' first written submission, para. 237; 8 September 2020 response to Panel question
No. III(a), para. 29; European Union's second written submission, para. 119; and 10 June 2020 response to
Panel question No. 21, paras. 108 and 110.
431 European Union's opening statement at the first meeting of the Panel, para. 98.
432 European Union's first written submission, para. 469.
433 United States' first written submission, para. 175 (referring to Injury Determination, (Exhibit EU-5),
tables II-1 and IV-5–IV-8).
434 European Union's 12 November 2020 response to Panel question No. 21, para. 161.

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sugar".435 The United States argued that the Mexican investigating authority's determination was
inconsistent wi th various provisions of Article 3 of the Anti -Dumping Agreement because the
investigating authority focused solely on the industrial market for sugar.436 The panel found that the
Mexican investigating authority had "explicitly stated that it excluded from its consideration sugar
sold in the household market, and limited its examination to sugar sold in the industrial market,
despite the fact that it had determined that there was only one like product at issue, sugar, and one
industry, cane sugar producers". 437 As the industrial sector of the Mexican sugar market only
accounted for 53% of total sugar consumption, the panel concluded that the Mexican investigating
authority's injury determination was not based on consideration of the domestic industry as a
whole.438 The panel did not, however, make any findings that would support the
European Union's claim that "segmentation" is only valid where conditions of competition differ
between segments. On the contrary, the panel took pains to distinguish between the not ion of an
injury determination made "on the basis of information regarding only production sold in one specific
market sector, to the exclusion of the remainder of the domestic industry 's production", and an
investigating authority's "consideration of factors relevant to the injury analysis on a sectoral basis,
so as to gain a better understanding of the actual functioning of the domestic industry and its specific
markets".439 As regards the examination of factors on a sectoral basis, the panel stated that t here
"is certainly nothing in the [Anti -Dumping] Agreement which precludes a sectoral analysis of the
industry and/or market" and that "in many cases, such an analysis can yield a better understanding
of the effects of imports, and more thoroughly reasoned analysis and conclusion". 440 The
panel's interpretation of the Anti-Dumping Agreement in Mexico – Corn Syrup is thus consistent with
our view that an investigating authority has discretion to examine parts, sections, or segments of a
market when undertaking an injury investigation as long as such examination is b ased on an
objective examination of positive evidence.441 On this basis, it is our view that even if the conditions
of competition did not differ between customer groups, this would not establish that the
Injury Determination was not objective , as the customer groups were based on positive evidence
and collectively represented the whole market.442
7.216. The European Union maintains that the USITC commissioner that dissented against the
Injury Determination, Commissioner Broadbent, "seems to share [the] view" that t he USITC could

435 Panel Report, Mexico – Corn Syrup, para. 7.148.
436 Panel Report, Mexico – Corn Syrup, paras. 7.143-7.144.
437 Panel Report, Mexico – Corn Syrup, para. 7.158.
438 Panel Report, Mexico – Corn Syrup, para. 7.153.
439 Panel Report, Mexico – Corn Syrup, para. 7.154.
440 Panel Report, Mexico – Corn Syrup, para. 7.154.
441 See para. 7.210 above.
442 The European Union also notes that the United States submitted into evidence three examples of
determinations by an investigating authority of the European Union. (European Union's opening statement at
the first meeting of the Panel, para. 100 (referring to Commission Implementing Regulation (EU) 2016/181
(Exhibit USA-33); and Commission Regulation (EC) 1611/2003 (Exhibit USA-35))). The European Union
maintains that these determinations "vividly illustrate the difference between the WTO-consistent market
segmentations carried out by the EU and the WTO-inconsistent market 'segmentation' carried out by the US in
the present case". (European Union's opening statement at the first meeting of the Panel, para. 100 (referring
to Commission Implementing Regulation (EU) 2016/181 (Exhibit USA-33); and Commission Regulation (EC)
1611/2003 (Exhibit USA-35))); see also European Union's second written submission, para. 110; and
United States' 8 September 2020 response to Panel question No. III(a), para. 33.
Exhibit USA-33 contains Commission Regulation (EU) 2016/181 of 10 February 2016 imposing a
provisional anti-dumping duty on imports of certain cold-rolled flat steel products originating in the
People's Republic of China and the Russian Federation. This is subject to an ongoing dispute before a
WTO panel. (Russia's panel request, WT/DS521/2; Constitution note of the Panel, WT/DS521/3).
Exhibit USA-34 contains Commission Regulation (EC) 896/2007 of 27 July 2007 imposing a provisional
anti-dumping duty on imports of dihydromyrcenol originating in India. Exhibit USA-35 contains Commission
Regulation (EC) 1611/2003 of 15 September 2007 imposing a provisional anti-dumping duty on imports of
certain stainless-steel cold-rolled flat products originating in the United States. Neither of the measures
contained in Exhibit USA-34 or Exhibit USA-35 have been the subject of dispute resolution at the WTO.
We recall that our terms of reference are "to examine … the matter referred to the DSB by the
European Union" in its request for the establishment of a panel. (Constitution note of the Panel, WT/DS577/4).
The European Union's request for establishment of a panel contains reference to the Injury Determination but
makes no mention of the measures by the European Union contained in Exhibits USA-33, USA-34, and USA-35.
(European Union's panel request, p. 2). We have thus not been directed to examine the WTO consistency of
these measures, which are unrelated to the Injury Determination. We consequently decline to examine
whether the European Union's investigating authority conducted "WTO-consistent market segmentations" in
the measures contained in Exhibits USA-33, USA-34, and USA-35.

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only meaningfully assess volume for the industry as a whole. 443 The European Union supports this
assertion with a block quote from the dissenting opinion.444 We recall that the European Union, as
the complainant, bears the onus of establishing that the Injury Determination (as represented by
the decision of the majority of commissioners) was not based on an objective examination of positive
evidence.445 The mere fact that a dissenting view exists does not establish that the
majority's findings were not based on an objective examination of positive evidence. Rather, to
demonstrate the merits of its claims , the European Union must explain what it is about the views
expressed by the dissenting commissioner that shows that a reasonable and objective investigating
authority could not arrive at the same conclusion as the majority. There is nothing that has been
brought to the Panel's attention with respect to the dissent of that commissioner that w ould cause
us to consider that the majority's finding was not objective.
7.217. Therefore, based on the above, we reject the European Union's argument that the
USITC's examination of the volume and price effects of ripe olives from Spain was based on a
"segmented analysis" of customer groups in the ripe olive market that was "arbitrary, meaningless
and in contradiction to the USITC's own determinations".446
7.4.3.2 Whether the USITC's definition of the domestic industry made it improper to
consider customer groups
7.218. In the Injury Determination the USITC defined the domestic industry as "all U.S. processors
of ripe olives".447 The European Union argues that the USITC's consideration of customer groups was
inappropriate because an investigating authority is "bound" by its definition of the domestic industry
and "cannot define the domestic industry in a non-segmented manner and then carry out an injury
analysis on the basis of a segmented industry".448 The European Union bases this argument on the
observation that Article 4.1 and footnote 9 of the Anti -Dumping Agreement, as well as Article 16.1
and footnote 45 of the SCM Agreement, together require that a finding of injury be a determination
that "domestic producers as a whole" or those domestic producers representing "a major proportion
of the total domestic production" have been injured.449 The European Union argues that the reason
for this is that a selective definition of the domestic industry would give rise to a material risk of
distortion.450 The European Union argues by a nalogy that "the same risk of distortion arises if the
investigating authority first defines the domestic industry in a certain manner (here: all ripe
olives) but subsequently carries out its injury and causation analysis only in a particular segment of
that domestic industry (here: the retail 'segment')".451
7.219. The United States considers that the European Union's argument is inconsistent with the
European Union's explicit agreement with the Appellate Body's statements in US – Hot-Rolled Steel
concerning an investigating authority's analysis of market segments, in particular that "it may be

443 European Union's first written submission, para. 475.
444 European Union's first written submission, para. 475 (referring to Injury Determination,
(Exhibit EU-5), p. 28 (dissenting view)).
445 See para. 7.7 above.
446 European Union's first written submission, para. 465.
447 Injury Determination, (Exhibit EU-5), p. 10.
448 European Union's second written submission, para. 102. See also European Union's first written
submission, paras. 497-502; and second written submission, para. 162.
We note that the European Union placed this argument in the section VII(B)(2) of its first written
submission titled "The USITC's analysis of volume effects is flawed because the USITC only analysed volume
effects for the retail 'segment' of the domestic industry, not for the industry as a whole".
(European Union's first written submission, paras. 494-512). We address other arguments in
section VII(B)(2) of the European Union's first written submission below. (See paras. 7.236-7.237 below). It is
our view, however, that the argument that an investigating authority is "bound" by its definition of the
domestic industry is a stand-alone argument that is most logically addressed in this section along with the
European Union's argument that the USITC's consideration of customer groups was not based on an objective
examination of positive evidence.
449 European Union's first written submission, para. 497.
450 European Union's first written submission, para. 497 (referring to Appellate Body Report, EC –
Fasteners (China), para. 419).
451 European Union's first written submission, para. 497.

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highly pertinent for investigating authorities to examine a domestic industry by part, sector or
segment".452
7.220. The Anti -Dumping Agreement and the SCM Agreement contain guidance on the required
scope of an injury determination. Footnote 9 of the Anti-Dumping Agreement and footnote 45 of the
SCM Agreement provide:
Under this Agreement the term "injury" shall, unless otherwise specified, be taken to
mean material injury to a domestic industry, threat of material injury to a domestic
industry or material retardation of the establishment of such an industry and shall be
interpreted in accordance with the provisions of this Article.
7.221. Article 4.1 of the Anti-Dumping Agreement and Article 16.1 of the SCM Agreement further
provide that, subject to certain exceptions, the term "domestic industry" shall "be interpreted as
referring to the domestic producers as a w hole of the like products or to those of them whose
collective output of the products constitutes a major proportion of the total domestic production of
those products".
7.222. The term "injury" is thus defined as "material injury to a domestic industry, threat of material
injury to a domestic industry or material retardation of the establishment of such an industry". 453
The "domestic industry" is, in turn, defined as the "domestic producers as a whole of the like
products" or those domestic producers "whose collective output of the products constitutes a major
proportion of the total domestic production". 454 A finding of injury must consequently be a
determination that "domestic producers as a whole" or those domestic producers representing "a
major proportion of the total domestic production" have been injured.455
7.223. Our interpretation of these provisions is consistent with the European Union's assertion that
an injury determination must concern the domestic industry as defined by the relevant investigating
authority in accordance with Article 4.1 and Article 16.1.456 We find no support, however, for the
different proposition espoused by the European Union, which is that an investigating authority may
only consider sections of a market while undertaking an injury analysis when it has explicitly
identified these sections in the definition of the domestic industry . There is no reason that an
investigating authority's analysis of market segments would necessarily imply that the final injury
determination was not made with res pect to the domestic industry as defined by the investigating
authority. We therefore disagree that the USITC's analysis of market segments posed a risk of
distortion. In particular, in this case the three customer groups collectively represented the whole
market. Their analysis by the USITC would thus not necessarily leave parts of the domestic industry
unexamined.457 We therefore do not see any material risk of distortion arising from the fact that the
USITC did not incorporate into its definition of the domestic industry reference to the various market
segments it later analysed.
7.224. We consequently reject the European Union's claim that the USITC was prevented from
considering customer groups because such customer groups were not explicitly referred to in the
definition of the domestic industry.

452 United States' first written submission, paras. 173-174 (referring to Appellate Body Report, US –
Hot-Rolled Steel, para. 204; and European Union's first written submission, para. 499).
453 Anti-Dumping Agreement, fn 9 and SCM Agreement, fn 45.
454 Anti-Dumping Agreement, Article 4.1 and SCM Agreement, Article 16.1.
455 See, e.g. Panel Report, Mexico – Corn Syrup, para. 7.147. (emphasis omitted)
456 Our view is also consistent with prior reports. See, e.g. Panel Report, Mexico – Corn Syrup,
para. 7.147 (referring to Article 4.1 and fn 9 of the Anti-Dumping Agreement and stating "[t]hese
two provisions inescapably require the conclusion that the domestic industry with respect to which injury is
considered and determined must be the domestic industry defined in accordance with Article 4.1, that is, the
domestic producers of the like product as a whole, or those of them whose collective output of the like product
constitutes a major proportion of the domestic production of the like product").
457 See para. 7.214 above.

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7.4.3.3 Conclusion on the USITC's alleged "segmented analysis" of customer groups in
its examination of volume and price effects under Articles 3.1 and 3.2 of the
Anti-Dumping Agreement and Articles 15.1 and 15.2 of the SCM Agreement
7.225. We find that the European Union has not demonstrated that the USITC's analysis of
customer groups was not based on an objective examinati on of positive evidence. We find further
that the USITC's consideration of customer groups was not improper in light of the definition given
to the domestic industry. On this basis, we conclude that the European Union has not demonstrated
that the USITC 's consideration of customer groups in its examination of volume and price effects
was inconsistent with Articles 3.1 and 3.2 of the Anti -Dumping Agreement and Articles 15.1 and
15.2 of the SCM Agreement.
7.4.4 The USITC's examination of the volume of dumped and subsidized ripe olives from
Spain
7.226. In relation to the USITC 's volume analysis, the European Union raises two distinct lines of
argument. First, the European Union argues the USITC failed to consider whether there had been a
significant increase in dumped or subsidized imports as required by the first sentence of Article 3.2
and Article 15.2.458 Second, the European Union argues the USITC's volume analysis was not based
on an objective examination of positive evidence. 459 The European Union asserts that the USITC
thus acted inconsistently with Articles 3.1 and 3.2 of the Anti-Dumping Agreement and Articles 15.1
and 15.2 of the SCM Agreement.460 The United States asks the Panel to reject the
European Union's arguments in their entirety .461 We examine the merits of the
European Union's claims in the sections that follow.
7.4.4.1 Whether the USITC failed to consider whether there has been a significant
increase in dumped or subsidized imports as required by the first sentence in Article 3.2
of the Anti-Dumping Agreement and Article 15.2 of the SCM Agreement
7.227. The European Union argues that the USITC 's volume analysis failed to comply with the
requirement in Article 3.2 and Article 15.2 to "consider whether there has been a significant increase
in [dumped or] subsidized imports" because the USITC's "conclusion simply states that volumes of
Spanish imports were significant".462 The European Union maintains that the USITC's conclusion was
inadequate as the "text of [Article 3.2 and] Article 15.2 unequivocally stipulate[s] that a volume
effect requires an increase of [dumped or] subsidized imports"463, and that "the authority must show
a growth in [dumped or] subsidized imports".464 The European Union alleges that the USITC failed
to meet the requirements of Article 3.2 and Article 15.2 because it "only considered a significant
presence of Spanish imports in the domestic industry".465

458 European Union's first written submission, paras. 519-521. See also European Union's second written
submission, paras. 146-152.
459 European Union's first written submission, sections VII(B)(2)-VII(B)(3); second written submission,
sections V(B)(2)-(3).
460 European Union's first written submission, paras. 511, 517, and 525; second written submission,
paras. 144-145 and 152.
461 United States' first written submission, paras. 164-195; second written submission, paras. 49-74.
462 European Union's first written submission, para. 521. See also European Union's second written
submission, paras. 146-152.
463 European Union's first written submission, para. 523.
464 European Union's first written submission, para. 524. We note that the European Union specifically
argues that "the USITC did not consider a volume effect within the meaning of [Article 3.2 of the
Anti-Dumping Agreement and] Article 15.2 of the SCM Agreement". (European Union's first written submission,
para. 519). The European Union repeatedly refers to the concept of "volume effect" throughout its
submissions. See, e.g. European Union's first written submission, paras. 431, 453, 460, 465, 468, and 487.
The concept of "volume effect" is not found in the Anti-Dumping Agreement or the SCM Agreement. We
understand the European Union to not have intended any particular technical meaning to attach to this term.
This is confirmed by the European Union in its second written submission, where it observes that the distinction
between "volume analysis" and "volume effects analysis" is "a purely terminological issue and entirely
irrelevant for the resolution of this dispute". (European Union's second written submission, para. 150). We
therefore will not refer to "volume effects" except if contained in a quotation from the European Union.
465 European Union's first written submission, para. 525. (emphasis original)

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7.228. The United States responds that Article 3.2 and Article 15.2 do not require an investigating
authority to find an absolute or relative increase in the volume of subject imports.466
7.229. We recall that the first sentence in Article 3.2 and Article 15.2 sets out the requirements for
the examination of the volume of dumped or subsidized imports:
With regard to the volume of the [dumped or subsidized] imports, the investigating
authorities shall consider whether there has been a significant increase in [dumped or
subsidized] imports, either in absol ute terms or relative to production or consumption
in the importing Member.
In our view the European Union's argument that an investigating authority "must show a growth in
[dumped or] subsidized imports"467 to "consider whether" there has been a significan t increase in
volume is based on an erroneous construction of the term "consider whether" in Article 3.2 and
Article 15.2. These provisions instruct an investigating authority to "consider whether" there has
been a significant increase in volume. As noted above, the ordinary meaning of "consider" includes
"[t]o view or contemplate attentively, to survey, examine" and "[t]o contemplate mentally , fix the
mind upon; to think over, meditate or reflect on, bestow attentive thought upon, give heed to, take
note of".468 To "consider" indicates a requirement that an investigating authority take something
into account in reaching its decision , not a requirement to arrive at a particular conclusion .469 This
understanding is supported by the contrast between the obligation to "consider" that is contained in
the first sentence of Article 3.2 and Article 15.2, and the use of the more definitive term
"demonstrate" in Article 3.5 of the Anti-Dumping Agreement and Article 15.5 of the SCM Agreement,
which state "[i]t must be demonstrated that the [dumped or subsidized] imports are, through the
effects of [dumping or subsidies] … causing injury". Moreover, the first sentence in Article 3.2 and
Article 15.2 qualifies the instruction to "consider" with the word "whether" . Thus the ordinary
meaning of "consider", its contrast with more definitive language used in other provisions of Article 3
and Article 15, and the qua lification "whether", are incompatible with the
European Union's interpretation that an investigating authority may only successfully "consider
whether" there has been a significant increase in volume in circumstances where the investigating
authority can "show a growth in [dumped or] subsidized imports".470 Rather, the language of the
first sentence of Article 3.2 and Article 15.2 makes clear that an investigating
authority's consideration of whether there has been a "significant increase" in volume may be
evidenced by an examination of the change in volume, regardless of whether volumes in fact
increased, decreased, or remained stable.
7.230. In support of its interpretation, the European Union argues that the panel in US – DRAMs
explicitly concluded that the "mer e consideration of a presence – or decrease – of imports is
inconsistent with Article 15.2 SCM [Agreement]".471 The European Union finds support for this
assertion in the panel's finding that "[a]lthough the [USITC] found that 'the absolute volume of
subject imports … is significant' it did not determine that the increase in the absolute volume of
subsidized import s was significant". 472 The panel's conclusion was, however, based on a factual
determination that there was no evidence that the investigating authority had considered whether
there was a significant increase in the absolute volume of subject imports. 473 Moreover, the panel
did not conclude that this failure to determine a significant increase was inconsistent with Article 15.2
of the SCM Agreement. Rather, the Panel observed that "[s]ince Article 15.2 provides that '[n]o one
or several of these factors can necessarily give decisive guidance', the fact that the [USITC] did not
find that there was a significant increase in the absolute volume of subsidized imports is not per se

466 United States' first written submission, paras. 181-195.
467 European Union's first written submission, para. 524. We note that the European Union clarified that
it does not argue that volume of imports of Spanish ripe olives was not significant. (European Union's opening
statement at the second meeting of the Panel, para. 54).
468 Oxford Dictionaries online, definition of "consider"
https://www.oed.com/view/Entry/39593?redirectedFrom=consider#eid (accessed 7 July 2021),
v., meaning 3.a.
469 For a similar view, see Appellate Body Report, China – GOES, para. 130.
470 European Union's first written submission, para. 524.
471 European Union's opening statement at the second meeting of the Panel, para. 56.
472 European Union's second written submission, para. 151 (referring to Panel Report, US –
Countervailing Duty Investigation on DRAMs, para. 7.234). (emphasis original)
473 Panel Report, US – Countervailing Duty Investigation on DRAMs, fn 226.

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inconsistent with Article 15.2 of the SCM Agreement".474 The panel continued that "Article 15.2 [of
the SCM Agreement] does not require a determination that there has been a significant increase in
subsidized imports".475 The panel observed, instead, that Article 15.2 of the SCM Agreement "simply
requires investigating authorities to 'consider' whether there has been such an increase". 476
Consistent with our analysis above, the panel in US – DRAMs further suggested that "an injury
determination may be consistent with Article 15 of the SCM Agreement even in the absence of a
determination that (as opposed to consideration whether) there has been a significant increase in
the volume of subsidized imports". 477 The panel's observations in US – DRAMs are therefore
consistent with our interpretation that compliance with Article 3.2 and Article 15.2 is unaffected by
whether the volume of dumped or subsidized imports in fact increased, decreased , or remained
stable.
7.231. We note that t he European Union argues that the United States misrepresents the
European Union's argument as being that Article 3.2 and Article 15.2 require an investigating
authority to "find" or "determine", as opposed to "consider whether", there has been a significant
increase in the volume of dumped or subsidized imports.478 Despite alleging this, the European Union
nevertheless maintains that its argument is that "the USITC failed to consider a volume increase
because it only considered a decrease". 479 The European Union appears to suggest that an
investigating authority cannot, by definition, consider whether there was a "significant increase" in
circumstances where there was in fact a decreas e. As previously stated, we do not agree with this
interpretation because an investigating authority's compliance with the first sentence of Article 3.2
and Article 15.2 is not dependent on whether the volume of imports increased, decreased, or
remained stable.
7.232. On the basis of our interpretation as set out above, we now turn to consider whether the
USITC's assessment of the volume of ripe olives satisfied the requirements of Article 3.2 of the
Anti-Dumping Agreement and Article 15.2 of the SCM Agreement. We agree with the view of the
panel in Thailand - H-Beams that to establish compliance with the first sentence of Article 3.2 and
Article 15.2, "it must be apparent in the relevant documents in the record that the investigating
authorities have given attenti on to and taken into account whether there has been a significant
increase in dumped imports, in absolute or relative terms".480 The USITC identified that the volume
of ripe olives from Spain decreased from 35,037 tonnes to 32,782 tonnes during the period of
investigation.481 The USITC then identified the changes in the market share of Spanish ripe olives
during the period of investigation.482 The USITC also examined the change in market shares in the
retail sector.483 The USITC concluded that the volume of ripe olives was significant on an absolute
and relative basis , and found that the volume of subject ripe olives was significant relative to
domestic production.484 The USITC's examination of the changes in volume and market share of
Spanish ripe olives, coupled with the assessment of the significance of these imports, shows that
the USITC considered whether there was a significant increase on an absolute and relative basis.
We find that the European Union has thus not established that the USITC failed to consider whether
there was a significant increase in the volume of Spanish ripe olives.485

474 Panel Report, US – Countervailing Duty Investigation on DRAMs, para. 7.234. The panel did,
however, find that the investigating authority had found that the increase in volume of subsidized imports was
significant relative to domestic production and consumption. (Panel Report, US – Countervailing Duty
Investigation on DRAMs, para. 7.234).
475 Panel Report, US – Countervailing Duty Investigation on DRAMs, fn 224.
476 Panel Report, US – Countervailing Duty Investigation on DRAMs, fn 224.
477 Panel Report, US – Countervailing Duty Investigation on DRAMs, fn 224.
478 European Union's second written submission, paras. 147-148.
479 European Union's second written submission, para. 148 (emphasis original); see also ibid. para. 149.
480 Panel Report, Thailand – H-Beams, para. 7.161.
481 Injury Determination, (Exhibit EU-5), p. 18.
482 Injury Determination, (Exhibit EU-5), p. 18.
483 Injury Determination, (Exhibit EU-5), pp. 18-19.
484 Injury Determination, (Exhibit EU-5), pp. 18-19.
485 We also reject the European Union's argument that, because the USITC's concluding sentence does
not contain the word "increase", there is therefore "no indication that the USITC considered any increasing
trends in volumes concerning Spanish imports for the industry as a whole". (European Union's first written
submission, para. 521). Article 3.2 and Article 15.2 do not contain a formal requirement that the conclusion of
an investigating authority's volume analysis contain the word "increase". We accordingly reject the
European Union's argument that the absence of the word "increase" from the USITC's concluding sentence

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7.4.4.2 Whether the USITC's volume analysis was not based on an objective examination
of positive evidence in violation of Articles 3.1 and 3.2 of the Anti -Dumping Agreement
and Articles 15.1 and 15.2 of the SCM Agreement
7.233. The European Union argues that the manner in which the USITC conducted its examination
of the volume of ripe olives was not based on an objective examination of positive evidence.486 The
European Union argues that this is because t he USITC (a) only analysed the retail customer group
and failed to consider the industry as a whole487; (b) improperly drew conclusions about the industry
as a whole from the retail sector488; (c) failed to consider the distributional and institutional customer
groups in a like manner as the retail customer group, without satisfactory explanation489; (d) failed
to consider the distributional and institutional/food processor customer groups to the extent required
for an objective examination based on positive evidence 490; and (e) failed to provide a meaningful
basis for causation.491 The European Union asserts that the USITC thus did not conduct an objective
examination bas ed on positive evidence in viol ation of Articles 3.1 and 3.2 of the
Anti-Dumping Agreement and Articles 15.1 and 15.2 of the SCM Agreement.492 The United States
requests that the Panel reject the European Union's arguments in their entirety.493
7.234. In respect of the analysis below, we recall that an investigating authority's analysis of the
volume of dumped or subsidized imports pursuant to Article 3.2 and Article 15.2 must comply with
the overarching requirement contained in Article 3.1 and Article 15.1 that a determination of injury
must be based on an objective examination of positive evidence.
7.4.4.2.1 Factual background
7.235. The section of the Injury Determination titled "Volume of Subject Imports" provides as
follows:
Section 771(7)(C)(i) of the Tariff Act provides that the "Commission shall consider
whether the volume of imports of the merchandise, or any increase in that volume,
either in absolute terms or relative to production or consumption in the United States,
is significant."
Subject imports had a significant presence in the U.S. market throughout the [period of
investigation] on both an absolute and relative basis. The volume of subject imports
increased from 35,037 short tons in 2015 to 35,139 short tons in 201 6, and then
declined to 32,782 short tons in 2017. As observed above, subject imports' market
share increased from *** percent in 2015 to *** percent in 2016 and then declined to
*** percent in 2017.
As discussed above, ripe olives are generally sold to di stributors, retailers, and
institutional/food processors. During the [period of investigation], the retail sector was
the largest sector of the market for the domestic industry accounting for between ***
percent and *** percent of U.S. processors' commercial shipments of ripe olives.
Subject imports increasingly entered the retail sector during the [period of
investigation] as U.S. importers' commercial U.S. shipments from Spain increased ***
percent, allowing subject imports to capture *** percentage point s of market share
directly at the expense of the domestic industry in this sector between 2015 and 2017.
U.S. importers' U.S. commercial shipments of ripe olives from Spain to retailers as a
share of their total reported shipments increased from *** percen t in 2015 to ***
percent in 2016 and *** percent in 2017; by contrast, U.S. producers' U.S. commercial
shipments of ripe olives declined from *** percent in 2015 to *** percent in 2016 and

establishes that the USITC did not "consider whether there has been a significant increase" in dumped or
subsidized imports.
486 European Union's first written submission, paras. 494-518; second written submission,
paras. 127-145.
487 European Union's first written submission, para. 494.
488 European Union's first written submission, paras. 513-518; second written submission, para. 145.
489 European Union's second written submission, paras. 127-140.
490 European Union's first written submission, paras. 505-507.
491 European Union's second written submission, paras. 141-144.
492 European Union's first written submission, paras. 511 and 517.
493 United States' first written submission, paras. 164-180.

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*** percent in 2017. The record also indicates that, as a share of U.S. commercial
shipments to retailers of private label and branded products, subject imports captured
*** percentage points and *** percentage points respectively of market share from the
domestic industry between 2015 and 2017.
In light of the foregoing, we find that the volume of subject imports from Spain is
significant in absolute terms and relative to both apparent U.S. consumption and
U.S. production.494
7.4.4.2.2 Whether the USITC only analysed the retail customer group and failed to
consider the industry as a whole
7.236. The European Union argues that even if this Panel does not find the USITC's volume analysis
flawed as a result of the allegedly arbitrary "segmentation", it is "in any event WTO inconsistent
because instead of analysing volume effects for the domest ic industry as a whole, the USITC only
analysed the retail 'segment'". 495 We are unpersuaded by this argument, as in our view the
USITC's volume analysis clearly examined the industry as a whole. This is evidenced by the
second paragraph of the section of the Injury Determination titled "Volume of Subject Imports", as
extracted above.496 In that paragraph, the USITC described the change in the total volume of ripe
olives from Spain during the period of investigation.497 The USITC relevantly stated that the "volume
of subject imports increased from 35,037 short tons in 2015 to 35,139 short tons in 2016, and then
declined to 32,782 short tons in 2017". 498 The USITC then observed that "subject imports' market
share increased from *** percent in 2015 to *** percent in 2016 and then declined to *** percent
in 2017" , and found that the volume of subject imports was significant relative to domestic
production.499 The USITC also stated that "[s]ubject imports had a significant presence in the
U.S. market throughout the [period of investigation] on both an absolute and relative basis".500 The
USITC thus clearly examined the change in volume of Spanish ripe olives in the market as a whole
in its volume analysis.
7.237. The extract above shows that the USITC's analysis of the change in total volume of Spanish
ripe olives in the second paragraph of the section titled "Volume of Subject Imports" was followed
by a third paragrap h in which the USITC focused on changes in volume and market share in the
retail sector. 501 The European Union maintains that "[t]he USITC 's volume effects analysis is
contained in the third paragraph since the fourth paragraph only sets forth the conclusio n".502 The
European Union reasons that the USITC only considered the retail customer group as "nothing is
said in the third paragraph about volume effects with respect to the domestic industry as a whole".503
We are not persuaded by t he European Union's reading of the Injury Determination. The
European Union provides no explanation as to why we should understand the USITC's volume
analysis to be confined to the third paragraph of the section titled "Volume of Subject Imports".
Absent a persuasive explanation otherwise, in our view the USITC's volume analysis comprises all
four paragraphs of the section titled "Volume of Subject Imports". 504 In particular, the
USITC's volume analysis includes the examination of change in the total volume and market share
of Spanish ripe olives in the second paragraph of that section. As the USITC considered the industry
as a whole in the second paragraph, the European Union's argument that the third paragraph does
not address the market as a whole does not establish that the USIT C only considered the retail
customer group.

494 Injury Determination, (Exhibit EU-5), pp. 18-19. (fns omitted; redacted original)
495 European Union's first written submission, para. 494. (emphasis original)
496 Injury Determination, (Exhibit EU-5), p. 18.
497 Injury Determination, (Exhibit EU-5), p. 18.
498 Injury Determination, (Exhibit EU-5), p. 18.
499 Injury Determination, (Exhibit EU-5), p. 18. (redacted original)
500 Injury Determination, (Exhibit EU-5), p. 18.
501 Injury Determination, (Exhibit EU-5), p. 18.
502 European Union's first written submission, para. 496.
503 European Union's first written submission, para. 496.
504 Injury Determination, (Exhibit EU-5), pp. 18-19.

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7.4.4.2.3 Whether the USITC improperly drew conclusions about the industry as a whole
from the retail sector
7.238. The European Union argues that the USITC "extended its analysis of volume effects for the
retail 'segment' to the entire domestic industry without any evidence, reasoning or explanation".505
The European Union asserts this is because, in its view, the reference to " the foregoing" in the
USITC's conclusion "only refers to volume effects in the retail 'segment' not to volume effects in the
industry as a whole".506
7.239. We note that t he USITC concludes its volume analysis by stating that, "[i]n light of the
foregoing, we find that the volume of subject imports from Spain is significant in absolute terms and
relative to both apparent U.S. consumption and U.S. production" .507 In our view, the phrase "the
foregoing" includes reference to the analysis of the total volume and market share of Spanish ripe
olives in the second paragraph of the volume analysis, as well as the consideration of the retail
customer group in the third paragraph of the analysis. The European Union provides no reason why
the analysis covered by "the foregoing" would include only the immediately preceding paragraph,
and not the other paragraphs of the USITC's volume analysis. Accordingly, we find that the
European Union has not established that the reference to "the foregoing" in the USITC's conclusion
shows that the USITC improperly extended its conclusions regarding the retail sector to the whol e
industry.508
7.4.4.2.4 Whether the USITC failed to consider the distributional and institutional
customer groups in like manner as the retail customer group, without satisfactory
explanation
7.240. The European Union additionally argues that the USITC failed to consider t he distributional
and institutional/food processor customer groups in like manner as the retail customer group and
failed to provide a satisfactory explanation for not doing so. 509 We agree with the European Union
that the USITC's volume analysis did not consider the distributional and institutional/food processor
customer groups in the same detail as the retail customer grou p. The USITC did, however, provide
an explanation for its focus on the retail customer grou p. The USITC observed that "ripe olives are
generally sold to distributors, retailers, and institutional/food processors" , and explained that "the
retail sector was the largest sector of the market for the domestic industry" during the period of
investigation.510 While the percentage share of sales of each customer group by the domestic
industry is redacted in the USITC report that was placed before us, the United States has referred
to a submission from the GOS from the underlying investigation that indicated that the domestic
industry's sales to customers in the retail segment accounted for between 85.3% to 87.1% of total
annual shipments during the 2015-2017 period.511 The retail sector thus clearly represents the vast

505 European Union's first written submission, para. 513.
506 European Union's first written submission, para. 514.
507 Injury Determination, (Exhibit EU-5), p. 19.
508 The European Union further claims that the USITC's volume analysis improperly equated the retail
customer group with the whole market because the retail segment represents only around 20% of Spanish
imports, and thus "cannot be representative for effects for the whole industry". (European Union's first written
submission, para. 502). We do not consider that the small proportion of Spanish imports sold into the retail
customer group establishes that the USITC simply equated the retail customer group with the whole market.
As noted above, the USITC considered the change in volume and market share at the level of the market as a
whole. (See para. 7.236 above). The USITC explained its subsequent focus on the retail customer group on the
basis that the retail sector was significant to the domestic industry, not because it represented a high
proportion of sales for importers of Spanish ripe olives. (Injury Determination, (Exhibit EU-5), p. 20). In our
view, the explanation that the retail sector represents most of the domestic industry's sales provides a
reasonable justification for the USITC's focus on that sector, as the domestic industry would be particularly
sensitive to developments in that sector. We therefore consider the European Union's argument to be
unpersuasive.
509 European Union's second written submission, para. 130 (referring to Appellate Body Report, US –
510 Injury Determination, (Exhibit EU-5), p. 18.
511 United States' first written submission para. 175 and fn 242 (referring to Government of
Spain's prehearing brief, (Exhibit USA-4), pp. 10-11; and Report accompanying Government of
Spain's prehearing brief, (Exhibit USA-5), pp. 28-29). The European Union argues that the proportion of sales
by the domestic industry to the retail sector could not be above 83% because the Injury Determination
indicates that ripe olives from Spain commanded a 17% market share in the retail customer groups in 2017.
(European Union's 8 September 2020 response to Panel question No. 3(c), para. 140). The European Union,

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majority of the domestic industry's sales and in our view this provides a reasonable justification for
the USITC's focus on the retail sector. We thus find that the USITC's observation regarding the
importance of the retail customer group to the domestic industry constitutes a satisfactory
explanation for the particular focus given to that sector.
7.241. The European Union maintains that the significance of retailers to the domestic industry was
not an appropriate explanation for the USITC 's focus on that customer group. 512 We are not
persuaded by the European Union's argument that the USITC's identification of the retail customer
group as representing the largest sector for the domestic industry was "a mere factual
statement … not an explanation".513 Rather, we consider the USITC's observation of the fact that the
retail customer group was the most important for the domestic industry also served as an
explanation of the USITC 's focus on that section of the market. 514 We also reject the
European Union's contention that the United States' submission that the USITC "had an economic
basis to focus on the retail segment, where the domestic industry was concentrated" was an ex post
justification.515 We find the United States' assessment is clearly reflected in the USITC's observation
that "the retail sector was the largest sector of the market for the domestic industry".516
7.242. We are furthermore not convinced by the European Union's reliance on the report of the
panel in Mexico – Corn Syrup for the proposition that the importance of a particular sector cannot
justify an investigating authority's focus on that sector in its injury examination .517 As discussed
above, in that case the panel found that the Mexican investigating authority had only assessed one
sector and "took no account of the fact that almost half of production" was sold in a second sector.518
The panel observed that Mexico had argued that the market sector focused on by the Mexican
investigating authority constituted a "major proportion" of domestic production and was thus
consistent with Article 4.1 of the Anti-Dumping Agreement. The panel rejected this argument,
finding that, while Article 4.1 of the Anti-Dumping Agreement allows for consideration of producers
whose collective output of the like product constitutes a major proportion of domestic production of
that product, Article 4.1 does not allow an injury determination to be made simply with respect to a
major proportion of production.519 The panel based its observation in that case on the fact that the
Mexican investigating authority had expressly excluded from consideration a sector representing a
substantial portion of domestic production. 520 We do not believe the panel's observation supports
the European Union's proposition that an investigating authority cannot give particular consideration
to a specific sector where that sector is especially important to the domestic industry. Moreover, the
facts before that panel were different to those before us, as the customer groups examined by the
USITC represent the whole ripe olive market, and the European Union has not established that the
USITC excluded from consideration data relating to any particular customer group.521
7.243. We are therefore unpersuaded by the European Union's various arguments that the
USITC's observation that the "the retail sector was the largest sector of the market for the domestic
industry" did not satisfactorily explain and thereby justify the USITC's focus on the trends in market
share in the retail sector in its volume analysis.

however, misunderstands the relevant footnote and table of the Injury Determination. These indicate that, in
2017, 17% of all Spanish imports were sold to the retail customer group. (Injury Determination,
(Exhibit EU-5), fn 104 and table II-1). This does not mean that 17% of all sales to the retail customer group
were of ripe olives from Spain. The range of 75-80% suggested by the European Union as "more likely" is, in
any event, consistent with the USITC's observation that "the retail sector was the largest sector of the market
for the domestic industry". (European Union's 8 September 2020 response to Panel question No. 3(c),
para. 140; Injury Determination, (Exhibit EU-5), p. 18).
512 European Union's second written submission, para. 138; 8 September 2020 response to Panel
question No. 3(c), paras. 133 and 137.
513 European Union's second written submission, para. 138.
514 Injury Determination, (Exhibit EU-5), p. 18.
515 European Union's 8 September 2020 response to Panel question No. 3(c), para. 133. See also
United States' first written submission, para. 175.
516 Injury Determination, (Exhibit EU-5), p. 18.
517 European Union's 8 September 2020 response to Panel question No. 3(c), para. 137 (quoting Panel
Report, Mexico – Corn Syrup, para. 7.154 and fn 624).
518 Panel Report, Mexico – Corn Syrup, para. 7.154.
519 Panel Report, Mexico – Corn Syrup, para. 7.154 and fn 624.
520 Panel Report, Mexico – Corn Syrup, para. 7.158; see also ibid. paras. 7.150-7.152.
521 See para. 7.214 above.

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7.4.4.2.5 Whether the USITC failed to consider the distribution al and institutional/food
processor customer groups to the extent required for an objective examination based on
positive evidence
7.244. The European Union maintains that the USITC failed to consider the distributional and
institutional/food processor customer g roups to the extent required to constitute an objective
examination based on positive evidence, despite those groups accounting for around 80% of Spanish
imports.522 In particular, the European Union asserts that the fact that the "shares of imports of
Spanish ripe olives decreased" in the distributional and institutional customer groups is "entirely and
conveniently omitted" by the USITC. 523 The European Union argues that such "selective analysis"
fell short of the requirement to conduct an objective examination based on positive evidence.524
7.245. We agree that the USITC did not describe the change in market share of Spanish ripe olives
in the distributional and institutional customer groups. Furthermore, the revised public versions of
tables IV-6 and IV-8 provided by the United States confirmed the European Union's argument that
the Spanish market share in the distributional and institutional customer groups trended down over
the period of investigation.525 However, the mere fact that there was a decrease in market share in
the distributional and institutional customer groups by ripe olives from Spain does not establish that
the USITC's analysis was not based on an objective examination of positive evidence . As observed
above, the USITC described t he change in volume with regard to the whole market , then gave
additional consideration to trends in the retail sector.526 The USITC explained its focus on retailers
on the basis of the importance of that channel of distribution to the domestic industry .527 In our
view, the USITC's observation that the retail sector was particularly important to the domestic
industry implies that the distributional and institutional/food processor customer groups were not as
important. We find further support for the conclusi on that the USITC's approach was reasonable in
the fact that the USITC had already observed that the absolute volume of subject imports decreased
over the period of investigation. 528 Moreover, as the United States observes, the data cited to
support the USITC's discussion of the change in volume and market share in the retail sector also
included supporting data on the distribution and institutional/food sectors. 529 We consequently
disagree with the view that the USITC did not conduct an objective examination based on positive
evidence simply because the USITC chose not to describe the change in market share of Spanish
ripe olives in the distributional and institutional customer groups.
7.246. Finally, we observe that the European Union also cites the opinion of the dissenting USITC
commissioner, in which the commissioner rejects the view that Spanish ripe olives gained market
share in the retail customer group at the expense of the domestic ind ustry.530 The European Union
states that the dissenting commissioner "referred to the 'industry's overall market shares' and
dismissed the relevance of increased sales of Spanish ripe olives to retail customers". 531 We recall

522 European Union's first written submission, paras. 505-507. See also European Union's second written
submission, para. 134.
523 European Union's first written submission, para. 506; see also ibid. para. 504, table titled
"U.S. importers' U.S. commercial shipments of ripe olives from Spain" (based on Injury Determination,
(Exhibit EU-5), table II-1, p. II-2).
524 European Union's first written submission, para. 507.
525 United States' letter to the Panel dated 4 February 2021 (providing revised public versions of
Injury Determination, (Exhibit EU-5), tables IV-6, IV-7, IV-8, and C-1).
In its first written submission, the European Union relied on table II-1 in the Injury Determination to
show that Spanish ripe olives lost 9.1% of market share in the distributional customer group and 0.7% of
market share in the institutional customer group. (European Union's first written submission, para. 504). As
discussed above, total quantity and market share of all sales to each customer group are not identified in
table II-1. (See fn 511 above). Rather, table II-1 describes the proportion of Spanish imports directed to each
customer group each year (for a total of 100% in any year). A decrease of 9.1 percentage points in the
distributional customer group, therefore, indicates that there was a decrease in the proportion of Spanish
imports sold to that customer group. This does not establish the direction or magnitude of the change in
market share of Spanish imports, as that depends on the extent of corresponding changes in the total volume
of domestic and other importer ripe olives sold to each customer group in the period of investigation.
526 Injury Determination, (Exhibit EU-5), p. 18.
527 Injury Determination, (Exhibit EU-5), p. 18.
528 Injury Determination, (Exhibit EU-5), p. 18.
529 United States' first written submission, para. 178; Injury Determination, (Exhibit EU-5), p. 18 and
fns 104-105 (referring to table II-1).
530 European Union's first written submission, para. 510 (quoting Injury Determination, (Exhibit EU-5),
p. 28 (dissenting view)).
531 European Union's first written submission, para. 510.

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our view that the mere fact that a dissenting view exists does not establish that the
majority's findings were not based on an objective examination of positive evidence. 532 We do not
find the European Union's observation that the dissenting commissioner approached the volume
analysis in a different manner to the majority alters our conclusions set out above. We note,
moreover, that the dissenting opinion ultimately arrived at the same conclusion as the majority of
commissioners that "the volume of subjec t imports, in absolute terms and relative to
U.S. consumption, is significant".533
7.4.4.2.6 Whether the USITC 's volume analysis failed to provide a meaningful basis for
causation
7.247. The European Union also maintains that the USITC's examination of volume could not form
a "meaningful basis" for causation and was thus inconsistent with Article 3.2 and Article 15.2.534
The European Union bases this argument on the proposition that an investigating authority's volume
analysis "must provide 'explanatory force ' for the occurre nce of a significant volume increase". 535
In making this argument, the European Union notes the observation by the Appellate Body in
China – GOES that, when examining price suppression or depression under Article 3.2 and
Article 15.2, "an investigating auth ority is required to consider the relationship between subject
imports and prices of like domestic products, so as to understand whether subject imports provide
explanatory force for the occurrence of significant depression or suppression of domestic prices".536
The European Union argues that "there is no reason" why this obligation is not equally applicable to
an investigating authority's consideration of whether there was a significant increase in the volume
of dumped or subsidized imports.537 We note that, in relation to volume, an investigating authority
is simply directed by Article 3.2 and Article 15.2 to "consider whether there has been a significant
increase in [dumped or subsidized] imports". The investigating authority's inquiry regarding volume
only concerns the identification of the change in the volume of imports and an assessment of its
significance. There is no further requirement to use this data to consider some further phenomena
such as an effect on prices. We therefore disagree with the European Union's assertion that an
investigating authority's volume analysis must provide "explanatory for ce" for the occurrence of a
significant volume increase. Accordingly, we reject the European Union's argument made on that
basis.
7.4.4.3 Conclusion on the USITC's volume analysis under Articles 3.1 and 3.2 of the
Anti-Dumping Agreement and Articles 15.1 and 15.2 of the SCM Agreement
7.248. For the reasons set out above, we find that the European Union has not demonstrated that
the USITC improperly considered whether there had been a significant increase in the volume of
dumped or subsidized ripe olives from Spain, as req uired by the first sentence of Article 3.2 of the
Anti-Dumping Agreement and Article 15.2 of the SCM Agreement. We find further that the
European Union has not demonstrated that the USITC's volume analysis was not based on an
objective examination of positive evidence. On this basis, we conclude that the European Union has
not demonstrated that the USITC's volume analysis was inconsistent with Articles 3.1 and 3.2 of the
Anti-Dumping Agreement and Articles 15.1 and 15.2 of the SCM Agreement.
7.4.5 The USITC's examination of the price effects of dumped and subsidized ripe olives
from Spain
7.249. The European Union argues that the USITC 's consideration of price undercutting by ripe
olives from Spain was not based on an objective examination of positive evidence, and th us is in
violation of Articles 3.1 and 3.2 of the Anti-Dumping Agreement and Articles 15.1 and 15.2 of the
SCM Agreement.538 The European Union's arguments are premised on the view that the
USITC's consideration of price undercutting should be properly unde rstood as a "second volume

532 See para. 7.216 above.
533 Injury Determination, (Exhibit EU-5), p. 28 (dissenting view).
534 European Union's second written submission, paras. 141-142; first written submission, para. 517.
535 European Union's second written submission, para. 142 (referring to Appellate Body Report, China –
GOES, para. 154).
536 European Union's second written submission, para. 141 (quoting Appellate Body Report, China –
GOES, para. 154).
537 European Union's second written submission, para. 142.
538 European Union's first written submission, section VII(C)(2)-(3); second written submission,
section V(C)(2)-(3).

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analysis".539 In this section we will consequently first address the question of whether the USITC
conducted a "second volume analysis ". We will then consider the European Union's various
arguments in support of its view that the USITC's consideration of price undercutting was not based
on an objective examination of positive evidence.540
7.250. The United States maintains that the European Union's arguments are based on a
misconstruction of Article 3.2 and Article 15.2, and the USITC did not conduct a second examination
of the volume of ripe olives from Spain.541 The United States further responds that the USITC's price
effects analysis was based on an objective examination of positive evidence.542
7.251. We examine the merits of the European Union's claims in the sections that follow.
7.4.5.1 Whether the USITC 's examination of price undercutting constituted a second
volume analysis
7.252. The European Union argues that the USITC "did not carry out a price effect analysis in the
context of price undercutting" but rather "carried out a – second – volume analysis". 543 The
European Union alleges the USITC's analysis of price undercutting could "not consider a price effect
in the form of an effect on the price of the domestic industry" because the USITC found no significant
price suppression or price depression.544 The European Union asserts the USITC instead considered
the effect of price undercutting through changes in market share in the retail sector. 545 The
European Union maintains that changes in market share are a "volume effect" and thus that the
"USITC nowhere considered … that domestic prices were affected by subject imports".546
7.253. The United States responds that the European Union's argument is based on a
misconstruction of Articles 3.1 and 3.2 and Articles 15.1 and 15.2.547 The United States argues that
these provisions provide that price undercutting is, in and of itself, a price effect.548 The United States
thus maintains that the USITC properly considered the effect of dumped and subsidized ripe olives
on prices in the domestic market through its analysis of price undercutting.549
7.254. We observe that in the section of the Injury Determination titled "Price Effects of the Subject
Imports", the USITC examined the price effects of dumped and subsidized ripe olives from Spain
during the period of inv estigation. The USITC first found that there was significant underselling by
Spanish ripe olives. 550 The USITC concluded that Spanish ripe olives did not have the effect of
significantly depressing the prices of domestic ripe olives, or of preventing price increases that would
otherwise have occurred to a significant degree.551
7.255. We note that the USITC employed the term "undersold" and "underselling" in place of
"undercut" and "undercutting" in Article 3.2 of the Anti-Dumping Agreement and Article 15.2 of the
SCM Agreement. We employ these terms interchangeably throughout.
7.256. The European Union's characterization of the USITC 's analysis of price undercutting as a
second volume analysis raises a range of complex interpretative questions. These include whether

539 European Union's second written submission, paras. 162 and 164; see also ibid. para. 155 (alleging
the "USITC undertook a somewhat bizarre (and highly WTO-inconsistent) hybrid price/volume analysis in the
context of 'price undercutting'") and para. 160 (alleging "the USITC undertook a volume analysis that was
window-dressed as a price undercutting analysis"). The arguments that flow from the
European Union's characterization of the USITC's examination of price undercutting as a second volume
analysis are addressed at paragraphs 7.263-7.281 below.
540 European Union's first written submission, section VII(C)(2)-(3); second written submission,
section V(C)(2)-(3).
541 United States' first written submission, section V(B); second written submission, section IV(C).
542 United States' first written submission, section V(B); second written submission, section IV(C).
543 European Union's second written submission, para. 154.
544 European Union's first written submission, paras. 528 and 541; second written submission,
para. 154.
545 European Union's first written submission, para. 542.
546 European Union's second written submission, para. 154.
547 United States' first written submission, paras. 196-206.
548 United States' first written submission, para. 199.
549 United States' first written submission, paras. 201-205; second written submission, paras. 75-79.
550 Injury Determination, (Exhibit EU-5), p. 21.
551 Injury Determination, (Exhibit EU-5), p. 21.

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such a "hybrid price/volume analysis" 552 is something conceived of and permitted by the
agreements. We do not consider it necessary to discuss all these issues because we disagree with
the central premise of the European Union's argument: the proposition that price undercutting is
not, in and of itself, an effect on domestic prices.553 For the reasons that follow, we find that the text
of Articles 3.1 and 3.2 and Articles 15.1 and 15.2 does not support this interpretation. Rather, in our
view, those provisions reco gnize that consideration of significant price undercutting under the
second sentence of Article 3.2 and Article 15.2 on its own constitutes an "examination of … the effect
of the dumped imports on prices in the domestic market for like products" under Article 3.1 and
Article 15.1.
7.257. We first observe that Article 3.1 and Article 15.1 direct an investigating authority to examine
the "effect of the [dumped or subsidized] imports on prices in the domestic market for like products".
We next recall that the second sentence of Article 3.2 and Article 15.2 states:
With regard to the effect of the [dumped or subsidiz ed] imports on prices, the
investigating authorities shall consider whether there has been a significant price
undercutting by the [dumped or subsidized] 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.
The second sentence of Article 3.2 and Article 15.2 thus describes what an investigating authority
should examine "[w]ith regard to the effect of the [dumped or subsidized] imports on prices". While
the second sentence in Article 3.2 and Article 15.2 does not specify which "prices" are the object of
the enquiry, we understand this to be a reference to "prices in the domestic market for like products".
We consider this to be correct based on the clear cross-reference to Article 3.1 and Article 15.1. This
is also supported by the parallel manner in which the examination of volume is treated in the
first sentence of Article 3.2 and Article 15.2. To make the same point from a different perspective,
an interpretation of the term "prices" in the second sentence as referring not to "prices in the
domestic market for like products", but to some other prices, would seem to contradict the otherwise
logical progression of analysis presented in Article 3 and Article 15 by leaving unspecified what an
examination of subject imports effect on domestic prices requires. 554 We are thus of the view that
the second sentence in Article 3.2 and Article 15.2 is intended to detail what action s by an
investigating authority constitutes an examination of the effect on domestic prices as required by
Article 3.1 and Article 15.1.
7.258. Article 3.2 and Article 15.2 instruct an investigating authority to consider whether the
dumped or subsidized imports result in any of three phenomena, i.e. significant price undercutting,
significant price depression, or significant price suppression. The use of the disjunctive "or" between
these three phenomena indicates that they are independent lines of inquiry. A view that only price
depression and price suppression constitute price effects would read out of the text the option to
consider price undercutting as an independent channel of inquiry. This would be inconsistent with
the requirement that effect be given to all terms of a treaty. 555 We thus interpret Article 3.2 and
Article 15.2 to mean that a consideration of any of the three price effects can independently satisfy
the requirement in Article 3.1 and Article 15.1 to examine the "effect … on prices in the domestic
market for like products".556
7.259. The European Union maintains that, even if Article 3.2 and Article 15.2 provide for three
different price effects, only price depression and price suppression are "'true ' stand-alone price
effects".557 The European Union argues that price undercutt ing cannot itself be an "effect … on
prices" because it is only through price depression or suppression that "the price curve of the

552 European Union's second written submission, para. 155.
553 European Union's first written submission, para. 541; second written submission, para. 158.
554 For a similar view about the logical progression of analysis in Article 3 of the
Anti-Dumping Agreement and Article 15 of the SCM Agreement, see, e.g. Appellate Body Report, China –
GOES, paras. 128 and 143.
555 Appellate Body Report, US – Gasoline, DSR 1996:1, p. 21.
556 Similar conclusions are arrived at in prior reports, such as Appellate Body Report, China – GOES,
China – HP-SSST (Japan) / China – HP-SSST (EU), para. 7.129.
557 European Union's 26 March 2021 response to Panel question No. 1, para. 7.

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domestic industry 's prices" can be impacted. 558 In the European Union's view, then, "price
undercutting requires, at least f actually, the existence of price depression and/or price
suppression".559 However, we consider that such a narrow interpretation of "effect … on prices" is
neither required by the definition of "effect" nor consistent with the structure of the provisions. The
ordinary meaning of an "effect" is, inter alia, "[s]omething accomplished, caused, or produced; a
result, consequence". 560 This definition indicates that the examination of the "effect" of subject
imports on domestic prices required by Article 3.1 and Article 15.1 must entail an examination of
whether there has been some result or consequence with respect to domestic prices that was caused
by subject imports. We do not see any reason that such a result or consequence may only be in the
form of a change in the price of the domestic like product. It is our view, rather, that such a result
or consequence could be in the form of a change in the relative prices of domestic like product and
the products with which it competes. Such changes could impact the competitiveness of the price of
the domestic like product, even if there is no evidence during the period of investigation that t he
price of the domestic like product is significantly depressed or suppressed. We find this broader view
to be consistent with the structure of the second sentence in Article 3.2 and Article 15.2, which as
explained above, provides for three separate chan nels of inquiry. In contrast, the
European Union's narrow interpretation would in practice read price undercutting out of Article 3.2
and Article 15.2 as an independent line of inquiry. Informed by the principle that an interpretation
must be above all based on the text of the treaty561, we conclude that the broader understanding of
the meaning of an "effect … on prices" must be the correct interpretation. We therefore reject the
European Union's argument that price undercutting is not a "'true' stand-alone" price effect and find
that the USITC's analysis of price undercutting is properly characterized as an examination of price
effects.
7.260. We find our position is consistent with the findings by the Appellate Body in China – HP-SSST
(Japan) / China – HP-SSST (EU). The European Union quotes the observation by the Appellate Body
in that report that "an inquiry into price undercutting … is not satisfied by a static examination of
whether there is a mathematical difference at any point in time during the [period of investigation]
without any assessment of whether or how these prices interact over time".562 The European Union
further quotes the Appellate Body's view that an investigating authority must instead conduct a
"dynamic assessment of price developments and trends in the relationship between the prices of the
dumped [or subsidized] imports and those of domestic like products over the duration of the [period
of investigation]". 563 Based on these observations, the European Union asserts that the USITC
conducted a "static exam ination" of various instances of price undercutting, but then failed to
conduct a "dynamic assessment" of the interaction of the prices of Spanish imports and of domestic
prices.564 The European Union asserts that the USITC 's alleged failure to conduct a "d ynamic
assessment" means the USITC "did not consider price effects … in the context of its price
undercutting analysis".565
7.261. In our view, the European Union's submissions are based on a misunderstanding of the
Appellate Body's finding in China – HP-SSST (Japan) / China – HP-SSST (EU). In that case, the
Appellate Body found that the Chinese investigating authority had failed to properly explain the basis
of its finding that a certain grade of dumped imports were underselling the domestic like product.566
In particular, the Appellate Body expressed concern that the Chinese investigating authority had
failed to explain how significant underselling could be found to exist given that the price of the
domestic like product had more than doubled during the course of o ne year, while the price of
dumped imports had fallen.567 The Appellate Body based this finding on the view that an objective
examination of price undercutting should take into account any relevant trends across the period of

558 European Union's first written submission, fn 467.
559 European Union's 26 March 2021 response to Panel question No. 1, para. 7.
560 Oxford Dictionaries online, definition of "effect"
https://www.oed.com/view/Entry/59664?rskey=HPLU9L&result=1&isAdvanced=false#eid (accessed
7 July 2021), n., meaning b.
561 See, e.g. Appellate Body Report, Japan – Alcoholic Beverages II, DSR 1996:I, p. 105.
562 European Union's second written submission, para. 159 (quoting Appellate Body Reports,
China - HP-SSST (Japan) / China – HP-SSST (EU), para. 5.160).
563 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), para. 5.161. See also
European Union's second written submission, para. 159.
564 European Union's second written submission, para. 159.
565 European Union's second written submission, para. 159. (emphasis original)
566 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), paras. 5.168-5.171.
567 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), para. 5.168.

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investigation, as well as the d uration of any identified price undercutting. As the Appellate Body
explained, "an objective examination would have taken into account all the positive evidence relating
to, inter alia, the contrary price movements of the [subject] imports and domestic [like product], as
well as the limited period during which the perceived mathematical difference occurred".568
7.262. We agree w ith the Appellate Body's interpretation that an analysis of price undercutting
must be objective and must take into account all relevant evidence. The Appellate Body's rejection
of a mere "static examination", however, concerned whether the Chinese investigating
authority's examination of price undercutting was based on an objective examination of positive
evidence. The Appellate Body's statements were unrelated to the question of whether a price effect
identified through a consideration of price undercutting may only be in the form of price suppression
or price depression. On the contrary, the Appellate Body clearly held the same view as this Panel,
having emphasi zed that, "[w]e do not read Article 3.2 as suggesting that the 'effect' of price
undercutting must either be price depression or price suppression". The Appellate Body observed
that, "while price undercutting by imports may lead to price depression or price suppression, 'there
is no requirement in Article 3.2 to demonstrate the existence of these other phenomena when
considering the existence of price undercutting'". 569 This is consistent with our understanding of
Article 3.2 and Article 15.2 and does not support the European Union's position that price
undercutting is not, in and of itself, a price effect. We therefore do not agree with the
European Union's characterization of the USITC's analysis of price undercutting as a second volume
analysis, and do not consider it relevant to further examine that proposition.
7.4.5.2 Whether the USITC 's price effects analysis was not based on an objective
examination of positive evidence in violation of Articles 3.1 and 3.2 of the
Anti-Dumping Agreement and Articles 15.1 and 15.2 of the SCM Agreement
7.263. In the previous section we disagreed with the European Union's characterization of the
USITC's examination of price undercutting as a second volume analysis. Having rejected this view,
we now directly address the European Union's various arguments in support of its position that the
USITC's price undercutting analysis itself was not based on an objective examination of positive
evidence, and thus violated Articles 3.1 and 3.2 of the Anti -Dumping Agreement and Articles 15.1
and 15.2 of the SCM Agreement.570 We approach these arguments based of our understanding that
the USITC's analysis of price undercutting was an examination of price effects, not a volume analysis.
7.264. The European Union argues the USITC failed to conduct an objective examination of price
effects based on positive evidence because the USITC (a) concluded that underselling resulted in a
loss of market share in the retail sector without adequate supporting evidence 571; ( b) only
considered price effects in the retail sector and not at the level of the domestic industry as a whole572;
and ( c) improperly extended its conclusions concerning price effects in the retail sector to the

568 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), para. 5.169.
569 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), para. 5.156. (emphasis
original)
570 European Union's first written submission, paras. 550-551 and 556-557; second written submission,
para. 157.
571 European Union's first written submission, para. 543; second written submission, para. 157; and
opening statement at the first meeting of the Panel, para. 125.
We note that the United States asserted following the second Panel meeting that the
European Union's argument that the USITC's price effects analysis was unsupported by positive evidence is
outside the Panel's terms of reference, alleging that arguments to this effect constitute a "wholly separate
claim" that was not identified in the European Union's panel request. (United States' 25 February 2021
response to Panel question No. 15, para. 51). We reject the United States' assertion. The
European Union's request for establishment clearly identified a claim that "the USITC's price effects analysis
lacked positive evidence". (European Union's panel request, p. 2). This description is sufficient to identify the
claim. Furthermore, no due process issues arise, as the European Union raised its arguments in its opening
statement at the first meeting of the Panel and the United States had the opportunity to respond, which it did
in its second written submission. (United States' second written submission, paras. 75-79).
572 European Union's first written submission, paras. 531 and 540-551.

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domestic industry as a whole.573 The United States responds that the USITC's price effects analysis
was based on an objective examination of positive evidence.574
7.265. In respect of t he analysis below, we recall that an investigating authority's analysis of the
effect of dumped or subsidized imports on prices in the domestic market for like products pursuant
to Article 3.2 and Article 15.2 must comply with the overarching requirement contained in Article 3.1
and Article 15.1 that a determination of injury must be based on an objective examination of positive
evidence.
7.4.5.2.1 Factual background
7.266. In the section of the Injury Determination entitled "Price Effects of the Subject Imports", the
USITC recounted that it had collected pricing information on 4 products using data from 23 importers
and 2 domestic producers.575 The USITC observed that these data showed ripe olives from Spain
undersold the domestic like product in 37 of 48 quarterly comparisons, with an average underselling
margin of 30.3%. 576 The USITC stated that ripe olives from Spain "undersold the domestic like
product and captured market share in the retail sector of the market".577 The USITC then examined
the loss of market share in the retail branded and retail private label sectors.578 The USITC observed
that the data concerning lost sales "provides further support for the proposition that subject imports
were sold at low prices and as a res ult captured market share from the domestic industry". 579 The
USITC concluded that the underselling by ripe olives from Spain was significant because of the
following factors:
(1) [T]he predominant underselling by subject imports on a per instance and volum e
basis; (2) the high degree of substitutability between the domestic like product and
subject imports; (3 ) the importance of price in purchasing decisions; (4 ) the
underselling by subject imports which enabled them to capture market share from
domestic industry in the important retail sector; and (5) the reports of lost sales.580
7.4.5.2.2 Whether the USITC concluded that underselling resulted in a loss of market
share in the retail sector without adequate supporting evidence
7.267. We begin with the European Union's assertion that the USITC concluded that underselling
resulted in a loss of market share in the retail sector without adequate supporting evidence. The
European Union challenges four aspects of the data relied upon by the USITC in drawing that
conclusion. These are that (a) the purchasers responding to questionnaires used to identify lost sales
were mainly distributors 581; ( b) the identified underselling was concentrated in the institutional
channel582; (c) there were instances of overselling in the retail channel in two out of three years583;
and (d) the USITC failed to produce a price undercutting margin specifically for the retail channel.584
We consider each of these in turn.585

573 European Union's first written submission, paras. 531 and 552-556.
574 United States' second written submission, paras. 75-79; 26 March 2021 responses to Panel question
No. 1, paras. 1-6, and No. 2, paras. 7-23; and 13 April 2021 comments on the
European Union's 26 March 2021 response to Panel question No. 1, paras. 9-18.
575 Injury Determination, (Exhibit EU-5), pp. 19-20.
576 Injury Determination, (Exhibit EU-5), p. 20.
577 Injury Determination, (Exhibit EU-5), p. 20.
578 Injury Determination, (Exhibit EU-5), pp. 20-21. The United States clarified in response to Panel
questions that the "retail branded sector" refers to domestic shipments of branded product to retailers, that
references to the "retail private label sector" refer to domestic shipments of private label product to retailers,
and that references to the "retail sector" reflect the sum of the prior two categories.
(United States' 26 March 2021 response Panel question No. 2, para. 15).
579 Injury Determination, (Exhibit EU-5), p. 21.
580 Injury Determination, (Exhibit EU-5), p. 21.
581 European Union's second written submission, para. 157.
582 European Union's second written submission, para. 157.
583 European Union's second written submission, para. 157.
584 European Union's second written submission, para. 157.
585 We note that paragraphs 7.267-7.275 include a discussion of factual statements made by the
United States in response to questions from the Panel following the second Panel meeting.
(United States' 26 March 2021 response to Panel questions). As discussed above, these factual statements

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7.268. We observe that Article 3.2 and Article 15.2 do not specify what methodology an
investigating authority must employ when considering price undercutting.586 Whatever methodology
is adopted, however, is subject to the overarching requirement contained in Article 3.1 and
Article 15.1 that it be objective and based on positive evidence. 587 We recall that, to perform an
objective examination, an investigating authority must support its findings with reasoning that is
coherent and internally consistent. 588 We further recall that, while we must address the
European Union's argument through a cr itical analysis of the USITC 's examination of price
undercutting, a panel is not to undertake a de novo review of the investigation, nor substitute its
judgment for that of the investigating authority.589
7.269. The European Union first alleges that the lost sales data referred to by the USITC do not
support the USITC 's findings concerning the retail sector because purchasers responding to
questionnaires used to identify lost sales were mainly distributors, not retailers. 590 We recall that
the USITC observed that data concerning lost sales "provides further support for the proposition that
subject imports were sold at low prices and as a result captured market share from the domestic
industry".591 Most relevantly, the USITC observed that of 25 responding purchasers (a) 13 reported
that they had purchased subject imports instead of domestically produced product since 2015;
(b) 12 of these 13 purchasers reported that subject import prices were lower than those for the
domestically produced product; and (c ) 6 of the 13 purchasers reported that price was a primary
reason for its decision to shift its purchases from the domestic like product to subject imports.592 In
response to questions the United States clarified, however, that of the 13 purchasers who reported
that they purchased subject imports rather than the domestic product, 6 were retailers.593 The
United States also clarified that of the 12 purchasers who reported that the subject imports were
lower priced than the domestic like product, there were also 6 retailers.594 The United States further
explained that, of the 6 purchasers who reported that lower prices were the primary reason that
they purchased subject imports rather than the domestic like product, 4 were retailers.595 It is clear,
therefore, that a large portion of purchasers in each relevant category of the lost sales data were
retailers. We consequently find that an objective investigating authority could have treated the lost
sales data as supporting the USITC 's conclusion that underselling by subject imports resulted in a
loss of market share by the domestic industry in the retail sector.
7.270. The European Union's second argument is that the fact that the underselling was
concentrated in the institutional sector means th ere was no evidence supporting the finding that
underselling resulted in a loss of market share in the retail sector by the domestic industry. 596 Of
the four pricing products used by the USITC to collect pricing data, two were retail products (Products
1 and 2) and two were institutional products (Products 3 and 4).597 The European Union argues that,

were made by the United States in response to questions from the Panel intended to clarify certain data
redacted in the version of the Injury Determination available to the Panel. (See paras. 7.196-7.201 above).
The United States did not provide the unredacted Injury Determination in support of these factual statements.
The European Union was provided with an opportunity to comment on the United States response, however,
and did not challenge the accuracy of the relevant factual statements made by the United States.
(European Union's 13 April 2021 comments on the United States' 26 March 2021 response to Panel questions).
In light of the fact that the United States has access to the unredacted version of the Injury Determination,
and the absence of any challenge by the European Union to the accuracy of such factual statements, we will
treat the factual statements by the United States discussed in paragraphs 7.267-7.275 as provided in good
faith and accepted by the parties for the purpose of this dispute.
586 This view is shared by prior panels. For example, the panel in EC – Tube or Pipe Fittings stated that
"Article 3.2 requires the investigating authorities to consider whether price undercutting is 'significant' but does
not set out any specific requirement relating to the calculation of a margin of undercutting, or provide a
particular methodology to be followed in this consideration." (Panel Report, EC – Tube or Pipe Fittings,
para. 7.281. See also, e.g. Panel Reports, Thailand – H-Beams, para. 7.159; EU – Biodiesel (Indonesia),
587 For a similar conclusion, see, e.g. Appellate Body Reports, Mexico – Anti-Dumping Measures on Rice,
588 See para. 7.209 above.
589 See para. 7.4 above.
590 European Union's second written submission, para. 157.
591 Injury Determination, (Exhibit EU-5), p. 21.
592 Injury Determination, (Exhibit EU-5), p. 21.
593 United States' 26 March 2021 response to Panel question No. 2, para. 22.
594 United States' 26 March 2021 response to Panel question No. 2, para. 22.
595 United States' 26 March 2021 response to Panel question No. 2, para. 22.
596 European Union's second written submission, para. 157.
597 Injury Determination, (Exhibit EU-5), fn 112.

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while the USITC observed an average underselling margin of 30.3%, "footnote 117 [of the Injury
Determination] makes clear that such underselling was 'concentrated' in the institutional sector and
hence could not lead to any market share losses – the effect that the USITC is considering – since
the USITC only found such share loss for the retail 'segment'". 598 The actual text of this footnote,
however, does not support the European Union's assertion that underselling by Products 1 and 2 in
the retail sector "could not lead to any share losses". The relevant part of footnote 117 of the
Injury Determination reads: "[w]e recognize that on an overall volume basis the underselling by
subject imports was concentrated in Products 3 and 4 (i.e ., institutional), the two pricing products
involving the largest quantities of subject imports during the [period of investigati on] and in the
sector of the market where subject imports had a large presence".599 In our view, the mere fact that
the volume of underselling was concentrated in the institutional products (Products 3 and 4) does
not support the conclusion that there was no underselling by the retail products (Products 1 and 2),
or that such underselling could not result in a loss of market share in the retail sector. On the
contrary, it is unsurprising that the volume of underselling would be concentrated in the pricing
products involving the largest quantities of subject imports (i.e. Products 3 and 4). Accordingly, we
do not agree with the European Union's characterization of the implications of the
USITC's statements in footnote 117.
7.271. The European Union thirdly argues tha t the USITC 's finding was unsupported by evidence
because "there were even instances of overselling in the retail channel in two out of three years".600
We agree that the Injury Determination confirms the existence of overselling in two years, stating
"[i]nstances of overselling occurred in products 1-2 (retail products ) in 2015 and 2016 only". 601
There was thus no overselling in 2017, the final year of th e period of investigation for the
Injury Determination. In total, the USITC identified 11 instances of overselling with an average
overselling margin of 10.9%.602 However, in our view, the mere fact that there was overselling does
not establish that underselling could not have resulted in market share loss by the domestic industry.
The Injury Determination indicates that Product 1 recorded four-quarters of underselling and
eight-quarters of overselling, while Product 2 recorded nine-quarters of underselling and
three-quarters of overselling.603 Products 1 and 2 undersold the domestically produced product in
54% of quarterly comparisons, which reflected 62% of the total import shipments of those
two pricing products.604 For each product, the average underselling margin exceeded the average
overselling margin.605 There was thus a greater volume of underselling, and at greater margins, than
of overselling. Furthermore, the underselling was more concentrated towards the end of the period
of investigation, as instances of overselling occurred in Products 1 and 2 in 2015 and 2016, but not
2017.606 In light of these facts we conclude that an objective investigating authority could have
reasonably treated the underselling data concerning Products 1 and 2 as supporting the conclusion
that underselling resulted in a loss of market share in the retail sector.607
7.272. Lastly, the European Union argues that the USITC "provided no undercutting margin for the
retail channel in its analysis, only an average industry -wide margin of 30.3 percent", and that this
was insufficient to show underselling in the retail channel.608 The European Union correctly observes
that the price undercutting margins were not prepared on the basis of the retail sector, but in relation
to each pricing product.609 As the United States conceded, the USITC's pricing data were based on

598 European Union's first written submission, para. 543.
599 Injury Determination, (Exhibit EU-5), fn 117 and p. 20.
600 European Union's second written submission, para. 157. (emphasis original)
601 Injury Determination, (Exhibit EU-5), p. V-11.
602 Injury Determination, (Exhibit EU-5), p. V-11, table V-10.
603 Injury Determination, (Exhibit EU-5), p. V-11, table V-10.
604 United States' 26 March 2021 response to Panel question No. 2, para. 23.
605 United States' 26 March 2021 response to Panel question No. 2, para. 23.
606 Injury Determination, (Exhibit EU-5), p. V-11.
607 We agree with the panel's observation in EC – Tube Fittings, the "fact that certain sales may have
occurred at 'non-underselling prices' does not eradicate the effects in the importing market of sales that were
made at underselling prices", given that "there might be a considerable number of sales at undercutting prices
which might have had an adverse effect on the domestic industry". (Panel Report, EC – Tube or Pipe Fittings,
para. 7.277 (emphasis original)).
608 European Union's second written submission, para. 157.
609 In addition to stating the average industry-wide price undercutting margin of 30.3%, the USITC also
refers to table V-10 which contains price undercutting margins specific to each pricing product. (Injury
Determination, (Exhibit EU-5), table V-10). While the price undercutting margins specific to each pricing
product are redacted in the version of the Injury Determination available to the Panel, we have not reason to
doubt that these were calculated by the USITC.

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product type, not purchaser, and "[t]he USITC did not calculate underselling margins specific to any
channel of distribution".610 In other words, the two relevant retail pricing products, Products 1 and
2, were sold to both retailers and distributors.
7.273. We observe that the USITC did not prepare data specifically for sales to retailers and thus
did not have a price undercutting margin specific to the retail sector, despite relying on this data to
conclude that there had been significant underselling in the retail sector. 611 The European Union
maintains that the USITC 's conclusions as to price undercutting in the retail sector were thus
unsupported, as the data concerning price undercutting did not specifically relate to the retail
channel.612 The European Union seeks to support this assertion by observing that a price
undercutting margin at the industry level could mask overselling in a particular sector, such as the
retail channel.613 The United States, however, responds that the relevant pricing data were collected
uniformly at the same level of trade, specifically the first arm 's length sale from the importer or
producer to the purchaser.614 The United States asserts that there was no evidence indicating that
the prices of those products would be different when sold to retailers and distributors.615
7.274. As noted above, Article 3 of the Anti -Dumping Agreement and Article 15 of the
SCM Agreement do not specify what methodology an investigating authority must employ when
considering price undercutting.616 In our view an objective investigating authority could reasonably
have treated the underselling by Products 1 and 2, being retail products, as supporting an inference
that such underselling occurred in the retail sector, thus resulting in the identified loss of market
share. This inference was also consistent with evidence of lost sales, as discussed above.617 We thus
find that the European Union has not established that an objective investigating authority could not
have concluded that the underselling identified in Products 1 and 2 resulted in the domestic
market's loss of market share in the retail sector.
7.275. On the basis of the reasons above, we therefore conclude that the European Union has not
established that the USITC's finding that price undercutting resulted in a loss of market share in the
retail sector was unsupported by evidence.
7.4.5.2.3 Whether the USITC only considered price effects in the retail sector and not at
the level of the domestic industry as a whole
7.276. We next turn to the European Union's argument that the USITC only considered price effects
in the retail customer group and not in the whole market. 618 In particular, the European Union
asserts that the USITC's price effects analysis only examined the loss of market share in the retail
sector. The European Union argues that the loss of market share was "the 'effect[] ' that the USITC
chose to consider in the context of its price effect analysis for price undercutting" and that the USITC
was thus "obliged to consider [the loss in market share] for the … industry as a whole".619
7.277. In our assessment, t he European Union's argument is premised on a misconstrued
understanding of the USITC's price effects analysis as a second volume analysis, and the erroneous
view that the USITC 's specific consideration of the loss of market share in the retail sector in a
portion of the price effects analysis was the entire second volume analysis .620 But this is not how
the USITC undertook its price effects analysis. The USITC 's price effects analys is did not only
examine the retail sector, but compared quarterly prices across four pricing products and assessed
lost sales data from a range of purchasers.621 The four pricing products represented sales across all
customer groups and accounted for a sign ificant portion of all sales of Spanish ripe olives. For
example, in 2017 alone, the sales data for the pricing products was based on approximately 65.5%

610 United States' 25 February 2021 response to Panel question No. 12, para. 46.
611 United States' 25 February 2021 response to Panel question No. 12, para. 46.
612 European Union's second written submission, para. 156.
613 European Union's second written submission, para. 156.
614 United States' 26 March 2021 response to Panel question No. 2, para. 19.
615 United States' 26 March 2021 response to Panel question No. 2, para. 19.
616 See para. 7.268 above.
617 See para. 7.269 above.
618 European Union's first written submission, para. 540.
619 European Union's first written submission, para. 546. (emphasis original)
620 See, e.g. European Union's second written submission, para. 164.
621 Injury Determination, (Exhibit EU-5), pp. 18-20.

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of reported shipments of subject imports from Spain .622 The USITC 's examination of price
undercutting was thus not limited to a consideration of the price of sales to retailers, but rather took
into account the prices across the whole market. The European Union's argument that the
USITC's price effects analysis only considered the retail sector is thus not factually supported and
fails.623
7.278. The European Union also argues that the view of the dissenting USITC commissioner "fully
supports" the argument that the USITC's price effects analysis failed to properly consider the market
as a whole.624 The European Union argues that this is because the dissenting commissioner "focused
her analysis under 'Price Effects of Subject Imports' on the overall market shares, not the retail
segment".625 The European Union then quotes three paragraphs of the dissenting
commissioner's analysis in their entirety and concludes that the commissioner's statements "speak
for themselves".626 We agree that the dissenting commissioner concluded that the underselling by
Spanish ripe olives was not significant.627 However, both the majority and the dissent employed the
same market-wide data regarding price comparisons and lost sales to assess the existence and
significance of price underc utting.628 Therefore we disagree that the dissenting
commissioner's analysis establishes that the majority failed to properly consider the market as a
whole, and consequently reject the European Union's argument to that effect.
7.4.5.2.4 Whether the USITC improperly extended its conclusions concerning the
consideration of price effects in the retail sector to the domestic industry as a whole
7.279. Finally, the European Union argues the USITC "improperly extend[ed] its consideration of
price effects for the retail 'segment' to the entire domestic industry without any evidence, reasoning
or explanation". 629 The European Union bases this argument on the language of the
USITC's concluding paragraph of its price effects analysis.630 The USITC concluded:
Accordingly, based on the cu rrent record, we find that there was significant price
underselling of the domestic like product by subject imports. As a result of this
underselling, subject imports captured market share from the domestic industry in the
large and important retail sector while maintaining their significant presence in the
U.S. market for ripe olives throughout the [period of investigation] . The low ‐priced
subject imports consequently had significant adverse effects on the domestic industry,
which are described further below.631
7.280. The European Union argues that the reference in the first sentence of this extract to "the
current record" is a reference only to " price effects (in the form of volume effects ) in one out of
three 'segments' (retail) and not in the industry as a whole".632 The European Union argues that the
reference to "underselling of the domestic like product by subject imports" in the first sentence, and
the statement that subject imports had adverse effects "on the domestic industry" in the final

622 Injury Determination, (Exhibit EU-5), p. 20.
623 The European Union further argues that the USITC failed to consider the distributional and
institutional customer groups in a like manner as the retail customer group, without satisfactory explanation.
(European Union's second written submission, paras. 163-169). As discussed above in relation to the
USITC's volume analysis, however, we consider the USITC to have provided a satisfactory explanation for its
particular focus on the retail sector. (See para. 7.240 above). In particular, the USITC observed in its
examination of price undercutting that "[o]f particular note is that subject imports undersold the domestic like
product and captured market share in the retail sector of the market, which was the largest and most
important sector of the U.S. market for the domestic industry". (Injury Determination, (Exhibit EU-5), p. 20).
We consider the USITC to have thus provided a clear and satisfactory explanation of its decision to focus on the
retail sector as the largest and most significant sector for the domestic industry.
624 European Union's first written submission, paras. 548-549 (referring to Injury Determination,
(Exhibit EU-5), pp. 29-31 (dissenting view)).
625 European Union's first written submission, para. 548. (emphasis original)
626 European Union's first written submission, paras. 548-549.
627 Injury Determination, (Exhibit EU-5), p. 31 (dissenting view).
628 Compare Injury Determination, (Exhibit EU-5), pp. 20-21 (majority view) with pp. 29-30 (dissenting
view).
629 European Union's first written submission, para. 552.
630 European Union's first written submission, para. 553.
631 Injury Determination, (Exhibit EU-5), p. 22.
632 European Union's first written submission, para. 553.

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sentence, are both references to the domestic industry as a whole, and are thus unsupported by the
USITC's findings in relation to underselling in the retail sector.633
7.281. We recall that we have already found above that the USITC's price effects analysis concerned
the whole market and therefore relat ed to the industry as a whole . Thus we consider that "the
current record" referred to in the first sentence of the extract includes the USITC 's analysis of the
whole market, as opposed to just the section in which the USITC examined changes in market share
in the retail sector. We also note that the USITC's statement in the final sentence that there were
certain consequential adverse impacts on the domestic industry is based on an analysis "described
further below". By "described further below", we understand the USITC to be referring to its impact
and causation analysis in the following sections. This sentence, then, merely indicates the outcome
of the forthcoming analysis, rather than being a conclusion that would appropriately be challenged
on the basis o f the USITC's price effects analysis. Consequently, we find that the European Union
has failed to establish that the concluding paragraph of the USITC's price effects analysis shows that
the analysis was not based on an objective examination of positive evidence.634
7.4.5.3 Conclusion on the USITC's price effects analysis under Articles 3.1 and 3.2 of the
Anti-Dumping Agreement and Articles 15.1 and 15.2 of the SCM Agreement
7.282. For the reasons above, we find that the European Union has not established that the
USITC's examination of price undercutting should be characterized as a second volume analysis. We
find further that the European Union has not demonstrated that the USITC's price effects analysis
was not based on an objective examination of positive evidence. On this basis, we conclude that the
European Union has not demonstrated that the USITC's price effects analysis was inconsistent with
Articles 3.1 and 3.2 of the Anti -Dumping Agreement and Articles 15.1 and 15.2 of the
SCM Agreement.
7.4.6 The USITC's examination of the consequent impact of dumped and subsidized ripe
olives from Spain
7.283. The European Union argues that the USITC's impact analysis was not based on an objective
examination of positive evidence, and was thus inconsistent with Articles 3.1 and 3.4 of the
Anti-Dumping Agreement and Articles 15.1 and 15.4 of the SCM Agreement.635 The European Union
first argues that the USITC's findings concerning volume and price effects were not at the level of
the industry as a whole and thus could not s upport a conclusion that ripe olives from Spain had a
consequent impact on the domestic industry. 636 The European Union also argues that the
USITC's impact analysis was itself not based on an objective examination of positive evidence. 637
The United States requests the Panel to reject the European Union's arguments in their entirety.638
We examine the merits of the European Union's claims in the sections that follow.

633 European Union's first written submission, para. 554.
634 The European Union also asserts that the USITC's consideration of price effects provided no
meaningful basis for causation regarding the domestic industry as a whole. (European Union's second written
submission, para. 170; see also 10 June 2020 response to Panel question No. 22, para. 119 (referring to
Appellate Body Reports, China - HP-SSST (Japan) / China – HP-SSST (EU), para. 5.180); 8 September 2020
response to Panel question No. 3(c), paras. 92-95; and 12 November 2020 response to Panel question No. 29,
para. 187). This argument is, however, based on the European Union's prior assertion that the "USITC
considered a volume increase of Spanish imports only in the retail channel and considered a mere presence of
Spanish imports for the industry as a whole". (European Union's second written submission, para. 170). We
have already found that the USITC's volume and price effects analyses were not exclusively limited to the retail
sector, and that there is no requirement to find an increase in volume under Article 3.2 and Article 15.2. (See
paras. 7.226-7.282 above). The European Union's argument thus fails.
635 European Union's first written submission, section VII(D); second written submission, section V(D).
636 European Union's first written submission, paras. 574-589; second written submission,
paras. 179-182.
637 European Union's first written submission, paras. 566-573 and 590-597; second written submission,
paras. 173-178 and 183-185.
638 United States' first written submission, section V(C); second written submission, section IV(D).

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7.4.6.1 Whether the USITC could have made a finding of consequent impact on the basis
of its findings concerning volume and price effects
7.284. The European Union argues that the USITC did not make any findings concerning the volume
and price effects of ripe olives from Spain at the "level of the domestic industry as a whole". 639 In
relation to volume, the European Union observes that the USITC did not find an increase in subject
imports in absolute terms, or relative to domestic consumption or production across the market as
a whole.640 In relation to price effects, the European Union observes that the price undercutting
identified by the USITC only resulted in a loss of market share in the retail sector. The
European Union asserts that such findings do not concern the domestic industry as a whole, and
thus the USITC could not establish a consequent impact on the domestic industry. 641 The
United States argues that the European Union's arguments are based on a misinterpretation of the
relationship between the provisions of Article 3 of the Anti-Dumping Agreement and Article 15 of the
SCM Agreement.642
7.285. We recall that pursuant to Article 3.1 of the Anti-Dumping Agreement and Article 15.1 of the
SCM Agreement, a determination of injury must involve an objective examination based on positive
evidence of both (a) the volume of the dumped or subsidized imports and the effect of the dumped
or subsidized imports on prices in the domestic market for like products ; and (b) the consequent
impact of these imports on domestic producers of such products. Article 3.2 and Article 15.2 detail
what is required for an examination of volume and price effects. Article 3.4 and Article 15.4 set forth
the requirements for this examination of the impact of the dumped or subsidized imports. Article 3.4
of the Anti-Dumping Agreement provides that:
The examination of the impact of t he 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, pro ductivity, return on investments, or utilization of
capacity; factors affecting domestic prices; the magnitude of the margin of dumping;
actual and potential negative effects on cash flow, inventories, employment, wages,
growth, ability to raise capital or investments. This list is not exhaustive, nor can one
or several of these factors necessarily give decisive guidance.
7.286. The list of economic factors and indices in Article 3.4 of the Anti-Dumping Agreement is the
same as in Article 15.4 of the SCM Agreement, except that Article 15.4 changes the order of certain
listed economic factors and indices, excludes "the magnitude of the margin of dumping", and
includes a specific indicator concerning agriculture. We consider the obligations arising from the
two provisions to be the predominantly the same for the purpose of addressing the arguments raised
by the European Union.
7.287. The European Union's argument concerns the relationship between the findings an
investigating authority makes in its examination of v olume and price effects under Article 3.2 and
Article 15.2, and the investigating authority's subsequent examination of the consequent impact of
such volume and price effects under Article 3.4 and Article 15.4. We understand the European Union
to contend t hat the USITC 's finding that underselling resulted in a loss of market share by the
domestic industry in the retail sector concerns only one sector of the market as a whole, and thus
not the domestic industry as a whole. This argument relates to the requir ement identified in prior
Appellate Body reports, with which we agree, that an investigating authority must assess the impact
of subject imports on the domestic industry as a whole. 643 We disagree, however, with the

639 European Union's first written submission, paras. 574, 581, and 583. We note that the
European Union's first written submission separates its argument that the USITC did not make any findings
concerning the volume and price effects of ripe olives at level of the domestic industry as a whole into a
section on volume and a section on price effects. (European Union's first written submission, section VII(D)(3),
paras. 574-582 (regarding volume), and section VII(D)(4), paras. 583-589 (regarding price effects)). We will
address these arguments together as, in our view, the substantive issues are the same.
640 European Union's first written submission, para. 574.
641 European Union's first written submission, paras. 574, 581, and 583.
642 United States' first written submission, para. 216.
643 We agree with the view of the Appellate Body in China – HP-SSST (Japan) / China – HP-SSST
(EU) that an impact analysis must be carried out with respect to the industry as whole. As the Appellate Body
said: "while there is no exclusive methodology prescribed for an investigating authority to conduct an

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European Union's contention that in the absence of volume and price effects "at the level of the
domestic industry as a whole" there could be no impact.644 We do not see any reason why findings
concerning volume and price effects that relate to one sector cannot have consequent impacts on
the industry as a whole. A deterioration in one sector could clearly impact the domestic industry as
a whole. In our view, t here is no need for every sector to be negatively impacted for the domestic
industry's economic and financial indicia to deteriorate, a lthough the degree of any such
deterioration will be determined by the combined influence of developments in all sectors. We
therefore reject the European Union's argument that the USITC's lack of findings concerning volume
and price effects "at the level of the domestic industry as a whole" could not result in any consequent
impact.
7.4.6.2 Whether the USITC's impact analysis was not based on an objective examination
of positive evidence in violation of Articles 3.1 and 3.4 of the Anti -Dumping Agreement
and Articles 15.1 and 15.4 of the SCM Agreement
7.288. The European Union makes two arguments that the USITC 's impact analysis was itself not
based on an objective examination of positive evidence. First, the European Union argues this is
because the USITC failed to consider the ripe olive market as a whole.645 Second, the European Union
argues that the USITC improperly drew conclusions about the ripe olive industry as a whole from
the retail sector.646 The United States requests the Panel to reject the European Union's arguments
in their entirety.647
7.289. In respect of the analysis below, we recall that an investigating authority's analysis of the
consequent impact of dumped or subsidized imports on the domestic industry pursuant to Article 3.4
and Article 15.4 must comply with the overarching requirement contained in Article 3.1 and
Article 15.1 that a determination of injury must be based on an objective examination of positive
evidence.
7.4.6.2.1 Factual background
7.290. In the section of the Injury Determination titled "Impact of the Subject Imports", the USITC
examined the consequent impact of Spanish ripe olives on the domestic industry. The USITC
relevantly stated:
U.S. processors ' output indicia were mixed from 2015 to 2017. On the one hand,
U.S. processors' production capacity was s table between 2015 and 2017, production
increased by *** percent, and capacity utilization increased by *** percentage points.
On the other hand, U.S. processors ' U.S. shipments (by quantity ) declined by ***
percent. Inventories generally increased from 2015 to 2017.
U.S. processors' employment‐related data also were mixed. The number of production
and related workers ("PRWs"), total hours worked, and hours worked per PRW each
declined overall from 201 5 to 2017. However, wages paid, hourly wages, and worker
productivity each increased overall between 2015 and 2017.
Many of the U.S. processors' financial performance indicia deteriorated over the [period
of investigation]. Net income fell by *** percent f rom 2015 to 2017 while operating
income declined by *** percent during the same period. As a ratio to net sales, net
income and operating income also both declined, by *** percentage points and ***
percentage points, respectively. Capital expenditures fell by *** percent, and research

examination under Article 3.4, an investigating authority's examination of the relationship between the dumped
imports and the state of the domestic industry must be one that enables the investigating authority to derive
an understanding about the impact of the dumped imports on the domestic industry as a whole".
(Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU), para. 5.204 (emphasis omitted)).
644 European Union's first written submission, paras. 574, 581, 583, and 588.
645 European Union's first written submission, paras. 566-573.
646 European Union's first written submission, paras. 590-597; second written submission,
paras. 177-178 and 183-185.
647 United States' first written submission, paras. 219-231.

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and development expenses also declined. Although total net assets increased, the
operating return on assets declined from 2015 to 2017.
We find that subject imports from Spain had a significant impact on the domestic
industry. As discussed above, the significant volumes of subject imports that undersold
the domestic like product captured market share from the domestic industry in its
largest sector of the market – the retail sector – and also resulted in U.S. processors of
ripe olives carrying increasing inventories. There is evidence in the record indicating
that the retail sector was the domestic industry 's most important sector of the
U.S. market for ripe olives and one in which the domestic industry lost profits during
the [period of investigation]. As a result, several of the domestic producers ' indicators
were worse than they would have been otherwise.648
7.4.6.2.2 Whether the USITC 's impact analysis only examined the retail sector and not
the industry as a whole
7.291. We first address the European Union's argument that the USITC only examined the retail
sector and not the industry as a whole, and therefore did not conduct an objective examination. 649
The European Union bases its argument on the fourth paragraph of the USITC 's impact analysis
extracted above. The European Union maintains that the economic indicia of market shares,
inventories, and lost profits referred to in that paragraph were only examined with respect to the
retail sector. 650 The European Union asserts that "there is no explanation by the USITC why
three negative economic factors related to the retail segment should impact the domestic industry
as a whole".651
7.292. In our view , the European Union's argument misconstrues the Injury Determination. The
European Union's reading of the determination fails to consider the context of the USITC's discussion
of the loss of market share in the retail sector within the broader impact analysis. The USITC
indicated that the loss of market share in the retail sector resulted in increased inventories and lost
profits. The USITC observed that "[a]s a result, several of the domestic producers ' indicators were
worse than they would have been otherwise". The USITC does not specify which indicators it refers
to here, but i n our view this statement clearly relates to, and is consistent with, the
USITC's identification in the immediately preceding paragraph that "[m]any of the
U.S. processors' financial performance indicia deteriorated over the [period of investigation] ",
including net income, operating income, capital expenditure, research and development expenses,
and operating return on assets.652 These indicators were all considered on an industry wide basis in
the preceding paragraph. The European Union itself acknowledges that, in the paragraphs preceding
the USITC's discussion of the loss of market share in the retail sector, the USITC "assessed economic
factors for the industry as a whole". 653 In our view, the USITC 's discussion of the domestic
industry's loss of market share and consequent increase in inventories and loss of profits was clearly
linked with the identified deterioration of a range of economic indicators affecting the whole domestic
industry. We are therefore not convinced by the European Union's assertion that the USITC only
considered economic factors related to the retail sector, as it ignores the clear connection drawn by
the USITC between the loss of market share in the retail sector and the deterioration of a range of
industry wide economic indicators.
7.293. The European Union also observes in support of its argument that the USITC's impact
analysis exclusively considered the retail sector the fact that the "dissenting opinion equally found
that there was no impact on the domestic industry as a whole". 654 As we addressed above, we do
not consider the mere fact that a dissenting view exists to establish that the majority's findings were
not based on an objective examination of positive evidence.655 The European Union has provided no
further explanation as to why the dissenting commissioner's conclusion that there was no significant

648 Injury Determination, (Exhibit EU-5), pp. 22-24. (fns omitted; redacted original)
649 European Union's first written submission, para. 566.
650 European Union's first written submission, para. 568.
651 European Union's first written submission, para. 568.
652 Injury Determination, (Exhibit EU-5), pp. 23-24.
653 European Union's second written submission, para. 174; see also further discussion of this at
United States' first written submission, para. 229.
654 European Union's first written submission, para. 570 (referring to Injury Determination,
(Exhibit EU-5), p. 32 (dissenting view)).
655 See para. 7.216 above.

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impact on the domestic industry as a whole establishes that the majority 's impact analysis only
considered the retail sector. Rather, as discussed above, in our view , the majority connected the
domestic industry's loss of market share, and consequent increase in inventories and loss of profits,
with the deterioration of a range of economic indicators affecting the whole domestic industry. As
such, we do not consider that the European Union's reference to the dissenting opinion of one of the
commissioners sufficient to establish that the majority 's impact analysis was not based on an
objective examination of positive evidence.656
7.4.6.2.3 Whether the USITC's impact analysis improperly extended the USITC finding of
market share losses in the retail sector to the industry as a whole
7.294. We next consider the European Union's argument that the USITC's conclusion in the impact
section improperly extended the USITC 's findings concerning the impact of mark et share losses in
the retail sector to the industry as a whole without any evidentiary basis. 657 The European Union
bases this argument on the last two sentences of the section of the Injury Determination titled
"Impact of the Subject Imports", where the USITC stated:
Thus, other factors cannot explain the domestic industry 's market share losses in the
retail sector and overall financial performance declines.
Accordingly, for the above reasons, we conclude that subject Imports [sic] had a
significant adverse impact on the domestic industry.658
7.295. In relation to these final sentences, the European Union argues that the USITC did not
explain how its findings concerning a loss of market share in the retail sector could impact the
industry as a whole.659 For the reasons discussed above, we find this argument to be unpersuasive,
as we found the USITC to have connected the increase in inventories and lost profits resulting from
a loss of market share in the retail sector with the identified deterioration in certain industry wide
financial indicators.660
7.296. The European Union also argues that the USITC failed to explain how it could arrive at its
finding of significant impact when only around 20% of Spanish imports were sold into the retail

656 In its second written submission the European Union recharacterizes its argument that the USITC
failed to examine the consequent impact on the domestic industry as a whole by distinguishing between
concerns relating to the USITC's "assessment of the economic factors" and the "assessment of the relationship
between subject imports and the state of the domestic industry (consequent impact)".
(European Union's second written submission, paras. 174-178). We understand the arguments made in
relation to the "assessment of the relationship between subject imports and the state of the domestic industry
(consequent impact)" to be the same in substance as the European Union's argument that the USITC
improperly drew conclusions about the ripe olive industry as a whole from the retail sector, which we dismiss
at paras. 7.294-7.297 below.
In relation to the USITC's "assessment of economic factors", the European Union also introduced a
separate line of argument that "the use of non-segmented economic indicators after the US 'segmented' the
industry in the context of Article 15.2 [of the SCM Agreement] is in itself WTO-inconsistent".
(European Union's 12 November 2020 response to Panel question No. 31, para. 196; see also second written
submission, para. 176). As discussed above, we do not adopt the European Union's characterization of the
Injury Determination as based on a "segmented analysis", nor do we consider the European Union to have
established that the USITC's consideration of customer groups was, in and of itself, not based on an objective
examination of positive evidence. (See paras. 7.205-7.217 above). We thus disagree with the premise of the
European Union's argument and reject it on that basis.
657 European Union's first written submission, paras. 591-597. We note that the European Union divide
this argument into two sections. The first of these concerns the USITC's allegedly improper extension of its
"findings of an impact through volume effects in the retail 'segment' to the industry as a whole".
(European Union's first written submission, section VII(D)(5) (emphasis added)). The second concerns the
USITC's allegedly improper extension of its "findings of an impact through price effects in the retail
'segment' to the industry as a whole". (European Union's first written submission, section VII(D)(6) (emphasis
added)). As the European Union observes, however, the considerations underlying both these arguments are
the same. (European Union's first written submission, para. 595). We have thus decided to treat these two
arguments together as concerning the USITC's relevant finding that significant price undercutting resulted in a
loss of market share in the retail sector, and consequently led to a deterioration of certain of the domestic
industry's financial performance indicators. (Injury Determination, (Exhibit EU-5), pp. 23-24).
658 Injury Determination, (Exhibit EU-5), p. 26.
659 European Union's first written submission, paras. 591 and 595.
660 See para. 7.293 above.

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sector, and in circumstances where the volume of Spanish imports was decreasing at the industry
level.661 We do not agree that these facts would prevent an objective investigating authority arriving
at the USITC 's findings concerning impact. The USITC connected the domestic indu stry's loss of
market share, and consequent increase in inventories and loss of profits in the retail sector, with the
deterioration of a range of economic indicators affecting the whole domestic industry .662 The facts
observed by the European Union do not negate the impact on the domestic industry identified by
the USITC resulting from a loss of market share in the retail sector, by far the largest market for the
domestic industry.
7.297. We therefore reject the European Union's argument that the USITC 's impact analysis was
not based on an objective examination of positive evidence because the USITC improperly extended
findings of market share losses in the retail sector to the industry as a whole without any evidentiary
basis.
7.4.6.3 Conclusion on the USITC 's impact anal ysis under Articles 3.1 and 3.4 of the
Anti-Dumping Agreement and Articles 15.1 and 15.4 of the SCM Agreement
7.298. For the reasons above, we find that the USITC's findings concerning volume and price effects
did not prevent the USITC from properly examining the consequent impact of dumped and subsidized
ripe olives from Spain, as required by Article 3.4 and Article 15.4. We find further that the
European Union has n ot demonstrated that the USITC's impact analysis was not based on an
objective examination of positive evidence. On this basis, we conclude that the European Union has
not demonstrated that the USITC's impact analysis was inconsistent with Articles 3.1 and 3.4 of the
Anti-Dumping Agreement, and Articles 15.1 and 15.4 of the SCM Agreement.
7.4.7 The USITC's causation analysis of dumped and subsidized ripe olives from Spain
7.299. In the section of the Injury Determination titled "Impact of the Subject Imports", the USITC
additionally examined whether dumped and subsidized ripe olives from Spain were causing injury to
the domestic industry. The USITC examined, inter alia, whether the injury identified as resulting
from Spanish ripe olives should in fact be attributed to either a decline in apparent consumption or
an increase in non-subject imports.663 The USITC concluded that neither of these factors explained
the injury experienced by the domestic industry.664
7.300. The European Union challenges the USITC's non-attribution analysis regarding the decline
in apparent consumption665 and the USITC's non-attribution analysis of non-subject imports, notably
from Morocco.666 The European Union alleges the USITC's non-attribution analyses were not based
on an objective exa mination of positive evidence, inconsistent ly with Articles 3.1 and 3.5, and
Articles 15.1 and 15.5. 667 The United States asks the Panel to reject the
European Union's arguments in their entirety.668
7.301. We examine the merits of the European Union's claims in the sections that follow.

661 European Union's second written submission, para. 184.
662 Injury Determination, (Exhibit EU-5), pp. 23-24.
663 Injury Determination, (Exhibit EU-5), pp. 25-26.
664 Injury Determination, (Exhibit EU-5), p. 26.
665 European Union's first written submission, paras. 620-630.
666 European Union's first written submission, paras. 631-638.
667 The European Union also claims that the USITC failed to carry out its causation assessment with
respect to the domestic industry as a whole. (European Union's first written submission, para. 612). This
argument concerns the same paragraph of the Injury Determination discussed at paras. 7.291-7.293 above in
relation to the USITC's impact analysis. The European Union's couches its argument in essentially the same
terms. We thus do not give separate consideration to the European Union's argument that the causation
analysis failed to consider the domestic industry as a whole. This argument fails for the same reasons the
argument concerning the impact analysis failed.
668 United States' first written submission, section V(D); second written submission, section V(E).

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7.4.7.1 Whether the USITC 's non-attribution analysis of the decline in apparent
consumption was not based on an objective examination of positive evidence in violation
of Articles 3.1 and 3.5 of the Anti -Dumping Agreement and Articles 15.1 and 15.5 of the
SCM Agreement
7.302. The European Union claims that the USITC's non-attribution analysis regarding the decline
in apparent US consumption of ripe olives during the period of investigation was not based on an
objective examination of positive evidence.669 The European Union maintains that the information
available in the Injury Determination makes clear that any injury resulted from the decline in
apparent consumption.670 The United States argues that the USITC's findings were fully supp orted
by the fact that the decline in apparent consumption was modest and could not account for the
magnitude of the reported declines in the industry 's shipments and financial performance
indicators.671 The United States maintains that the USITC 's non-attribution analysis regarding the
decline in apparent consumption was therefore based on an objective examination of positive
evidence.672
7.303. The USITC 's analysis regarding the decline in apparent consumption of ripe olives was
summarized as follows:
As discussed above, apparent U.S. consumption decreased by *** percent during 2015
to 2017. However, this relatively modest decline in apparent U.S. consumption was
smaller than the declines in shipments, net sales, and operating and net income
experienced by the domestic industry.673
7.304. The USITC thus concluded that the "relatively modest" decline in apparent consumption was
not the cause of the injury to the domestic industry because the decline in apparent consumption
was less than the declines in (a) shipments, ( b) net sales, and ( c) operating and net income
experienced by the domestic industry.674
7.305. Article 3.5 of the Anti-Dumping Agreement provides:
It must be demonstrated that the dumped imports are, through the effects of dumping,
as set forth in paragraphs 2 and 4, causing injury within the meaning of this Agreement.
The demonstration of a causal relationship between the dumped imports and the injury
to the domestic industry shall be based on an examination of all relevant evidence
before the authorities. The authorities shall also examine any known factors other than
the dumped imports which at the same time are injuring the domestic industry, and the
injuries caused by these other factors must not be attributed to the dumped imports.
Factors which may be relevant in this respect include, inter alia, the volume and prices
of imports not sold at dumping prices, contraction in demand or changes in the patterns
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.
Article 15.5 of the SCM Agreement is substantially similar to Article 3.5 of the
Anti-Dumping Agreement, with the exception that Article 15.5 concerns "subsidized imports".
7.306. Article 3.5 and Article 15.5 require an investigating authority to ascertain whether the
dumped or subsidized imports are causing injury to the domestic industry. As part of that causation
analysis, the investigating authority must "examine any known factors other than the [dumped or
subsidized] 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 or subsidized ] imports"
(non-attribution). Article 3.5 and Article 15.5 do not set out a specific methodology for investigating
authorities when undertaking a non -attribution analysis. However, the methods applied by an

669 European Union's first written submission, paras. 620-630.
670 European Union's first written submission, para. 623.
671 United States' first written submission, paras. 240-250.
672 United States' first written submission, paras. 240-250.
673 Injury Determination, (Exhibit EU-5), p. 25. (fn omitted; redacted original)
674 Injury Determination, (Exhibit EU-5), p. 25.

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investigating authority must comport with the overarching obligat ion in Article 3.1 and Article 15.1
to undertake an objective examination based on positive evidence.
7.307. Relying on the analysis by the dissenting USITC commissioner, the European Union asserts
that "the decline in US consumption can perfectly explain the 'sl ight' decrease of sales by
US producers and any alleged injury resulting therefrom". 675 The European Union asserts "the
dissenting opinion … clearly explains" that "the factors invoked by the USITC, when looked at more
closely and when put into their proper economic context, do not show that it was Spanish imports
rather than declining US consumption that caused injury". 676 The European Union continues that
"[o]n the basis of [the dissenting commissioner's] explanations it becomes evident … that it was the
decline in consumption that caused injury, if any".677
7.308. The dissenting commissioner's analysis of the decline in consumption involved a
consideration of the decline in apparent consumption against different factors to those focused on
by the majority. The dissenting commissioner stated that, "despite the domestic industry selling and
shipping slightly lower volumes over the [period of investigation], it did so at higher unit values and
maintained steady and improving gross profitability during a period of decl ining apparent
U.S. consumption".678 The dissenting commissioner thus emphasi zed that the domestic
industry's lower sales and shipment volumes were to some extent compensated for by higher unit
values and improved gross profitability.679
7.309. The panel notes that the factual accuracy of the USITC's finding that the decline in apparent
consumption was less than the decline in shipments, net sales, and operating and net income
experienced by the domestic industry was not challenged by the dissenting commissioner nor by the
European Union in its submissions.680 We agree with previous Appellate Body and panel reports that
Article 3.5 and Article 15.5 do not require that subject imports be the sole cause of injury to the
domestic industry.681 We consider that an objective investigating authority could reasonably rely on
the fact that the decline in apparent consumption was less than in other key indicators to conclude
that the decline in consumption was not the sole cause of the injury experienced by the domestic
industry. In our view, then, the European Union has not established that an objective investigating
authority could not have determined, as the majority did, that the decline in apparent consumption
was not the sole cause of injury to the domestic industry.
7.310. The European Union alleges that the USITC failed to give proper consideration to certain
facts observed by the dissenting commissioner, in particular the increase in unit values of domestic
shipments during the period of investigation682 and that the "domestic industry's gross income as a
ratio to net sales actually increased during the [period of investigation]".683 However, no substantive
argument was presented to the Panel explaining why an objective investigating authority would have
to give these factors the weight accorded to them by the dissenting commissioner when conducting
the non-attribution analysis of the decline in apparent consumption.
7.311. Without wishing to overstate the point, w e recall that the mere fact that a dissenting view
exists does not establish that the majority's findings were not based on an objective examination of
positive evidence. 684 Absent any persuasive reasons to conclude that an objective investigating
authority would necessarily have considered the domestic industry's higher unit values and improved
gross profitability when conducting the non-attribution analysis, and have concluded that the injury
could not be attributed to the dumped and subsidized imports, our view is that the
European Union's argument fails.

675 European Union's first written submission, para. 628 (referring to Injury Determination,
(Exhibit EU-5), p. 32 (dissenting view)).
676 European Union's first written submission, para. 623.
677 European Union's first written submission, para. 623. (fn omitted)
678 Injury Determination, (Exhibit EU-5), p. 32 (dissenting view).
679 Injury Determination, (Exhibit EU-5), p. 32 (dissenting view).
680 Injury Determination, (Exhibit EU-5), p. 25.
681 Appellate Body Reports, US – Wheat Gluten, para. 67; US – Line Pipe, para. 209. See also Panel
682 Injury Determination, (Exhibit EU-5), p. 32 (dissenting view).
683 European Union's first written submission, para. 626 (referring to Injury Determination,
(Exhibit EU-5), p. 32 (dissenting view)).
684 See para. 7.216 above.

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7.4.7.2 Whether the USITC 's non-attribution analysis of non -subject imports from
Morocco was not based on an objective examination of positive evidence in violation of
Articles 3.1 and 3.5 of the Anti -Dumping Agreement and Articles 15.1 and 15.5 of the
SCM Agreement
7.312. The European Union claims that the USITC's non-attribution analysis regarding non-subject
imports from Morocco was not based on an objective examination of positive evidence. 685 In
particular, the European Union argues that an objective investigating authority would attribute injury
to the increase of non -subject imports from Morocco over the period of investigation. 686 The
United States argues that the USITC 's findings were supported by the absence of non -subject
imports from Morocco in the retail sector, and the comparatively small overall volume of Moroccan
ripe olives.687 The United States thus maintains that the USITC's analysis was based on an objective
examination of positive evidence.688
7.313. The USITC 's non-attribution analysis regarding non -subject imports from Morocco was
summarized as follows:
While nonsubject imports were generally the lowest ‐priced and captured market share
from both the domestic industry and subject imports, subject imports had a
substantially larger presence in the U.S. market than nonsubject imports throughout
the [period of investigation] . Moreover, the record indicates that nonsubject imports
captured market share from subject imports in the institutional sector of the U.S.689
7.314. The European Union argues that the "available import figures make crystal clear that it was
the significant increase in non -subject imports that caused injury to the domestic industry, if any,
not the decreasing Spanish imports".690 The European Union finds support for this argument in data
drawn from the records of relevant harmonized tariff schedule codes on the USITC 's Dataweb
platform.691 A table contained in the European Union's first written submission and based on these
data shows that Spanish imports decreased by 6.44% during the period of investigation, while
Moroccan imports increased 100.28% (from a significantly lower base ).692 The United States, in
contrast, asserts that Mo roccan imports increased less than 20% during the period of
investigation.693
7.315. We do not consider the fact that Spanish imports decreased while Moroccan imports
increased at a whole market level implies that an objective investigating authority could not hav e
attributed the loss of market share identified in the retail sector resulting from underselling by
Spanish imports and consequent deterioration of certain economic indices. While Moroccan imports
increased during the period of investigation, the absolute volume of non-subject imports was less
than subject imports. Even relying on the higher rate of increase asserted by the European Union,
Moroccan imports increased only from 5,633 tonnes to 11,282 tonnes during the period of
investigation.694 This volume was far below that of Spanish ripe olives, even with Spanish imports
per annum declining from 35,037 tonnes to 32,782 tonnes across the period of investigation. 695
Furthermore, the USITC observed that increasing Moroccan imports captured market share from
Spanish ripe olives in the institutional sector, not from domestic ripe olives in the retail sector. 696
We thus consider that an objective investigating authority could have arrived at the

685 European Union's first written submission, paras. 631-638.
686 European Union's first written submission, para. 633.
687 United States' first written submission, paras. 252-258.
688 United States' first written submission, paras. 252-258.
689 Injury Determination, (Exhibit EU-5), p. 25. (fns omitted)
690 European Union's first written submission, para. 636.
691 European Union's first written submission, para. 633 (table 2: Import sources during the POI (short
tonnes dry weight)).
692 European Union's first written submission, para. 633 (table 2: Import sources during the POI (short
tonnes dry weight)).
693 United States' 13 April 2021 comments on European Union's 26 March 2021 response to Panel
question No. 3, para. 20.
694 European Union's first written submission, para. 633 (table 2: Import sources during the POI (short
tonnes dry weight)).
695 European Union's first written submission, para. 633 (table 2: Import sources during the POI (short
tonnes dry weight)).
696 Injury Determination, (Exhibit EU-5), pp. 25-26.

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USITC's conclusion, regardless of whether the increase in volume of Mo roccan imports was
consistent with the figures presented by the United States or the European Union.697
7.316. The European Union also argues that the USITC's observation that "the record indicates that
nonsubject imports captured market share from subject imports in the institutional sector" does not
support the USITC's finding that Moroccan imports did not cause injury to the domestic industry.698
In particular, the European Union argues that, for purposes of establishing causation, it is "irrelevant
that Moroccan imports are mostly present in the institutional/food channel" because "Moroccan ripe
olives are substitutable with domestic ripe olives". 699 This argument relies on the
European Union's assertion that "Spanish imports cannot have caused injury to th e domestic
industry through market share losses" while non -subject imports "increased massively", were
"cheaper", and were acknowledged by the USITC as having taken market share from both the
domestic industry and subject imports. 700 We recall, however, tha t Article 3.5 and Article 15.5 do
not require that subject imports be the sole cause of injury to the domestic industry. 701 We are
further of the view that an objective investigating authority could find that evidence that increasing
Moroccan imports captured market share in a sector in which the domestic industry had relatively
few sales reasonably supports the USITC's conclusion. Consequently, we see no grounds to find that
the USITC's consideration of non-subject imports was inconsistent with Articles 3.1 and 3.5 of the
Anti-Dumping Agreement and Articles 15.1 and 15.5 of the SCM Agreement.
7.4.7.3 Conclusion on the USITC 's causation analysis under Articles 3.1 and 3.5 of the
Anti-Dumping Agreement and Articles 15.1 and 15.5 of the SCM Agreement
7.317. For the reasons ab ove, we find that the European Union has not demonstrated that the
USITC's non-attribution analysis of the decline in apparent consumption was not based on an
objective examination of positive evidence. We further find that the European Union has not
established that the USITC's non-attribution analysis of non -subject imports was not based on an
objective examination of positive evidence. We thus find that European Union has not demonstrated
that the USITC 's causation analysis was inconsistent with Articles 3.1 and 3.5 of the
Anti-Dumping Agreement and Articles 15.1 and 15.5 of the SCM Agreement.
7.4.8 Consequential claims
7.318. In addition to its substantive arguments, the European Union argues that each of its
allegations concerning the USITC 's volume and price e ffects analyses resulted in consequential
violations in subsequent parts of the USITC 's injury investigation. 702 Having found that the
European Union has failed to establish the merits of its substantive arguments concerning the
USITC's analysis of volume a nd price effects , we similarly find that the
European Union's consequential claims must also fail.
7.4.9 Conclusion in relation to the USITC's Injury Determination
7.319. For the reasons above, we thus conclude that the European Union has not demonstrated
that the USITC's Injury Determination violated Articles 3.1, 3.2, 3.4 , and 3.5 of the
Anti-Dumping Agreement or Articles 15.1, 15.2, 15.4, and 15.5 of the SCM Agreement.

697 We note that the European Union also alleges that non-subject imports from sources other than
Morocco also increased during the period of investigation from 6,169 tonnes to 7,030 tonnes.
(European Union's first written submission, para. 633 (Table 2: Import sources during the POI (short tonnes
dry weight))). We do not consider that this relatively small increase in non-subject imports from sources other
than Morocco could establish that the USITC's non-attribution analysis was not based on an objective
examination of positive evidence, either by itself or in combination with the increase in Moroccan imports
alleged by the European Union.
698 European Union's second written submission, para. 191.
699 European Union's second written submission, para. 191.
700 European Union's second written submission, para. 192.
701 Appellate Body Reports, US – Wheat Gluten, para. 67; US – Line Pipe, para. 209. See also Panel
702 In relation to the USITC's volume analysis, see: European Union's first written submission,
paras. 493, 512, 518, 560, 564-565, 600, and 610. In relation to the USITC's price effects analysis,
see: European Union's first written submission, paras. 539, 551, 557, 560, 564-565, 600, and 610.

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7.5 The European Union's claims concerning Aceitunas Guadalquivir's final subsidy
margin and countervailing duty rate calculation
7.5.1 Introduction
7.320. In this section the Panel addresses the European Union's claims concerning the
USDOC's calculation of the final subsidy margin and countervailing duty rate for one of the
three individually examined respond ents, Aceitunas Guadalquivir . The focus of the
European Union's complaint is the USDOC's decision to rely upon information reported in Aceitunas
Guadalquivir's response to the initial exporter's questionnaire to represent different values in the
calculation of Aceitunas Guadalquivir's preliminary and final subsidy margin and countervailing duty
rate.
7.321. In its preliminary determination , the USDOC calculated the subsidy margin and
countervailing duty rate of each respondent by multiplying the weighted average per kilogram
benefit by the volume of purchases of raw olives, regardless of end-use (the numerator), and then
dividing that amount by sales of olives and olive products. 703 The USDOC determined Aceitunas
Guadalquivir's numerator by relying upon the volume of raw olive purchases reported by Aceitunas
Guadalquivir in response to the USDOC's initial 4 August 2017 questionnaire. The USDOC modified
its calculation methodology in the final determination . In particular, the USDOC calculated t he
subsidy margin and countervailing duty rates by multiplying the weighted average per kilogram
benefit by the volume of raw olives used to produce subject merchandise, and then dividing that
amount by sales of subject merchandise.704 For Aceitunas Guadalquivir, the USDOC once again used
the volume of raw olive purchases reported by Aceitunas Guadalquivir in the 4 August 2017
questionnaire in calculating the numerator.
7.322. The European Union argues, as Aceitunas Guadalquivir did in the investig ation705, that the
USDOC's initial 4 August 2017 questionnaire, properly understood, asked the respondents to report
their total volume of raw olive purchases regardless of end-use, not the narrower subcategory of
raw olive purchases processed into subject merchandise.706 The European Union argues that the
USDOC's actions after the 4 August 2017 questionnaire – including a 27 September 2017 request
for the respondents to resubmit information regarding their suppliers of raw olives , and the
USDOC's decision in its preliminary determination to calculate subsidy margins for the respondents
based on raw olive purchases regardless of end -use707 – show that Aceitunas Guadalquivir was
correct in its understanding of the scope of the questions contained in the initial questionnaire.708 In
these circumstances, the European Union claims that the USDOC's final calculation of Aceitunas
Guadalquivir's subsidy margin and countervailing duty rate was inconsistent with Article VI:3 of
the GATT 1994 and Articles 10, 19.1, 19.3, 19.4, and 32.1 the SCM Agreement, and that the USDOC
failed to comply with the procedural obligations under Articles 12.1 and 12.8 of the SCM Agreement
in relation to that calculation. 709 The European Union further claims consequential violations of
Article VI:3 of the GATT 1994 and Articles 10, 19.1, 19.3, 19.4, and 32.1 of the SCM Agreement due
to the USDOC's reliance on Aceitunas Guadalquivir 's final subsidy margin in calculating the "all
others" rate applied to all exporters and producers that were not individually investigated.710
7.323. The United States argues that the European Union's claims rely upon an incomplete
presentation of the factual record. Contrary to European Union's assertions, the Unite d States
maintains that, in the initial 4 August 2017 questionnaire, the USDOC expressly requested each
mandatory respondent to report purchases of raw olives used to produce ripe olives and, prior to
the final determination, made clear that this was an essential fact under consideration. In doing so,
the United States argues that the record reflects that the USDOC evaluated the evidence supplied

703 PIDM, (Exhibit EU-1), p. 17; Aceitunas Guadalquivir preliminary determination, (Exhibit EU-36),
pp. 2-3.
704 FIDM, (Exhibit EU-2), p. 44.
705 FIDM, (Exhibit EU-2), p. 41; Ministerial error memorandum, (Exhibit EU-69), p. 3.
706 European Union's first written submission, para. 698.
707 PIDM, (Exhibit EU-1); Aceitunas Guadalquivir preliminary determination, (Exhibit EU-36), p. 2.
708 European Union's first written submission, paras. 699-704.
709 European Union's first written submission, paras. 639-728.
710 European Union's first written submission, paras. 729-730.

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by Aceitunas Guadalquivir in an unbiased and objective manner and satisfied all notice and disclosure
requirements.711
7.324. We begin by examining the European Union's substantive claims concerning the
USDOC's calculation of Aceitunas Guadalquivir's final subsidy margin and countervailing duty rate,
before turning to address the European Union's procedural claims.712
7.5.2 The USDOC's calculation of Aceitunas Guadalquivir 's final subsidy margin and
countervailing duty rate
7.325. The European Union asserts that the USDOC improperly based its calculation of Aceitunas
Guadalquivir's final subsidy margin and corresponding countervailing duty rate on Aceitunas
Guadalquivir's reported volume of purchases of raw olives, regardless of end -use, which was a
purportedly larger volume than its purchases of raw olives processed into the subject merchandise,
being ripe olives. The European Union claims that, in doing so, the USDOC acted inconsistently with
Article VI:3 of the GATT 1994 and Article 19.4 of the SCM Agreement, and consequently,
Articles 19.1 and 32.1 of the SCM Agreement, because the USDOC failed to calculate precisely t he
amount of the subsidy granted on the imported product, leading the USDOC to impose countervailing
duties on Aceitunas Guadalquivir in excess of what was required to offset the subsidies granted.713
Moreover, to the extent that the USDOC's calculation is based on Aceitunas Guadalquivir's reported
volume of purchases of raw olives, regardless of end -use, the European Union asserts that the
calculation of Aceitunas Guadalquivir's countervailing duty rate differs from the calculation of the
rates imposed on t he mandatory respondents Agro Sevilla and Ángel Camacho without any
justification, and thus is inconsistent with the requirement in Article 19.3 of the SCM Agreement to
apply countervailing duties on a non-discriminatory basis.714 Finally, the European Union also claims
that the USDOC's approach to calculating the countervailing duty rate for Aceitunas Guadalquivir
also violates the obligation contained in Article 10 of the SCM Agreement to "take all necessary
steps" to ensure that the imposition of the duti es complies with Article VI:3 of the GATT 1994 and
the SCM Agreement.715
7.326. The United States argues that the record of the investigation refutes each of the
European Union's claims. The United States argues that the USDOC, in its initial 4 August 2017
questionnaire, requested from each mandatory respondent (including Aceitunas
Guadalquivir) purchase information for their raw olives processed into ripe olives. The United States
contends that the USDOC used the information that each respondent report ed in response to the
USDOC's questionnaire to calculate the final subsidy rate for each respondent. In this way, the
United States contends that the USDOC used a uniform calculation method to calculate each
respondent's final subsidy rate and that the USDOC provided a reasoned and adequate explanation,
based on positive record evidence, to support using the purchase information submitted by each of
the three companies.716
7.327. The United States further contends that the European Union has not raised any of its
arguments in the context of Article 14 of the SCM Agreement and therefore has not properly
challenged the method for determining the subsidy "amount" in the determination at issue. In this
regard, the United States argues that Article 14 of the SCM Agreement "speaks directly to the notion
of calculating the amount of benefit in terms of the benefit to the recipient", and thus provides
substantive rules against which "the appropriate amounts in each case" discussed in Article 19.3

711 United States' first written submission, para. 260.
712 We note that, although the European Union's panel request also refers to Article 12.5 of the
SCM Agreement, the European Union did not subsequently pursue a claim under this provision in its
submissions to the Panel. We therefore do not address this provision in our findings. (European Union's panel
request, p. 2).
713 European Union's first written submission, paras. 706-707. See also ibid. paras. 683 and 689.
714 European Union's first written submission, para. 708.
715 European Union's first written submission, para. 710.
716 United States' first written submission, para. 288.

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may be understood. 717 By fail ing to raise any of its arguments in the context of Article 14, the
United States contends that the European Union's complaint must fail.718
7.328. We begin by addressing the United States' assertion that the European Union has not
properly challenged the USDOC 's determination of Aceitunas Guadalquivir 's subsidy margin by
failing to raise a claim under Article 14 of the SCM Agreement.
7.5.2.1 The legal basis of the European Union's claims in relation to the calculation of
Aceitunas Guadalquivir's subsidy margin and countervailing duty rate
7.329. The United States argues that the European Union has not properly challenged the
USDOC's determination of Aceitunas Guadalquivir's subsidy amount because the relevant provision
under the SCM Agreement governing such calculations is Article 14, which the European Union has
not relied upon. The United States maintains that Article 19.4 of the SCM Agreement and Article VI:3
of the GATT 1994, which are the main legal bases of the European Union's claims, do not dictate
precisely how an investigating authority should determine the appropriate denominator for a given
numerator when calculating countervailing duty ratios. Rather, the United States maintains that
these provisions only prescribe that the elements of the numerator and denomina tor must be
determined so as to ensure that the level of duty does not exceed the amount of subsidy, in terms
of subsidization per unit. 719 Similarly, the United States contends that the other provision the
European Union relies upon, Article 19.3 of the SCM Agreement, does not speak to the substantive
issue of what a subsidy is and how a benefit is found to exist.720
7.330. The European Union disagrees that it needed to bring a claim under Article 14 of the
SCM Agreement in order to challenge the USDOC's calculation of Aceitunas Guadalquivir's subsidy
margin, arguing that a determination of the amount of a subsidy benefit can comply with the specific
guidelines in Article 14 but nonetheless contravene other disciplines, such as those in Article VI:3 of
the GATT 1994 or Article 19 of the SCM Agreement. Thus, insofar as the USDOC's determination is
inconsistent with other disciplines such as the calculation of benefit, there was no requirement for
the European Union to bring a claim under Article 14.721
7.331. We note that Article 14 sets out disciplines and guidelines for the calculation of the amount
of a subsidy in terms of benefit to the recipient. The chapeau to Article 14 provides in general terms
that "any method used" to determine the benefit to the reci pient shall be provided for in national
legislation or implementing regulations; that the application of that method shall be transparent and
adequately explained; and that the method must be consistent with the guidelines in
subparagraphs (a)-(d).722 These guidelines concern the following six types of financial
contributions: government provision of equity capital, a government loan , a loan guarantee by a
government, and the provision of goods and services or purchase of goods by a government. We
see nothing in the terms of the chapeau of Article 14, or in the guidelines it prescribes, to suggest
that it was intended to exhaustively define the Members' obligations with respect to the
determination of the amount of a subsidy benefit. For example, Article 14 does not provide specific
guidance with respect to how to determine the amount of a subsidy provided in the form of a grant
to a recipient that produces input products alleged to indirectly subsidiz e a downstream imported
processed product, which is the issue we are confronted with in this dispute. In this regard, we recall

717 United States' first written submission, para. 298. The United States contends that Article 19 of the
SCM Agreement is concerned with the primarily ministerial function of imposing and collecting countervailing
duties once those duties are already calculated and determined in accordance with the obligations imposed by
the preceding articles of the SCM Agreement. (United States' 12 November 2020 response to Panel question
No. 15, paras. 46-49).
718 United States' first written submission, para. 298; second written submission, paras. 105-107.
719 United States' first written submission, para. 294 (referring to Appellate Body Report, US – Washing
Machines, para. 5.269 ("[w]ithin these confines, the SCM Agreement does not dictate any particular
methodology for calculating subsidy ratios, and does not specify explicitly which elements should be taken into
account in the numerator and the denominator."))
720 United States' first written submission, paras. 296-297. See also United States' 12 November 2020
response to Panel question No. 15, para. 46 ("Article 19 is concerned with the primarily ministerial function of
imposing and collecting [countervailing duties] once those duties are already calculated and determined in
accordance with the obligations imposed by the preceding articles of the SCM Agreement. Article 19 does not
impose substantive requirements with respect to an investigating authority's calculation and determination of a
[countervailing duty] rate" (emphasis original)).
721 European Union's 12 November 2020 response to Panel question No. 41, paras. 215-218.
722 Appellate Body Report, Japan – DRAMS (Korea), para. 190.

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our previous finding that under the terms of Article VI:3, an investigating authority considering how
to countervail indirect subsidies must analyse whether and to what extent subsidies on inputs may
have indirectly flowed to the processed product and, thereby, be included in the determination of
the total amount of subsidies bestowed on the investigated product.723 An investigating authority is
required to make this determination in order to ensure that countervailing duties are not applied in
an amount that is in excess of the estimated subsidy determined to have been granted to the
investigated product. To this extent, we agree with previous Appellate Body reports that, under the
terms of Article VI:3, an investigating authority is required to ascertain as accurately as possible the
amount of subsidization bestowed on the investigated products to ensure that countervailing duties
are not applied in excess of the subsidization of the subsidized product on the per unit basis
adopted.724
7.332. Thus, we agree with the European Union that it was not required to bring a claim under
Article 14 of the SCM Agreement in challenging the USDOC 's determination of Aceitunas
Guadalquivir's subsidy amount and corresponding countervailing duty rate. Accordingly, we see no
reason to reject the European Union's claims simply because they were not raised under Article 14
of the SCM Agreement.
7.5.2.2 Whether the USDOC properly determined Aceitunas Guadalquivir 's subsidy
margin and corresponding countervailing duty rate
7.333. The European Union claims that the USDOC incorrectly determined Aceitunas
Guadalquivir's final subsidy margin and corresponding countervailing duty rate when it used
Aceitunas Guadalquivir 's reported volume of purchases of raw olives, regardless of end-use – a
purportedly larger volume of purchases than the volume of raw olive purchases used to process the
subject merchandise. According to the European Union, the USDOC's reliance on this value in this
way led it to erroneously calculate the numerator of Aceitunas Guadalquivir 's final subsidy
calculation, which the USDOC sought to determine by multiplying the weighted average per kilogram
benefit by the volume of purchases of raw olives that were processed into ripe olives.725 In the
denominator of the calculation, the USDOC used Aceitunas Guadalquivir 's sales of ripe olives. 726
Thus, the European Union contends that the resulting final margin and corresponding countervailing
duty rate is "excessive and inappropriate".727
7.334. As we did in relation to the European Union's complaint against the USDOC's determination
of pass -through, we begin our a ssessment of the European Union's claims with respect to the
USDOC's calculation of Aceitunas Guadalquivir's final subsidy margin and countervailing duty rate
by focusing on Article VI:3 of the GATT 1994. We recall that Article VI:3 of the GATT 1994 provides:
No countervailing duty shall be levied on any product of the territory of any contracting
party imported into the territory of another contracting party in excess of an amount
equal to the estimated bounty or subsidy determined to have been granted, directly or
indirectly, on the manufacture, production or export of such product in the country of
origin or exportation, including any special subsidy to the transportation of a particular
product. The term "countervailing duty" shall be understood to mean a special duty
levied for the purpose of offsetting any bounty or subsidy bestowed, directly, or
indirectly, upon the manufacture, production or export of any merchandise.728
7.335. Article VI:3 establishes that WTO Members may levy duties that "offset" subsidies in an
amount not in excess of the estimated subsidy determined to have been granted, directly or
indirectly, on the manufacture, production, or export of a product. Thus, und er the terms of
Article VI:3, an unbiased and objective investigating authority must ensure, and take the necessary

723 See section 7.3.1.1 above.
724 Appellate Body Reports, US – Countervailing Measures on Certain EC Products, para. 139; US –
Washing Machines, para. 5.268.
725 FIDM, (Exhibit EU-2), pp. 43-44; see also Aceitunas Guadalquivir final determination,
(Exhibit EU-41), p. 2; Extract from Aceitunas Guadalquivir final calculation data, (Exhibit EU-47 (BCI)); and
Extract from Aceitunas Guadalquivir final calculation data, tab BPS Growers, (Exhibit EU-76).
726 FIDM, (Exhibit EU-2), pp. 43-44; see also Aceitunas Guadalquivir final determination,
(Exhibit EU-41), p. 2; Extract from Aceitunas Guadalquivir final calculation data, (Exhibit EU-47 (BCI)); and
Extract from Aceitunas Guadalquivir final calculation data, tab BPS Growers, (Exhibit EU-76).
727 European Union's first written submission, para. 706.
728 Fn omitted.

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steps to ascertain as accurately as possible the amount of subsidization bestowed on the investigated
products. In our view, this implies th at an investigating authority's subsidy margin and
countervailing duty calculations must be based on appropriate input values that are as accurate as
possible. We examine whether the USDOC fulfilled this requirement when it relied upon the volume
of raw olive purchases reported in Aceitunas Guadalquivir's 4 August 2017 questionnaire response,
to determine its final subsidy margin and countervailing duty rate.
7.336. The parties disagree as to what information the USDOC solicited from the respondents in its
initial 4 August 2017 questionnaire. They have also expressed different views about the nature of
the raw olive purchases information Aceitunas Guadalquivir reported, as well as the extent to which
subsequent USDOC requests for information and verification of Aceitunas
Guadalquivir's questionnaire responses clarify and confirm the nature of Aceitunas
Guadalquivir's reported purchases information.
7.5.2.2.1 The USDOC's initial 4 August 2017 questionnaire
7.337. The European Union argues that Aceitunas Guadalquiv ir correctly understood the
4 August 2017 questionnaire729 as requesting information about the volume of raw olive purchases
regardless of the processed olive product for which the raw olives were used .730 Although the
European Union acknowledges that the cover letter of the 4 August 2017 questionnaire instructs the
respondents to provide the "requested information on your company's sources of raw olives that
were processed into ripe olives"731, the European Union asserts that the specific questions that
followed (contained in attachment I to the questionnaire) were entitled "Sources of Raw and Ripe
Olives" and did not direct the respondents to limit or separately report data with respect to the
volume of raw olives purchased that are processed into ripe olives.732
7.338. The cover letter to the 4 August 2017 questionnaire describes the purpose behind the
USDOC's initial enquiry in the following terms:
The [USDOC] asks that you respond to the questions outlined in Attachment I to th is
letter and provide the requested information on your company's sources of raw olives
that were processed into ripe olives during the period of investigation (POI )
January 1, 2016, through December 31, 2016.733
7.339. This statement from the cover letter suggest s that the USDOC was seeking information on
the sources of raw olives used for ripe olive processing. At the same time, we note that the relevant
questions attached to the cover letter were not drafted with the same distinction or qualification and
did not direct the respondents to provide the volume of raw olives purchased that were used to
process ripe olives. The United States argues that the "relevant" 734 question in this regard, was
question 6 of the 4 August 2017 questionnaire. This question set out as follows735:
If your company processes ripe olives and obtains its raw olives from suppliers that are
affiliated with, but separately incorporated from your company or from suppliers that
are not affiliated with your company, please complete the attached "Template for

729 The USDOC's 4 August 2017 questionnaire and accompanying cover letter to Aceitunas Guadalquivir
are contained in: Letter to Aceitunas Guadalquivir on questionnaire, (Exhibit EU-58). See also Letter to
Agro Sevilla on questionnaire, (Exhibit USA-6); and Letter to Ángel Camacho on questionnaire,
(Exhibit USA-7).
730 European Union's first written submission, paras. 697 and 716; second written submission,
para. 195. Thus, the European Union argues that "it cannot be argued that the data used by USDOC [to
calculate Aceitunas Guadalquivir's subsidy] was ever indicated by [Aceitunas] Guadalquivir as being the volume
of raw olives processed into ripe olives". (European Union's first written submission, para. 695).
731 European Union's first written submission, paras. 643 and 698 (emphasis added). We note that this
is also the position of the United States. (United States' first written submission, paras. 276-277 (referring to
Letter to Aceitunas Guadalquivir on questionnaire, (Exhibit EU-58), p. 1)).
732 European Union's first written submission, paras. 643 and 698.
733 Letter to Aceitunas Guadalquivir on questionnaire, (Exhibit EU-58), p. 1 (emphasis added). See also
Letter to Agro Sevilla on questionnaire, (Exhibit USA-6); and Letter to Ángel Camacho on questionnaire,
(Exhibit USA-7).
734 United States' first written submission, para. 276.
735 Letter to Aceitunas Guadalquivir on questionnaire, (Exhibit EU-58), attachment I.

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Suppliers of Raw Olives," to include all of those suppliers . Please be sure to indicate
whether the supplier(s) might be considered cross-owned with your company.736
7.340. On its own, we do not understand this question to have directed the respondents to report
the volume of purchases of raw olives processed into ripe olives. Rather, what is required by this
question is information about the suppliers of raw olives, in accordance with the "Template for
Suppliers of Raw Olives". That template did not ask the respondents to distinguish and separately
report data with respect to the volume of raw olives purchased to process ripe olives and the volume
of raw olive purchased for any end -use.737 Rather, the heading in this template concerning the
volume of purchases simply calls for data about the "volume of raw olives purchased", without
distinction or qualification.738
7.341. We recognize, however, that when read in conjunction with the cover letter, a respondent
could well have understood question 6 to be asking for information about raw olive purchases that
were used to process ripe olives. T his appears to have been the understanding of two of the three
mandatory respondents, Agro Sevilla and Ángel Camacho, who initially submitted only information
on volumes of purchases of raw olives used to produce ripe olives.739 Nevertheless, in our view, the
fact that "Template for Suppliers of Raw Olives" simply asked for data on the "volume of raw olives
purchased", without distinction or qualification, means that question 6 could have also been
reasonably understood as asking for the volume of raw olives purchased, regardless of end-use.
7.342. The remaining questions in the 4 August 2017 questionnaire seeking purchase and
production information are framed in a similar ly general manner, and do not indicate whether
information about purchases or production of raw olives must be limited to raw olives used to process
into ripe olives. Question 7 provides:
If your company processes ripe olives and you have no suppliers that are separa tely
incorporated or unaffiliated, please confirm that the raw olives your company processes
into ripe olives are produced within your company (that is, none of your suppliers are
separately incorporated ) and report the quantity of raw olives produced by y our
company. If not, please explain the sources of the raw olives you process.740
7.343. Question 8 provides:
If your company processes ripe olives and produces raw olives, but you also have
outside suppliers of raw olives, please complete the attached "Template for Suppliers of
Raw Olives," for your outside purchases. Please also report the quantity of raw olives
produced by your company.741
7.344. Both questions 7 and 8 sought information from responding companies that processed ripe
olives from raw olives produced in-house. The first instruction in question 7 directs such companies
to "confirm that the raw olives your company processes into ripe olives are produced within your

736 Original emphasis omitted; emphasis added.
737 Aceitunas Guadalquivir response to the sourcing questionnaire, (Exhibit EU-63); Agro Sevilla
response to the sourcing questionnaire (public version), (Exhibit EU-17); and Ángel Camacho response to the
sourcing questionnaire (public version), (Exhibit EU-68).
738 Reporting template for processors of ripe olives, (Exhibit EU-61).
739 In its response to the 27 September 2017 request (discussed below), Agro Sevilla submitted updated
information to the USDOC, delineating between "[v]olume of Black Olives Purchased" (i.e. for purchases of raw
olives processed into ripe olives) and "[v]olume of Green Olives Purchased" (i.e. for purchases of raw olives
processed into other olive products). (Agro Sevilla revised olive sourcing data, (Exhibit EU-65 (BCI)); Agro
Sevilla revised olive sourcing data (public version), (Exhibit EU-79)). Ángel Camacho submitted updated
information also delineating between "[q]uantity Raw for Ripe" (i.e. for purchases of raw olives processed into
ripe olives) and a column labelled "[q]uantity Raw for No Ripe" (i.e. for purchases of raw olives processed into
other olive products). (Ángel Camacho revised olive sourcing data, (Exhibit EU-64 (BCI)); Ángel Camacho
revised olive sourcing data (public version), (Exhibit EU-78)). For both Agro Sevilla and Ángel Camacho, figures
for raw olives processed into ripe olives in their 27 September 2017 responses align with figures reported in
response to the USDOC's 4 August 2017 questionnaire. (See also Agro Sevilla response to the sourcing
questionnaire, (Exhibit EU-42 (BCI)); Agro Sevilla response to the sourcing questionnaire (public version),
(Exhibit EU-17); Ángel Camacho response to the sourcing questionnaire, (Exhibit EU-44 (BCI)); and
Ángel Camacho response to the sourcing questionnaire (public version), (Exhibit EU-68)).
740 Letter to Aceitunas Guadalquivir on questionnaire, (Exhibit EU-58), attachment I. (emphasis added)
741 Letter to Aceitunas Guadalquivir on questionnaire, (Exhibit EU-58), attachment I. (emphasis added)

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company". This initial part of question 7 clearly states that the information the USDOC was
requesting concerned in-house production of raw olives processed into ripe olives. In contrast, the
second part of question 7 is expressed in more general terms, simply asking companies to report
the "quantity of raw olives produced by your company". While it is possible to read this second
instruction, in the light of the first, to be limited to raw olives processed into ripe olives, the fact that
the USDOC decided not to specify, for example, that it was requesting information on the "quantity
of raw olives produced [for this purpose] by your company", leaves open another reasonable
interpretation – that is, that the USDOC wanted companies t o report the volume of raw olives
produced in-house for any end -use. In our view, question 8 offers even less clarity in this regard,
as it simply asks for relevant respondent companies to complete the same template as question 6
(which we recall did not distinguish between end-uses for which raw olives were processed), and to
report the "quantity of raw olives produced by your company", without distinction or qualification.
Thus, we find that questions 7 and 8 do not help a reasonable respondent to understand whether
the purchase information the USDOC requested in question 6 was limited to the volume of raw olives
processed into ripe olives. In this respect, we find these questions to be as unspecific as question 6.
7.345. Thus, we disagree with the United States that the 4 August 2017 questionnaire clearly
identified that the USDOC was requesting the respondents to report purchase information for raw
olives processed into ripe olives.742
7.346. The United States argues that the USDOC had no obligation to investigate whether Aceitunas
Guadalquivir provided different information than what the USDOC had allegedly asked for in the
4 August 2017 questionnaire, and that Aceitunas Guadalquivir should have asked for clarification if
it considered the questionnaire was ambiguous. In this connection, the United States refers to the
cover page of the questionnaire, which instructed respondents to consult with the officials in charge
if there were questions during the investigation. Thus, according to the United States, not having
received questions from Aceitunas Guadalquivir regarding its request for information, an unbiased
and objective investigating authority could have concluded, as the USDOC did, that the information
submitted by Aceitunas Guadalquivir in response to the 4 August 2017 questionnaire represented
the company's purchases of raw olives that were processed into ripe olives.743
7.347. We agree with the underlying concern raised by the United States and accept that an
investigated company should consult with officials to clarify any doubts about its understanding of
information it is expected to provide. However, given our view that the 4 August 2017 questionnaire
could have been reasonably interpreted by Aceitunas Guadalquivir in the way it was, there was no
reason for Aceitunas Guadalquivir to have recognized that there was any ambiguity or to have sought
clarification. The absence of any request on the part of Aceitunas Guadalquivir for clarification of
question 6 of the 4 August 2017 questionnaire says nothing about the reliability of the information
submitted by Aceitunas Guadalquivir. In our view, it only indicates that the three respondents held
different understandings about what was being requested.

742 On 7 September 2017 the USDOC sent a supplemental questionnaire requesting the
respondents' largest unaffiliated suppliers to provide questionnaire responses regarding their raw olive sources
and sales to the respondents. Questions contained in that request similarly do not ask suppliers to provide
information on raw olives supplied to respondents for processing subject merchandise only. (See, e.g. Letter to
Aceitunas Guadalquivir regarding questionnaire to unaffiliated suppliers, (Exhibit USA-14), p. 12, general
question A ("[i]f your company only supplies raw olives sourced from growers, please identify the growers from
whom your company sources raw olives, and the volume and value of raw olives sourced from each supplier
during the [period of investigation]"); and general question B ("[p]lease provide the following information for
your company for the [period of investigation]. … The quantity and f.o.b. value of your operations's [sic]
production and sales of raw olives. … The quantity and f.o.b. value of raw olives sold to [Aceitunas
Guadalquivir]. Please report the sale value on an f.o.b. (factory) basis" (emphasis original))).
743 United States' 12 November 2020 responses to Panel question No. 44, paras. 89-91, and No. 45,
para. 94. The United States emphasizes that the other two mandatory respondents did seek clarification or
additional guidance from the USDOC. (United States' 12 November 2020 response to Panel question No. 46,
para. 98 (referring to Letter from the USDOC on clarification, (Exhibit EU-60), pp. 1-2)). Counsel for the three
mandatory respondents Agro Sevilla, Ángel Camacho, and Aceitunas Guadalquivir had contacted the USDOC to
discuss a USDOC letter, dated 26 September 2017, regarding a request for information contained in supplier
questionnaire for the respondents' largest suppliers. (Letter from the USDOC on clarification, (Exhibit EU-60),
p. 1).

BCI deleted, as indicated [[***]]

7.5.2.2.2 The USDOC's information requests following the 4 August 2017 questionnaire
7.348. Several exchanges between the USDOC and the respondents after the issuance of the
4 August 2017 questionnaire help to shed light on the nature of the information the respondents
had in fact submitted. We find particularly instructive a 27 September 2017 memorandum addressed
to the file, in which the USDOC recorded its exchange with the respondents' counsel, including the
following:
In addition, the respondents ' counsel informed the [USDOC] that the info rmation
regarding the volume and value of raw olives supplied to Agro Sevilla by its member
cooperatives and other suppliers was limited to olives used in the production of the ripe
olives subject to this [countervailing duty] investigation. We now request that
Agro Sevilla resubmit the information regarding its suppliers of raw olives to include the
volume and value of all raw olives purchased from each supplier, regardless of the
processed olive product for which the raw olives were used. If it is necessary to correct
the reporting in this manner for the other two mandatory respondents, we request that
the information be resubmitted.744
7.349. Two respondents, Agro Sevilla and Ángel Camacho, responded to the
USDOC's 27 September 2017 request by the 6 October 2017 deadline and resubmitted revised and
additional raw olives data, including the volume and value of raw olives purchased from each supplier
regardless of end-use.745 Aceitunas Guadalquivir, however, did not resubmit revised or additional
information or otherwise respond to this request.
7.350. The European Union argues that the only plausible interpretation of the 27 September 2017
request is that Agro Sevilla (and any other respondent) needed to resubmit raw olives purchased
from each supplier regardless of end-use, if they had not already done so, and hence, that it had
been incorrect of them to limit their initial responses to the 4 August 2017 questionnaire to providing
information on their raw olive purchases that were processed into ripe olives. Furthermore, the
European Union contends that Aceitunas Guadalquivir's lack of a response should have signalled to
the USDOC that Aceitunas Guadalquivir had already reported its overall raw olive purchases from
each supplier regardless of end-use. Hence, Aceitunas Guadalquivir did not need to submit new or
updated information.746
7.351. The United States rejects the European Union's assertion that the 27 September 2017
request somehow revoked or superseded the USDOC's 4 August 2017 request for respond ents to
report their raw olive purchases processed into ripe olives. Likewise, the United States does not
accept that Aceitunas Guadalquivir's silence and decision not to respond should have led the USDOC
to believe that Aceitunas Guadalquivir's reporting in response to the 4 August 2017 questionnaire
reflected the company's purchases of raw olives regardless of end-use.747
7.352. In our assessment, the USDOC's 27 September 2017 request indicates that it invited
Ángel Camacho and Aceitunas Guadalquivir, "if it is necessary", to "correct" and "resubmit" raw olive
purchase information reported to include the volume and value of all raw olives purchased from each
supplier, regardless of the processed olive product for which the raw olives were used. We consider
that Aceitunas Guadalquivir's conduct in not responding to the USDOC's 27 September 2017 request
signalled that Aceitunas Guadalquivir's reporting already included "the volume and value of all raw
olives purchased from each supplier, regardless of the processed olive product for which the raw
olives were used". No evidence is before the Panel to indicate that Aceitunas Guadalquivir was an
uncooperative respondent.
7.353. We note that prior to the final determination, the petitioner had argued to the USDOC that
Aceitunas Guadalquivir had "not reported its purchased olive volumes used only for making ripe
olives", and that "[i]n the absence of this information, [the USDOC] should derive an approximation

744 Letter from the USDOC on clarification, (Exhibit EU-60), p. 2. (emphasis added)
745 Ángel Camacho revised olive sourcing data, (Exhibit EU-64 (BCI)); Agro Sevilla revised olive sourcing
data, (Exhibit EU-65 (BCI)).
746 European Union's first written submission, paras. 701-702; 10 June 2020 response to Panel question
No. 29, para. 145.
747 United States' first written submission, paras. 283 and 311-312.

BCI deleted, as indicated [[***]]

for Aceitunas Guadalquivir using a yield ratio based on Angel Camacho's purchases".748 In rejecting
the petitioner's assertion in its final issues and decision memorandum, the USDOC stated that in its
4 August 2017 questionnaire it had asked all companies to provide information on their "sources of
raw olives that were processed into ripe olives during the period of investigation " and that "[a]ll
companies responded to this questionnaire by reporting their raw olive purchases".749 Then, referring
to the 27 September 2017 information request, the USDOC noted that Agro Sevilla and
Ángel Camacho found it necessary to submit additional information, while Aceitunas Guadalquivir
did not. Without further explanation, the USDOC concluded: "[t]hus, Aceitunas
Guadalquivir's originally reported information is indicative of its raw olives purchases that were used
to produce subject merchandise".750
7.354. Similarly, in its 12 July 2018 Ministerial error memorandum (filed after the final
determination), the USDOC summarized its decision to base Aceitunas Guadalquivir's final subsidy
margin and countervailing duty rate on Aceitunas Guadalquivir 's volume of raw olive purchases
reported in its responses to the 4 August 2017 questionnaire, characterizing Aceitunas
Guadalquivir's decision not to respond to the USDOC's 27 September 2017 request to resubmit
information as follows:
Because Aceitunas Guadalquivir did not revise its data [in response to the
27 September 2017 request], we understood that Aceitunas Guadalquivir's reported
volume represented purchases of raw to ripe because the initial question we asked was
for the volume of purchases of raw to ripe. The totality of the evidence on the record
did not suggest that Aceitunas Guadalquivir's initial reporti ng was incorrect or was
otherwise not responsive to the question asked.751
7.355. The USDOC states in this passage that it understood that Aceitunas Guadalquivir's reported
purchases "represented purchases of raw to ripe" because of Aceitunas Guadalquivir's decision not
to revise that information in the light of the 27 September 2017 memorandum. We recall, however,
that the 27 September 2017 request sought information on total purchases of raw olives, regardless
of end-use, and not purchases of raw to ripe . Furthermore, in its preliminary determination, which
was issued on 20 November 2017, the USDOC treated Aceitunas Guadalquivir's reported purchases
as if they represented purchases of raw olives regardless of end-use.752 Thus, the record shows that
shortly after Aceitunas Guadalquivir's non-response to the 27 September 2017 memorandum, the
USDOC did not treat Aceitunas Guadalquivir's reported purchases of raw olives as if they represented
its purchases of raw olives processed into ripe olives. To this extent, the USDOC's subsequently
stated understanding of the implications of Aceitunas Guadalquivir's decision not to respond to the
27 September 2017 memorandum is inconsistent both with the information requested in that
memorandum and with its reliance on Aceitunas Guadalquivir's reported information to determine
Aceitunas Guadalquivir's preliminary subsidy margin and countervailing duty rate, which was based
on total olive purchases, regardless of end-use.
7.356. According to the United States, however, Aceitunas Guadalquivir 's response to a
supplemental questionnaire that the USDOC sent exclusively to Aceitunas Guadalquivir on
21 December 2017 (that is, after the USDOC's preliminary determination) shows that the U SDOC
was entitled to understand that Aceitunas Guadalquivir had reported only purchases of raw olives
processed into ripe olives. On 21 December 2017, the USDOC sought the following confirmation
from Aceitunas Guadalquivir:
In your questionnaire response o f August 14, 2017 at Exhibit 2, [Aceitunas
Guadalquivir] provided a list of unaffiliated suppliers and total purchases of raw olives
to be [] kilograms. Confirm that this number includes purchases of all raw olives
regardless of the processed olive product for which the raw olives were used. Explain if
these purchases are made on a gross or net basis, that is, with or without sticks, leaves,

748 FIDM, (Exhibit EU-2), p. 41. See also Case brief of petitioner in Countervailing Duty Investigation of
Ripe Olives from Spain (23 April 2018), (Exhibit USA-20), p. 11.
749 FIDM, (Exhibit EU-2), p. 44.
750 FIDM, (Exhibit EU-2), p. 44.
751 Ministerial error memorandum, (Exhibit EU-69), pp. 4-5.
752 FIDM, (Exhibit EU-2), p. 44 ("[i]n the Preliminary Determination, when calculating the weighted
average per kilogram benefit using the information provided by all the reporting olive growers, we did not limit
our calculations to the raw olives used to produce ripe olives" (emphasis added)). See also Aceitunas
Guadalquivir preliminary determination, (Exhibit EU-36), pp. 2-3.

BCI deleted, as indicated [[***]]

and other debris and culls. Explain how the purchased volumes are recorded in your
accounting system and explain whether you apply a standard yield loss ratio in recording
the purchased volume of raw olives.753
7.357. On 5 January 2018, Aceitunas Guadalquivir responded as follows:
[Aceitunas] Guadalquivir only records the value of its raw olive purchases in its
accounting system. Raw olive quantities are recorded in an ERP system as they are
weighed when they enter the factory or when purchased from storage throughout the
year. Weight is recorded in the ERP system on a net basis ( i.e., net of other debris).
Specifically, each del ivery is evaluated by a [Aceitunas] Guadalquivir employee to
assess the volume of raw olives for processed olive production relative to other
materials, such as leaves sticks, leaves, and other debris and culls. These other
materials are not recorded as pa rt of raw olive volume in the ERP system. The [ ]
kilograms represents all raw olive receipts as recorded in the ERP system in 2016.754
7.358. The United States maintains that Aceitunas Guadalquivir's response fails to confirm whether
the reported purchase volume represented all purchases of raw olives without regard to the
end-product.755 According to the United States, Aceitunas Guadalquivir 's statement that it "only
records the value of its raw olive purchases in its accounting system "756, was in response t o the
USDOC's request to "[e]xplain how the purchased volumes are recorded in your accounting
system"757 and shows that its accounting system records only the value, and not the quantity, of its
raw olive purchases. 758 The United States considers that Aceitunas Guadalquivir's statement that
"[t]he [redacted] kilograms represents all raw olive receipts as recorded in the ERP system in
2016"759 provides information regarding Aceitunas Guadalquivir 's recording system but does not
mean that the raw olive purchase information the company submitted in response to the
4 August 2017 questionnaire included purchases of raw olives that were used to produce products
other than ripe olives.760
7.359. We note that the USDOC did not comment on, or refer to, Aceitunas
Guadalquivir's 5 January 2018 response in its final issues and decision memorandum. However, the
USDOC addressed Aceitunas Guadalquivir 's response to its 21 December 2017 request in the
12 July 2018 Ministerial error memorandum, where it clarified as follows:
With regard to the post-preliminary supplemental question to confirm that the reported
purchases represented all purchases regardless of the processed product, Aceitunas
Guadalquivir again did not specify that the volume they reported was of raw to ripe, or
otherwise of total purchases. Rather, Aceitunas Guadalquivir stated that number was
indicative of all raw olive purchases in their system; again, based on their response to
our original question, we understood this to mean that all of their raw olive purchas es
were for ripe olives.761
7.360. Thus, consistent with the United States' position, the USDOC explained in its Ministerial error
memorandum that it was of the view that Aceitunas Guadalquivir had not confirmed, in its
5 January 2018 response, whether the reported purchases represented all purchases of raw olives
regardless of end -use. In addition, the USDOC explained that it had understood from Aceitunas
Guadalquivir's response to the original questionnaire that "all of [Aceitunas Guadalquivir's] raw olive

753 Supplemental questionnaire to Aceitunas Guadalquivir, (Exhibit EU-62), p. 4. (fn omitted; emphasis
added)
754 Aceitunas Guadalquivir fourth supplemental questionnaire response, (Exhibit EU-59), p. 6.
755 The United States submits that Aceitunas Guadalquivir could have clearly stated, as specifically
prompted in the USDOC's question, that its response had included all purchases of raw olives and was not
limited to those purchases of raw olives that were used to produce ripe olives. (United States' first written
756 Aceitunas Guadalquivir fourth supplemental questionnaire response, (Exhibit EU-59), p. 6.
757 Supplemental questionnaire to Aceitunas Guadalquivir, (Exhibit EU-62), p. 4.
758 United States' 10 June 2020 response to Panel question No. 24, para. 78.
759 Aceitunas Guadalquivir fourth supplemental questionnaire response, (Exhibit EU-59), p. 6.
760 United States' 10 June 2020 response to Panel question No. 24, para. 79.
761 Ministerial error memorandum, (Exhibit EU-69), p. 5. (fn omitted)

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purchases were for ripe olives". 762 In other words, the USDOC found Aceitunas
Guadalquivir's response to the supplemental questionnaire to be inconclusive, revealing only,
according to the USDOC, "that [the] number was indicative of all raw olive purchases in the ir
system".763 The USDOC then reiterated its position that "based on their response to our original
question" (i.e. the questionnaire of 4 August 2017), the USDOC considered that Aceitunas
Guadalquivir had reported its purchase of raw olives processed into ripe olives.
7.361. Again, we find the USDOC's position to be in tension with what transpired prior to the
21 December 2017 request. Notably, Aceitunas Guadalquivir did not resubmit its reported purchase
information in reaction to the USDOC's 27 September 2017 request "to correct the reporting" in the
same manner as Agro Sevilla. We recall that Agro Sevilla had been asked to "resubmit the
information regarding its suppliers of raw olives to include the volume and value of all raw olives
purchased from each supplier, regardless of the processed olive product for which the raw olives
were used".764 Moreover, and significantly, the USDOC had used Aceitunas Guadalquivir's reported
figures in calculating Aceitunas Guadalquivir's preliminary subsidy margin and coun tervailing duty
rate without "limit[ing] [its] calculations to the raw olives used to produce ripe olives".765 The USDOC
offers no explanation for why, if it had understood Aceitunas Guadalquivir to have reported
purchases of raw olives processed into ripe olives, it decided to rely on Aceitunas Guadalquivir's raw
olive purchases reported in response to the 4 August 2017 questionnaire as the basis for its
preliminary determination of Aceitunas Guadalquivir's subsidy margin and countervailing duty rate,
which were based on the total purchases regardless of end-use.
7.5.2.2.3 Aceitunas Guadalquivir's verification report
7.362. We also find the USDOC 's stated understanding of Aceitunas Guadalquivir 's reported
purchase information to be at odds with Aceitunas Guadalquivir's verification report. We note that
in the section of the verification report where the USDOC reviewed "the total purchases of olives by
supplier", the USDOC made the following observations:
However, [Aceitunas Guadalquivir ] reminded [the USDOC] that it has only reported
purchases of raw olives and not purchases of any "semi -processed" or "processed"
olives that are to become or already are green olives. For example, although purchases
of what [Aceitunas Guadalquivir] defined as a "semi -processed" olive were included if
they ultimately became ripe olives, they were not included if they ultimately became
green olives. Thus, [ Aceitunas Guadalquivir ] explained that because [the USDOC]
requested only purchases of ripe olives, [ Aceitunas Guadalquivir] reported only olives
purchased in acetic acid; [ Aceitunas Guadalquivir] did not report olives purchased in
brine, because, as they explained, brine olives must become green olives. [ Aceitunas
Guadalquivir] explained that they do not consider themselves the processors of these
green olives that they purchase; however, when asked if they would consider
themselves the resellers of the product, they stated no because we "process them."
They clarified that they may change the brine, make an analysis, or prepare them by
stuffing them, or pitting or slicing them. These olives account for an additional [ ]
kilograms of purchases.
…
We preselected two of [Aceitunas Guadalquivir's] purchases of raw olives for the [period
of investigation] for further examination. … The quantities reported on the invoices
matched [ Aceitunas Guadalquivir ]'s reporting in its questionnaire responses,

762 On its face, this statement could be read to mean that the USDOC considered that all of Aceitunas
Guadalquivir's purchased raw olives were processed into ripe olives. However, we do not understand this to be
the USDOC's position, as other record evidence shows that the USDOC was aware that Aceitunas Guadalquivir
processed raw olives into other end-products. Thus, we understand the USDOC's statement to mean that the
USDOC considered that Aceitunas Guadalquivir's reported volume of purchases of raw olives, represented its
purchases of raw olives processed into ripe olives.
763 United States' 10 June 2020 response to Panel question No. 24, para. 79 (quoting Ministerial error
memorandum, (Exhibit EU-69), p. 5).
764 Letter from the USDOC on clarification, (Exhibit EU-60), p. 2.
765 FIDM, (Exhibit EU-2), p. 44.

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furthermore we were able to trace these volumes by their corresponding values through
to [Aceitunas Guadalquivir]'s general ledger.766
7.363. The United States argues that the USDOC 's stated understanding of the purchase
information submitted in Aceitunas Guadalquivir's response to the 4 August 2017 questionnaire is
consistent with observations made in these passages. 767 According to th e United States, the
verification report reveals that Aceitunas Guadalquivir had selectively reported its purchases of
"semi-processed" and "processed" olives ( i.e. reporting them only when they were processed into
ripe olives), logically implying that Aceitunas Guadalquivir must have also only reported its raw olive
purchases used to process ripe olives. The United States maintains that Aceitunas
Guadalquivir's decision not to report purchases of "semi -processed" and "processed" olives that
could no longer become subject merchandise demonstrates that the USDOC was correct in observing
that it "understood that the originally reported volume of olives purchased represented purchases
of raw to ripe [(i.e. purchases of raw olives used to produce ripe olives)] and the additional volume
of olive purchases not reported represented olives purchased for the production of non -subject
merchandise".768
7.364. The European Union rejects the United States' understanding of Aceitunas
Guadalquivir's verification report. The European Union contends that it is clear from the opening
sentence in the first cited passage that the entire explanation refers to olives that are not "raw", but
that are already semi -processed or processed, and thus, does not spe ak to Aceitunas
Guadalquivir's reporting of raw olives.769 The European Union also refers to the following passage in
the same section of the verification report:
We also reviewed [ Aceitunas Guadalquivir's] reported sales of olive derived products.
These include sales of oil produced that is not suitable for consumption and olives that
are destined for the mill ("molino"), which are olives that do not meet the standard to
sell as a ripe or table olive; these olives are processed into an industrial olive oil not
suitable for consumption. We observed no inconsistencies with the information reported
in the questionnaire responses.770
7.365. The European Union argues that this passage conclusively demonstrates that the USDOC
knew that Aceitunas Guadalquivir's production was not limited to subject merchandise and that some
of the raw olives purchased by Aceitunas Guadalquivir were used to produce goods other than
subject merchandise.771
7.366. We do not share the United States' characterization of the verification report. As an initial
matter, we note that the cited passage in paragraph 7.362 above addresses Aceitunas
Guadalquivir's reporting of its purchases of semi-processed and processed olives, not its reporting
of purchases of raw olives. Thus, on its own, the observation that Aceitunas Guadalquivir did not
report purchases of semi-processed and processed olives that could not be processed into ripe olives
(but could only become green olives), does not demonstrate that Aceitunas Guadalquivir must have
taken the same approach with respect to its reporting of raw olive purchases. The United States
argues that the same passage from the veri fication report reveals that Aceitunas Guadalquivir
confirmed its understanding that the USDOC had "requested only purchases of ripe olives [(i.e. raw
olives processed into ripe olives)]".772 We note, however, that the United States misreads the
relevant statement, which does not clarify that Aceitunas Guadalquivir's reference to "purchases of
ripe olives" should be understood to mean "raw olives processed into ripe olives".773 In this regard,
the European Union argues that the reference to "purchases of ripe olives" in the verification report
is incorrect, suggesting that this can only be understood to mean purchases of raw olives, as it is

766 Aceitunas Guadalquivir verification report, (Exhibit USA-22), pp. 7-8. (fn omitted)
767 Ministerial error memorandum, (Exhibit EU-69), p. 5 ("based on [Aceitunas Guadalquivir's] response
to our original question, we understood this to mean that all of their raw olive purchases were for ripe olives.")
768 United States' 10 June 2020 response to Panel question No. 24, para. 81 (referring to Ministerial
error memorandum, (Exhibit EU-69), p. 5).
769 European Union's 10 June 2020 response to Panel question No. 26, para. 130.
770 Aceitunas Guadalquivir verification report, (Exhibit USA-22), p. 7. (fns omitted)
771 European Union's 8 September 2020 response to Panel question No. 4(b), paras. 150-152;
11 March 2021 comments on United States' 25 February 2021 response to Panel question No. 20, para. 90.
772 United States' 25 February 2021 response to Panel question No. 21, para. 62. (emphasis added)
773 Emphasis added.

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uncontested that the USDOC asked for purchase information with respect to raw olives.774 However,
contrary to the United States' reading, other information from the verification report reveals that
the USDOC had, in fact, verified that reported purchases of raw olives included "molino" olives. 775
As the USDOC indicated in the verification report (cited in paragraph 7.363 above), these olives do
not meet the standard to sell as a ripe olive and are instead processed into an industrial olive oil not
suitable for consumption. 776 In our view, the fact that the USDOC was aware that Aceitunas
Guadalquivir used raw olives to produce products other than ripe olives, and the fact that the USDOC
observed that certain raw olives ("molino" olives) identified in Aceitunas Guadalquivir's invoices did
not meet the standard to be sold as ripe olive s, and were process ed into industrial olive oil not
suitable for consumption , undermine the United States' reading of the verification report. 777
Moreover, as further discussed below, information on record also revealed a significant discrepancy
between the volume of raw olives purchased by Aceitunas Guadalquivir and the sales of ripe olives.
7.5.2.2.4 Aceitunas Guadalquivir 's submissions on the reported volume of raw olive
purchases after the final determination
7.367. Finally, the European Union maintains that the USDOC also had before it information
showing that Aceitunas Guadalquivir's reported volume of raw olives purchased was significantly
larger than its reported volume of its sales of ripe olives .778 Given the size of this difference, the
European Union argues that the USDOC could not properly have regarded Aceitunas
Guadalquivir's reported data as being "indicative" of raw olive purchases solely to process ripe
olives.779 The USDOC's 12 July 2018 Ministerial error memorandum reveals that Aceitunas
Guadalquivir made the same point, commenting that, due to the "comparatively small volume" of
Aceitunas Guadalquivir's sales of subject merchandise relative to Aceitunas Guadalquivir's reported
volume of purchases contained in its responses to the 4 August 2017 questionnaire, the USDOC
should have known that the reported volume of purchases did not represent the volume of raw olives
purchased to produce ripe olives.780 Consequently, Aceitunas Guadalquivir requested the USDOC to
use the volume of Aceitunas Guadalquivir's ripe olives sales during the period of investigation as a
proxy to derive the volume of raw olive purchases to process into ripe olives.
7.368. The USDOC rejected Aceitunas Guadalquivir's request on the grounds that, for the reasons
set out above 781, it ha d understood Aceitunas Guadalquivir to have provided information on its
purchase of raw olives for processing into ripe olives. The USDOC then went on to note that even if
the volume originally reported did not represent raw olive purchases to process ripe olives, then the
"correct" volume was not on the record. The USDOC further characterized the situation as "a
reporting error made by the respondent, which the respondent did not alert [the USDOC] to during
the course of the investigation or prior to the issuance of the Final Determination" and observed that
the absence of an alternative volume of olive purchases on the record was not a ministerial error
eligible for correction.782 We note, however, that the USDOC did not adequately address Aceitunas
Guadalquivir's submission that the "comparatively small" volume of reported sales of ripe olives
relative to the reported volume of purchases of raw olives demonstrated that the reported volume
of raw olives represented "a volume greater than the purchases of 'raw to ripe'".783

774 European Union's 10 June 2020 response to Panel question No. 26, para. 132 ("[i]t is apparent that
the wording of the verification is incorrect, as it refers to a request for 'purchases of ripe olives'. It is however
uncontested between the United States and the EU that the investigating authority did not request information
on purchases of ripe olives, but only on purchases of raw olives" (emphasis omitted)).
775 United States' 25 February 2021 response to Panel question No. 21, para. 62.
776 After issuance of the final determination, Aceitunas Guadalquivir argued to the USDOC that this part
of the verification report demonstrated that the USDOC had verified and, therefore, should have known that its
reported purchases included raw olives purchased to produce products other than ripe olives. (Ministerial error
memorandum, (Exhibit EU-69), p. 3).
777 United States' 25 February 2021 response to Panel question No. 21, para. 62.
778 The European Union has submitted that in 2016 the volume of raw olives purchased by Aceitunas
Guadalquivir was [[***]] kilograms while the volume of its sales of ripe olives was [[***]] kilograms,
representing a relative difference of [[***]]%. (European Union's first written submission, para. 663 (referring
to Aceitunas Guadalquivir comments for the final determination, (Exhibit EU-71 (BCI)), p. 4)).
779 European Union's first written submission, para. 663.
780 Ministerial error memorandum, (Exhibit EU-69), p. 3.
781 See paras. 7.354 and 7.359 above.
782 Ministerial error memorandum, (Exhibit EU-69), p. 5.
783 Ministerial error memorandum, (Exhibit EU-69), p. 3.

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7.369. We recall that the USDOC 's Ministerial error memorandum was issued after the final
determination in this dispute. Under US law the purpose of such memoranda is to correct any error
"in addition, subtraction, or other arithmetic function, clerical error resulting from inaccurate
copying, duplication, or the like, and any other similar type of unintentional error which [the USDOC]
considers ministerial".784 The USDOC found that its reliance on Aceitunas Guadalquivir's volume of
raw olives purchases, as reported in its response to the 4 August 2017 questionnaire, was not a
ministerial error, and the European Union has not challenged that characterization. We accept that
there is a point in every investigation when the exchange between interested parties and an
investigating authority with respect to matters addressed in a proceeding must come to an end.
However, in the light of the events that transpired prior to the final determination, we believe that,
overall and on balance, the record of the investigation shows that there were multiple indications
that the volume of purchases of raw olives reported by Aceitunas Guadalquivir in its response to the
4 August 2017 questionnaire did not represent only Aceitunas Guadalquivir's purchases of raw olives
processed into ripe olives.
7.370. First, we recall our finding that the USDOC 's initial request for information in the
4 August 2017 cover letter and questionnaire could reasonably have been understood in two ways,
including in the manner interpreted by Aceitunas Guadalquivir. Second, Aceitunas Guadalquivir did
not "correct" and " resubmit" its reported purchase information in response to the
USDOC's 27 September 2017 request "to correct the reporting" so as to "resubmit the information
regarding its suppliers of raw olives to include the volume and value of all raw olives purchased from
each supplier, regardless of the processed olive product for which the raw olives were used" 785,
conduct that confirmed that Aceitunas Guadalquivir had already reported its total raw olive
purchases in response to the 4 August 2017 questionnaire. Third, and in our view, significantly, the
USDOC treated Aceitunas Guadalquivir's reported figures as representing its volume of purchases of
raw olives for processing into any end -product when it calculated Aceitunas
Guadalquivir's preliminary subsidy margin and countervailing duty rate. Finally, verification revealed
that the reported volume of purchases of raw olives included "molino" olives (which are not
processed into ripe olives), and record evidence showed that there was a [[***]]% difference
between the reported volume of raw olives purchased by Aceitunas Guadalquivir and the reported
volume of Aceitunas Guadalquivir's sales of ripe olives.786
7.5.2.2.5 Conclusion
7.371. Thus, in the light of the above considerations, we find that, by relying on the volume of
Aceitunas Guadalquivir's raw olive purchases reported in its response to the initial 4 August 2017
questionnaire to determine Aceitunas Guadalquivir's final subsidy margin and countervailing duty
rate, the USDOC acted inconsistently with the requirement in Article VI:3 of the GATT 1994 to
ensure and take the necessary steps to ascertain , as accurately as possible , the amount of
subsidization bestowed on the investigated products.
7.372. Having found that the United States acted inconsistently with Article VI:3 of the GATT 1994,
we believe that it is not necessary to achieve a positive solution to this dispute to make additional
findings in relation to these claims under Articles 10, 19.1, 19.3, 19.4 , and 32.1 of the
SCM Agreement. We therefore decline to address these claims.
7.5.3 The USDOC's calculation of an "all others" rate
7.373. The European Union claims that the United States acted inconsiste ntly with its obligations
under Article VI:3 of the GATT 1994 and Articles 10, 19.1, 19.3, 19.4 , and 32.1 of the
SCM Agreement, due to the manner in which the USDOC calculated the "all others " rate of

784 The 12 July 2018 ministerial memorandum notes in this regard that Section 705(e) of the Act and
19 CFR 351.224(f) define a "ministerial error" as an error in addition, subtraction, or other arithmetic function,
clerical error resulting from inaccurate copying, duplication, or the like, and any other similar type of
unintentional error which the USDOC considers ministerial. (Ministerial error memorandum, (Exhibit EU-69),
p. 2).
785 Letter from the USDOC on clarification, (Exhibit EU-60), p. 2.
786 According to the European Union, such a discrepancy means that Aceitunas Guadalquivir's reported
purchases could not be reasonably construed as "indicative" of its raw olives purchases that were used to
produce subject merchandise. (European Union's first written submission, para. 663 (referring to the same
submission made by Aceitunas Guadalquivir to the USDOC in Aceitunas Guadalquivir comments for the final
determination, (Exhibit EU-71 (BCI)), p. 4)).

BCI deleted, as indicated [[***]]

countervailing duties imposed on exporters of ripe oliv es not individually investigated. The USDOC
calculated the "all others" rate of countervailing duties as the weighted average of the countervailing
duties imposed on the three mandatory respondents, Agro Sevilla, Ángel Camacho, and Aceitunas
Guadalquivir.787 The European Union argues that to the extent that the USDOC incorrectly calculated
Aceitunas Guadalquivir's subsidy margin and countervailing duty rate, then the "all others" rate must
also be inconsistent with the same obligations.
7.374. We agree with the European Union that an inconsistency arising in respect of the calculation
of Aceitunas Guadalquivir's subsidy margin and corresponding countervailing duty rate necessarily
has implications for the "all others" rate, as the USDOC calculated this rate as the weighted average
of the duties imposed on the three mandatory respondents. In the preceding analysis we found that
the USDOC's calculation of Aceitunas Guadalquivir 's final subsidy margin and corresponding
countervailing duty rate was inconsistent with Arti cle VI:3 of the GATT 1994. Accordingly, we find
that the USDOC's calculation of the "all others" rate was, consequently, also inconsistent with
Article VI:3 of the GATT 1994.
7.375. Having reached this finding, we do not further address the European Union's claims under
Articles 10, 19.1, 19.3, 19.4, and 32.1 of the SCM Agreement in respect of the USDOC's calculation
of the "all others" rate, as we do not consider it necessary to do so for purposes of resolving the
dispute before us.
7.5.4 Whether the USDOC properly requested information on purchases of raw olives
used to produce ripe olives consistently with Article 12.1 of the SCM Agreement
7.376. The European Union claims that the USDOC acted inconsistently with Article 12.1 of the
SCM Agreement by allegedly fail ing to properly notify Aceitunas Guadalquivir that the USDOC
required information regarding Aceitunas Guadalquivir's volume of purchases of raw olives that were
processed into the subject merchandise, ripe olives. 788 The United States argues that the
European Union's claim relies on a misreading of the USDOC's initial 4 August 2017 questionnaire
and an incomplete account of the factual record and therefore should be rejected.789
7.377. Article 12.1 of the SCM Agreement provides:
Interested Members and all interested parties in a countervailing duty 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 question.
7.378. We agree with the parties, as well as past panel and Appellate Body reports, that Article 12.1
of the SCM Agreement sets out fundamental due process rights, in particular, for an interested party
to be given adequate notice of any information the investigating authority requires and an adequate
opportunity to provide the requested information.790 The particular information that an investigating
authority requires from interested parties will determine what the notice must convey and will vary
with the circumstances. In this regard, we share the view expressed by the panel in China – Broiler
Products that, "[a]t a minimum, a notice must convey an understanding of what information is
required in order to enable all interested parties to prepare and sub mit relevant written evidence
regarding the matters as to which information is sought."791
7.379. The European Union's claim derives from its argument that the USDOC's initial
4 August 2017 questionnaire requested respondents to report the volume and value of all raw olives
purchased from each supplier, regardless of the processed olive product for which the raw olives
were used . The European Union submits that Aceitunas Guadalquivir correctly understood the
questionnaire as asking for this information and further submits that the USDOC's actions after the

787 PIDM, (Exhibit EU-1), p. 31.
788 European Union's first written submission, paras. 712-718.
789 United States' first written submission, para. 265.
790 European Union's first written submission, para. 715; United States' first written submission,
para. 268. See, e.g. Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, para. 241.
791 Panel Report, China – Broiler Products (Article 21.5 – US), para. 7.232.

BCI deleted, as indicated [[***]]

4 August 2017 questionnaire demonstrate that Aceitunas Guadalquivir 's understanding was
correct.792
7.380. The United States maintains that th e 4 August 2017 questionnaire requested the
respondents' purchase information on raw olives used to produce ripe olives, thereby notifying the
mandatory respondents that the USDOC required this information .793 The United States also
emphasizes that the other two mandatory respondents, Agro Sevilla and Ángel Camacho, responded
to the initial questionnaire by reporting their raw olive purchases used to process subject
merchandise.794
7.381. As we found above795, we disagree with the United States' assertion that the 4 August 2017
questionnaire identified in clear and unambiguous terms that the USDOC was requesting the
respondents to report purchase information for raw olives processed into ripe olives. On the one
hand, we found that if read in connection with the la nguage in the questionnaire's cover letter, a
respondent could have reached the understanding that it was supposed to report its raw olive
purchases that were used to process ripe olives. T he two respondents, Agro Sevilla and
Ángel Camacho, did in fact submit information only on raw olive purchases to produce subject
merchandise. On the other hand, as we noted above, based on their wording, the relevant questions
could also plausibly have been understood by a reasonable interested party to have asked for
information on raw olive purchases regardless of end -use. In this regard, we recall that the
referenced "[t]emplate for Suppliers of Raw Olives" did not ask the respondents to distinguish and
separately report data with respect to the volume of raw olives purchased that are processed into
ripe olives, and raw olive purchases regardless of the processed olive product for which the raw
olives were used. Nor do we think that the ambiguity should have led Aceitunas Guadalquivir to have
sought clarification as to what was being requested. Accordingly, we disagree that the 4 August 2017
questionnaire provided the requisite notice.
7.382. Moreover, the USDOC did not at any subsequent point prior to the final determination796
request that Aceitunas Guadalquivir report its raw olive purchases that were used to process ripe
olives, or suggest that Aceitunas Guadalquivir should have reported its raw olive purchases that
were used to process ripe olives. As explained above 797, in its 27 September 2017 request the
USDOC alerted the respondents that the legal counsel for Agro Sevilla had informed the USDOC that
the volume and value of raw olives that Agro Sevilla had reported in response to the 4 August 2017
questionnaire was limited to olives used in the production of the ripe olives. The USDOC requested
that Agro Sevilla "resubmit" the information regarding its suppliers of raw olives to include the
volume and value of all raw olives purchased from each supplier, regardless of the processed olive
product for which the raw olives were used, and also requested the other respondents to "resubmit"
and "correct" their reporting in this manner, if it was necessary to do so .798 Aceitunas Guadalquivir
did not resubmit any new information. Subsequently , the USDOC used information on the volume
of raw olives purchased, irrespective of end-use, submitted by Agro Sevilla and Ángel Camacho in
response to the 27 September 2017 request, and reported by Aceitunas Guadalquivir in its
responses to the 4 August 2017 questionnaire, to determine preliminary subsidy margins of the
three respondents.799 Then, on 21 December 2017800, the USDOC requested Aceitunas Guadalquivir
to confirm that information reported by Aceitunas Guadalquivir in its responses to the 4 August 2017
questionnaire included purchases of all raw olives regardless of the processed olive product for which

792 European Union's first written submission, paras. 643-665; second written submission, para. 195.
793 Letter to Aceitunas Guadalquivir on questionnaire, (Exhibit EU-58); Letter to Agro Sevilla on
questionnaire, (Exhibit USA-6); and Letter to Ángel Camacho on questionnaire, (Exhibit USA-7).
794 United States' first written submission, paras. 284-285. As explained in fn 739 above, in response to
the USDOC's 27 September 2017 request, both Agro Sevilla and Ángel Camacho each replied by resubmitting
the template for their raw olive suppliers, delineating their purchases of raw olives that were processed into
ripe olives and purchases of raw olives that were processed into other olive products. The information confirms
that Agro Sevilla and Ángel Camacho responded to the USDOC's 4 August 2017 questionnaire by submitting
purchases of raw olives that were processed into ripe olives.
795 See paras. 7.337 and 7.347 above.
796 In its final issues and decision memorandum the USDOC stated that the cover letter to the initial
4 August 2017 questionnaire had "asked all companies to provide information on their 'sources of raw olives
that were processed into ripe olives during the period of investigation'". (FIDM, (Exhibit EU-2), p. 44).
797 See paras. 7.348-7.355 above.
798 Letter from the USDOC on clarification, (Exhibit EU-60), p. 2.
799 PIDM, (Exhibit EU-1), p. 17. See also Aceitunas Guadalquivir preliminary determination,
(Exhibit EU-36), pp. 2-3.
800 See paras. 7.356-7.361 above.

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the raw olives were used , without asking Aceitunas Guadalquivir to report its raw olive purchases
that were used to process ripe olives.801
7.383. In light of the above, we disagree that the USDOC properly notified interested parties of the
required information on purchases of raw olives. As we have explained, neither in the initial
4 August 2017 questionnaire nor subsequently, did the USDOC clearly, and unambiguously, convey
an understanding to the respondents that they were required to submit information on raw olive
purchases used to process ripe olives. Indeed, the actions of the USDOC after issuance of the initial
questionnaire appeared to confirm that the required information was the volume of raw olives
purchased regardless of end -use. Accordingly, we find that the USDOC failed to notify the
respondents within the meaning of Article 12.1 of the SCM Agreement that the USDOC required
information regarding the volume of purchases of raw olives that were processed into the subject
merchandise, ripe olives.
7.5.5 Whether the USDOC informed interested parties of the essential facts under
consideration consistent with Article 12.8 of the SCM Agreement
7.384. The European Union claims that the USDOC acted inconsistently with Article 12.8 of the
SCM Agreement because the USDOC allegedly failed to disclose, before its final determination, that
the volume of purchases of raw olives process ed into ripe olives was an "essential fact" for its
determination of Aceitunas Guadalquivir's final subsidy rate. 802 The United States argues that the
European Union's claim should be rejected as the USDOC disclosed the essential facts under
consideration "months before the final determination ", thus permitting the parties to defend their
interests.803
7.385. Article 12.8 of the SCM Agreement provides:
The authorities shall, before a final determination is mad e, inform all interested
Members and 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.
7.386. Article 12.8 does not specifically define the "essential facts under consideration" that an
investigating authority must disclose prior to its final determination. However, it follows from the
fact that they must be those "which form the bas is for the decision whether to apply definitive
measures", that not all facts considered by an investigating authority need to be disclosed. Rather,
we agree with prior panels and the Appellate Body, that the "essential facts" that must be disclosed
are "those facts that are significant in the process of reaching a decision as to whether or not to
apply definitive measures".804 In our view, given that the margin or amount of subsidization lies at
the centre of a decision of whether or not to apply definitive measures, facts relating to the
calculation of the margin or amount of subsidization are "essential facts" within the meaning of
Article 12.8 of the SCM Agreement.805 We also note that Article 12.8 directs investigating authorities
to inform interested parties of those facts in sufficient time to ensure they can defend their interests.
In our view, this means that the disclosure of "essential facts" must be done in such a way that
permits an interested party to understand how they have been used and potenti ally relied upon by
an investigating authority. In this regard, we share the view expressed by the Appellate Body that
authorities must disclose the "essential facts under consideration" in a "coherent way" so that
interested parties can understand the basis for the decision whether to apply definitive measures.806

801 Supplemental questionnaire to Aceitunas Guadalquivir, (Exhibit EU-62), p. 4.
802 European Union's first written submission, para. 728.
803 United States' first written submission, para. 321.
804 Appellate Body Report, China – GOES, para. 240. See also Panel Reports, US – Supercalendered
Paper, para. 7.82; and China – Broiler Products (Article 21.5 – US).
805 For a similar view, see Panel Report, China – GOES, para. 7.463 (stating that the essential facts
underlying an investigating authority's conclusions regarding the amount of subsidization should also be
disclosed under Article 12.8 as the rate of subsidization also forms the basis of the decision whether to apply
definitive measures). See also Panel Report, Mexico – Olive Oil, para. 7.110. Similarly, in the context of
anti-dumping, the Appellate Body has found that the calculation methodology used by an investigating
authority may constitute an essential fact, within the meaning of Article 6.9 of the Anti-Dumping Agreement.
(Appellate Body Report, Russia – Commercial Vehicles, para. 5.218).
806 Appellate Body Report, China – GOES, para. 240.

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7.387. The European Union's claim concerns the alleged failure of the USDOC to inform the
respondents, prior to making a final determination, that their final subsidy margins would be
calculated by relyi ng on each respondent's volume of purchases of raw olives processed into ripe
olives. As discussed above 807, in its calculation of final subsidy margins the USDOC used what it
considered to be each respondent's volume of purchases of raw olives processed into ripe olives to
determine the subsidy amount (i.e. the numerator in its calculation) .808 In its preliminary
determination, however, the USDOC had calculated subsidy margins for the respondents based on
a different methodology that relied upon the respondents' reported volume of overall purchases of
raw olives, regardless of the end-product they were used to produce.809
7.388. Not unlike its argument under Article 12.1 of the SCM Agreement, t he European Union
submits that the USDOC's initial questionnaire was correctly understood as asking the respondents
to report their overall raw olive purchases. Thus, the European Union contends that the USDOC could
not have disclosed to the respondents through the initial questionnaire that the volume of purchases
of raw olives processed into ripe olives was an "essential fact" that would be used to determine each
of the respondents' final subsidy margins. In addition, the European Union argues that the USDOC
did not at any subsequent point prior to the final determination disclose to the respondents that the
volume of purchases of raw olives processed into ripe olives was going to be used to determine the
respondents' final subsidy margins. To the contrary, the European Union submits that the
USDOC's entire "approach" up to the point of adoption of the final determination suggested that the
volume of purchases of all raw olives, regardless of end-use, was the decisive value. Thus, according
to the European Union, the only reasonable inference of the USDOC's actions was that the USDOC
did not regard the value of raw olives processed into ripe olives as a relevant fact and as a result,
the respondents were not able to effectively defend their interests.810
7.389. The United States denies that the respondents were not aware that their raw olive purchases
used to process ripe olives was an essential fact under consideration or that the respondents could
not effectively defend their interests. In this respect, the United States submits that the USDOC
disclosed to interested parties on at least three occasions before the final determination that the
essential facts under consideration included the volume of raw olives processed into ripe olives: first,
through its 4 August 2017 and 27 September 2017 questionnaires; second, through the
USDOC's February 2018 notification agenda for on-site verification; and finally, through verification
reports subsequently sent to the parties. Thus, the United States contends that the facts under
consideration, as variables in the benefit calculation for the final determination, were extensively
addressed in the record and interested parties had sufficient time to – and in fact did – defend their
interests.811 In this regard, the United States maintains that the written and oral advocacy presented
by the interested parties between the preliminary and final determinations demonstrates that the
necessary disclosure took "place in sufficient time for the parties to defend their interests".812
7.390. We understand that the obligation in Article 12.8 requires an investigating authority to
disclose the essential facts in such a way that permits an interested party to understand the basis
for the decision that will be reached by the investigating authority and defend its interests. We do
not exclude the possibility that an investigating authority 's request for information in a n initial
questionnaire may serve this purpose. However, whether such a request will provide the requisite
notice will depend on how the questionnaire is drafted and the particular circumstances in which it
is issued. The fact that requested information may have been provided does not necessarily imply
that an investigating authority has informed a party of the essential facts. Were this to be the case,
the obligation in Article 12.8 would be arguably reduced to ensuring that an investigating authority
did not rely on any fact that had not been solicited from a party during the investigation. In other
words, Article 12.8 would not require any action on the part of an investigating authority other than
simply requesting information.
7.391. Turning to the 4 August 2017 questionnaire, we recall that, in the context of addressing the
European Union's other claims, including its Article 12.1 claim 813, we disagreed with the

807 See para. 7.321 above.
808 FIDM, (Exhibit EU-2), p. 44.
809 See para. 7.321 above. See also PIDM, (Exhibit EU-1), p. 17; and Aceitunas Guadalquivir preliminary
determination, (Exhibit EU-36), pp. 2-3.
810 European Union's first written submission, paras. 722-728.
811 United States' first written submission, paras. 329-331.
812 United States' first written submission, para. 332.
813 See para. 7.381 above.

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United States' assertion that it identified in clear terms that the USDOC was requesting the
respondents to report purchase information for raw olives processed into ripe olives. Accordingly,
we do not consider that the 4 August 2017 questionnaire can be found to have informed the
respondents that the essential facts under consideration included the volume of raw olives processed
into ripe olives or that those facts would form the basis of the USDOC's calculation of subsidization
amounts in its final determination.
7.392. We are also of the view that the USDOC 's 27 September 2017 request did not disclose to
the respondents that both sets of raw olive purchase information – i.e. raw olives that were used to
produce ripe olives and raw olives regardless of their use – would be under consideration in
determining whether to apply definitive measures. 814 We recall that the 27 September 2017
memorandum stated the following:
In addition, the respondents ' counsel informed the [USDOC] that the information
regarding the volume and value of raw olives supplied to Agro Sevilla by its member
cooperatives and other suppliers was limited to olives used in the production of the ripe
olives subject to this [countervailing duty] investigation. We now request that
Agro Sevilla resubmit the information regarding its suppliers of raw olives to include the
volume and value of all raw olives purchased from each supplier, regardless of the
processed olive product for which the raw olives were used. If it is necessary to correct
the reporting in this manner for the other two mandatory respondents, we request that
the information be resubmitted.815
7.393. As discussed in the context of address ing the European Union's other claims, rather than
disclosing to the respondents that their raw olive purchases used to process ripe olives would form
the basis of their subsidy calculations, the 27 September 2017 request suggested that the volume
and value of all raw olives purchased from each supplier regardless of end-use, was the information
sought by the USDOC. As already explained816, upon being alerted that Agro Sevilla had reported
the volume and value of raw olives used to process ripe olives in response to the 4 August 2017
questionnaire, the USDOC requested Agro Sevilla to "resubmit" information regarding its purchases
of all raw olives, regardless of the processed olive product for which the raw olives were used. The
USDOC also requested the other respondents to "resubmit" and "correct" their reporting in this
manner if it was necessary to do so. The United States emphasizes that the 4 August 2017 and
27 September 2017 questionnaires were separate requests for information and that the
27 September 2017 request did not withdraw or alter the 4 August 2017 request.817 In addition, the
United States submits that, in asking the respondent companies to "correct" and "resubmit" their
purchase volume information "to include the volume and value of all raw olives purchased from each
supplier, regardless of the processed olive product for which the raw olives were used "818, the
27 September 2017 request asked the respondents to supplement – not replace – the previously
reported information on purchases of raw olives that were used to produce ripe olives. 819 We note,
however, that the 27 September 2017 request directs the respondents to resubmit information only
if it was necessary to do so. Furthermore, in its request, the USDOC did not explicitly instruct the
respondents to ensure that both figures were on record.820 Therefore, based on our reading of the
USDOC's request, if a respondent had already submitted their overall raw olive purchases without
regard to end -use (as opposed to its raw olive purchases used to process ripe olives), that
respondent could have reasonably understood that there was no obligation to "resubmit" and
"correct" reported information. We fail to see how a respondent in that situation would have

814 United States' first written submission, para. 329.
815 Letter from the USDOC on clarification, (Exhibit EU-60), p. 2. (emphasis added)
816 See also paras. 7.348-7.355 above.
817 United States' first written submission, paras. 283 and 311-312; 8 September 2020 response to
818 Letter from the USDOC on clarification, (Exhibit EU-60), p. 2. (emphasis added)
819 United States' 8 September 2020 response to question No. IV(a), para. 39.
820 The United States emphasizes that the respondents Agro Sevilla and Ángel Camacho each submitted
revised exhibits that delineated each company's purchases of raw olives that were processed into ripe olives,
purchases of raw olives that were processed into other olive products, and total purchases of raw olives
without regard to use. (United States' 8 September 2020 response to question No. IV(a), para. 40). However,
in its 27 September letter, the USDOC requested that Agro Sevilla "resubmit the information regarding its
suppliers of raw olives to include the volume and value of all raw olives purchased from each supplier,
regardless of the processed olive product for which the raw olives were used". The USDOC requested the other
respondents to resubmit information "[i]f it is necessary to correct the reporting in this manner". (Letter from
the USDOC on clarification, (Exhibit EU-60), p. 2).

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necessarily understood that both sets of raw olive purchase information – i.e. raw olives that were
used to produce ripe olives and raw olives regardless of use – were essential facts under
consideration.
7.394. As discussed in detail in the preceding sections of our analysis, the USDOC used information
submitted by Agro Sevilla and Ángel Camacho in response to the 27 September 2017 request, and
information reported by Aceitunas Guadalquivir in its responses to the initial 4 August 2017
questionnaire, to determine preliminary subsidy margins for the three respondents. 821 On
21 December 2017822, the USDOC further requested Aceitunas Guadalquivir to confirm that the
information reported by Aceitunas Guadalquivir in its responses to the 4 August 2017 questionnaire
included purchases of all raw olives regardless of the processed olive product for which the raw
olives were used.823 Based on this build-up of events, we share the European Union's view that up
to that point, the USDOC's approach suggested that the volume of purchases of raw olives regardless
of end-use was the decisive value in determining the respondents' subsidy margins.
7.395. The other occasions in which the United States considers that the USDOC gave the relevant
notice to interested parties concern the USDOC's on -site verification of each
company's questionnaire responses.
7.396. The United States argues that the USDOC's 9 February 2018 notification agenda for on-site
verification disclosed to the parties in at least two ways that purchase volumes of raw olives used to
produce ripe olives were essential facts under consideration. First, the United States maintains that
each respondent's agenda listed the factual submissions to be verified, including the 4 August 2017
questionnaire requesting information regarding mandator y respondents' purchases of raw olives
used to produce ripe olives purchases. In addition, the United States maintains that the section in
the agenda entitled "Sales and Export Information " directed parties to be prepared to present
information regarding "[t]otal quantities of raw olives used for specific types of finished products
(i.e., ripe olives, other table olives, olive oil, other) ", thus informing the parties that the total
purchases of raw olives and those purchases of raw olives used for specific types of products, such
as ripe olives, were essential facts under consideration.824
7.397. We recall that we have already found that the 4 August 2017 questionnaire did not inform
the respondents that the essential facts under consideration included the volume o f purchases of
raw olives processed into ripe olives.825 We note also that the United States considers the language
in the verification agenda informed the respondents that the total purchases of raw olives and
purchases of raw olives used for specific types of products, such as ripe olives, were essential facts
under consideration.826 In our view, the fact that the verification agenda revealed that the USDOC
wanted to verify "[t]otal quantities of raw olives used for specific types of finished products (i.e., ripe
olives, other table olives, olive oil, other)" is not a notification that the USDOC intended to use, or
was considering to use, only the volume of raw olives purchased for processing into ripe olives in its
calculation of the subsidy margin. In the absence of any explanation as to why the USDOC wanted
the responding parties to be prepared for verification of the listed information, the agenda item (to
the extent that it referred to all finished products) could have also been understood as a means for
the USDOC to verify the reported volumes of purchases of raw olives regardless of end-use. Indeed,
such an understanding would have been consistent with events preceding the on -site verification,
which as we have already noted suggested that the volume of purchases of raw olives regardless of
end-use would be the value used in the USDOC's determination of the respondents' subsidy margins.

821 PIDM, (Exhibit EU-1), p. 17. See also Aceitunas Guadalquivir preliminary determination,
(Exhibit EU-36), pp. 2-3.
822 See paras. 7.356-7.361 above.
823 Supplemental questionnaire to Aceitunas Guadalquivir, (Exhibit EU-62), p. 4.
824 United States' first written submission, para. 330. See also Letter to Aceitunas Guadalquivir
regarding verification of questionnaire responses, (Exhibit USA-21), p. 6; Letter to Agro Sevilla regarding
verification of questionnaire responses, (Exhibit USA-18), p. 5; and Letter to Ángel Camacho regarding
verification of questionnaire responses, (Exhibit USA-19), p. 5.
825 We recall our view, as set out above, whether an investigating authority's request for information in
a questionnaire may serve to disclose to interested parties which are the essential facts under consideration
will depend on the circumstances. (See para. 7.390 above).
826 United States' first written submission, para. 330 (referring to Letter to Aceitunas Guadalquivir
regarding verification of questionnaire responses, (Exhibit USA-21), p. 8).

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7.398. The United States also refers to Aceitunas Guadalquivir 's verification report, which the
United States argues "shows that the USDOC reviewed Aceitunas Guadalquivir's purchases of raw
olives and, more specifically, Aceitunas Guadalquivir's purchases of raw olives that were processed
into ripe olives ".827 The section of the verification report cited by the United States addresses
Aceitunas Guadalquivir's purchases of olives by supplier, both cross-owned and unaffiliated, as well
as the purchase terms of raw olives. Relevant portions of this section are quoted in paragraphs 7.362
and 7.363 above. As the report confirms, Aceitunas Guadalquivir representatives explained how they
collected the information on olive purchases which were reported in its questionnaire responses. The
USDOC also reviewed Aceitunas Guadalquivir's reported sales of olive -derived products.828 Similar
to our view on the USDOC's 9 February 2018 notification agenda, we do not see how the verification
of Aceitunas Guadalquivir's reported purchase information provides clear notification that the USDOC
intended to use, or was considering to use, the volume of raw olives purchased for processing into
ripe olives in its calculation of the subsidy margin, particularly in the absence of any explanation as
to why the USDOC wanted to verify the listed information.
7.399. Finally, we recall that the United States submits that the written and oral advocacy
presented by the interested parties between the preliminary and final determinations evidences that
the necessary disclosure of essential facts took place in time for the respondents to defend t heir
interests.829
7.400. As the United States points out, prior to the final determination the petitioner asked the
USDOC to modify the methodology it had used to determine the respondents' preliminary subsidy
margins, and to use instead a "ripe olives -only metho dology".830 The respondents (including
Aceitunas Guadalquivir), urged the USDOC to reject the petitioner's request on both factual and
legal grounds.831 We see nothing in the reasons and arguments advanced by the respondents to
suggest that the USDOC had previously disclosed that the volume of purchases of raw olives
processed into ripe olives was an "essential fact under consideration" for the purpose of its final
determination of the respondents' margins of subsidization. We note, for example, that the
respondents' submissions make no reference to any prior statements or specific requests made by
the USDOC that would suggest that they had been informed o f this possibility. Rather, the
respondents' rebuttal is focused entirely on addressing the reasons advanced in the
petitioner's request. In our view, the exchange between the petitioner and the respondents, in the
light of the preceding events in the underlying investigation, does not demonstrate that the USDOC
had previously disclosed that it would use, or was in fact considering to use, a ripe olives -only
methodology, or, in other words, that the USDOC had previously disclosed that the volume of
purchases of raw olives processed into ripe olives was an "essential fact under consideration" for the
purpose of Aceitunas Guadalquivir's final subsidy margin.
7.401. For the foregoing reasons, we find that the 4 August 2017 questionnaire and
27 September 2017 memorand um, and the USDOC's 9 February 2018 verification agendas and
verification report s sent to the respondents, did not inform the respondents that the volume of
purchases of raw olives processed into ripe olives were "essential facts under consideration" within
the meaning of Article 12.8. Accordingly, by failing to provide this information, we find that the
USDOC acted inconsistently with the United States' obligations under Article 12.8 of the
SCM Agreement.
7.5.6 Conclusion
7.402. In relation to the European Union's substantive claims, we find that the USDOC acted
inconsistently with the United States' obligations under Article VI:3 of the GATT 1994 because:
a. by relying on the volume of Aceitunas Guadalquivir's raw olive purchases reported in its
response to the initial 4 August 2017 questionnaire to determine Aceitunas
Guadalquivir's final subsidy margin and countervailing duty rate, the USDOC did not

827 United States' first written submission, para. 331 (referring to Aceitunas Guadalquivir verification
report, (Exhibit USA-22), pp. 6-8).
828 Aceitunas Guadalquivir verification report, (Exhibit USA-22), p. 7.
829 United States' first written submission, para. 332.
830 Case brief of petitioner in Countervailing Duty Investigation of Ripe Olives from Spain
(23 April 2018), (Exhibit USA-20), pp. 6-12.
831 Rebuttal brief, (Exhibit USA-24), pp. 6-9.

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ensure, and take the necessary steps to ascertain as accurately as possible the amount of
subsidization bestowed on the investigated products; and
b. the USDOC relied upon the margin of subsidization incorrectly determined for Aceitunas
Guadalquivir in its determination of the "all others" rate of countervailing duties imposed
on exporters of ripe olives that were not individually investigated.
7.403. In the light of our findings with respect to the European Union's claims under Article VI:3,
we do not believe that making further findings on the merits of the European Union's complaint that
the same USDOC actions are also inconsistent with Articles 10, 19.1, 19.3, 19.4, and 32.1 of the
SCM Agreement would contribute to achieving a positive solution of this dispute. Accordingly, we
decline to make findings with respect to these claims.
7.404. In relation to the European Union's procedural cla ims, we find that the USDOC acted
inconsistently with the United States' obligations under:
a. Article 12.1 of the SCM Agreement because the USDOC failed to notify the respondents
that the USDOC required information regarding the volume of purchases of raw ol ives
processed into ripe olives; and
b. Article 12.8 of the SCM Agreement because the USDOC failed to inform interested parties
before the final determination that the volume of purchases of raw olives processed into
ripe olives was an "essential fact under consideration".
8 CONCLUSIONS AND RECOMMENDATION
8.1. For the reasons set forth in this Report, the Panel concludes as follows:
a. With respect to the European Union's claims regarding the USDOC's de jure specificity
determination:
i. the European Union has demonstrated that the USDOC's 29 May 2020 Remand
Redetermination as it relates to the USDOC's original findings of de jure specificity is
a measure or is part of the measure that is before the Panel in this dispute;
ii. the European Union has not demonstrated that the USDOC acted inconsistently with
Articles 2.1 and 2.1(a) of the SCM Agreement merely because the USDOC based its
findings of de jure specificity in the ripe olives countervailing duty investigation on the
rules in the relevant subsidy programmes governing the calculation of the amounts of
subsidies available to eligible enterprises;
iii. the European Union has not demonstrated that the USDOC acted inconsistently with
Article 2.1(a) of the SCM Agreement because the USDOC's determination of de jure
specificity was dependent upon how certain alleged features of past subsidy
programmes no longer in force were relied upon and integrated into the
BPS programme;
iv. the European Union has not demonstrated that, as a matter of fact, the USDOC found
that the BPS/GP and SPS subsidies were de jure specific to olive growers as a result
of being coupled or tied to olive production;
v. the USDOC acted inconsistently with Articles 2.1, 2.1(a), and 2.4 of the
SCM Agreement because:
(1) the USDOC did not properly examine and account for the rules governing the
allocation and valuation of BPS entitlements with respect to new farmers,
farmers holding entitlements transferred under the SPS programme, and
farmers no longer growing olives;

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(2) the USDOC relied upon erroneous factual findings with respect to function
and role of the so called "regional rate" to support its determination of de jure
specificity; and
(3) the USDOC did not properly examine and account for the rules governing the
allocation and valuation of SPS entitlements with respect to farmers with
SPS entitlements obtained via transfer, and farmers holding
COMOF programme-based entitlements no longer producing olives.
For the reasons set out in (v)(1)-(3), the USDOC's determination of de jure specificity
was not based on a reasoned and adequate explanation of why access to the BPS and
SPS subsidies was explicitly limited to olive growers, within the meaning of Articles 2.1
and 2.1(a) of the SCM Agreement, and was not clearly substantiated on the basis of
positive evidence, as required by Article 2.4 of the SCM Agreement;
vi. the USDOC acted inconsistently with Article 2.4 of the SCM Agreement to the extent
that the USDOC's determinations of de jure specificity with respect to the SPS and
BPS/GP subsidies relied upon an erroneous factual finding concerning the calculation
of assistance under the COMOF programme832;
vii. the European Union has not demonstrated that the USDOC acted inconsistently with
Articles 2.1, 2.1(a), and 2.4 of the SCM Agreement because, contrary to the
European Union's assertions:
(1) the USDOC's rejection of the arguments concerning the application of the
convergence factor under the BPS programme was supported by record
evidence, and to this extent, reasonably and adequately explained and based
on clearly substantiated positive evidence;
(2) the totality of the USDOC's discussion of the rules governing the calculation
of SPS payments reveals that the USDOC correctly understood that
SPS payments were made to farmers and that Spain did not implement the
SPS programme on a regional basis; and
(3) the lack of a formal specificity finding under US law does not undermine the
USDOC's determinations of de jure specificity with respect to the SPS, BP S,
and GP programmes, given the absence of any suggestion on the part of the
European Union that the COMOF programme subsidies were not de jure
specific, and in the light of the fact that the USDOC considered it had made
sufficient factual findings to satisfy itself that those subsidies would be de jure
specific under its domestic legislation, had it been required to make such a
determination.
viii. given our findings at paragraphs 8.1.a.v and vi, the Panel declines to mak e further
findings under Articles 1.2, 2.1, 2.1(a), 2.1(b), and 2.4 of the SCM Agreement.
b. With respect to the European Union's claims in relation to Section 771B of
the Tariff Act of 1930 and its application in the ripe olives countervailing duty
investigation:
i. Section 771B of the Tariff Act of 1930 is as such inconsistent with Article VI:3 of
the GATT 1994 and Article 10 of the SCM Agreement because it requires the USDOC
to presume that the entire benefit of a subsidy provided in respect of a raw agricultural
input product passes through to the downstream processed agricultural product, based
on a consideration of only two factual circumstances, without leaving open the
possibility of taking into account any other factors that may be relevant to th e
determination of whether there is any pass-through and, if so, its degree;

832 See para. 7.127(d) above.

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ii. the USDOC acted inconsistently with Article VI:3 of the GATT 1994 and Article 10 of
the SCM Agreement regarding its application of Section 771B of the Tariff Act of 1930
in the Spanish ripe olives countervailing duty investigation because it failed to establish
the existence and extent of indirect subsidization taking into account all relevant facts
and circumstances; and
iii. given our findings at paragraphs 8.1.b.i and ii, the Panel declines to make further
findings under Articles 19.1, 19.3, 19.4, and 32.1 of the SCM Agreement, either with
respect to Section 771B of the Tariff Act of 1930 as such or the USDOC's application
of Section 771B of the Tariff Act of 1930 in the in the Spanish ripe olives countervailing
duty investigation.
c. With respect to the European Union's claims regarding the USITC's Injury Determination:
i. with respect to the United States' request for a preliminary ruling, the United States
has not demonstrated that the European Union's claims under Article 15.4 of the
SCM Agreement and Article 3.4 of the Anti -Dumping Agreement are not properly
before the Panel;
ii. the European Union has not demonstrated that the USITC acted inconsistently with
Articles 15.1 and 15.2 of the SCM Agreement, and Articles 3.1 and 3.2 of the
Anti-Dumping Agreement, by failing to undertake an analysis of the volume of ripe
olives from Spain based on an objective examination of positive evidence;
iii. the European Union has not demonstrated that the USITC acted inconsistently with
Articles 15.1 and 15.2 of the SCM Agreement, and Articles 3.1 and 3.2 of the
Anti-Dumping Agreement, by failing to consider a "volume effect" within the meaning
of Article 15.2 of the SCM Agreement and Article 3.2 of the Anti-Dumping Agreement;
iv. the European Union has not demonstrated that the USITC acted inconsistently with
Articles 15.1 and 15.2 of the SCM Agreement, and Articles 3.1 and 3.2 of the
Anti-Dumping Agreement, by failing to undertake an analysis of the price effects of
ripe olives from Spain that was based on an objective examination of positive
evidence;
v. given our findings at paragraphs c.ii-iv, the European Union has not demonstrated that
the USITC acted inconsistently with Articles 15.4 and 15.5 of the SCM Agreement, and
Articles 3.4 and 3.5 of the Anti -Dumping Agreement, as a consequence of alleged
violations concerning the USITC's volume analysis and price effects analysis;
vi. the European Union has not demonstrated that the USITC acted inconsistently with
Articles 15.1 and 15.4 of the SCM Agreement, and Articles 3.1 and 3.4 of the
Anti-Dumping Agreement, by failing to undertake an analysis of the consequent impact
of ripe olives fr om Spain on the domestic industry that was based on an objective
examination of positive evidence;
vii. given our findings at paragraph c.vi, the European Union has not demonstrated that
the USITC acted inconsistently with Article 15.5 of the SCM Agreement, and Article 3.5
of the Anti-Dumping Agreement, as a consequence of alleged violations concerning the
USITC's impact analysis; and
viii. the European Union has not demonstrated that the USITC acted inconsistently with
Articles 15.1 and 15.5 of the SCM Agreement, and Articles 3.1 and 3.5 of the
Anti-Dumping Agreement, by failing to undertake a causation analysis that was based
on an objective examination of positive evidence.
d. With respect to the European Union's claims concerning Aceitunas Guadalquivir's final
subsidy margin and countervailing duty rate calculation:
i. the USDOC acted inconsistently with Article VI:3 of the GATT 1994 because, by relying
on the volume of Aceitunas Guadalquivir's raw olive purchases reported in its response

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to the initial 4 August 2017 questionnaire to determine Aceitunas Guadalquivir's final
subsidy margin and countervailing duty rate, the USDOC did not ensure, and take the
necessary steps to ascertain as accurately as possible the amount of subsidization
bestowed on the investigated products;
ii. the USDOC acted inconsistently with Article VI:3 of the GATT 1994 because the USDOC
relied upon the margin of subsidization incorrectly determined for
Aceitunas Guadalquivir in its determination of the "all others" rate of countervailing
duties imposed on exporters of ripe olives that were not individually investigated;
iii. given our findings at paragraphs 8.1. d.i and ii, the Panel declines to make further
findings that the same USDOC actions are also inconsistent with Articles 10, 19.1,
19.3, 19.4 and 32.1 of the SCM Agreement;
iv. the USDOC acted inconsistently with Article 12.1 of the SCM Agreement because the
USDOC failed to notify the respondents that the USDOC required information regarding
the volume of purchases of raw olives processed into ripe olives; and
v. the USDOC acted inconsistently with Article 12.8 of the SCM Agreement because the
USDOC failed to inform interested parties before the final determination that the
volume of purchases of raw olives processed into ripe olives was an "essential fact
under consideration".
8.2. Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment. We c onclude that, to the extent that the measures at issue are
inconsistent with the GATT 1994, the SCM Agreement and Anti -Dumping Agreement, they have
nullified or impaired benefits accruing to the European Union under that agreement.
8.3. Pursuant to Article 19.1 of the DSU, we recommend that the United States bring its measures
into conformity with its obligations under the GATT 1994, the SCM Agreement, and the
Anti-Dumping Agreement.