CHINA – MEASURES IMPOSING ANTI-DUMPING DUTIES ON HIGH-PERFORMANCE STAINLESS STEEL SEAMLESS TUBES ("HP-SSST") FROM JAPAN AB-2015-4 CHINA – MEASURES IMPOSING ANTI-DUMPING DUTIES ON HIGH-PERFORMANCE STAINLESS STEEL SEAMLESS TUBES ("HP-SSST") FROM THE EUROPEAN UNION AB-2015-5
Document: CHINA – MEASURES IMPOSING ANTI-DUMPING DUTIES ON HIGH-PERFORMANCE STAINLESS STEEL SEAMLESS TUBES ("HP-SSST") FROM THE EUROPEAN UNION AB-2015-5 Reports of the Appellate Body Note: The Appellate Body is issuing these Reports in th e form of a single document constituting two separate Appellate Body Reports: WT/DS454/AB/R; and WT/DS460/AB/R. The cover page, preliminary pages, sections 1-4, 5.3, the subsecti ons of section 5.5 that are not attributed below to only DS454 or DS460, and the annexes contained in the Addendum (document WT/DS454/AB/R/Add.1, WT/DS460/AB/R/Add.1) are common to both Reports. The page header throughout the document bears the two document symbols WT/DS454/AB/R and WT/DS460/AB/R, with the following exceptions: sections 5.5.2.1 and 5.5.3.1.2, which bear the document symbol for the Appellate Body Report WT/DS454/AB/R; and sections 5.1, 5.2, 5.4, 5.5.1.2, and 5.6, which bear the document symbol for the Appellate Body Report WT/DS460/AB/R. Finally, Section 6, on
Date: 14 October 2015
Document codes: WT/DS454/AB/R; WT/DS460/AB/R; WT/DS454/AB/R; WT/DS460/AB/R.; WT/DS454/AB/R/Add.1
Complainant: Japan
Respondent: China
Third parties: EU, India, South Korea, Russia, U.S., Turkey, Saudi Arabia
Dispute stage: Appellate Body
Agreements cited: Art. 3.1, 3.2, 3.4, 3.5, 6.5, 6.8, 6.9, 6.5.1, 7.4, 12.2, 12.2.2  Anti-dumpingArt. VI  GATT 1994

CHINA – MEASURES IMPOSING ANTI-DUMPING DUTIES ON
HIGH-PERFORMANCE STAINLESS STEEL SEAMLESS TUBES ("HP-SSST")
FROM JAPAN
AB-2015-4
CHINA – MEASURES IMPOSING ANTI-DUMPING DUTIES ON
HIGH-PERFORMANCE STAINLESS STEEL SEAMLESS TUBES ("HP-SSST")
FROM THE EUROPEAN UNION
AB-2015-5
Reports of the Appellate Body
Note:
The Appellate Body is issuing these Reports in th e form of a single document constituting two
separate Appellate Body Reports: ; and The cover page,
preliminary pages, sections 1-4, 5.3, the subsecti ons of section 5.5 that are not attributed below
to only DS454 or DS460, and the annexes contained in the Addendum (document
, ) are common to both Reports. The page header
throughout the document bears the two document symbols and ,
with the following exceptions: sections 5.5.2.1 and 5.5.3.1.2, which bear the document symbol for
the Appellate Body Report ; and sections 5.1, 5.2, 5.4, 5.5.1.2, and 5.6, which
bear the document symbol for the Appellate Body Report Finally, Section 6, on
pages JPN-103 and JPN-104, bears the document symbol for and contains the Appellate Body's
conclusions and recommendation in the Appellate Body Report ; and Section 6, on
pages EU-105 to EU-107, bears the document sy mbol for and contains the Appellate Body's
conclusions and recommendation in the Appellate Body Report
 •

ABBREVIATIONS USED IN THESE REPORTS
Abbreviation Description
Anti-Dumping
Agreement
Agreement on Implementation of Article VI of the General Agreement on
Tariffs and Trade 1994
BCI business confidential information
BCI Procedures Additional Working Procedures of the Panels Concerning Business
Confidential Information (contained in Annex A-2 to the Panel Reports)
complainants Japan and the European Union
COP cost of production
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of
Disputes
EU Panel Report Panel Report, China – Measures Imposing Anti-Dumping Duties on High-
Performance Stainless Steel Seamless Tubes ("HP-SSST") from the
European Union, WT/DS460/R, Add.1 and Corr.1
European Union's
panel request
Request for the Establishment of a Panel by the European Union,
WT/DS460/4, 16 August 2013
GAAP generally accepted accounting principles
GATT 1994 General Agreement on Tariffs and Trade 1994
HP-SSST high-performance stainless steel seamless tubes
Japan Panel Report Panel Report, China – Measures Imposing Anti-Dumping Duties on
High-Performance Stainless Steel Seamless Tubes ("HP-SSST") from
Japan, WT/DS454/R and Add.1
Japan's panel request Request for the Establishment of a Panel by Japan, WT/DS454/4,
11 April 2013
Kobe Kobe Special Tube Co., Ltd.
MOFCOM Ministry of Commerce of the People's Republic of China
Panel Reports Japan Panel Report and EU Panel Report
petitioners jointly, Jiangsu Wujin Stainless Steel Pipe Group Co., Ltd. and Changshu
Walsin Specialty Steel Co., Ltd.
POI period of investigation
SCM Agreement Agreement on Subsidies and Countervailing Measures
SG&A administrative, selling and general
SMI Sumitomo Metal Industries, Ltd.
SMST Salzgitter Mannesmann Stainless Tubes
Tubacex Tubacex Tubos Inoxidables, S.A.
Working Procedures Working Procedures for Appellate Review, WT/AB/WP/6, 16 August 2010
WTO World Trade Organization
WT/DS454/AB/R • WT/DS460/AB/R

PANEL EXHIBITS CITED IN THESE REPORTS
Exhibit Abbreviation
(if any) Description
CHN-5-EN (BCI)
EU-10 (BCI)
SMST's Dumping
Questionnaire
Response
Excerpts of the narrative of SMST's response to MOFCOM's
dumping questionnaire of 21 November 2011
CHN-10-CH (BCI)
CHN-10-EN (BCI)
EU-14 (BCI)
SMST's
Supplemental
Dumping
Questionnaire
Response
Excerpts of the narrative of SMST's response to MOFCOM's
supplemental dumping questionnaire of 20 February 2012
CHN-11-EN MOFCOM's
Verification
Notification to
SMST
Notification from MOFCOM to SMST concerning relevant issues for
the on-site verification of 3 May 2012
CHN-12-EN (BCI) MOFCOM's
Preliminary
Dumping Disclosure
to SMST
Letter dated 9 May 2012 from MOFCOM to SMST concerning
Disclosure of Basic Facts relied upon in the Dumping Part of the
Preliminary Determination concerning Certain High-performance
Stainless Steel Seamless Tubes
CHN-16-EN (BCI) Objections as to the accuracy of English translations of exhibits
attached to the first written submissions of Japan and/or the
European Union to the Panel
CHN-19-EN (BCI) Updated English version of Tabl e 6 annexed to SMST's Dumping
Questionnaire Response
CHN-20-CH (BCI)
CHN-20-EN (BCI)
SMI's Injury
Questionnaire
Response
Extract (question 8) of the narrative of SMI's response to
MOFCOM's injury questionnaire
EU-23-EN MOFCOM's
Verification
Disclosure to SMST
MOFCOM, High-performance Stainless Steel Seamless Tubes
Antidumping Investigation – Disclosure of Basic Verification
Facts, 25 June 2012
EU-25-CH
EU-25-EN
MOFCOM's Final
Dumping Disclosure
to SMST
MOFCOM, High-performance Stainless Steel Seamless Tubes
Antidumping Investigation – Dumping Margin Calculation
Disclosure before Final Determination, 26 September 2012
EU-27-CH
EU-27-EN
MOFCOM's Final
Dumping Disclosure
to the EU
Annex, Government Disclosure pr ior to the Anti-Dumping Final
Determination on Certain High -performance Stainless Steel
Seamless Tubes, 26 September 2012
EU-28-CH (BCI)
EU-28-EN (BCI)
SMST's Comments
on Final Dumping
Disclosure
Comments of the SMST on SMST Final Dumping Disclosure of
8 October 2012
JPN-1-CH
JPN-1-EN
EU-29
MOFCOM's Final
Determination
Notice
MOFCOM, Announcement No. 72 of 2012 on the Final Ruling of
the Anti-dumping Case against Imports of Certain High-
performance Stainless Steel Seamless Tubes Originated in the EU
and Japan, 8 November 2012
JPN-2-CH
JPN-2-EN
EU-30
MOFCOM's Final
Determination
Final Determination Notice, Appendix: Final Determination in the
Anti-dumping Investigation on Imports of Certain High-
performance Stainless Steel Seamless Tubes from the EU and
Japan
JPN-3-CH
JPN-3-EN
EU-1
Petition by the PRC
Industry
Petition by the PRC Industry of Certain High-performance
Stainless Steel Seamless Tubes for Anti-dumping Investigation on
Imports of Certain High-perform ance Stainless Steel Seamless
Tubes Originating in Japan and the EU, 15 July 2011
JPN-6-CH
JPN-6-EN
EU-17
MOFCOM's
Preliminary
Determination
Notice
MOFCOM, Announcement No. 21 of 2012 on Releasing the
Preliminary Ruling on Anti-dumping Investigation on Imports of
Certain High-performance Stainl ess Steel Seamless Tubes from
the EU and Japan, 8 May 2012
WT/DS454/AB/R • WT/DS460/AB/R

Exhibit Abbreviation
(if any) Description
JPN-7-CH
JPN-7-EN
EU-18
MOFCOM's
Preliminary
Determination
Preliminary Determination Notice, Appendix: Preliminary
Determination in the Anti-dumping Investigation on Imports of
Certain High-performance Stainl ess Steel Seamless Tubes from
the EU and Japan
JPN-18 (BCI) Letter dated 9 May 2012 from MOFCOM to SMI on the Disclosure
of Basic Facts upon Which the Preliminary Dumping
Determination in the Anti-dumping Investigation on Imports of
Certain High-performance Stai nless Steel Seamless Tubes is
Based
JPN-20 (BCI) Letter 26 September 2012 from MOFCOM to SMI on the
Disclosure of Basic Facts upon Which the Final Dumping
Determination in the Anti-dumping Investigation on Imports of
Certain High-performance Stai nless Steel Seamless Tubes is
Based
JPN-23-EN
EU-24
MOFCOM's Injury
Disclosure
MOFCOM, Notice on Information Disclosure Concerning Industry
Injury Investigation in the Anti-dumping Investigation on Imports
of Certain High-performance Stainless Steel Seamless Tubes from
the EU and Japan, 7 August 2012
JPN-25-EN Request for Considering Public Interest in the Anti-Dumping
Investigation on Certain High -Performance Stainless Steel
Seamless Tubes by Sumitomo Metal Industries, Ltd. and Kobe
Special Tube Co., Ltd., February 2012
JPN-29
EU-32
 Translation exhibit – Comments on Panel Exhibit CHN-16-EN
(BCI)

CASES CITED IN THESE REPORTS
Short Title Full Case Title and Citation
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
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon,
WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, p. 3327
Brazil – Desiccated
Coconut
Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut,
WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, p. 167
Brazil – Retreaded Tyres Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres,
WT/DS332/AB/R, adopted 17 December 2007, DSR 2007:IV, p. 1527
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 – Aircraft
(Article 21.5 – Brazil)
Appellate Body Report, Canada – Measures Affecting the Export of Civilian Aircraft
– Recourse by Brazil to Article 21.5 of the DSU, WT/DS70/AB/RW, adopted
4 August 2000, DSR 2000:IX, p. 4299
Canada – Periodicals Appellate Body Report, Canada – Certain Measures Concerning Periodicals,
WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, p. 449
Canada – Renewable
Energy /
Canada – Feed-in Tariff
Program
Appellate Body Reports, Canada – Certain Measures Affecting the Renewable Energy
Generation Sector / Canada – Measures Relating to the Feed-in Tariff Program,
WT/DS412/AB/R / WT/DS426/AB/R, adopted 24 May 2013, DSR 2013:I, p. 7
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
WT/DS454/AB/R • WT/DS460/AB/R

Short Title Full Case Title and Citation
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 – 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, circulated to WTO Members 13 February 2015
[appeal in progress]
China – Rare Earths Appellate Body Reports, China – Measures Related to the Exportation of Rare Earths,
Tungsten, and Molybdenum, WT/DS431/AB/R / WT/DS432/AB/R / WT/DS433/AB/R,
adopted 29 August 2014
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 Appellate Body Report, European Communities – Anti-Dumping Duties on Imports
of Cotton-Type Bed Linen from India, WT/DS141/AB/R, adopted 12 March 2001,
DSR 2001:V, p. 2049
EC – Bed Linen
(Article 21.5 – India)
Appellate Body Report, European Communities – Anti-Dumping Duties on Imports
of Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the DSU by
India, WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, p. 965
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 – 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, EC 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 – Salmon (Norway) Panel Report, European Communities – Anti-Dumping Measure on Farmed Salmon
from Norway, WT/DS337/R, adopted 15 January 2008, and Corr.1, DSR 2008:I,
p. 3
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 Appellate Body Report, European Communities – Anti-Dumping Duties on
Malleable Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/AB/R, adopted
18 August 2003, DSR 2003:VI, p. 2613
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
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
WT/DS454/AB/R • WT/DS460/AB/R

Short Title Full Case Title and Citation
Japan – Agricultural
Products II
Appellate Body Report, Japan – Measures Affecting Agricultural Products,
WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, p. 277
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
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 – Steel Pipes and
Tubes
Panel Report, Mexico – Anti-Dumping Duties on Steel Pipes and Tubes from
Guatemala, WT/DS331/R, adopted 24 July 2007, DSR 2007:IV, p. 1207
Peru – Agricultural
Products
Appellate Body Report, Peru – Additional Duty on Imports of Certain Agricultural
Products, WT/DS457/AB/R and Add.1, adopted 31 July 2015
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
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 – 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
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 – 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 – Corrosion-Resistant
Steel Sunset Review
Panel Report, United States – Sunset Review of Anti-Dumping Duties on
Corrosion-Resistant Carbon Steel Flat Products from Japan, WT/DS244/R, adopted
9 January 2004, as modified by Appellate Body Report WT/DS244/AB/R,
DSR 2004:I, p. 85
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
US – Countervailing and
Anti-Dumping Measures
(China)
Panel Report, United States – Countervailing and Anti-Dumping Measures on
Certain Products from China, WT/DS449/R and Add.1, adopted 22 July 2014, as
modified by Appellate Body Report WT/DS449/AB/R
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
Measures (China)
Appellate Body Report, United States – Countervailing Duty Measures on Certain
Products from China, WT/DS437/AB/R, adopted 16 January 2015
US – FSC Appellate Body Report, United States – Tax Treatment for "Foreign Sales
Corporations", WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III, p. 1619
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross-Border
Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April
2005, DSR 2005:XII, p. 5663 (Corr.1, DSR 2006:XII, p. 5475)
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
WT/DS454/AB/R • WT/DS460/AB/R

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 – 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 – Section 211
Appropriations Act
Appellate Body Report, United States – Section 211 Omnibus Appropriations Act of
1998, WT/DS176/AB/R, adopted 1 February 2002, DSR 2002:II, p. 589
US – Shrimp Appellate Body Report, United States – Import Prohibition of Certain Shrimp and
Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII,
p. 2755
US – Steel Safeguards Appellate Body Report, United States – Definitive Safeguard Measures on Imports
of Certain Steel Products, WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R,
WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R,
WT/DS259/AB/R, adopted 10 December 2003, DSR 2003:VII, p. 3117
US – Tyres (China) Appellate Body Report, United States – Measures Affecting Imports of Certain
Passenger Vehicle and Light Truck Tyres from China, WT/DS399/AB/R, adopted
5 October 2011, DSR 2011:IX, p. 4811
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
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
WT/DS454/AB/R • WT/DS460/AB/R

APPELLATE BODY

China – Measures Imposing Anti-Dumping
Duties on High-Performance Stainless
Steel Seamless Tubes ("HP-SSST") from
Japan (DS454)

China – Measures Imposing Anti-Dumping
Duties on High-Performance Stainless
Steel Seamless Tubes ("HP-SSST") from
the European Union (DS460)

Japan,
 Appellant
1/Appellee2/Third Participant3
China,
 Appellant4/Other Appellant5/Appellee6
European Union,
 Other Appellant
7/Appellee8/Third Participant9

India, Third Participant
Korea, Third Participant
Russia, Third Participant
Saudi Arabia, Third Participant
Turkey, Third Participant
United States, Third Participant
AB-2015-4

AB-2015-5

Appellate Body Division:

Van den Bossche, Presiding Member
Graham, Member
Ramírez-Hernández, Member

1 INTRODUCTION
1.1. Japan and China each appeals certain issues of law and legal interpretations developed in the
Panel Report, China – Measures Imposing Anti-Dumping Duties on High-Performance Stainless
Steel Seamless Tubes ("HP-SSST") from Japan , WT/DS454/R
10 (Japan Panel Report); and China
and the European Union each appeals certain issues of law and legal interpretations developed in
the Panel Report, China – Measures Imposing Anti-Dumping Duties on High-Performance Stainless
Steel Seamless Tubes ("HP-SSST") from the European Union, WT/DS460/R11 (EU Panel Report).12
1.2. On 24 May 2013 and 30 August 2013, respectively, two panels were established to consider
complaints by Japan 13 and the European Union 14 (the complainants) with respect to China's

1 In DS454 only.
2 In DS454 only.
3 In DS460 only.
4 In DS460 only.
5 In DS454 only.
6 In DS454 and DS460.
7 In DS460 only.
8 In DS460 only.
9 In DS454 only.
10 And Addendum thereto, WT/DS454/R/Add.1, 13 February 2015.
11 And Corr. 1 and Addendum thereto, WT/DS460/R/Add.1, 13 February 2015.
12 The Panel issued its findings in the form of a single document containing two separate reports. The
cover page, preliminary pages, descriptive part, sections 1-6, 7.1-7.2, and 7.5-7.11, and the Annexes
contained in the Addendum are common to both Panel Reports. Section 8.1 relates to the Japan Panel Report
WT/DS454/R only; and Sections 7.3-7.4 and 8.2 relate to the EU Panel Report WT/DS460/R only. We refer to
these two reports collectively as the "Panel Reports".
13 Request for the Establishment of a Panel by Japan, WT/DS454/4, 11 April 2013 (Japan's panel
request).
14 Request for the Establishment of a Panel by the European Union, WT/DS460/4, 16 August 2013
(European Union's panel request).
WT/DS454/AB/R • WT/DS460/AB/R

measures imposing anti-dumping duties on imports of certain high-performance stainless steel
seamless tubes (HP-SSST) from Japan and the European Union.15
1.3. On 27 September 2013, after consultation with the parties, the Panel 16 adopted additional
working procedures concerning business confidential information (BCI Procedures). Following a
request for a preliminary ruling by the European Union, the Panel introduced modifications to the
BCI Procedures on 22 May 2014.17
1.4. China's measures at issue in these disputes are set forth in the Preliminary Determination 18
and the Final Determination 19 of the Ministry of Commerce of the People's Republic of China
(MOFCOM), including any annexes and amendments thereto.20 MOFCOM identified the scope of the
products under investigation as imports of certain HP-SSST from the European Union and Japan. 21
HP-SSST is mainly used in the manufacture of pr essurized components such as superheaters and
reheaters of supercritical and ultra-supercritical boilers.22 MOFCOM found that there are three main
types or grades of HP-SSST, which the Panel referred to as Grade A, Grade B, and Grade C,
respectively.
23
1.5. Both complainants requested the Panel to find that China, in the conduct of the anti-dumping
investigation at issue, acted inconsistently with several provisions of the Agreement on
Implementation of Article VI of the Gene ral Agreement on Tariffs and Trade 1994
(Anti-Dumping Agreement), as well as Article VI of the General Agreement on Tariffs and Trade
1994 (GATT 1994). In particular, they requested the Panel to find that China acted contrary to the
provisions of the Anti-Dumping Agreement in its: (i) determination of injury; (ii) treatment of
certain confidential information provided by the applicants; (iii) alleged failure to disclose certain
essential facts; (iv) application of provisional measures; and (v) alleged provision of inadequate
information in its Final Determination Notice. In addition, the European Union requested the Panel
to find that China acted inconsistently with the Anti-Dumping Agreement in arriving at its
determination of dumping.
24
1.6. The Panel Reports were circulated to Members of the World Trade Organization (WTO) on
13 February 2015.25 In the Japan Panel Report, the Panel concluded that MOFCOM's determination
of injury is inconsistent with Articles 3.1, 3.2, 3.4, and 3.5 of the Anti-Dumping Agreement, for the
following reasons:
a. MOFCOM failed to account properly for differences in quantities when comparing the
price of Grade C subject imports with the domestic Grade C price in its price effects
analysis, contrary to Articles 3.1 and 3.2 of the Anti-Dumping Agreement;

15 On 29 July 2013, the Director-General composed the Panel to hear Japan's complaint in DS454. On
11 September 2013, the European Union and China agreed to compose the Panel to hear the European Union's
complaint in DS460 with the same persons hearing Japan's complaint. (Panel Reports, para. 1.5)
16 For ease of reference, we refer to the Panels in DS454 and DS460 collectively as the "Panel".
17 Panel Reports, para. 1.10 and Annex A-2.
18 Preliminary Determination Notice, 8 May 2012 (Panel Exhibits JPN-6-CH and JPN-6-EN, and EU-17);
and Preliminary Determination, 8 May 2012 (Panel Exhibits JPN-7-CH and JPN-7-EN, and EU-18).
19 Final Determination Notice, 8 November 2012 (Panel Exhibits JPN-1-CH and JPN-1-EN, and EU-29);
and Final Determination, 8 November 2012 (Panel Exhibits JPN-2-CH and JPN-2-EN, and EU-30).
20 Panel Reports, paras. 1.1 and 2.1. The period of investigation (POI) for the determination of dumping
was from 1 July 2010 to 30 June 2011, and the POI for the determination of injury was from 1 January 2008 to
30 June 2011. (MOFCOM's Preliminary Determination (Panel Exhibits JPN-7-EN and EU-18), internal p. 2)
21 MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and EU-30), internal p. 1.
22 MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and EU-30), internal pp. 19-20.
23 See Petition by the PRC Industry (Panel Exhibits JPN-3-CH and JPN-3-EN, and EU-1), internal
pp. 9-10; and MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and EU-30) internal pp. 23-28. Japan
argued before the Panel that Grade A is the least expensive and lowest grade product; Grade B is in the
middle, in terms of both price and grade; and Grade C is the most expensive and highest grade product. Due
to differences in the chemical and mechanical properties of these products, manufacturers of ultra-supercritical
boilers rely on Grades B and C, while Grade A is used mainly in supercritical boilers. (Japan's first written
24 Panel Reports, paras. 3.1-3.6.
25 On 17 September 2015, a correction to a clerical error in para. 8.9 of the EU Panel Report was
circulated in document WT/DS454/R/Corr.1, WT/DS460/R/Corr.1.
WT/DS454/AB/R • WT/DS460/AB/R

b. MOFCOM failed to evaluate properly the magnitude of the margin of dumping in
considering the impact of subject imports on the domestic industry, contrary to
Articles 3.1 and 3.4 of the Anti-Dumping Agreement;
c. MOFCOM improperly relied on the market sh are of subject imports, and on its flawed
price effects and impact analyses, in determining a causal link between subject imports
and material injury to the domestic industry, contrary to Articles 3.1 and 3.5 of the
Anti-Dumping Agreement; and
d. MOFCOM failed to ensure that injury caused by the decrease in apparent consumption
and the increase in production capacity was not attributed to subject imports, contrary
to Articles 3.1 and 3.5 of the Anti-Dumping Agreement.
26
1.7. The Panel, however, rejected Japan's claims under Articles 3.1, 3.2, 3.4, and 3.5 of the
Anti-Dumping Agreement that:
a. MOFCOM failed to consider whether Grade C subject imports had any price undercutting
effect on domestic Grade C products and improperly extended its findings of price
undercutting in respect of Grades B and C to the domestic like product as a whole,
contrary to Articles 3.1 and 3.2 of the Anti-Dumping Agreement; and
b. MOFCOM failed to undertake a segmented analysis and to weigh properly the positive
and negative injury factors when assessing the impact of subject imports on the
domestic industry, contrary to Articles 3.1 and 3.4 of the Anti-Dumping Agreement.27
1.8. The Panel concluded that MOFCOM allowed certain information supplied by the petitioners 28
to remain confidential without objectively assessing the "good cause" alleged or scrutinizing the
petitioners' showing of "good cause", contrary to Article 6.5 of the Anti-Dumping Agreement.29
1.9. The Panel also concluded that China acted inconsistently with Article 6.5.1 of the
Anti-Dumping Agreement by failing to require th e petitioners to provide sufficiently detailed
non-confidential summaries of information treated as confidential, or explanations as to why
summarization of this information was not possible.30
1.10. The Panel found that China acted inconsistently with Article 6.9 of the
Anti-Dumping Agreement by failing to disclose adequately essential facts in connection with:
a. the methodology used to calculate the margins of dumping for Sumitomo Metal
Industries, Ltd. (SMI) and Kobe Special Tube Co., Ltd. (Kobe); and
b. import prices, domestic prices, and price comparisons considered by MOFCOM in its
determination of injury.31
1.11. The Panel, however, rejected Japan's claim that China acted inconsistently with Article 6.9
of the Anti-Dumping Agreement by failing to disclose adequately essential facts in connection with:
a. the data underlying MOFCOM's determination of dumping in respect of SMI and Kobe;
and
b. the determination and the calculation of the dumping margins for all Japanese
companies other than SMI and Kobe.32

28 Jointly, Jiangsu Wujin Stainless Steel Pipe Group Co., Ltd. and Changshu Walsin Specialty Steel
Co., Ltd.
WT/DS454/AB/R • WT/DS460/AB/R

1.12. The Panel also rejected Japan's claim that MOFCOM's reliance on facts available to calculate
the dumping margin for all Japanese companies other than SMI and Kobe is inconsistent with
Article 6.8 and paragraph 1 of Annex II to the Anti-Dumping Agreement.
33
1.13. In the EU Panel Report, the Panel found that the European Union's claim under Article 2.2 of
the Anti-Dumping Agreement fell outside the Panel's terms of reference. 34 The Panel also found
that the European Union's claims under Article 2.2.1.1 of the Anti-Dumping Agreement
– pertaining to MOFCOM's use of data that: (i) allegedly were not in accordance with generally
accepted accounting principles (GAAP); (ii) did not reasonably reflect the costs associated with the
product under consideration; and (iii) were not historically utilized by Salzgitter Mannesmann
Stainless Tubes (SMST) – fell outside the Panel's terms of reference.
35
1.14. Turning to the European Union's claims that were within the Panel's terms of reference, the
Panel concluded that:
a. China acted inconsistently with Article 2.2.2 of the Anti-Dumping Agreement by failing to
determine an amount for administrative, selli ng and general (SG&A) costs for SMST on
the basis of actual data pertaining to production and sales in the ordinary course of trade
of the like product36; consequently, the Panel did not consider it necessary to rule on the
European Union's claims that China acted inco nsistently with Articles 2.2.1 and 2.2.1.1
of the Anti-Dumping Agreement37;
b. China acted inconsistently with Article 2.4 of the Anti-Dumping Agreement because
MOFCOM failed to address SMST's request for an adjustment to ensure a fair comparison
between the export price and the normal value for Grade C HP-SSST38;
c. China acted inconsistently with Article 6.7 and paragraph 7 of Annex I to the
Anti-Dumping Agreement because MOFCOM rejected SMST's request for rectification
only on the basis that it was not provided prior to the verification visit
39; and
d. MOFCOM's determination of injury is inconsiste nt with Articles 3.1, 3.2, 3.4, and 3.5 of
the Anti-Dumping Agreement because:
i. MOFCOM failed to account properly for differences in quantities when comparing the
price of Grade C subject imports with the domestic Grade C price in its price effects
analysis, contrary to Articles 3.1 and 3.2 of the Anti-Dumping Agreement;
ii. MOFCOM failed to evaluate properly the magnitude of the margin of dumping in
considering the impact of subject imports on the domestic industry, contrary to
Articles 3.1 and 3.4 of the Anti-Dumping Agreement;
iii. MOFCOM improperly relied on the market share of subject imports, and on its flawed
price effects and impact analyses, in determining a causal link between subject
imports and material injury to the domestic industry, contrary to Articles 3.1 and 3.5
of the Anti-Dumping Agreement; and
iv. MOFCOM failed to ensure that injury caused by the decrease in apparent
consumption and the increase in production capacity was not attributed to subject
imports, contrary to Articles 3.1 and 3.5 of the Anti-Dumping Agreement.40

33 Japan Panel Report, para. 8.2.b. The Panel made additional findings of inconsistency under
Articles 7.4, 12.2, and 12.2.2 of the Anti-Dumping Agreement (Japan Panel Report, paras. 8.1.e, 8.1.f, 8.2.d,
and 8.3), and consequential findings of inconsistency under Article 1 of the Anti-Dumping Agreement and
Article VI of the GATT 1994 (Japan Panel Report, para. 8.1.g). None of these findings have been appealed.
34 EU Panel Report, para. 8.9, as amended in document WT/DS454/R/Corr.1, WT/DS460/R/Corr.1.
35 EU Panel Report, para. 8.9.
37 EU Panel Report, para. 8.8.
WT/DS454/AB/R • WT/DS460/AB/R

1.15. The Panel, however, rejected the European Union's claims under Articles 3.1, 3.2, 3.4,
and 3.5 of the Anti-Dumping Agreement that:
a. MOFCOM failed to consider whether Grade C subject imports had any price undercutting
effect on domestic Grade C products and improperly extended its findings of price
undercutting in respect of Grades B and C to the domestic like product as a whole,
contrary to Articles 3.1 and 3.2 of the Anti-Dumping Agreement; and
b. MOFCOM failed to undertake a segmented analysis and to weigh properly the positive
and negative injury factors when assessing the impact of subject imports on the
domestic industry, contrary to Articles 3.1 and 3.4 of the Anti-Dumping Agreement.41
1.16. The Panel also rejected the European Union's claims that China acted inconsistently with
Article 6.8 and paragraphs 3 and 6 of Annex II to the Anti-Dumping Agreement by applying facts
available in respect of certain information that SMST sought to rectify at the verification. 42
Likewise, the Panel rejected the European Union's claims that China's reliance on facts available to
calculate the dumping margin for all EU companies other than SMST and Tubacex Tubos
Inoxidables, S.A. (Tubacex) is inconsistent with Article 6.8 and paragraph 1 of Annex II to the
Anti-Dumping Agreement.43
1.17. The Panel concluded that MOFCOM allowed certain information supplied by the petitioners to
remain confidential without objectively assessing the "good cause" alleged or scrutinizing the
petitioners' showing of "good cause", contrary to Article 6.5 of the Anti-Dumping Agreement.44
1.18. Similarly, the Panel found that China ac ted inconsistently with Article 6.5.1 of the
Anti-Dumping Agreement by failing to require th e petitioners to provide sufficiently detailed
non-confidential summaries of information treated as confidential, or explanations as to why
summarization of that information was not possible.45
1.19. The Panel also concluded that China acted inconsistently with Article 6.9 of the
Anti-Dumping Agreement by failing to disclose adequately essential facts in connection with:
a. the methodology used to calculate the margins of dumping for SMST and Tubacex; and
b. import prices, domestic prices, and price comparisons considered by MOFCOM in its
determination of injury.46
1.20. The Panel rejected the European Union's claims that China acted inconsistently with
Article 6.9 of the Anti-Dumping Agreement by failing to disclose adequately essential facts in
connection with:
a. the data underlying MOFCOM's determination of dumping in respect of SMST and
Tubacex; and
b. the determination and the calculation of the dumping margins for all EU companies other
than SMST and Tubacex.
47
1.21. In both the Japan and EU Panel Reports, the Panel concluded that, pursuant to Article 3.8 of
the Understanding on Rules and Procedures Govern ing the Settlement of Disputes (DSU), to the
extent that China acted inconsistently with certain provisions of the Anti-Dumping Agreement,
China nullified or impaired benefits accruing to Japan and the European Union under that

47 EU Panel Report, para. 8.7.d. The Panel made additional findings of inconsistency under Articles 7.4,
12.2, and 12.2.2 of the Anti-Dumping Agreement (EU Panel Report, paras. 8.6.h, 8.6.i, 8.7.e, and 8.8), and
consequential findings of inconsistency under Article 1 of the Anti-Dumping Agreement and Article VI of the
GATT 1994 (EU Panel Report, para. 8.6.j). None of these findings have been appealed.
WT/DS454/AB/R • WT/DS460/AB/R

Agreement.48 Accordingly, pursuant to Article 19.1 of the DSU, the Panel recommended that China
bring its measures into conformity with its obligations under the Anti-Dumping Agreement.49
1.22. On 20 May 2015, Japan notified the Dispute Settlement Body (DSB) of its intention to
appeal50 certain issues of law covered in the Japan Panel Report and certain legal interpretations
developed by the Panel, and filed a Notice of Appeal and an appellant's submission. 51 On
26 May 2015, China notified the DSB of its intention to appeal 52 certain issues of law covered in
the Japan Panel Report and certain legal interpretations developed by the Panel, and filed a Notice
of Other Appeal and an other appellant's submission.53
1.23. On 20 May 2015, China notified the DSB of its intention to appeal 54 certain issues of law
covered in the EU Panel Report and certain legal interpretations developed by the Panel, and filed
a Notice of Appeal and an appellant's submission.
55 On 26 May 2015, the European Union notified
the DSB of its intention to appeal 56 certain issues of law covered in the EU Panel Report and
certain legal interpretations developed by the Panel, and filed a Notice of Other Appeal and an
other appellant's submission.
57
1.24. By letter dated 28 May 2015, the Appellate Bo dy informed the participants and third parties
that it intended to consolidate the appellate pr oceedings in these disputes, and gave them an
opportunity to comment. No objections were received. By letter dated 1 June 2015, the
Appellate Body informed the participants and third parties that, in the interests of "fairness and
orderly procedure", as referred to in Rule 16(1) of the Working Procedures for Appellate Review 58
(Working Procedures), the appellate proceedings in respect of the aforementioned appeals would
be consolidated due to the significant overlap in the content of these disputes for which the
appeals were filed on the same date. A single Appe llate Body Division was selected to hear both
appeals, and a single oral hearing was held by the Division.
1.25. On 8 June 2015, Japan, the European Union
59, and China each filed an appellee's
submission.60
1.26. On 10 June 2015, the United States filed a third participant's submission. 61 On the same
day, India, Korea, Russia, Saudi Arabia, and Turkey each notified its intention to appear at the oral
hearing as a third participant.62

50 Pursuant to Articles 16.4 and 17 of the DSU.
51 Pursuant to Rules 20 and 21, respectively, of the Working Procedures for Appellate Review,
WT/AB/WP/6, 16 August 2010 (Working Procedures).
52 Pursuant to Articles 16.4 and 17 of the DSU.
53 Pursuant to Rule 23 of the Working Procedures.
54 Pursuant to Articles 16.4 and 17 of the DSU.
55 Pursuant to Rules 20 and 21, respectively, of the Working Procedures.
56 Pursuant to Articles 16.4 and 17 of the DSU.
57 Pursuant to Rule 23 of the Working Procedures.
58 WT/AB/WP/6, 16 August 2010.
59 In its appellee's submission, the European Union referred to Article 5 of the DSU that provides that
good offices, conciliation, or mediation may be requested and take place "at any time". The European Union
suggested that a "procedural possibility" that it could envisage would be to invite informally the participants to
"indicate whether or not they would be prepared to voluntarily participate in a short informal meeting". For the
European Union, the purpose of the meeting would be to ascertain whether the parties would be able to reach
an agreement concerning the Panel's findings under Article 2.2.2 of the Anti-Dumping Agreement, "or indeed
any other matter pending in this appeal". (European Union's appellee's submission, para. 215) At the oral
hearing, China was given an opportunity to comment.
60 Pursuant to Rules 22 and 23(4) of the Working Procedures.
61 Pursuant to Rule 24(1) of the Working Procedures.
62 Pursuant to Rule 24(2) of the Working Procedures.
WT/DS454/AB/R • WT/DS460/AB/R

1.27. On 15 June 2015, in response to a letter from the Division specifying the dates of the oral
hearing in these proceedings, Japan sent a letter to the Division indicating that it had concerns
regarding the decision to hold the oral hearing on days 71-72 of these proceedings.
63 On 16 June
2015, the Division received a letter from the European Union, in response to Japan's letter, stating
that the European Union assumed that, pursuant to Article 17.5 of the DSU, the Appellate Body
would inform the DSB, in due course, of the reasons for the delay. 64 On 17 June 2015, the
Appellate Body received a communication from China indicating that it did not have any
substantive comments on the procedures adopted by the Division in these appeals. On the same
date, the Appellate Body received a letter from Indi a indicating that it did not consider that more
specific explanations regarding the Appellate Body's timetable were necessary.
1.28. By letter dated 18 June 2015, the Division hearing these appeals indicated that it would
inform the DSB of the reasons for the delay by letter within two months of the date of the filing of
these appeals. The Division added that, in that letter, or as soon as possible thereafter, it would
provide an estimated date of circulation of the Appellate Body Reports in these disputes.
1.29. By letter dated 19 July 2015, the Chair of the Appellate Body notified the Chair of the DSB
that the Appellate Body would not be able to circulate its Reports by the end of the 60-day period,
or within the 90-day timeframe provided for in Article 17.5 of the DSU, due to the number and
complexity of the issues raised in these appeals and parallel proceedings, scheduling issues arising
from the overlap in the composition of the Divisions hearing the different appeals, and shortage of
staff in the Appellate Body Secretariat. He further indicated that, due to a pending request for a
change in the working schedule in the parallel appe llate proceedings in DS381, the Appellate Body
was not, at that time, in a position to inform the DSB of the estimated date of circulation of the
Appellate Body Reports in DS454 and DS460. The Chair indicated, however, that the
Appellate Body expected that matter to be resolv ed soon and that the Appellate Body would then
inform the DSB of the estimated date of circulation.
1.30. Subsequently, after the working schedule in DS381 was decided, the Chair of the
Appellate Body informed the Chair of the DS B, by letter dated 28 July 2015, that the
Appellate Body Reports in these appeals would be circulated no later than 14 October 2015.
1.31. The oral hearing in these appeals was held on 30-31 July 2015. The participants and two
third participants (Turkey and the United States) made oral statements. The participants and third
participants responded to questions posed by the Members of the Appellate Body Division hearing
these appeals.
2 ARGUMENTS OF THE PARTICIPANTS
2.1. The claims and arguments of the participan ts are reflected in the executive summaries of
their written submissions provided to the Appellate Body.
65 The Notices of Appeal and
Other Appeal, and the executive summaries of the participants' claims and arguments, are
contained in Annexes A and B of the Addendum to these Reports, WT/DS454/AB/R/Add.1,

63 Japan explained that, given the procedural history of these disputes and current workload of the
Appellate Body, Japan was of the view that the appellate proceedings should not be further delayed. Japan
requested the Appellate Body to provide the participants and third participants with the reasons for the
eventual delay in the circulation of the Appellate Body Reports in these proceedings, together with an estimate
of the period within which it would circulate its Reports.
64 The European Union clarified that it did not seek from the Appellate Body any further specific
explanations regarding the timetable for the above appeal proceedings. The European Union stated that it was
confident that the Appellate Body would do what it could to comply with all the provisions of the DSU, including
Article 17.5, taking into account the resource constraints upon it.
65 Pursuant to the Appellate Body communication on "Executive Summaries of Written Submissions in
Appellate Proceedings" and "Guidelines in Respect of Executive Summaries of Written Submissions in Appellate
Proceedings". (WT/AB/23, 11 March 2015)
WT/DS454/AB/R • WT/DS460/AB/R

3 ARGUMENTS OF THE THIRD PARTICIPANTS
3.1. The arguments of the United States, as th ird participant, are reflected in the executive
summary of its written submission provided to the Appellate Body 66, contained in Annex C of the
Addendum to these Reports, WT/DS454/AB/R/Add.1, WT/DS460/AB/R/Add.1.
4 ISSUES RAISED IN THESE APPEALS
4.1. The following issues are raised in these appeals:
a. with respect to the Panel's findings regarding Articles 2.2.1 and 2.2.2 of the
Anti-Dumping Agreement:
i. whether the Panel erred in finding that the European Union's panel request, as it
relates to Articles 2.2.1 and 2.2.2, complies with the requirement of Article 6.2 of the
DSU to provide a brief summary of the legal basis of the complaint sufficient to
present the problem clearly and, consequently, in finding that the European Union's
claims under these provisions were within the Panel's terms of reference (raised in
DS460 by China);
ii. whether the Panel erred in its interpretation and application of Article 2.2.2 in finding
that China failed to determine an SG&A amount for SMST on the basis of actual data
pertaining to production and sales in the ordinary course of trade of the like product
(raised in DS460 by China); and
iii. whether, in reaching its finding under Article 2.2.2, the Panel acted inconsistently
with its obligations under Articles 11 and 12.7 of the DSU and Article 17.6(i) of the
Anti-Dumping Agreement (raised in DS460 by China);
b. whether the Panel erred in finding that China acted inconsistently with Article 6.7 and
paragraph 7 of Annex I to the Anti-Dumping Agreement by rejecting SMST's request for
rectification of certain information only on the basis that it was not provided prior to
verification (raised in DS460 by the European Union);
c. with respect to the Panel's finding that China acted inconsistently with Article 6.5 of the
Anti-Dumping Agreement:
i. whether the Panel erred in its interpretation and application of Article 6.5 in finding
that China acted inconsistently with that provision because MOFCOM permitted the
full text of the reports in appendix V and appendix VIII to the petition, appendix 59
to the petitioners' supplemental evidence of 1 March 2012, and the appendix to the
petitioners' supplemental evidence of 29 Ma rch 2012, to remain confidential without
objectively assessing the petitioners' showing of "good cause" (raised in DS454 and
DS460 by China); and
ii. whether the Panel applied an erroneous stan dard of review an d failed to make an
objective assessment of the facts contrary to the requirements of Article 11 of the
DSU and Article 17.6(i) of the Anti-Dumping Agreement (raised in DS454 and DS460
by China);
d. with respect to the Panel's findings under Article 6.9 of the Anti-Dumping Agreement:
i. whether the Panel erred in its interpretation and application of Article 6.9 in rejecting
the European Union's claim that China acted inconsistently with that provision
because MOFCOM failed to disclose adequately the essential facts in connection with
the data underlying MOFCOM's determination of dumping concerning SMST and
Tubacex (raised in DS460 by the European Union); and

66 Pursuant to the Appellate Body communication on "Executive Summaries of Written Submissions in
Appellate Proceedings" and "Guidelines in Respect of Executive Summaries of Written Submissions in Appellate
Proceedings". (WT/AB/23, 11 March 2015)
WT/DS454/AB/R • WT/DS460/AB/R

ii. whether the Appellate Body can complete the legal analysis and find that China acted
inconsistently with Article 6.9 because MOFCOM failed to disclose adequately the
essential facts in connection with the data underlying MOFCOM's determination of
dumping concerning SMST and Tubacex (raised in DS460 by the European Union);
e. with respect to the Panel's findings under Articles 3.1 and 3.2 of the
Anti-Dumping Agreement:
i. whether the Panel erred in its interpretation of Article 3.2 in finding that, in its
consideration of whether there has been a significant price undercutting, an
investigating authority may consider simply whether dumped imports sell at lower
prices than comparable domestic products (raised in DS454 by Japan and in DS460
by the European Union);
ii. whether the Panel erred by rejecting Japan's and the European Union's claims that
MOFCOM acted inconsistently with Articles 3.1 and 3.2 by failing to consider whether
Grade C subject imports had any price undercutting effect on domestic Grade C
products, in the sense of placing downward pressure on those domestic prices by
being sold at lower prices (raised in DS454 by Japan and in DS460 by the
European Union);
iii. whether the Appellate Body can complete the legal analysis and find that MOFCOM's
assessment of whether there had been a significant price undercutting by Grade C
imports from Japan, as compared with the price of domestic Grade C, is inconsistent
with Articles 3.1 and 3.2 (raised in DS454 by Japan and in DS460 by the
European Union); and
iv. whether the Panel erred by rejecting the European Union's claim that MOFCOM acted
inconsistently with Articles 3.1 and 3.2 by improperly extending its finding of price
undercutting in respect of Grades B and C to the domestic like product as a whole,
including domestic Grade A (raised in DS460 by the European Union);
f. with respect to the Panel's findings under Articles 3.1 and 3.4 of the
Anti-Dumping Agreement:
i. whether the Panel erred in finding that Japan's claim, that MOFCOM failed to
examine whether dumped imports provided explanatory force for the state of the
domestic industry, fell outside the Panel's terms of reference (raised in DS454 by
Japan); and
ii. whether the Panel erred in rejecting Japan's and the European Union's claims that
MOFCOM acted inconsistently with Articles 3.1 and 3.4 because MOFCOM was
required to, but did not, undertake a segmented impact analysis (raised in DS454 by
Japan and in DS460 by the European Union);
g. with respect to the Panel's finding that China acted inconsistently with Articles 3.1
and 3.5 of the Anti-Dumping Agreement:
i. whether, in reaching its finding that MOFCOM improperly relied on the market share
of dumped imports in determining a causal link between dumped imports and injury
to the domestic industry, the Panel acted in consistently with Article 6.2 of the DSU
by addressing a claim by Japan that was outside the Panel's terms of reference
(raised in DS454 by China);
ii. whether, in reaching its finding that MOFCOM improperly relied on the market share
of dumped imports in determining a causal link between dumped imports and injury
to the domestic industry, the Panel acted inconsistently with Article 11 of the DSU
because it ruled on a matter that was not before it, or, in the alternative, made the
case for the complainant (raised in DS454 and DS460 by China);
WT/DS454/AB/R • WT/DS460/AB/R

iii. whether the Panel erred in finding that MO FCOM improperly relied on the market
share of dumped imports in determining a causal link between dumped imports and
injury to the domestic industry, and made no finding of cross-grade price effects
whereby price undercutting by Grade B and C imports might be shown to affect the
price of domestic Grade A HP-SSST (raised in DS454 and DS460 by China);
iv. whether the Panel erred in finding that China acted inconsistently with Articles 3.1
and 3.5 of the Anti-Dumping Agreement because MOFCOM failed to ensure that the
injury caused by the decrease in apparent consumption and the increase in domestic
production capacity was not attributed to the dumped imports (raised in DS454 and
DS460 by China); and
v. whether the Panel acted inconsistently with Article 11 of the DSU in finding that the
complainants had not advanced independent claims concerning MOFCOM's price
effects and impact analyses, under Articles 3.1 and 3.5 of the Anti-Dumping
Agreement, other than those concerning MOFCOM's reliance on market shares and
MOFCOM's non-attribution analysis (raised in DS454 by Japan and in DS460 by the
European Union); and
h. with respect to the Panel's designation of business confidential information (BCI) and its
adoption of BCI Procedures, whether the Panel erred in its interpretation and application
of Articles 18.2 and 13.1 of the DSU and Articles 17.7 and 6.5 of the Anti-Dumping
Agreement, and, in particular, in finding th at, in the context of a dispute brought under
the Anti-Dumping Agreement, the phrase "confidential information" in Article 17.7 refers
to the confidential information previously examined by the investigating authority and
treated as confidential pursuant to Article 6. 5, and which is then provided to a dispute
settlement panel pursuant to Article 17.7 (raised in DS460 by the European Union).

5 ANALYSIS OF THE APPELLATE BODY
5.1 Data for SG&A amounts – Articles 2.2.1 and 2.2.2 of the Anti-Dumping Agreement
5.1. We begin with China's claims as they relate to the Panel's assessment of MOFCOM's
determination of dumping for SMST, one of the EU companies that were investigated. We recall, in
this regard, that MOFCOM calculated the margin of dumping for a particular type of HP-SSST,
referred to in the Panel Reports as Grade B, on the basis of a comparison between SMST's export
prices to China and a constructed "normal value" 67, that is, the sum of: (i) the cost of production
(COP) in the country of origin; and (ii) amounts for SG&A costs and profits. With respect to the
amounts for SG&A costs and profits, the chapeau of Article 2.2.2 of the Anti-Dumping Agreement
states that these "shall be based on actual data pertaining to production and sales in the ordinary
course of trade of the like product by the exporter or producer under investigation."
68
5.2. We examine, first, China's claims that the Panel erred in concluding that the
European Union's panel request, as it relates to Articles 2.2.1 and 2.2.2 of the Anti-Dumping
Agreement, provides a "brief summary of the legal basis of the complaint sufficient to present the
problem clearly", as required by Article 6.2 of th e DSU. Thereafter, we examine China's claim that
the Panel erred in its interpretation and application of Article 2.2.2 of the Anti-Dumping
Agreement, and acted inconsistently with its duties under Articles 11 and 12.7 of the DSU and
Article 17.6(i) of the Anti-Dumping Agreement when it found that MOFCOM had failed to determine
an amount for SG&A costs for SMST on the basis of actual data pertaining to production and sales
in the ordinary course of trade of the like product.
5.1.1 The Panel's terms of reference
5.1.1.1 The Panel's findings
5.3. The European Union alleged in its panel request that China acted inconsistently with:
Articles 2.2, 2.2.1, 2.2.1.1, and 2.2.2 of the Anti-Dumping Agreement because China
did not determine the amounts for [SG&A] costs and for profits on the basis of records
and actual data by the exporters or producers under investigation. In particular, the
amounts for [SG&A] costs and for profits as constructed by China do not reflect the
records and the actual data of the exporters or producers under investigation.
69
5.4. In its first written submission to the Panel, the European Union relied on this language in its
panel request as the basis for its claims that China acted inconsistently with:
 Article 2.2 of the Anti-Dumping Agreement because the unrepresentative and rejected
data used by MOFCOM did not permit a proper comparison, and the amount for SG&A
was not reasonable;
 Article 2.2.1 of the Anti-Dumping Agreement because MOFCOM used free samples, which
by definition are not sales in the ordinary course of trade;
 Article 2.2.1.1 of the Anti-Dumping Agreement because MOFCOM used unrepresentative
and rejected data that: (i) did not correspond to the records kept by SMST; (ii) were not
in accordance with generally accepted accounting principles (GAAP); (iii) did not
reasonably reflect the costs associated with the product under consideration; and
(iv) had not been historically utilized by SMST; and

67 We recall that Article 2.1 of the Anti-Dumping Agreement identifies a product as "dumped" where the
product is introduced into the commerce of another country at less than its "normal value". "Normal value" is
understood by that provision to be the "comparable price, in the ordinary course of trade, for the like product
when destined for consumption in the exporting country."
68 Article 2.2.1.1 of the Anti-Dumping Agreement stipulates that "costs shall normally be calculated on
the basis of records kept by the exporter or producer under investigation, provided that such records are in
accordance with the generally accepted accounting principles of the exporting country and reasonably reflect
the costs associated with the production and sale of the product under consideration."
69 European Union's panel request, para. 1.

 Article 2.2.2 of the Anti-Dumping Agreemen t because MOFCOM failed to determine an
SG&A amount for SMST on the basis of actual data pertaining to production and sales in
the ordinary course of trade of the like product.
70
5.5. China argued that several of these claims were outside the Panel's terms of reference
because the European Union had not complied with the requirements under Article 6.2 of the DSU
with respect to those claims. In making this ar gument, China submitted that the European Union
had presented two sets of claims in its first written submission: (i) main claims under Article 2.2.2;
and (ii) "additional/support claims" under Articles 2.2, 2.2.1, and 2.2.1.1 in support of its main
claims.
5.6. With regard to the European Union' s "main claims", China accepted that "the
European Union's claim under Article 2.2.2 that the SG&A amount was not based on actual data
falls within the Panel's terms of reference." 71 However, China contended that "the
European Union's panel request does not include a claim under Article 2.2.2 that the SG&A amount
did not pertain to production and sales in the ordinary course of trade."
72 With regard to what it
described as the European Union's "additional claims", China accepted that "the European Union's
claim under Article 2.2.1.1 that data used did not correspond to the records kept by SMST falls
within the Panel's terms of reference."
73 However, China maintained that all remaining "additional
claims" under Articles 2.2, 2.2.1, and 2.2.1.1 were outside the scope of the European Union's
panel request.74 According to China, "such non-inclusion" was "not a matter of a lack of any clarity
or precision in the European Union's request for establishment of a panel". 75 Rather, China
asserted that the European Union "clearly specified the claims included in its request for
establishment", and "expressly limited" its claims under Articles 2.2, 2.2.1, 2.2.1.1, and 2.2.2 to
the claims that the SG&A amounts used by MOFCOM to construct normal value did not reflect the
records kept by SMST, and were not based on "actual data".
76 China contended that the use of the
term "in particular" in the European Union's panel request clearly defined the claims raised by the
European Union.77
5.7. Citing Appellate Body jurisprudence, the Pa nel recalled that, "when 'a provision contains not
one single, distinct obligation, but rather multiple obligations, a panel request might need to
specify which of the obligations contained in the provision is being challenged'" 78, and that
"compliance with the requirements of Article 6.2 [of the DSU] must be determined on the merits of
each case, having considered the panel request as a whole, and in the light of attendant
circumstances."79 The Panel observed that the mere fact that the European Union referred to a
particular provision in its panel request, allegedly without specifying the particular obligation being

70 See EU Panel Report, para. 7.32 (referring to European Union's first written submission to the Panel,
paras. 167, 170, and 172-174).
71 EU Panel Report, para. 7.39 (referring to China's first written submission to the Panel, paras. 51-53
and 71; second written submission to the Panel, para. 5; and opening statement at the second Panel meeting,
para. 51).
72 EU Panel Report, para. 7.39 (referring to China's first written submission to the Panel, paras. 54-55;
response to Panel question No. 10, paras. 35 and 38; second written submission to the Panel, paras. 4, 6-7,
18, and 27; and opening statement at the second Panel meeting, paras. 51 and 55-56). China argued that
Article 2.2.2 contains multiple obligations. According to China, the "actual data" requirement in Article 2.2.2 is
distinct from the requirement relating to data pertaining to sales and production in the ordinary course of
trade, which is contained in the same provision. (China's first written submission to the Panel, para. 67;
opening statement at the first Panel meeting, paras. 19-21; response to Panel question No. 7, paras. 33-34;
second written submission to the Panel, para. 21; opening statement at the second Panel meeting,
paras. 52-55; comments on European Union's response to Panel question No. 81, para. 22)
73 EU Panel Report, para. 7.39 (referring to China's first written submission to the Panel, paras. 52, 55,
and 71; second written submission to the Panel, para. 5; and opening statement at the second Panel meeting,
para. 51).
74 EU Panel Report, para. 7.39 (referring to China's first written submission to the Panel, paras. 54-55;
second written submission to the Panel, para. 57; and opening statement at the second Panel meeting,
para. 51).
75 EU Panel Report, para. 7.39.
76 EU Panel Report, para. 7.39.
77 EU Panel Report, para. 7.39 (referring to China's first written submission to the Panel, para. 65;
opening statement at the first Panel meeting, para. 19; second written submission to the Panel, paras. 4-7;
and comments on European Union's response to Panel question No. 81, para. 21).
78 EU Panel Report, para. 7.47 (quoting Appellate Body Reports, China – Raw Materials, para. 220; and
referring to Appellate Body Reports, Korea – Dairy, para. 124; and EC – Fasteners (China), para. 598).
79 EU Panel Report, para. 7.47 (quoting Appellate Body Report, US – Carbon Steel, para. 127).

challenged, did not necessarily mean that the European Union's panel request fails to meet the
requirements of Article 6.2 of the DSU. The Pa nel noted that this was "because the relevant
WTO obligations may nevertheless be identifiable from a careful reading of the panel request as a
whole."
80 The Panel proceeded, therefore, to "examine whether a careful reading of the
European Union's panel request, including any na rrative explanation contained therein, permits a
sufficiently clear identification of the legal basis regarding each of the Article 2 claims pursued in
the European Union's first written submission."81
5.8. Regarding the European Union's claim under Article 2.2.1, the Panel described Article 2.2.1
as containing "one single obligation relating to when sales of the like product may be treated as
not being in the ordinary course of trade"82, and considered that a "reference" to Article 2.2.1 was,
therefore, "sufficient to clearly present a problem pertaining to the treatment of below-cost
sales".83 The Panel concluded that the European Union's panel request, with respect to the claim
under Article 2.2.1 of the Anti-Dumping Agreement, complies with Article 6.2 of the DSU.
5.9. With respect to the European Union's claim under Article 2.2.2, the Panel observed that the
European Union's panel request alleges that "Chi na did not determine the [SG&A amounts] on the
basis of … actual data by the exporters or prod ucers under investigation", and recalled that China
had accepted that the European Union's claim under Article 2.2.2 relating to "actual data" was
properly before the Panel. 84 Further, the Panel pointed out that the panel request includes a
reference to Article 2.2.1 of the Anti-Dumping Agr eement. Relying on the text of that provision,
which stipulates the conditions under which "sales … at prices below per unit … costs of production
plus [SG&A costs] may be treated as not being in the ordinary course of trade … and may be
disregarded in determining normal value", the Panel considered that "a reasonably informed
reader would understand from the reference to Article 2.2.1 that the European Union also takes
issue … with whether or not SG&A amounts are based on data pertaining to the production and
sales in the ordinary course of trade."
85 Thus, the Panel concluded that the European Union's claim
under Article 2.2.2 relating to "actual data pertaining to production and sales in the ordinary
course of trade" was within the scope of its terms of reference.
86
5.1.1.2 The relevant legal standard under Article 6.2 of the DSU
5.10. We begin our analysis by reviewing WTO jurisprudence regarding the requirements of
Article 6.2 of the DSU. We then address the specific issues raised by China on appeal.
5.11. Article 6.2 of the DSU reads, in relevant part:
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.
5.12. Article 6.2 of the DSU sets out two princi pal requirements: (i) the identification of the
specific measures at issue; and (ii) the provision of a brief summary of the legal basis of the
complaint sufficient to present the problem clearly.
87 The requirements specified in Article 6.2 are
significant because, "pursuant to Article 7 of th e DSU, a panel's terms of reference are governed

80 EU Panel Report, para. 7.47 (referring to the preliminary ruling of the panel in US – Countervailing
and Anti-Dumping Measures (China) dated 7 May 2013, para. 3.35, contained in document WT/DS449/4).
81 EU Panel Report, para. 7.47. (fn omitted)
82 EU Panel Report, para. 7.49.
83 EU Panel Report, para. 7.49.
84 EU Panel Report, para. 7.51.
85 EU Panel Report, para. 7.51.
86 EU Panel Report, para. 7.51. Taking this view, the Panel considered it unnecessary to address the
European Union's and China's arguments relating to whether Article 2.2.2 contains multiple obligations. The
Panel also rejected China's argument that the European Union's panel request was "expressly limited", by the
use of the words "in particular", to the obligation for the SG&A amounts to be based on actual data. (EU Panel
Report, fn 108 to para. 7.51)
87 In addition, Article 6.2 contains two further requirements, namely, that the request be made in
writing and that it indicate whether consultations were held. (See Appellate Body Report, Korea – Dairy,
para. 120)

by the request for establishment of a panel." 88 In other words, a panel request delimits the scope
of a panel's jurisdiction.
5.13. In assessing whether a panel request is "sufficiently precise" to comply with Article 6.2,
panels must "scrutinize carefully the panel reques t, read as a whole, and on the basis of the
language used". 89 While submissions and statements made during the course of the panel
proceedings may be consulted in order to confirm the meaning of the words used in the panel
request
90, they cannot "cure" defects in the request. 91 Rather, a panel request must be examined
on its face as it existed at the time of filing. 92 The need to examine the panel request "on its face"
and "on the basis of the language used" makes the narrative in the panel request a significant part
of the assessment of whether the request provid es "a brief summary of the legal basis of the
complaint sufficient to present the problem clearly".
93
5.14. With respect to this requirement, the A ppellate Body has explained that the reference in
Article 6.2 of the DSU to the "legal basis of the complaint" refers to the claims pertaining to a
specific provision of a covered agreement containing the obligation alleged to be violated 94; and
that it is the claims, and not the arguments, that are to be set out in a panel request in a way that
is sufficient to present the problem clearly. 95 For the purposes of Article 6.2, a "claim" refers to an
allegation that "the respondent party has violated, or nullified or impaired the benefits arising
from, an identified provision of a particular agreement." 96 "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".
97 The Appellate Body has stated that the
"[i]dentification of the treaty provisions claimed to have been violated by the respondent is always
necessary" and is a "minimum prerequisite if the legal basis of the complaint is to be presented at
all".98
5.15. Regarding the requirement that a complainant provide a "brief summary" that is sufficient
to "present the problem clearly", the Appellate Body has explained that a panel request must
"plainly connect the challenged measure(s) with the provision(s) of the covered agreements
claimed to have been infringed".
99 Thus, "to the extent that a provision contains not one single,
distinct obligation, but rather multiple obligations, a panel request might need to specify which of
the obligations contained in the provision is being challenged."100
5.16. A further element relevant to assessing the consistency of a panel request with Article 6.2 of
the DSU is whether it complies with the due process objective in that provision of notifying the
respondent and third parties of the nature of the complainant's case.101

88 Appellate Body Report, US – Carbon Steel, para. 124.
89 See Appellate Body Report, EC – Fasteners (China), para. 562.
90 Appellate Body Report, US – Carbon Steel, para. 127.
91 Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 787 (referring to
Appellate Body Reports, EC – Bananas III, para. 143; and US – Carbon Steel, para. 127).
92 Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 787.
93 See Appellate Body Reports, China – Raw Materials, paras. 230-232.
94 See Appellate Body Report, EC – Selected Customs Matters, para. 130.
95 See Appellate Body Report, EC – Selected Customs Matters, para. 153.
96 Appellate Body Report, Korea – Dairy, para. 139.
97 Appellate Body Report, Korea – Dairy, para. 139.
98 Appellate Body Report, Korea – Dairy, para. 124 (referring to Appellate Body Reports, Brazil –
Desiccated Coconut, fn 21 at p. 22, DSR 1997:I, p. 186; EC – Bananas III, paras. 145 and 147; and India –
Patents (US), paras. 89 and 92-93).
99 Appellate Body Reports, China – Raw Materials, para. 220; US – Countervailing and Anti-Dumping
Measures (China), para. 4.8 (both quoting Appellate Body Report, US – Oil Country Tubular Goods Sunset
Reviews, para. 162).
100 Appellate Body Reports, China – Raw Materials, para. 220 (referring to Appellate Body Report, Korea
101 Appellate Body Report, EC and certain member States – Large Civil Aircraft, paras. 639-640
(referring to Appellate Body Report, US – Carbon Steel, para. 126, in turn referring to Appellate Body Report,
Brazil – Desiccated Coconut, p. 22, DSR 1997:I, p. 186). See also Appellate Body Reports, EC – Chicken Cuts,

5.1.1.3 Whether the European Union's clai ms under Articles 2.2.1 and 2.2.2 of the
Anti-Dumping Agreement were within the scope of the Panel's terms of reference
5.17. China contends, as it did before the Panel, that the European Union's panel request was
expressly limited to two claims: (i) that MOFC OM did not determine SG&A amounts and profits
on the basis of the records of the exporters or producers; and (ii) that MOFCOM did not determine
SG&A amounts and profits on the basis of the actual data of the exporters or producers. 102 For
China, this was clear, given that the European Union alleged in its panel request that China acted
inconsistently with the identified provisions of the Anti-Dumping Agreement "because" China did
not determine SG&A amounts "on the basis of records and actual data by the exporters or
producers under investigation".
103 China adds that the use of the term "in particular", in the
second sentence of paragraph 1 of the European Union's panel request, further defines the claims
raised by the European Union.104
5.18. The European Union counters that it did not expressly limit its panel request through the
use of the term "because", but that this term wa s simply used to introduce a brief summary of the
legal basis of the complaint. 105 With respect to the expression "in particular", the European Union
argues that the Panel correctly found that this language served to highlight that the
European Union's claims under the provisions at issue would focus on the manner in which China
determined the amount for SG&A costs for SMST "as constructed" by MOFCOM.
106
5.19. We recall that the European Union's panel request includes specific references to
Articles 2.2, 2.2.1, 2.2.1.1, and 2.2.2 of the Anti -Dumping Agreement, and a specific listing of the
grounds for the European Union's claims. The European Union alleged, in order, that: (i) China had
violated Articles 2.2, 2.2.1, 2.2.1.1, and 2.2.2 of the Anti-Dumping Agreement; (ii) this was so
"because China did not determine the amounts for [SG&A] costs and for profits on the basis of
records and actual data by the exporters or producers under investigation"; and
(iii) "[i]n particular, the amounts for [SG&A] costs and for profits as constructed by China do not
reflect the records and the actual data of the exporters or producers under investigation".107
5.20. We disagree with China to the extent it argues that it is not relevant to assess the nature of
the provisions cited by the European Union in its panel request, including whether they contain a
single obligation, or multiple, distinct obligations. 108 Contrary to what China suggests, "[w]hether
or not a general reference to a treaty provision will be adequate to meet the requirement of
sufficiency under Article 6.2 is to be examined on a case-by-case basis, taking into account the
extent to which such reference sheds light on the nature of the obligation at issue." 109 Moreover,
Article 6.2 of the DSU does not prohibit a party from including in the panel request statements
"that foreshadow its arguments in substantiating the claim"
110, and that the presence of such
statements "should not be interpreted to narrow the scope of the measures or the claims".111
5.1.1.3.1 Article 2.2.1 of the Anti-Dumping Agreement
5.21. With these considerations in mind, we turn to examine the nature and scope of
Articles 2.2.1 and 2.2.2 of the Anti-Dumping Agreement. We start with Article 2.2.1, which reads,
in relevant part:

102 China's appellant's submission, para. 51.
103 China's appellant's submission, para. 52 (quoting European Union's panel request, para. 1,
first sentence: "This is clear from the first sentence at stake: an alleged violation of 'Articles 2.2, 2.2.1, 2.2.1.1
and 2.2.2 of the Anti-Dumping Agreement because China did not determine the amounts for administrative,
selling and general costs and for profits on the basis of records and actual data by the exporters or producers
under investigation'"). (emphasis added by China)
104 China's appellant's submission, paras. 55-58.
105 European Union's appellee's submission, paras. 60-62.
106 European Union's appellee's submission, para. 65.
107 EU Panel Report, para. 7.31 (quoting European Union's panel request, para. 1).
108 See China's appellant's submission, para. 60.
109 Appellate Body Report, US – Countervailing and Anti-Dumping Measures (China), para. 4.17
(referring to Appellate Body Report, US – Carbon Steel, para. 130, in turn referring to Appellate Body Report,
Korea – Dairy, para. 124).
110 Such statements may, as they are here, be introduced by terms such as "because" and "in
particular".
111 Appellate Body Report, EC – Selected Customs Matters, para. 153.

Sales of the like product in the domestic market of the exporting country or sales to a
third country at prices below per unit (fixed and variable) costs of production plus
[SG&A] costs may be treated as not being in the ordinary course of trade by reason of
price and may be disregarded in determining normal value only if the authorities
determine that such sales are made within an extended period of time in substantial
quantities and are at prices which do not provide for the recovery of all costs within a
reasonable period of time.
112
5.22. Under Article 2.2.1, investigating authorities may treat below-cost sales of the like product
as not being "in the ordinary course of trade" by reason of price, and may disregard such sales in
determining normal value "only if" the authorities determine that such sales were: (i) made within
an extended period of time; (ii) in substantial qu antities; and (iii) at prices which do not provide
for the recovery of all costs within a reasonable period of time. While an investigating authority
can act inconsistently with Article 2.2.1 in different ways – e.g. by disregarding below-cost sales
without determining whether they were "made wi thin an extended period of time" or "in
substantial quantities" – this does not mean, however, that Article 2.2.1 contains multiple, distinct
obligations. Rather, as we see it, Article 2.2.1 sets out a single obligation whereby an investigating
authority may disregard below-cost sales of the like product only if it determines that "such"
below-cost sales display the three specific characteristics mentioned above. The fact that the
European Union did not include statements in it s panel request foreshadowing the arguments it
would make in order to substantiate its claim under Article 2.2.1 does not mean that the
European Union's panel request does not comply with the standard set out in Article 6.2 of the
DSU.
113
5.23. In the light of the above, we uphold the Pa nel's finding, in paragraph 7.49 of the EU Panel
Report, that the European Union's panel request complies with the requirement in Article 6.2 of
the DSU to "provide a brief summary of the legal basis of the complaint sufficient to present the
problem clearly" in respect of the European Unio n's claim under Article 2.2.1 of the Anti-Dumping
Agreement.
5.1.1.3.2 Article 2.2.2 of the Anti-Dumping Agreement
5.24. Turning to China's claim under Article 2.2. 2 of the Anti-Dumping Agreement, we note that
this provision sets forth how the amounts for SG&A costs and profits are to be calculated for
purposes of constructing normal value. The chapeau of Article 2.2.2 provides, in relevant part, that
"the amounts for [SG&A] costs and for profits shall be based on actual data pertaining to
production and sales in the ordinary course of trade of the like product by the exporter or producer
under investigation." Article 2.2.2 further clarifies that, "[w]hen such amounts cannot be
determined on this basis" – i.e. "based on actual data pertaining to production and sales in the
ordinary course of trade of the like product by th e exporter or producer under investigation" – an
investigating authority may proceed to employ one of the other three methods provided in
subparagraphs (i)-(iii) of Article 2.2.2.
5.25. By its express terms, Article 2.2.2 requires that an investigating authority, when calculating
constructed normal value under Article 2.2, first attempt to make such a calculation using the
"actual data pertaining to production and sales in the ordinary course of trade". Therefore, if actual
data for SG&A costs and profits in the ordinary course of trade exists for the exporter under
investigation, an investigating authority may not calculate constructed value using data from other
sources.
114
5.26. China reads the reference in the chapeau of Article 2.2.2 to "actual data pertaining to
production and sales in the ordinary course" as setting out multiple, distinct obligations, including
an obligation to determine an amount for SG&A costs on the basis of "actual data" that is
"independent" and "distinct" from the obligation to determine such costs on the basis of data
"pertaining to production and sales in the ordinary course of trade".
115 Thus, while China accepts,
based on the narrative explanation contained in the European Union's panel request, that the
European Union's claim under Article 2.2.2 relating to "actual data" was within the Panel's terms of

112 Fns omitted; emphasis added.
113 See Appellate Body Report, EC – Selected Customs Matters, para. 153.
114 See Appellate Body Report, EC – Tube or Pipe Fittings, para. 97.
115 China's appellant's submission, paras. 61-62.

reference, China contends that this is not the case for the European Union's claim relating to the
determination of an SG&A amount on the basis of actual data pertaining to production and sales in
the ordinary course of trade.116 For its part, the European Union submits that the relevant terms in
Article 2.2.2 are interlinked. 117 Specifically, the European Union argues that the term "pertaining
to" is a modifier that links the term "actual data" to what follows, so that "it is only the phrase as a
whole that makes sense."118
5.27. Looking at the structure of Article 2.2.2, we note that the noun "data" is immediately
preceded by the adjective "actual" and followed by the phrase "pertaining to production and sales
in the ordinary course of trade". As we see it, the term "actual data" is clearly linked to the
language that follows. The phrase "pertaining to production and sales in the ordinary course of
trade" serves, in particular, to specify the actual data that is to be used in order to calculate an
amount for SG&A costs for purposes of constructi ng normal value under Article 2.2.2. Thus, read
as a whole, the relevant phrase imposes a single obligation, set out in the chapeau of Article 2.2.2,
for investigating authorities to determine amounts for SG&A costs and profits on the basis of
actual data that relates to, or concerns, production and sales in the ordinary course of trade. This
reading of Article 2.2.2 would appear to be confir med by the second sentence of that provision,
which refers back to the first sentence, and provides that, when SG&A amounts "cannot be
determined on this basis", thus referring in the singular to the preferred method to be used to
calculate such SG&A amounts. This is consistent with the Appellate Body having referred to the
chapeau of Article 2.2.2 as setting out "a general obligation ('shall') on an investigating authority
to use 'actual data pertaining to production and sales in the ordinary course of trade' when
determining amounts for SG&A and profits."
119
5.28. China seeks to overcome the plain language in Article 2.2.2 by referring to the
Appellate Body report in EC – Bed Linen .120 In that dispute, the Appellate Body explained, in the
context of examining a substantive claim under Article 2.2.2(ii), that " all of 'the actual amounts
incurred and realized' by other exporters or pr oducers must be included [when constructing
normal value], regardless of whether those amounts are incurred and realized on production and
sales made in the ordinary course of trade or not."121 In making this statement, the Appellate Body
did not address the question of whether Article 2.2.2 sets out distinct requirements concerning the
determination of constructed normal value that would have to be spelt out explicitly in a panel
request pursuant to Article 6.2 of the DSU in order to fall within a panel's terms of reference. The
Appellate Body report in EC – Bed Linen , therefore, does not support China's position that
Article 2.2.2 sets out distinct requirements with respect to "actual data", on the one hand, and
"data pertaining to production and sales in the ordinary course of trade", on the other hand.
5.29. China also takes issue with the Panel's reliance on the reference to Article 2.2.1 of the
Anti-Dumping Agreement in the European Union's panel request in concluding that the
European Union's claim under Article 2.2.2 was within the Panel's terms of reference. This
reference, as China contends, cannot be read to include a claim under Article 2.2.2 being within
the Panel's terms of reference given that this claim "was not among the two claims to which the
[European Union's] panel request was expressly limited".
122 China adds that Article 2.2.1 and
Article 2.2.2 were listed separately in the European Union's panel request, together with a number
of other provisions.
5.30. In response, the European Union argues that the reference to Article 2.2.1, with its single
obligation regarding the ordinary course of trade, confirms or provides relevant context for

116 China also accepts, as within the Panel's terms of reference, the European Union's claim under
Article 2.2.1.1 that the data used by MOFCOM to calculate an amount for SG&A costs did not correspond to the
records kept by SMST, given the reference in the European Union's panel request to the records of the
exporters.
117 European Union's appellee's submission, para. 52.
118 European Union's appellee's submission, para. 53.
119 Appellate Body Report, EC – Tube or Pipe Fittings, para. 97.
120 China's appellant's submission, paras. 62-63.
121 China's appellant's submission, para. 63 (quoting Appellate Body Report, EC – Bed Linen, para. 80).
(emphasis original)
122 China's appellant's submission, para. 66.

understanding the reference to Article 2.2.2 in the panel request, since each of these provisions is
a development of Article 2.2 "with respect to if and how normal value may be constructed".123
5.31. We agree with China that the reference to Article 2.2.1 in the European Union's panel
request could be read to suggest that the European Union considered that MOFCOM erred by
excluding sales that should have been considered as being in the ordinary course of trade from its
determination of an SG&A amount for SMST, rather than by including sales that should have been
excluded. This does not mean, however, that th e Panel would have been precluded from taking
into account the reference to Article 2.2.1 in the panel request as relevant context in determining
whether the European Union's claim under Article 2.2.2 was properly within the Panel's terms of
reference. Although claims under Article 2.2.1 and Article 2.2.2 require distinct identification, the
obligations contained in these provisions are related insofar as they pertain to the calculation of
constructed normal value. Thus, a reference to Article 2.2.1 may be useful to understand the
scope of the claim raised under Article 2.2.2. We agree, therefore, with the Panel that the
reference to Article 2.2.1 can relevantly inform the question of whether the European Union had
sufficiently articulated a claim under Article 2.2.2. We do not consider that the Panel erred by
looking at the language contained in the European Union's panel request as a whole, including the
reference to Article 2.2.1 of the Anti-Dumping Agreement.
5.32. China contends that the Appellate Body's reasoning in EC – Fasteners (China) lends support
to its position in this case, referring to a "similarly structured sentence" found in China's panel
request in that case.
124 We find China's arguments in this regard to be unavailing. Regardless of
whether China's panel request in EC – Fasteners (China) may have contained a "similarly
structured sentence"125, as China argues, the sufficiency of a panel request for the purposes of
Article 6.2 of the DSU is to be determined on the basis of the language contained in the panel
request and the nature of the obligations contained in the provisions at issue. Here, for the
reasons described above, we consider the narrative provided by the European Union to be
sufficient to identify a claim under Article 2.2.2 of the Anti-Dumping Agreement regarding "actual
data pertaining to production and sales in the ordinary course of trade", considering the nature of
the single obligation contained in that provision. This was not the basis for the Appellate Body's
finding in EC – Fasteners (China) , where a claim "regarding the disclosure of the identity of the
complainants and supporters" was not mentioned explicitly, and not covered by other language
contained in China's panel request, or captured through a reference to any one of the identified
treaty provisions by itself.
5.33. China asserts that the Panel "distorted" the meaning of the relevant part of the
European Union's panel request, and failed to make an objective assessment of the term
"in particular" contained in the European Union's panel request, when it found that the
European Union had raised more than two claims under Article 2 of the Anti-Dumping Agreement
regarding MOFCOM's calculation of a constructed normal value for SMST.
126 China also submits
that, in finding that the "mere mention" of Arti cle 2.2.1 provides "a brief summary of the legal
basis of the complaint" in relation to Article 2.2.2, and considering that "a reasonably informed
reader" would understand from this reference to Article 2.2.1 that the European Union also takes
issue "with whether or not SG&A amounts are based on data pertaining to the production and
sales in the ordinary course of trade", the Panel failed to make an objective assessment of the
matter before it, as required under Article 11 of the DSU.
127 Having disagreed with China that the
European Union's panel request was "expressly limited" to two claims under Article 2 of the
Anti-Dumping Agreement, and having agreed with the Panel that the reference in the
European Union's panel request to Article 2.2.1 can relevantly inform the question of whether the
European Union had sufficiently articulated a claim under Article 2.2.2, we do not consider it
necessary to make additional findings regarding China's claims under Article 11 of the DSU.

123 European Union's appellee's submission, para. 69. (emphasis original)
124 China's appellant's submission, para. 53.
125 We note that, in EC – Fasteners (China), the Appellate Body found that China's panel request
referred explicitly to four claims under Articles 6.2 and 6.4 of the Anti-Dumping Agreement relating to: (i) the
composition of the domestic industry; (ii) data concerning normal value determination; (iii) information on the
adjustments for differences affecting price comparability; and (iv) Eurostat data on which total EU production
and consumption figures were based; and that an additional claim regarding the "disclosure of the identity of
complainants and supporters" did not fall "within the scope of any of the four above descriptions".
(Appellate Body Report, EC – Fasteners (China), paras. 596-597)
126 See China's appellant submission, para. 67.

5.34. In sum, having reviewed the language in Article 2.2.2 of the Anti-Dumping Agreement, we
do not agree with China that Article 2.2.2 sets out separate obligations regarding "actual data" and
"data pertaining to production and sales in the ordinary course of trade". Instead, we consider the
narrative in the European Union's panel request – "China did not determine the amounts for
[SG&A] costs and for profits on the basis of records and actual data by the exporters or producers
under investigation"
128 – to be broad enough to encompass the European Union's claim regarding
"actual data pertaining to production and sales in the ordinary course of trade". That the
European Union did not include further language from the text of Article 2.2.2 of the Anti-Dumping
Agreement does not, in our view, limit or redu ce the scope of the European Union's claim to
"actual data".
5.35. For all these reasons, we uphold the Panel's finding, in paragraph 7.51 of the EU Panel
Report, that the European Union's panel request complies with the requirement in Article 6.2 of
the DSU to "provide a brief summary of the legal basis of the complaint sufficient to present the
problem clearly" in respect of the European Unio n's claim under Article 2.2.2 of the Anti-Dumping
Agreement.
5.1.2 The Panel's interpretation and applic ation of Article 2.2.2 of the Anti-Dumping
Agreement
5.36. We now turn to address whether, as China claims, the Panel erred in its interpretation and
application of Article 2.2.2 of the Anti-Dumpi ng Agreement and acted inconsistently with
Articles 11 and 12.7 of the DSU and Article 17.6(i) of the Anti-Dumping Agreement in concluding
that China acted inconsistently with Article 2.2.2 because MOFCOM did not determine an SG&A
amount for SMST on the basis of "actual data pertaining to production and sales in the ordinary
course of trade of the like product".
5.1.2.1 The Panel's findings
5.37. Before the Panel, the European Union claimed that China acted inconsistently with
Articles 2.2, 2.2.1, 2.2.1.1, and 2.2.2 of th e Anti-Dumping Agreement because "China did not
determine the amount for [SG&A] on the basis of re cords and actual data kept by the exporter or
producer under investigation (SMST) or in a manne r that reasonably reflects the costs associated
with the production and sale of [Grade B]."
129 The European Union argued that "the data from
table 6-3 of SMST's questionnaire response, which was used by China to construct normal value,
was not 'actual data pertaining to production and sales in the ordinary course of trade'."
130
According to the European Union, this was becaus e: (i) Table 6-3 included SG&A amounts derived
from planned rates and not the actual expense; and (ii) the SG&A amounts in Table 6-3 were
based on "abnormally high" COP, as it included two unrepresentative free sample production
transactions.131 China, for its part, submitted that MOFCOM determined the SG&A amount on the
basis of actual data reported by SMST for Grade B HP-SSST sold in the European Union included in
Table 6-3. Moreover, China argued that "it is irrelevant whether or not the coefficients used to
determine the SG&A amounts are also actual data, because the SG&A amounts at issue were
'based on' actual data, i.e. actual [COP], and Article 2.2.2 does not require the SG&A amount to be
actual data in itself."
132
5.38. The Panel began its assessment with the text of Article 2.2.2, which sets forth how the
amounts for SG&A are to be calculated for purposes of a constructed normal value. The Panel
understood the issue to be whether Table 6-3, which China submitted was the basis for the SG&A
amounts used in MOFCOM's calculation of normal value, was "based on 'actual data pertaining to
production and sales in the ordinary course of trade of the like product'".
133 The Panel explained, in
this regard, that "[i]t is undisputed that the SG&A amounts in table 6-3 consist of the [COP]

128 EU Panel Report, para. 7.31 (quoting European Union's panel request, para. 1) (emphasis added)
129 EU Panel Report, para. 7.53 (quoting European Union's first written submission to the Panel,
para. 160).
130 EU Panel Report, para. 7.55.
131 EU Panel Report, para. 7.55 (referring to updated English version of Table 6 annexed to SMST's
Dumping Questionnaire Response (Panel Exhibit CHN-19-EN (BCI))).
132 EU Panel Report, para. 7.59.
133 EU Panel Report, para. 7.65.

multiplied by certain coefficients" and that these coefficients reflect "the planned internal rates
used by SMST in preparing price/cost allocations for orders".134
5.39. Next, the Panel noted the apparent disa greement between MOFCOM and SMST with respect
to the source of the data to be used to dete rmine the SG&A amount. While the European Union
asserted that SMST understood that MOFCOM shou ld have been using the SG&A amount based on
actual data from Table 6-5, China submitted that MOFCOM made it clear in its disclosures that it
was using the data in Table 6-3.
135 Regardless of the parties' differing understandings, the Panel
found that it was undisputed that SMST requested MOFCOM, and MOFCOM accepted, "not to use in
the constructed normal value calculations the [COP] in table 6-3 for Grade B sales in the
European Union, because such [COP] was distorte d due to the inclusion of the two free sample
transactions."
136 However, MOFCOM used the SG&A amounts in Table 6-3, even though these had
been derived by applying certain coefficients to the disregarded COP data.
5.40. While noting China's argument that the affected SG&A data could have been corrected by
the relevant coefficients, the Panel did not consider that "an unbiased and objective investigating
authority could have assumed the corrective potential of the relevant coefficients without any
supporting analysis or evidence." 137 Instead, the Panel agreed with the European Union that "any
such assumption would have been 'speculative'." 138 Thus, the Panel opined that, "by using SG&A
data based on the application of coefficients to data that had already been excluded for the
purpose of constructing normal value, MOFCOM failed to fulfil the requirements of Article 2.2.2."139
Put differently, the Panel concluded that MOFCOM improperly utilized data relating to two free
samples, which MOFCOM had excluded for the purp ose of determining the COP, to establish the
SG&A amounts. On this basis, the Panel concluded that "China acted inconsistently with
Article 2.2.2 of the Anti-Dumping Agreement by failing to determine an SG&A amount for SMST on
the basis of actual data pertaining to production and sales in the ordinary course of trade of the
like product."
140
5.1.2.2 Analysis of the Panel's findings re garding MOFCOM's determination of an SG&A
amount for SMST
5.41. China begins by raising a claim under Article 12.7 of the DSU, arguing that the Panel did not
set out the findings of fact, the applicability of the relevant provisions, and the basic rationale
behind its findings. According to China, it is not clear whether the Panel considered the measure at
issue to be inconsistent with Article 2.2.2 of the Anti-Dumping Agreement because it is not based
"on actual data or on data pertaining to producti on and sales in the ordinary course of trade, or
both".
141 In addition, China argues that the Panel: (i) failed to set out how and why China allegedly
violated these requirements; (ii) failed to address the interpretation of these requirements and the
relevant facts that would lead to a conclusion of violation of these requirements; and
(iii) precluded China from making an informed decision about whether and what to appeal. 142
Moreover, China contends that the Panel acted inconsistently with its obligations under Article 11
of the DSU by failing to provide an adequate explanation for its findings.143

134 EU Panel Report, para. 7.65 (referring to SMST's Supplemental Dumping Questionnaire Response
(Panel Exhibits CHN-10-CH and CHN-10-EN (BCI), and EU-14 (BCI)), internal p. 4; and SMST's Dumping
Questionnaire Response (Panel Exhibit EU-10 (BCI)), internal p. 69).
135 See EU Panel Report, para. 7.66 and fn 130 thereto.
136 EU Panel Report, para. 7.66 (referring to SMST's Dumping Questionnaire Response (Panel
Exhibit CHN-5-EN (BCI)), internal p. 17; MOFCOM's Preliminary Dumping Disclosure to SMST (Panel
Exhibit CHN-12-EN (BCI)), internal pp. 2-3; MOFCOM's Preliminary Determination (Panel Exhibits JPN-7-EN and
EU-18), internal p. 27; MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and EU-30), internal p. 38;
European Union's first written submission to the Panel, para. 168; and China's first written submission to the
Panel, paras. 98, 107, and 116; response to Panel question No. 22(b)(iii), para. 78; and second written
137 EU Panel Report, para. 7.66.
138 EU Panel Report, para. 7.66.
139 EU Panel Report, para. 7.66.
140 EU Panel Report, para. 7.66.
141 China's appellant's submission, para. 94.
142 China's appellant's submission, para. 96.
143 China's appellant's submission, para. 97.

5.42. In response, the European Union argues that "the way forward for China is clear", and that
"China can ensure that the measure taken to comply complies with Article 2.2.2, by ensuring that
the amounts for [SG&A] are based on actual data pertaining to production and sales in the
ordinary course of trade by SMST"
144 contained in Table 6-5 (Profitability), Table 6-6 (Detailed
Chart of Allocation of Administrative Expenses), Table 6-7 (Detailed Chart of Allocation of Sales
Expenses), and Table 6-8 (Detailed Chart of Alloca tion of Financial Expenses) annexed to SMST's
Dumping Questionnaire Response of 21 November 2011. 145 The European Union submits that
China's arguments are "largely a re-iteration of its arguments concerning the scope of the
[European Union's] Panel Request, insofar as they attempt to de-link the relevant interlinked
terms of Article 2.2.2".
146 The European Union further argues that MOFCOM disregarded SMST's
repeated statements directing MOFCOM to the actual data pertaining to production and sales in the
ordinary course of trade by SMST contained in Tables 6-5 through 6-8, and that China had ample
opportunity to defend itself during the Panel proceedings.147
5.43. We consider that China's arguments, although raised in the context of Articles 11 and 12.7
of the DSU, in fact concern the proper constr uction and application of the requirement in
Article 2.2.2 of the Anti-Dumping Agreement to determine constructed normal value on the basis
of "actual data pertaining to production and sales in the ordinary course of trade". We have
already addressed China's arguments pertaining to the interpretation of Article 2.2.2 of the
Anti-Dumping Agreement and disagreed with China's assertion that Article 2.2.2 sets out
"independent" and "distinct" obligations in relation to "actual data" and "data pertaining to
production and sales in the ordinary course of tr ade". We, therefore, do not consider there to be
any basis for us to find that the Panel failed to make an objective assessment of the matter before
it, as required under Article 11 of the DSU, or that the Panel failed to provide, in its Reports, the
basic rationale for its findings as required under Article 12.7 of the DSU.
5.44. As a second ground of appeal, China asserts that "[t]he Panel misinterpreted Article 2.2.2
as requiring an investigating authority not to base the SG&A amount on data that were not used
for the determination of the [COP] amount."
148 China submits that the Panel "seems to have
erroneously considered" that it follows from "the fact that SG&A data are derived from [COP] that
had not been taken into account by MOFCOM for the [COP] calculation in the normal value
determination" that such data are, therefore, "not based on actual data and/or that these are not
based on data pertaining to production and sale s in the ordinary course of trade of the like
product".
149
5.45. Contrary to what China seems to suggest, the Panel did not make a finding as to whether or
not the SG&A amount had to be determined on the basis of data that were used for the
determination of COP amounts. Nor did the Pa nel address the issue of whether or not the
coefficients reported by SMST, that is, "the planned internal rates used by SMST in preparing
price/cost allocations for orders, are 'actual data' for purposes of Article 2.2.2."
150
5.46. As a third ground of appeal, China submits that the Panel "should have assessed how, in
fact, the SG&A amount was determined and how the data underlying this determination were
obtained", and whether the SG&A amount used by MOFCOM in its calculation of normal value "was
'based on' data that: (i) is actual; and (ii) pertai ns to production and sales in the ordinary course
of trade".
151 In China's view, there was no reason for the Panel "to assume that MOFCOM
disregarded the [COP] of Grade B sold domestically because it was not actual or did not pertain to
production or sales in the ordinary course of trade".
152 According to China, instead, the Panel
should have analysed this question, and should also have looked into precisely which factual
circumstances constituted the "certain particularity" referred to by MOFCOM when MOFCOM

144 European Union's appellee's submission, para. 187.
145 Updated English version of Table 6 annexed to SMST's Dumping Questionnaire Response (Panel
Exhibit CHN-19-EN (BCI)).
146 European Union's appellee's submission, para. 188.
147 European Union's appellee's submission, para. 190.
148 China's appellant's submission, para. 99.
149 China's appellant's submission, para. 99.
150 EU Panel Report, fn 137 to para. 7.66.
151 China's appellant's submission, para. 100.
152 China's appellant's submission, para. 101.

explained in its Preliminary Dumping Disclosure that it had "used the [COP] of Grade B sold in the
Chinese market 'due to [a] certain particularity of the transactions of this model in the EU'".153
5.47. The European Union responds that the facts on the Panel record demonstrate that MOFCOM
accepted SMST's request "not to use in the constructed normal value calculations the COP in
table 6-3 for Grade B sales in the European Union, because such COP was abnormally high due to
the inclusion of the two free samples." 154 The European Union maintains that "the only pertinent
particularity of the transactions" is that "the COP was abnormally high due to the two free
samples."155 The European Union argues that the Panel was, therefore, "correct to state that it was
undisputed that SMST requested MOFCOM, and MOFC OM accepted, not to use in the constructed
normal value calculations the COP in Table 6-3 for Grade B sales in the European Union, because
such COP was distorted due to the two free samples."
156 The European Union adds that China had
many opportunities during the Panel proceedings to step forward and assert that the phrase
"certain particularity" means something other than the fact that the COP was abnormally high due
to the two free samples, yet it failed to do so.
157 The European Union submits that "China is
precluded at this stage from making any new factual assertions in this respect", and cannot
"reasonably fault the Panel" for concluding as it did based on the facts and evidence that were
before it.158
5.48. China appears to conflate the obligations that apply to investigating authorities with those
that apply to WTO panels. It was not for the Panel in the present case to determine what MOFCOM
meant when it referred to a "certain particularity"; rather, this was an issue for MOFCOM to
explain in its written determination. We also do not agree with China that the Panel "assumed"
that MOFCOM disregarded the COP of Grade B sold domestically for the reason that "it was not
actual or did not pertain to production or sales in the ordinary course of trade."
159 Rather, as we
understand it, the basis for the Panel's finding und er Article 2.2.2 of the Anti-Dumping Agreement
was, instead, that MOFCOM "assumed the corrective potential of the relevant coefficients" used to
calculate an SG&A amount for SMST "without supporting analysis or evidence". 160 The Panel saw
error, in particular, in MOFCOM's decision, without explanation or analysis, "to disregard the [COP]
data in table 6-3 for Grade B sales in the European Union", while at the same time using "the SGA
amounts in table 6-3, even though [those amounts] had been derived by applying certain
coefficients to that disregarded [COP] data."
161
5.49. As a fourth ground of appeal, China takes issue with the Panel's finding that "it is
undisputed that … MOFCOM accepted not to use in the constructed normal value calculations the
[COP] in table 6-3 for Grade B sales in the European Union, because such [COP] was distorted due
to the inclusion of the two free sample transactions."
162 China states that "it is undisputed that
MOFCOM accepted not to use the [COP] in table 6-3 for Grade B sales in the European Union to
determine the COP in the normal value determination."163 However, China considers that the Panel
acted inconsistently with Article 11 of the DSU to the extent that it found that "MOFCOM decided
not to use the [COP] of domestic sales because these costs were 'distorted due to the inclusion of
the two free sample transactions' in the sense that they were not 'actual' and/or did not pertain to
production and sales 'in the ordinary course of trade'."
164

153 China's appellant's submission, para. 107 (quoting MOFCOM's Preliminary Dumping Disclosure to
SMST (Panel Exhibit CHN-12-EN (BCI)), internal p. 2).
154 European Union's appellee's submission, para. 194. (fn omitted)
155 European Union's appellee's submission, para. 195. (fn omitted)
156 European Union's appellee's submission, para. 195.
157 European Union's appellee's submission, paras. 196-197 (referring to China's appellant's submission,
para. 108).
158 European Union's appellee's submission, para. 197.
159 China's appellant's submission, para. 101.
160 EU Panel Report, para. 7.66.
161 EU Panel Report, para. 7.66.
162 China's appellant's submission, para. 109 (quoting EU Panel Report, para. 7.66).
163 China's appellant's submission, para. 109.
164 China's appellant's submission, para. 109. (emphasis original)

5.50. As noted above, SMST stated in its response to MOFCOM's initial dumping questionnaire
that:
[t]he December 2010 production costs for [Grade B was] abnormally high and should
not be used in BOFT's cost or constructed value calculations. This production relates to
the zero price samples discussed above with respect to question 9, Item 6 of
Section 4. These were test orders in very small quantities. This led to abnormally high
per-unit raw material costs because, despite the small production quantity, an entire
hollow had to be used for each order.
165
5.51. MOFCOM responded that:
… due to [a] certain particularity of the transactions of [Grade B] in the EU, according
to Article 4 of the Anti-Dumping Regulation of the People's Republic of China
("AD Regulation"), the Investigating Authority decides to provisionally use the
production costs of [Grade B] exported to China, SG&A of sales in the EU and
reasonable profitability as the basis to determine the constructed value.
166
5.52. Regardless of what MOFCOM meant when it referred to a "certain particularity of the
transactions of [Grade B] in the EU", and whether MOFCOM considered that the COP was distorted
or not due to the inclusion of the two free samples, MOFCOM was required, in its determination, to
explain why it determined an amount for SG&A costs "based on the application of coefficients to
data that had already been excluded for the purpose of constructing normal value ".
167 In the
absence of such an explanation provided by MOFCOM in its written report, we fail to see how the
Panel could have found China to have acted consistently with its obligations under Article 2.2.2 of
the Anti-Dumping Agreement. We do not consider that the Panel erred in finding that "an unbiased
and objective investigating authority could [not] have assumed the corrective potential of the
relevant coefficients without any supporting analysis or evidence ."
168 Contrary to what China
appears to argue, this does not constitute a finding, by the Panel, that MOFCOM could not rely on
these (rejected) "transactions for the purposes of determining SG&A amounts"; rather, we
understand the Panel simply to have found that MOFCOM was required to explain why it chose to
do so, and failed to give such explanation.
5.53. China argues that the Panel acted contrary to Article 11 of the DSU and Article 17.6(i) of the
Anti-Dumping Agreement by failing to take into account that "MOFCOM requested SMST to clarify
the nature of the coefficients, but did not obtain the requested clarification."
169 China contends
that an objective assessment of the methodology used by MOFCOM to obtain the SG&A amount
"would have led the Panel to conclude that China complied with its obligations to ensure that the
SG&A amount is 'based on' data that is 'actual' and pertains to 'production and sales in the
ordinary course of trade'."
170
5.54. The European Union responds that "[t]here are no facts or evidence on the record that
would explain how the use of the planned coefficients might have cancelled out the use of the COP
of the samples and China has never offered any explanation in this respect." 171 The
European Union further submits that SMST did respond to MOFCOM's request for clarification, and
directed MOFCOM to the actual data pertaining to production and sales in the ordinary course of
trade by SMST, contained in Tables 6-5 through 6-8.
172
5.55. It is well established that a panel must neither conduct a de novo review nor simply defer to
the conclusions of the investigating authority. Inst ead, panels should test whether the conclusions
reached by the investigating authority are reasoned and adequate in the light of the explanations

165 SMST's Dumping Questionnaire Response (Panel Exhibits CHN-5-EN (BCI) and EU-10 (BCI)), internal
p. 17.
166 MOFCOM's Preliminary Dumping Disclosure to SMST (Panel Exhibit CHN-12-EN (BCI)), internal p. 2.
(emphasis added)
167 EU Panel Report, para. 7.66. (emphasis added)
168 EU Panel Report, para. 7.66. (emphasis added)
169 China's appellant's submission, para. 111.
170 China's appellant's submission, para. 112.
171 European Union's appellee's submission, para. 203.
172 European Union's appellee's submission, para. 204.

provided by the investigating authority in its written determination. 173 Contrary to what China
suggests, it was for MOFCOM to explain why it considered that the relevant coefficients had
corrective potential, and why it used SG&A data based on the application of coefficients to data
that had already been excluded for the purpose of constructing normal value. Even accepting, as
China argues, that MOFCOM had "requested SMST to clarify the nature of the coefficients, but did
not obtain the requested clarification"
174, this does not mean that the Panel erred in finding that
"an unbiased and objective investigating authority could [not] have assumed the corrective
potential of the relevant coefficients without any supporting analysis or evidence."175
5.56. Finally, with regard to the translation of SMST's request to MOFCOM to exclude the COP in
Table 6-3 for Grade B sales in the European Union, China argues that the European Union "distorts
SMST's response" by claiming that "SMST re quested that MOFCOM not use the December
production costs in constructed value calculations", whereas "the correct translation of SMST's
request refers to 'constructed cost calculation' rather than 'constructed value calculation'."176
5.57. The European Union responds that, although China originally submitted its own translation
of the relevant phrase in SMST's request as "cost or constructed value calculations" 177, China
subsequently changed its position and argued that the correct translation of this phrase was "cost
or constructed cost calculations". 178 For the European Union, these submissions are "manifestly
unreasonable and untenable", since, "[i]f the COP of the free samples was unfit for the purposes of
determining COP, it was equally unfit for the purposes of determining an amount for SG&A
[costs]."
179 The European Union contends that, when the Anti-Dumping Agreement uses the term
"constructed", it clearly refers to the entire calculation, and not merely to part of it, such as the
COP.180 Furthermore, the European Union submits that the term "costs" on its own is not limited to
the COP, to the exclusion of SG&A costs.181
5.58. The Panel found, in the light of its finding under Article 2.2.2 of the Anti-Dumping
Agreement, that it did not need to address the disagreement between the European Union and
China concerning the correct translation into English of SMST's request to exclude the COP in
Table 6-3.
182 We see no error in the approach taken by the Panel in this regard, and certainly no
error arising to a violation of Article 11 of the DSU or Article 12.7 of the DSU.183

173 Appellate Body Report, US – Tyres (China), para. 123.
174 China's appellant's submission, para. 111.
175 Panel Report, para. 7.66.
176 China's appellant's submission, para. 89 (quoting China's second written submission to the Panel,
para. 39 (emphasis original)). See also para. 87. Before the Panel, China submitted that there is a difference
between the Chinese characters for "cost" and "value", and that SMST only requested MOFCOM not to use the
information in Table 6.3 in the "cost or constructed cost calculation". According to China, SMST thus never
requested MOFCOM to disregard the SG&A amounts in that table. (China's second written submission to the
Panel, paras. 39-42)
177 European Union's appellee's submission, para. 163 (referring to SMST's Dumping Questionnaire
Response (Panel Exhibits CHN-5-EN (BCI) and EU-10 (BCI)), internal p. 16). (emphasis original)
178 European Union's appellee's submission, para. 163 (referring to China's second written submission to
the Panel, paras. 39-42). (emphasis original)
179 European Union's appellee's submission, para. 163.
180 European Union's appellee's submission, para. 163 (referring to Articles 2.3, 2.4, 5.2(ii), and 9.3.3 of
the Anti-Dumping Agreement).
181 European Union's appellee's submission, para. 163. The European Union notes that, whereas in some
instances the Anti-Dumping Agreement refers specifically to COP (Articles 2.2 and 2.2.1), in other instances it
refers particularly and expressly to SG&A costs (Articles 2.2, 2.2.1, and 2.2.2), or to costs generally
(Articles 2.2.1, 2.2.1.1, fns 5 and 6, and Article 2.4).
182 EU Panel Report, fn 137 to para. 7.66 (referring to China's opening statement at the first Panel
meeting, para. 19). See also China's first written submission to the Panel, para. 65; second written submission
to the Panel, para. 6; and comments on European Union's response to Panel question No. 81, para. 21.
183 We also note that certain of China's claims on appeal refer to both Article 11 of the DSU and
Article 17.6(i) of the Anti-Dumping Agreement. China, however, does not develop separate arguments
concerning the latter in its submissions. We recall, in this regard, the Appellate Body's finding in US –
Hot-Rolled Steel that both Article 17.6(i) of the Anti-Dumping Agreement and Article 11 of the DSU "require[]
panels to 'assess' the facts and this … clearly necessitat es an active review or examination of the pertinent
facts", and that "it is inconceivable that Article 17.6(i) should require anything other than that panels make an
objective 'assessment of the facts of the matter'." (Appellate Body Report, US – Hot-Rolled Steel, para. 55
(emphasis original)) Accordingly, the two provisions set out a similar standard of review. We understand that
this is not in dispute.

5.1.2.3 Conclusion
5.59. In the light of the above, we uphold the Panel's finding, in paragraphs 7.66 and 8.6.a of the
EU Panel Report, that China acted inconsistently with Article 2.2.2 of the Anti-Dumping Agreement
by failing to determine an SG&A amount for SMST on the basis of actual data pertaining to
production and sales in the ordinary course of trade of the like product.
5.1.3 The European Union's conditional appe al under Articles 2.2 and 2.2.1.1 of the
Anti-Dumping Agreement
5.60. The European Union conditionally appeals the Panel's findings that both the
European Union's claim under Article 2.2.1.1 of the Anti-Dumping Agreement, as it relates to the
obligation to "reasonably reflect the costs associated with the production and sale of the product
under consideration", and its claim under Articl e 2.2 of the Anti-Dumpi ng Agreement, do not
comply with the requirements of Article 6.2 of the DSU and that these claims were, therefore,
outside the scope of the Panel's terms of reference.
184 The European Union submits, however, that
we need not consider these aspects of its appeal in the event that we uphold the Panel's findings
concerning the European Union's claim under Arti cle 2.2.2 of the Anti-Dumping Agreement, or
complete the legal analysis and confirm its claim under Article 2.2.2.185
5.61. Having upheld the Panel's finding that China acted inconsistently with Article 2.2.2 of the
Anti-Dumping Agreement by failing to determine an SG&A amount for SMST on the basis of actual
data pertaining to production and sales in the ordinary course of trade of the like product, we need
not address this aspect of the European Union's appeal.
5.2 MOFCOM's alleged failure to take into account certain information provided during
the verification visit
5.62. We now turn to address China's appeal of the Panel's findings that China acted
inconsistently with Article 6.7 and paragraph 7 of Annex I to the Anti-Dumping Agreement by
rejecting SMST's request for rectification of information on the sole basis that this request was not
made before the verification started.
5.63. We begin by summarizing the relevant findings of the Panel before addressing specific
arguments raised by China on appeal.
5.2.1 The Panel's findings
5.64. Before the Panel, the European Union cont ended that: (i) SMST submitted to MOFCOM that
certain financial expenses had been inadve rtently double-counted in SMST's Dumping
Questionnaire Response; and (ii) SMST "adduced corrected information that was duly verified".
186
The European Union claimed that China acted inconsistently with Article 6.7 and paragraph 7 of
Annex I to the Anti-Dumping Agreement by refusing to take into account the corrected information
provided during the on-the-spot investigation.
187 Pointing to language in MOFCOM's Final
Determination and Final Dumping Disclosure to SMST, the European Union argued that the only
reason provided by MOFCOM "for refusing to take the corrected information into account was that
SMST did not raise this point before the verification started".
188
5.65. In response, China argued that investigating authorities are not required, under Article 6.7
and paragraph 7 of Annex I, to accept all information presented during a verification visit.
Moreover, while accepting that the purpose of a verification visit is to verify information provided

184 European Union's other appellant's submission, paras. 70 and 78.
185 European Union's other appellant's submission, paras. 70 and 78 (referring to China's Notice of
186 EU Panel Report, para. 7.93.
187 EU Panel Report, para. 7.93 (referring to European Union's first written submission to the Panel,
paras. 98-99 and 109).
188 EU Panel Report, para. 7.93 and fn 178 thereto.

or to obtain further details, China asserted that this "does not imply that an investigating authority
is compelled to verify information provided or to obtain further details".189
5.66. The Panel began its analysis by observ ing that the European Union's claim was of a
procedural nature and concerned the question of whether China acted inconsistently with
Article 6.7 and paragraph 7 of Annex I to the Anti-Dumping Agreement because MOFCOM refused
to take into account the information provided by SMST on the sole basis that SMST did not raise
this matter before the on-the-spot investigation started.
190
5.67. The Panel noted that, in a communication sent to SMST prior to the on-the-spot
investigation, MOFCOM had requested SMST to prepare certain documents relating to, inter alia,
Table 6-5 ("Profitability"), which summarized the information concerning SG&A costs contained in
Tables 6-6 ("Detailed Chart of Allocation of Administrative Expenses") and 6-8 ("Detailed Chart of
Allocation of Financial Expenses") supplied by SMST as annexes to its initial dumping questionnaire
response.191 The Panel considered, therefore, that there was "a clear and direct connection"
between the information that SMST sought to co rrect in Tables 6-6 and 6-8 and the information
expressly requested by MOFCOM relating to Table 6-5. 192 Recalling that, under paragraph 7 of
Annex I, "the main purpose of the on-the-spot investigation is to verify information", the Panel
considered "that an investigating authority would normally welcome the rectification of information
in these circumstances".
193 The Panel found that, by first requesting SMST to prepare documents
relating to Table 6-5, but then rejecting potentially relevant information "on the sole ground that
SMST did not raise this matter before the verification started", MOFCOM acted contrary to the
main purpose of the on-the-spot investigation.
194 Having said this, the Panel agreed with China
that Article 6.7 and paragraph 7 of Annex I to the Anti-Dumping Agreement do not contain an
obligation for an investigating authority "to accept all information presented to it during the
verification visit".195 The Panel also agreed that an investigating authority "does not necessarily
have to accept new information during verification"196, and that an investigating authority does not
"have to accept voluminous amounts of corrected information". 197 Turning to the specific facts
before it, the Panel highlighted, however, th at the European Union's claim concerned the
rectification of "one piece of information", namely, the financial expenses of SMST's
headquarters.198 The Panel therefore saw "no valid reason why MOFCOM did not accept the
rectified information from SMST, particularly since MOFCOM appear[ed] to have understood the
matter explained by SMST concerning the financial expenses at issue".
199 In these circumstances,
the Panel agreed with the European Union that China acted inconsistently with Article 6.7 and
paragraph 7 of Annex I to the Anti-Dumping Agreement because MOFCOM rejected this

189 EU Panel Report, para. 7.95 (referring to China's first written submission to the Panel,
paras. 216-222).
190 EU Panel Report, para. 7.98 and fn 194 thereto.
191 EU Panel Report, para. 7.99. MOFCOM requested that SMST prepare "two complete sets of
questionnaire responses and supplemental questionnaire responses for verification including all data,
information and manuscripts or original copies of the supporting materials". In particular, MOFCOM requested
"working sheets of Tables 6-3, 6-4 and 6-5". (MOFCOM's Verification Notification to SMST (Panel Exhibit CHN-
11-EN), internal pp. 2-3; China's first written submission to the Panel, para. 202)
192 EU Panel Report, para. 7.99.
193 EU Panel Report, para. 7.99.
194 EU Panel Report, para. 7.99. (emphasis added) In its Final Determination, MOFCOM stated with
regard to SMST's rectification request:
During verification, SMST Italia raised the point that certain financial expenses were entered
more than once in the questionnaire response, and requested for adjustments to be made. On
the ground that the company did not raise this point before the onsite verification started, the
Investigation Authority decided to deny the above request.
(Panel Exhibits JPN-2-EN and EU-30, internal pp. 38-39 (emphasis added))
195 EU Panel Report, para. 7.100 (quoting China's first written submission to the Panel, para. 218).
(emphasis added)
196 EU Panel Report, para. 7.100 (referring to United States' third party written submission to the Panel,
paras. 7 and 12).
197 EU Panel Report, para. 7.100.
198 EU Panel Report, para. 7.100.
199 EU Panel Report, para. 7.100. The Panel noted that, in the Verification Disclosure to SMST, MOFCOM
stated that SMST "provided the relevant materials supporting that certain expenses were double counted".
(EU Panel Report, fn 201 to para. 7.100)

information submitted by SMST on the sole basis th at it was not provided prior to the on-the-spot
investigation.200
5.2.2 Whether the Panel erred in finding that China acted inconsistently with Article 6.7
and paragraph 7 of Annex I to the Anti-D umping Agreement by rejecting SMST's
rectification request
5.68. On appeal, China contends that the Panel erred in finding that China acted inconsistently
with Article 6.7 and paragraph 7 of Annex I to the Anti-Dumping Agreement by rejecting SMST's
request for rectification of information relating to SMST's financial expenses on the sole basis that
this request was not made before the verification visit started. China maintains that, by creating
the obligation to act in line with the main purpose of the verification visit, the Panel read into
Article 6.7 and paragraph 7 of Annex I words that are not there. For China, Article 6.7 and
paragraph 7 of Annex I do not contain an obligation for an investigating authority to act in line
with the main purpose of the verification visit. China also maintains that Article 6.7 does not
impose on an investigating authority an obligation to conduct on-the-spot verification in the
territory of an exporting Member. Rather, for China, Article 6.7 grants an investigating authority
the right to carry out a verification visit subject to a number of limitations, "provided they obtain
the agreement of the firms concerned and notify the representatives of the government of the
Member in question, and unless that Member objects to the investigation".
201
5.69. The European Union counters that the Panel correctly found that " th[e] specific fact pattern
[of the present case] demonstrates an inconsistency with Article 6.7 and paragraph 7". 202
Referring to the language in paragraph 7 of Annex I concerning the main purpose of the
on-the-spot investigation, the European Union argues that "it is inherently contradictory and
internally inconsistent to ask for something, receive it, and then later reject it." 203 According to the
European Union, while an investigating authority enjoys a certain margin of appreciation under
Article 6.7 and paragraph 7 to Annex I, it should decide whether to accept or reject information
submitted to it "on the basis of objective criteria, such as the risk of undue delay in the conduct of
the proceedings".
204
5.70. The first sentence of Article 6.7 205 stipulates that, "[i]n order to verify information provided
or to obtain further details, the authorities may carry out investigations in the territory of other
Members as required". This right to carry out on-the-spot investigations in the territory of another
Member is limited, however, to instances where: (i) the investigating authority has obtained the
agreement of the firm(s) concerned; (ii) th e investigating authority has notified the
representatives of the government of the Member in question; and (iii) that Member has not
objected to the investigation.
206 The second sentence of Article 6.7 prescribes that the procedures
described in Annex I "shall apply to investigations carried out in the territory of other Members".
While Article 6.7 lays out the basic framework for verifications in the territory of another Member,
Annex I, entitled "Procedures for on-the-spot investigations pursuant to Paragraph 7 of Article 6",
sets out further parameters for the conduct of such investigations.
5.71. Paragraph 7 of Annex I states that, "[a]s the main purpose of the on-the-spot investigation
is to verify information provided or to obtain further details", such investigation should generally
"be carried out" after the investigating authority has received the response to the questionnaire
that was used in the anti-dumping investigation. Paragraph 7 further provides that "it should be

200 EU Panel Report, para. 7.101.
201 China's appellant's submission, para. 127.
202 European Union's appellee's submission, para. 124. (emphasis original)
203 European Union's appellee's submission, para. 125.
204 European Union's appellee's submission, para. 127.
205 Article 6.7 reads, in relevant part:
In order to verify information provided or to obtain further details, the authorities may carry out
investigations in the territory of other Members as required, provided they obtain the agreement
of the firms concerned and notify the representatives of the government of the Member in
question, and unless that Member objects to the investigation. The procedures described in
Annex I shall apply to investigations carried out in the territory of other Members.
206 The third sentence of Article 6.7 further provides: "Subject to the requirement to protect confidential
information, the authorities shall make the results of any [investigations carried out under Article 6.7]
available, or shall provide disclosure thereof pursuant to [Article 6.9], to the firms to which they pertain and
may make such results available to the applicants."

standard practice" to advise firms in advance abou t the "general nature of the information to be
verified and of any further information which needs to be provided", but that "this should not
preclude requests to be made on the spot for further details to be provided in the light of
information obtained."
5.72. Moving to the immediate context for Article 6.7 and paragraph 7 of Annex I, we note that
Article 6.6 of the Anti-Dumping Agreement stipulat es that investigating "authorities shall during
the course of an investigation satisfy themselves as to the accuracy of the information supplied by
interested parties upon which their findings are based."
207 The investigating authority can do so in
several ways, including by conducting on-the -spot investigations, as contemplated under
Article 6.7, "[i]n order to verify information provided or to obtain further details".208
5.73. We further note that Article 6 of the An ti-Dumping Agreement situates the conduct of on-
the-spot investigations within a broader set of provisions regulating the process of identifying and
gathering evidence for anti-dumping duty investigations. 209 In addition to laying down evidentiary
rules that apply throughout the course of an anti-dumping investigation, Article 6 speaks to the
due process rights that are enjoyed by interested parties during the investigation. This further
reinforces the textual directive under Article 6.6 for investigating authorities to satisfy themselves
as to the accuracy of the information supplied by interested parties, including in the context of
carrying out on-the-spot investigations under Article 6.7.
5.74. The requirement that investigating authoritie s "satisfy themselves as to the accuracy of the
information supplied by interested parties" does not mean that they are under an obligation to
accept and use all information that is submitted to them. Circumstances will vary, and
investigating authorities have some degree of latitude in deciding whether to accept and use
information submitted by interested parties during on-the-spot investigations or thereafter. That
latitude is limited, however, by the investigating authority's obligation under Article 6.6 to ensure
that the information on which its findings are based is accurate, and by the legitimate due process
interests of the parties to an investigation.
210 An investigating authority must balance these due
process interests with the need to control and expedite the investigating process. 211 This balance
between the due process interests of the parties and controlling and expediting the investigating
process applies throughout the investigation, including during on-the-spot investigations.
5.75. Depending on the particularities of each case, factors bearing upon the latitude of an
investigating authority to accept or reject information submitted during an on-the-spot
investigation may include, for example, the timing of the presentation of new information; whether
the acceptance of new information would cause undue difficulties in the conduct of the
investigation
212; whether the interested party has submitted voluminous amounts of information or
merely seeks to have an arithmetical or clerical error corrected; whether the information at issue
relates to facts that are "essential" within the meaning of Article 6.9 of the Anti-Dumping
Agreement; or whether the information supplied by an interested party relates to the information

207 We note that Article 6.6 includes the qualification "[e]xcept in circumstances provided for in
paragraph 8". In this regard, we note that it would not be possible for investigating authorities to "satisfy
themselves as to the accuracy of the information" in circumstances where interested parties refuse access to,
or otherwise do not provide, such information. The Appellate Body made a similar statement regarding
Article 12.5 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement) in US – Carbon
Steel (India). (See Appellate Body Report, US – Carbon Steel (India), fn 1077 to para. 4.418)
208 Alternatively, an investigating authority may, for example, send additional questionnaires to a
respondent, as contemplated under Article 6.1 of the Anti-Dumping Agreement, and request written responses
to such questionnaires.
209 See Appellate Body Reports, EC – Tube or Pipe Fittings, para. 138; EC – Bed Linen (Article 21.5 –
210 Including the interests of the party submitting particular information in having that information taken
into account. (See Article 6.1 of the Anti-Dumping Agreement, which reads, in relevant part: "All interested
parties in an anti-dumping investigation shall be given … ample opportunity to present in writing all evidence
which they consider relevant in respect of the investigation in question.")
211 See Appellate Body Report, US – Hot-Rolled Steel, para. 86. See also Article 6.14 of the Anti-
Dumping Agreement, which reads, in relevant part: "The procedures set out above are not intended to prevent
the authorities of a Member from proceeding expeditiously with regard to initiating an investigation, reaching
preliminary or final determinations … or from applying provisional or final measures".
212 The panel in EC – Salmon (Norway) said that it could not "see how the mere fact that … cost
information was submitted after the on-the-spot investigation means that it could not be used without 'undue
difficulties'." (Panel Report, EC – Salmon (Norway), para. 7.367)

specifically requested by the investigating authorit y. We agree with the Panel that Article 6.7 and
paragraph 7 of Annex I to the Anti-Dumping Agreement do not contain an obligation for an
investigating authority "to accept all information presented to it during a verification visit".
213 We
also agree with the Panel that an investigating authority does not necessarily "have to accept
voluminous amounts of corrected information". 214 At the same time, an investigating authority
may accept information provided during the on-the-spot investigation or, in appropriate
circumstances, even at a later stage.
215
5.76. With these considerations in mind, we recall that MOFCOM requested SMST to prepare
documents relating to Table 6-5, and that SMST sought to correct information contained in
Tables 6-6 and 6-8, which, in turn, were summarized in Table 6-5.
216 The Panel found, therefore,
that there was a "clear and direct connection" between the information that SMST sought to
correct and the information expressly requested by MOFCOM. 217 China does not contest this
finding.218 It is also uncontested that SMST's request for rectification concerned one specific piece
of information, that is, the financial expenses of SMST's headquarters. 219 In refusing to take that
information into account, MOFCOM did not reason that the acceptance of that information would
have caused undue difficulties in the conduct of the investigation; that SMST would have
submitted voluminous amounts of additional information to the investigating authority late in the
proceedings; or impeded or delayed the conduct of the anti-dumping proceedings in some way.
Instead, as the Panel found, MOFCOM rejected SMST's rectification request "on the sole ground
that SMST did not raise this matter before the verification started".
220 China does not contest that
this was the only reason for the rejection given by MOFCOM in the Final Determination.221
5.77. In these circumstances, and in the absence of any further explanation by MOFCOM, we see
no error in the Panel's finding that there seems to have been no valid reason why MOFCOM did not
accept the corrected information provided by SM ST. Moreover, contrary to what China suggests,
the Panel did not find that China acted inconsiste ntly with Article 6.7 and paragraph 7 of Annex I
because MOFCOM acted contrary to the main purpos e of the verification visit. Instead, as we
understand it, the Panel based its findings on the fact that, while MOFCOM expressly requested
SMST to prepare certain information for the on-the-spot investigation, it then refused to take into
account corrected information even though it had a "clear and direct connection" to the
information that had been requested. MOFCOM re jected the corrected information although it
consisted of only "one piece of information" regarding the financial expenses of SMST's
headquarters, and did so solely on the basis that it was not provided prior to the verification visit,
and without providing other reasons.
5.78. In the light of the foregoing, we uphold the Panel's finding, in paragraphs 7.101 and 8.6.c.
of the EU Panel Report, that China acted inconsistently with Article 6.7 and paragraph 7 of Annex I
to the Anti-Dumping Agreement by rejecting SMST's request for rectification only on the basis that
it was not provided prior to verification.
5.2.3 The European Union's conditional appeal under Article 6.8 and paragraphs 3 and 6
of Annex II to the Anti-Dumping Agreement
5.79. In the event that we reverse the Panel's findings under Article 6.7 and paragraph 7 of
Annex I to the Anti-Dumping Agreement, the Euro pean Union appeals the Panel's rejection of the
European Union's claim under Article 6.8 and paragraphs 3 and 6 of Annex II to the Anti-Dumping
Agreement.
222

213 EU Panel Report, para. 7.100 (quoting China's first written submission to the Panel, para. 218).
(emphasis added)
214 EU Panel Report, para. 7.100.
215 Panel Report, EC – Salmon (Norway), para. 7.367.
216 EU Panel Report, para. 7.99 (referring to MOFCOM's Verification Disclosure to SMST (Panel Exhibit
EU-23-EN), internal p. 3; and SMST's Comments on Final Dumping Disclosure (Panel Exhibit EU-28-EN (BCI)),
p. 2).
217 EU Panel Report, para. 7.99.
218 China's response to questioning at the oral hearing.
219 EU Panel Report, para. 7.100.
220 EU Panel Report, para. 7.99. (emphasis added)
221 China's response to questioning at the oral hearing.
222 European Union's other appellant's submission, paras. 84 and 107-108.

5.80. We recall that the Panel rejected the European Union's claims under Article 6.8 and
paragraphs 3 and 6 of Annex II that MOFCOM had applied "facts available", and found, instead,
that "MOFCOM based its determination on evidence contained in the records, which at that time
MOFCOM considered were the correct facts submitted by SMST."
223
5.81. Having upheld the Panel's finding that China acted inconsistently with Article 6.7 and
paragraph 7 of Annex I to the Anti-Dumping Agreement by rejecting SMST's rectification request
on the sole basis that it was not provided prior to the verification visit, we need not further
address this aspect of the European Union's appeal.

223 EU Panel Report, para. 7.102.
WT/DS454/AB/R • WT/DS460/AB/R

5.3 Showing of "good cause" under Article 6.5 of the Anti-Dumping Agreement
5.82. China claims that the Panel erred in its interpretation and application of Article 6.5 of the
Anti-Dumping Agreement in finding that China acted inconsistently with its obligations under that
provision by permitting the full text of certain reports submitted by the petitioners in the
underlying investigation "to remain confidential without objectively assessing 'good cause' and
scrutinizing the petitioners' showing".
224 China further claims, on three grounds, that the Panel
applied an erroneous standard of review and failed to make an objective assessment of the facts
before it, contrary to the requirements of Ar ticle 11 of the DSU and Article 17.6(i) of the
Anti-Dumping Agreement. First, China alleges th at the Panel erroneously limited its review to
assessing whether MOFCOM had explained why it considered that the full text of the reports at
issue warranted confidential treatment. Second, Ch ina contends that the Panel applied internally
inconsistent reasoning in its analysis of the claims under Articles 6.5 and 6.5.1 of the
Anti-Dumping Agreement. Third, China asserts th at the Panel improperly made the case for the
complainants with regard to their claims under Article 6.5 of the Anti-Dumping Agreement.
5.83. Before addressing the specific claims raised by China, we first summarize the relevant
findings of the Panel, and the context in which the Panel made those findings. We then examine
Article 6.5 of the Anti-Dumping Agreement, and the disciplines that apply thereunder.
5.3.1 The Panel's findings
5.84. Before the Panel, Japan and the European Union argued that China acted inconsistently with
Article 6.5 of the Anti-Dumping Agreement because MOFCOM permitted the full text of four reports
to remain confidential without objectively assessing the "good cause" alleged for confidential
treatment and scrutinizing the petitioners' showing.
225 These reports are contained in:
(i) appendix V to the petition; (ii) appendix VIII to the petition; (iii) appendix 59 to the petitioners'
supplemental evidence of 1 March 2012; and (iv) the appendix to the petitioners' supplemental
evidence of 29 March 2012.
5.85. China responded that "good cause" had be en adequately shown by the petitioners because
they had provided several substantiated reasons as to why confidential treatment was warranted
both for the names of the relevant third party institutes and the full text of the four reports at
issue.
226 In addition, China argued that the Anti-Dumping Agreement does not impose an
obligation on an investigating authority "to explain why it considers that confidential treatment [of
information] is warranted".
227
5.86. The Panel identified the issue before it as involving an examination of whether MOFCOM
permitted the full text of the four reports to remain confidential without objectively assessing the
"good cause" alleged for confidential treatmen t and scrutinizing the petitioners' showing to
determine whether the requests were sufficiently substantiated. 228 With regard to China's
allegation that the European Union had failed to establish a prima facie case of violation, the Panel
found that, although the European Union "could have been more specific in setting out its [] claim"
under Article 6.5 in its first written submission, overall, it considered that the European Union had
"sufficiently connected its Article 6.5 claim to the relevant appendices".229

224 Panel Reports, para. 7.303.
225 Panel Reports, para. 7.285. The Panel noted that the complainants accepted that the petitioners had
demonstrated "good cause" for treating as confidential the names of the third parties providing the reports and
considered that the petitioners' concerns could have been addressed by withholding such names. (Ibid., fn 452
to para. 7.285)
226 Panel Reports, para. 7.287.
227 Panel Reports, para. 7.287.
228 Panel Reports, para. 7.290. The Panel noted that "the complainants also argue[d] that the petitioners
[had] failed to show 'good cause' for treating as confidential the full text of the four confidential reports at
issue." The Panel decided to start its review with MOFCOM's assessment of the alleged showing of "good
WT/DS454/AB/R • WT/DS460/AB/R

5.87. The Panel noted that, in evaluating the complainants' claims under Article 6.5 of the
Anti-Dumping Agreement, it would be guided by the Appellate Body's pronouncements on "good
cause" in EC – Fasteners (China).230 Turning to the specific facts before it, the Panel examined the
petitioners' requests for confidential treatment of information contained in the four appendices at
issue, and MOFCOM's statement granting confidential treatment.231
5.88. Regarding the scope of MOFCOM's statement, the Panel found that, although it was directed
at the requests for confidential treatment of appendix V, it could "also be reasonably understood"
to apply to the appendix to the petitioners' supplemental evidence of 29 March 2012, as the latter
"builds on" the former.232
5.89. The Panel next turned to examine whether MOFCOM's statement was sufficient to
demonstrate that MOFCOM objectively assessed the petitioners' showing of "good cause" with
regard to both the names of the third party institutes and the full text of appendix V and the
appendix to the petitioners' supplemental eviden ce of 29 March 2012. The Panel found that, while
the petitioners' requests referred to both the na mes of the institutes and the full text of the
reports, when accepting the petitioners' requests for confidential treatment, "MOFCOM limited its
statement to address only 'the legitimacy of the petitioners' application to treat the name of the
"authoritative third party institute" as confidential'." 233 With respect to the confidential treatment
of the full text of the two reports at issue, the Panel noted that MOFCOM's statement only
"summariz[ed] the petitioners' arguments for confidential treatment and requests; rather than
[having] reflect[ed] MOFCOM's explanation or reasoning".
234 The Panel concluded that there was
thus "no evidence" that "MOFCOM objectively assessed the 'good cause' alleged for confidential
treatment, and scrutinized the petitioners' requests relating to the full text of appendix V, and
appendix to the petitioners' supplemental evidence of 29 March 2012." 235 With regard to
appendix VIII to the petition and appendix 59 to the petitioners' supplemental evidence of
1 March 2012, the Panel found that, in the abse nce of any evidence that MOFCOM objectively
assessed the "good cause" alleged and scrutinized the petitioners' requests, it had no basis to
conclude that MOFCOM had done so.
236
5.90. Having upheld the European Union's claim that MOFCOM did not objectively assess the
"good cause" alleged by the petitioners for confid ential treatment of the full text of the four
appendices at issue, the Panel noted China's argument that "the 'Anti-Dumping Agreement does
not require an investigating authority which found that confidential treatment is warranted to do or
specify anything, beyond the obligation to treat such information as confidential'."
237 The Panel
found that, "[i]n the absence of any explanation by MOFCOM", there was "no basis to conclude
that MOFCOM properly determined that the petitioners had shown 'good cause' for their requests
for confidential treatment".
238 The Panel also considered that it had "no basis … to imply that
MOFCOM properly determined that the petitioners had shown 'good cause' for their requests for
confidential treatment from the fact that MOFCOM ultimately granted their request".
239
5.91. The Panel concluded that China acted incons istently with Article 6.5 of the Anti-Dumping
Agreement by permitting the full text of the reports in appendix V and appendix VIII to the
petition, appendix 59 to the petitioners' supplemental evidence of 1 March 2012, and the appendix
to the petitioners' supplemental evidence of 29 March 2012 "to remain confidential without
objectively assessing 'good cause' and scrutinizing the petitioners' showing".
240

230 Panel Reports, para. 7.291 (referring to Appellate Body Report, EC – Fasteners (China),
paras. 537-539).
231 Panel Reports, paras. 7.292-7.296.
232 Panel Reports, para. 7.298. The Panel disagreed with China that MOFCOM's statement also applied to
the two remaining appendices at issue. (Ibid.)
233 Panel Reports, para. 7.299 (quoting MOFCOM's Preliminary Determination (Panel Exhibits JPN-7-EN
and EU-18), internal p. 33; and MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and EU-30), internal
p. 46). (emphasis added by the Panel)
234 Panel Reports, para. 7.299.
236 Panel Reports, para. 7.300.
237 Panel Reports, para. 7.301 (quoting China's first written submission to the Panel, para. 725).
238 Panel Reports, para. 7.302 and fn 487 thereto.
239 Panel Reports, para. 7.302.
240 Panel Reports, para. 7.303.
WT/DS454/AB/R • WT/DS460/AB/R

5.3.2 Assessment of the Panel's analysis
5.92. On appeal, China argues that the Panel erred in construing Article 6.5 of the Anti-Dumping
Agreement as imposing an obligation on an investigating authority to explain why it considers that
confidential treatment is warranted.
241 China refers to the panel report in Mexico – Steel Pipes and
Tubes and the Appellate Body report in EC  Fasteners (China) to argue that, while an
investigating authority must review and decide whether "good cause" was shown, there is no
obligation for an investigating authority to provide any explanation regarding its assessment and
scrutiny of the alleged showing of "good cause".242
5.93. Japan and the European Union observe that, contrary to what China suggests, the Panel did
not find that Article 6.5 of the Anti-Dumping Agreement contains an obligation for the investigating
authority to "provide an explanation" for its reasons for granting confidentiality. Rather, the
Panel's finding was that, in the absence of any explanation by MOFCOM, the Panel had no basis to
conclude that MOFCOM undertook an objective assessment and properly determined that the
petitioners had shown "good cause" for their reques ts for confidential treatment with respect to
the full text of the four reports at issue.
 243 At the oral hearing, Japan and the European Union
agreed that the degree of substantiation required from an investigating authority depends on the
nature of the information for which confidential treatment is sought, noting however that, in the
absence of any evidence that MOFCOM had obje ctively assessed the "good cause" alleged for
confidential treatment, the Panel correctly concluded that China had acted inconsistently with
Article 6.5.244
5.94. We begin our analysis by examining the text of Article 6.5 of the Anti-Dumping Agreement,
which provides:
Any information which is by nature confidential (for example, because its disclosure
would be of significant competitive advantage to a competitor or because its
disclosure would have a significantly adverse effect upon a person supplying the
information or upon a person from whom that person acquired the information), or
which is provided on a confidential basis by parties to an investigation shall, upon
good cause shown, be treated as such by the authorities. Such information shall not
be disclosed without specific permission of the party submitting it.[*]
[*original fn]17 Members are aware that in the territory of certain Members disclosure pursuant
to a narrowly-drawn protective order may be required.
5.95. In EC – Fasteners (China) , the Appellate Body explained that Article 6.5 covers information
that is "by nature confidential", as well as information that is "provided on a confidential basis",
and that a "good cause" showing by the party seek ing confidential treatment is required for both
of these categories of information.
245 The Appellate Body added that "[t]he 'good cause' alleged
must constitute a reason sufficient to justify the withholding of information from both the public
and from the other parties interested in the investigation."
246 According to the Appellate Body,
"'[g]ood cause' must be assessed and determined objectively by the investigating authority, and
cannot be determined merely based on the subj ective concerns of the submitting party." 247 The
Appellate Body further stated:

241 China's appellant's submission, paras. 284-286 and 290.
242 China's appellant's submission, paras. 288-289; other appellant's submission, paras. 195-196
(referring to Panel Report, Mexico – Steel Pipes and Tubes, paras. 7.380 and 7.382; and Appellate Body
Report, EC – Fasteners (China), para. 539 and fn 784 thereto).
243 Japan's appellee's submission, para. 61; European Union's appellee's submission, para. 268
(referring to Panel Reports, paras. 7.299-7.300 and 7.302).
244 Japan's and the European Union's responses to questioning at the oral hearing.
245 Appellate Body Report, EC – Fasteners (China), paras. 536-537. The Appellate Body also stated that
the "question of whether information is 'by nature' confidential depends on the content of the information.
Information that is 'provided on a confidential basis' is not necessarily confidential by reason of its content, but
rather, confidentiality arises from the circumstances in which it is provided to the authorities. These two
categories may, in practice, overlap." (Ibid., para. 536 (emphasis original))
246 Appellate Body Report, EC – Fasteners (China), para. 537.
247 Appellate Body Report, EC – Fasteners (China), para. 537.
WT/DS454/AB/R • WT/DS460/AB/R

In practice, a party seeking confidential treatment for information must make its
"good cause" showing to the investigating authority upon submission of the
information. The authority must objectively assess the "good cause" alleged for
confidential treatment, and scrutinize th e party's showing in order to determine
whether the submitting party has sufficiently substantiated its request. In making its
assessment, the investigating authority must seek to balance the submitting party's
interest in protecting its confidential information with the prejudicial effect that the
non-disclosure of the information may have on the transparency and due process
interests of other parties involved in the investigation to present their cases and
defend their interests. The type of eviden ce and the extent of substantiation an
authority must require will depend on the nature of the information at issue and the
particular "good cause" alleged. The obligation remains with the investigating
authority to examine objectively the justification given for the need for confidential
treatment. If information is treated as co nfidential by an authority without such a
"good cause" showing having been made, the authority would be acting inconsistently
with its obligations under Article 6.5 to gr ant such treatment only "upon good cause
shown".
248
5.96. The Appellate Body further noted that, "[w] henever information is treated as confidential,
transparency and due process concerns will nece ssarily arise because such treatment entails the
withholding of information from other parties to an investigation." 249 The Appellate Body stated
that "Articles 6.5 and 6.5.1 accommodate the conc erns of confidentiality, transparency, and due
process by protecting information that is by nature confidential or is submitted on a confidential
basis and upon 'good cause' shown, but establishing an alternative method for communicating its
content so as to satisfy the right of other parties to the investigation to obtain a reasonable
understanding of the substance of the confidential information, and to defend their interests."
250
5.97. The Appellate Body added that an investigating authority "must objectively assess the 'good
cause' alleged for confidential treatment, and scr utinize the party's showing in order to determine
whether the submitting party has sufficiently substantiated its request". 251 However, the
Appellate Body did not further say how the sufficiency of a showing of "good cause" is to be
assessed by an investigating authority, or how it is to be assessed by a reviewing panel. As we see
it, a panel tasked with reviewing whether an investigating authority has objectively assessed the
"good cause" alleged by a party must examine this issue on the basis of the investigating
authority's published report and its related supportin g documents, and in the light of the nature of
the information at issue
252 and the reasons given by the submitting party for its request for

248 Appellate Body Report, EC – Fasteners (China), para. 539. (fn omitted)
249 Appellate Body Report, EC – Fasteners (China), para. 541.
250 Appellate Body Report, EC – Fasteners (China), para. 542. (fns omitted) The Appellate Body noted
that:
Article 6.5.1 serves to balance the goal of ensuring that the availability of confidential treatment
does not undermine the transparency of the investigative process[]. In respect of information
treated as confidential under Article 6.5, Article 6.5.1 obliges the investigating authority to
require that a non-confidential summary of the information be furnished, and to ensure that the
summary contains "sufficient detail to permit a reasonable understanding of the substance of the
information submitted in confidence". The sufficiency of the summary provided will therefore
depend on the confidential information at issue, but it must permit a reasonable understanding of
the substance of the information withheld in order to allow the other parties to the investigation
an opportunity to respond and defend their interests.
(Ibid. (fns omitted))
251 Appellate Body Report, EC – Fasteners (China), para. 539.
252 As the Appellate Body in EC – Fasteners (China) noted, "[t]he confidentiality of information that is
'by nature' confidential will often be readily apparent. Article 6.5 provides illustrative examples of information
that falls into the category of 'by nature' confidential, including information that is sensitive 'because its
disclosure would be of significant competitive advantage to a competitor or because its disclosure would have a
significantly adverse effect upon a person supplying the information or upon a person from whom that person
acquired the information'." (Appellate Body Report, EC – Fasteners (China), para. 536)
WT/DS454/AB/R • WT/DS460/AB/R

confidential treatment.253 The type of evidence and the extent of substantiation the investigating
authority must require will depend on the nature of the information at issue and the particular
"good cause" alleged.
254 In reviewing whether an investigating authority has assessed and
determined objectively that "good cause" for confid ential treatment has been shown to exist, it is
not for a panel to engage in a de novo review of the record of the investigation and determine for
itself whether the existence of "good cause" has been sufficiently substantiated by the submitting
party.
5.98. Turning to the present case, we note that, in finding that there was no evidence that
MOFCOM objectively assessed the "good cause" al leged for confidential treatment, the Panel
stressed that it was not concluding that MOFCOM could not have treated the full text of the reports
contained in appendix V and the appendix to th e petitioners' supplemental evidence of 29 March
2012 as confidential.
255 Rather, the Panel found that there was "no evidence that MOFCOM ever
considered whether good cause had been shown for such treatment" 256, and thus no evidence of
an objective assessment.
5.99. Pursuant to Article 6.5 of the Anti-Dumping Agreement, it is for the investigating authority
to require a party that seeks confidential treatm ent of information to explain and provide reasons
as to why the information at issue should be treated as confidential. The investigating authority, in
turn, is under an obligation to assess objectively the "good cause" alleged by the submitting party
for confidential treatment, and to "scrutinize th e party's showing in order to determine whether
the submitting party has sufficiently substantiated its request". 257 As the Appellate Body has
explained, "'[g]ood cause' must be assessed and determined objectively by the investigating
authority, and cannot be determined merely based on the subjective concerns of the submitting
party."258 In the present case, however, MOFCOM merely summarized the reasons provided by the
petitioners for confidential treatment of the full text of two of the four reports at issue.259
5.100. Therefore, we see no error in the Panel's finding that, in the absence of any evidence that
MOFCOM objectively assessed the "good cause" allege d, it had no basis to conclude that MOFCOM
undertook an objective assessment and properly determined that the petitioners had shown "good
cause" for their requests for confidential treatment. 260 In these circumstances, we also see no
error in the Panel's conclusion that there was no basis for it to find that "MOFCOM properly

253 In this respect, we note that the Appellate Body found that "the examples provided in Article 6.5 in
the context of information that is 'by nature' confidential are helpful in interpreting 'good cause' generally,
because they illustrate the type of harm that might result from the disclosure of sensitive information, and the
protectable interests involved." The Appellate Body emphasized that "[t]hese examples are only illustrative,
however, and … consider[ed] that a wide range of othe r reasons could constitute 'good cause' justifying the
treatment of information as confidential under Article 6.5." (Appellate Body Report, EC – Fasteners (China),
para. 538)
254 Appellate Body Report, EC – Fasteners (China), para. 539.
257 Appellate Body Report, EC – Fasteners (China), para. 539.
258 Appellate Body Report, EC – Fasteners (China), para. 537.
259 In its Injury Disclosure and Final Determination, MOFCOM summarized in a footnote the reasons
provided by the petitioners for confidential treatment of the full text of the two reports as follows:
According to the reason provided by the petitioners for confidential treatment, a certain
authoritative institute in the domestic stainless steel tube industry provided information on
domestic and international markets for certain high-performance stainless steel seamless tubes.
To do this, the institute in question spent a large amount of time and energy on the research,
analysis and selection of relevant data and information, and provided the final report to the
petitioners at a certain price. If the petitioners were to disclose the full report itself and the name
of the said institute, it would on the one hand create obstacles for this institute to carry out
similar research in the future (for example, a third party may not want to cooperate with the
institute on its future researches) and on the other hand seriously affect the prospects of the
institute to sell reports with same or similar information and data to other third parties. In
addition, it would also cause serious negative impacts on the daily operations of the institute.
Therefore, at the request of this institute, the petitioners applied for confidential treatment for
the full text of the report.
(Panel Reports, para. 7.296 (quoting MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and EU-30),
internal p. 46, fn 18; and MOFCOM's Injury Disclosure (Panel Exhibits JPN-23-EN and EU-24), internal p. 22,
fn 17 (translation amended by Panel Exhibit CHN-16-EN, and accepted by the complainants in Panel Exhibits
JPN-29 and EU-32)))
260 Panel Reports, paras. 7.299-7.300.
WT/DS454/AB/R • WT/DS460/AB/R

determined that the petitioners had shown 'goo d cause' for their requests for confidential
treatment from the fact that MOFCOM ultimately granted their request for confidential
treatment."
261
5.101. China also submits that, in reaching its findings under Article 6.5 of the Anti-Dumping
Agreement, the Panel applied an erroneous standard of review and failed to make an objective
assessment of the facts before it, contrary to the requirements of Article 11 of the DSU and
Article 17.6(i) of the Anti-Dumping Agreement. 262 According to China, the Panel applied an
incorrect standard of review because it failed to take into account the information on the record
that was before MOFCOM. 263 Although China brings this claim as a separate one, it appears to be
premised on the same contention as its claim that the Panel erred in the interpretation and
application of Article 6.5, namely, that the Panel should have looked into the facts that were
before MOFCOM in order to determine whether MOFCOM objectively assessed the "good cause"
alleged.
5.102. We do not consider that the Panel would have complied with the applicable standard of
review if, in the absence of any evidence of an objective assessment by MOFCOM of the "good
cause" alleged, it had engaged in a de novo review of evidence on the record of the investigation
and determined for itself, or on the basis of subjective concerns of the petitioners, whether the
request for confidential treatment was sufficiently substantiated and that "good cause" for such
treatment objectively existed. Having rejected China's claim of error under Article 6.5 of the
Anti-Dumping Agreement, we also do not agree with China that the Panel acted inconsistently with
Article 11 of the DSU and Article 17.6(i) of the An ti-Dumping Agreement by failing to take into
account the information on the record, including the requests for confidential treatment by the
petitioners.
264 We fail to see how the Panel, having found that there was no evidence that
MOFCOM objectively assessed the "good cause" alleged, and that MOFCOM had instead only
summarized the petitioners' requests an d arguments for confidential treatment 265, could have
concluded that MOFCOM undertook an objective assessment and properly determined that the
petitioners had shown "good cause" for their requests for confidential treatment.
5.3.3 Whether the Panel applied internally inconsistent reasoning in violation of
Article 11 of the DSU
5.103. We next turn to China's claim that the Panel applied internally inconsistent reasoning in its
analysis of Japan's and the European Union's claims under Articles 6.5 and 6.5.1 of the
Anti-Dumping Agreement, contrary to the requirem ents of Article 11 of the DSU. China contends
that, unlike under Article 6.5, in its analysis under Article 6.5.1 of the Anti-Dumping Agreement,
the Panel did not take issue with the absence of explanations by MOFCOM, and focused its
examination, instead, on the non-confidential summ aries provided by the petitioners, as well as
the statements provided by the petitioners as to why summarization was not possible.
266 In
support of its position, China argues that, in EC – Fasteners (China) , in the context of its
assessment under Article 6.5.1, "the Appellate Body examined the statements provided by certain
parties who claimed that they could not provide a non-confidential summary of information
submitted in confidence, and did not requ ire an analysis of statements by the investigating
authority."267 In China's view, such internally inconsistent reasoning of the Panel in its analyses
under Article 6.5 and Article 6.5.1 cannot be reconciled with the Panel's duty to make an objective
assessment of the facts under Article 11 of the DSU.
5.104. Japan and the European Union respond that, while there may be similarities between the
obligations of an investigating authority under Ar ticle 6.5 and Article 6.5.1 of the Anti-Dumping
Agreement, a precondition for triggering the obligation under Article 6.5.1 for the investigating

261 Panel Reports, para. 7.302.
262 China's Notice of Appeal, para. 5.e.ii; Notice of Other Appeal, para. 5.c.ii; appellant's submission,
263 China's appellant's submission, para. 295; other appellant's submission, para. 202.
264 China's appellant's submission, para. 295; other appellant's submission, para. 202 (referring to
Appellate Body Reports, US – Tyres (China), para. 329; and US – Countervailing Duty Investigation on DRAMs,
paras. 187-188); responses to questioning at the oral hearing.
265 Panel Reports, para. 7.299.
266 China's appellant's submission, paras. 301-303; other appellant's submission, paras. 208-210.
267 China's appellant's submission, para. 301; other appellant's submission, para. 208 (referring to
Appellate Body Report, EC – Fasteners (China), para. 553). (emphasis original)
WT/DS454/AB/R • WT/DS460/AB/R

authority "to scrutinize the reasons advanced for not supplying non-confidential summaries" is "the
existence of a statement by the party pertaining to such reasons". 268 According to the
complainants, the Panel's finding that the record did not contain any reasons advanced by the
petitioners for not supplying non-confidential summaries was not a finding on the adequacy of
the reasons.
269
5.105. Article 6.5 and Article 6.5.1 of the Anti-Dumping Agreement each imposes distinct
obligations on an investigating authority. Under Article 6.5, the investigating authority is required
objectively to assess the "good cause" alleged by the party requesting confidential treatment. By
contrast, under Article 6.5.1, the investigating authority is obliged, in respect of information that
an investigating authority has decided to treat as confidential under Article 6.5, "to require that a
non-confidential summary of the information be furnished, and to ensure that the summary
contains 'sufficient detail to permit a reasonable understanding of the substance of the information
submitted in confidence'."
270 When it is not possible to supply a non-confidential summary,
Article 6.5.1 requires a party "to identify the exceptional circumstances and provide a statement
explaining the reasons why summarization is not possible". 271 For its part, the investigating
authority must scrutinize such statements to determine whether they establish exceptional
circumstances, and whether the reasons given explain why summarization is not possible.
272 Thus,
although the subject matter of Article 6.5 and Articl e 6.5.1 is similar, the nature of the obligations
that apply under the two provisions is different.
5.106. In the present disputes, the issue before the Panel under Article 6.5 was whether MOFCOM
permitted the full text of the four appendices to remain confidential without objectively assessing
and scrutinizing the petitioners' showing of "good cause". By contrast, under Article 6.5.1, the
issue before the Panel was: (i) whether MOFCOM required the petitioners to provide sufficient
non-confidential summaries of the confidential information contained in reports found in the four
appendices at issue; and (ii) whether MOFCOM required the petitioners to provide adequate
statements as to why summarization was not possible with respect to the remaining
32 appendices.
273
5.107. As we have noted above, whether an in vestigating authority has objectively assessed the
"good cause" alleged by a party under Article 6.5 is to be examined on the basis of the
investigating authority's published report and its related supporting documents, and in the light of
the nature of the information at issue and the reasons given by the interested party for its request
for confidential treatment. We have also found th at the Panel did not err in stating that, in the
absence of any evidence that MOFCOM had objectively assessed whether the petitioners had made
a showing of "good cause" in the present case, it could not find that MOFCOM had complied with
its obligation under Article 6.5.
274
5.108. In addressing the complainants' claim under Article 6.5.1 that MOFCOM failed to require
the petitioners to provide sufficient non-confidential summaries of the confidential information, the
Panel compared confidential versions and the non-confidential summaries of the four appendices
at issue. We recall that, in EC  Fasteners (China), the Appellate Body held that the sufficiency of
the summary provided depends on the confidential information at issue, and that it must permit
"a reasonable understanding of the substance of the information withheld". 275 Thus, in order to
determine whether MOFCOM ensured that the non-co nfidential summaries of the four reports at
issue were sufficiently detailed, the Panel compared those summaries with the confidential
versions of the underlying reports. Further, in assessing whether MOFCOM required the petitioners
to provide adequate statements as to why summarization was not possible with regard to the
remaining 32 appendices, the Panel examined the statements by the petitioners.
276

268 Japan's appellee's submission, para. 72; European Union's appellee's submission, para. 278.
269 Japan's appellee's submission, para. 74; European Union's appellee's submission, para. 281.
270 Appellate Body Report, EC – Fasteners (China), para. 542.
271 Appellate Body Report, EC – Fasteners (China), para. 544.
272 Appellate Body Report, EC – Fasteners (China), para. 544. (fn omitted)
273 Panel Reports, para. 7.304.
274 Panel Reports, para. 7.299 and fn 482 thereto.
275 Appellate Body Report, EC – Fasteners (China), para. 542.
276 Panel Reports, para. 7.324.
WT/DS454/AB/R • WT/DS460/AB/R

5.109. We do not consider that the Panel's approach to addressing the complainants' claims under
Articles 6.5 and 6.5.1 of the Anti-Dumping Agreement was "internally inconsistent". Rather, as we
see it, the Panel properly reflected the distinct nature of the substantive legal obligation at issue in
each case.
5.110. China also argues that the Panel's appr oach under Article 6.5 in the present disputes
contradicts the approach adopted by the Appellate Body in EC – Fasteners (China) in its analysis of
the claims under Article 6.5.1 of the Anti-Dumping Agreement. In EC
 Fasteners (China) , the
Appellate Body considered whether the investigating authority had ensured that two domestic
producers – Agrati and Fontana Luigi – had provided adequate statements as to why
summarization of confidential information wa s not possible. Having examined the Panel's
assessment of the statements by Agrati and Font ana Luigi, the Appellate Body concluded that
those statements did not contain sufficient explanations as to why summarization of certain
information was not possible, and, accordingly, that the European Union had failed to comply with
its obligations under Article 6.5.1. 277 Moreover, the Appellate Body found that the investigating
authority had failed to scrutinize the reasons provided in the statements of Agrati and Fontana
Luigi, in violation of Article 6.5.1. We do not view the approach taken by the Appellate Body in
EC – Fasteners (China) to support China's position regarding the alleged application of inconsistent
reasoning by the Panel in the present disputes. Similarly to what we have noted above, we
consider that the difference in the approaches taken by the Panel in its analysis under Article 6.5
and by the Appellate Body in EC – Fasteners (China) in its analysis under Article 6.5.1 reflects the
distinct nature of the substantive legal obligations at issue. For all these reasons, we do not agree
with China that the Panel failed to make an objective assessment of the matter before it by
applying an "internally inconsistent" reasoning in its examination of the claims under Articles 6.5
and 6.5.1 of the Anti-Dumping Agreement.
5.3.4 Whether the Panel made a case for the complainants
5.111. China argues that the Panel acted inconsiste ntly with Article 11 of the DSU by finding that
China acted inconsistently with Article 6.5 of the Anti-Dumping Agreement on grounds not alleged
by the complainants in their first written submissions, contrary to paragraph 7 of the Joint Working
Procedures of the Panels.
278 More specifically, China explains that it had understood, on the basis
of the complainants' panel requests, as well as the complainants' first written submissions, that
they were claiming that China had violated Ar ticle 6.5 of the Anti-Dumping Agreement because
MOFCOM granted confidential treatment to the four appendices at issue "without 'good cause'
being shown by the petitioners". 279 According to China, it was not until after the parties had
received question No. 67 from the Panel that the issue arose as to whether or not MOFCOM had
objectively assessed and determined the showing of "good cause" by the petitioners.
280
5.112. In response, Japan and the European Unio n submit that China's arguments are based on
its erroneous understanding of the nature of the analysis under Article 6.5. 281 According to the
complainants, an allegation that confidential treatment was extended without "good cause" being
shown is merely another way of expressing that the investigating authority failed to undertake an
objective assessment as to whether "good cause" had been shown by the applicant.
282
5.113. We understand China to distinguish betw een what it sees as two distinct issues:
(i) whether MOFCOM "objectively assessed" and scrutinized the "good cause" alleged for
confidential treatment in order to determine whether the petitioners' requests were sufficiently
substantiated; and (ii) whether MOFCOM grante d confidential treatment without a showing of
"good cause" by the petitioners. China considers that the complainants did not argue – at any
stage during the Panel proceedings, and, in any event, not in their first written submissions – the

277 Appellate Body Report, EC – Fasteners (China), paras. 553-554.
278 China's appellant's submission, para. 304; other appellant's submission, para. 211 (referring to Joint
Working Procedures of the Panels of 22 May 2014, as modified, contained in document WT/DS454/R/Add.1,
WT/DS460/R/Add.1, Annex A-1, para. 7).
279 China's appellant's submission, fn 300 to para. 304; other appellant's submission, fn 210 to
para. 211.
280 China's appellant's submission, paras. 274-275; other appellant's submission, paras. 180-181.
281 European Union's appellee's submission, para. 285; Japan's appellee's submission, para. 78.
282 European Union's appellee's submission, para. 285; Japan's appellee's submission, para. 78.
WT/DS454/AB/R • WT/DS460/AB/R

issue of whether MOFCOM objectively assessed the reasons given by the petitioners for their
requests for confidential treatment.283
5.114. We note that, in their panel requests, the complainants alleged that China acted
inconsistently with Article 6.5 because MOFCOM treated information supplied by the petitioners as
confidential "without good cause shown". 284 We consider this language to have been sufficient to
put China on notice that the question of whether MOFCOM objectively assessed the "good cause"
alleged by the petitioners would be an issue in these disputes.
5.115. In their first written submissions, the comp lainants further argued that the petitioners did
not show "good cause" for treating the full text of the relevant appendices as confidential, and
therefore China acted inconsistently with Article 6.5 "in permitting the full texts of these
Appendices to remain confidential".
285 The complainants also contended that, by granting the
confidential treatment to the full texts of the fo ur aforementioned reports "without a showing of
good cause", China violated Article 6.5. 286 Moreover, in response to question No. 67 from the
Panel, the complainants argued that "the authority must objectively assess the 'good cause'
alleged for confidential treatment, and scrutin ize the party's showing in order to determine
whether the submitting party has sufficiently substantiated its request".287
5.116. China takes issue with the fact that the complainants referred expressly to the obligation
of the investigating authority to assess objectively the "good cause" only after having received the
Panel's question. 288 We recall that paragraph 7 of the Joint Working Procedures of the Panels
provided that, "[b]efore the first substantive meet ing of the Panels with the parties, each party
shall submit a written submission in which it presents the facts of its case and its arguments, in
accordance with the timetable adopted by the Panels." 289 However, we see no reason why this
language should be construed to have precluded the complainants from further elaborating on the
claims identified in their panel requests in respon se to the Panel's questioning. We also note that
the Appellate Body has previously found that "pan els are entitled to ask questions of the parties
that they deem relevant to the consideration of the issues before them."
290 Moreover, it is within
the competence of a panel "freely to use argume nts submitted by any of the parties – or to
develop its own legal reasoning – to support its own findings and conclusions on the matter under
its consideration".291
5.117. Accordingly, we disagree with China's argument that the Panel made the case for the
complainants and thereby acted inconsistently with Article 11 of the DSU.
5.3.5 Conclusion
5.118. In the light of the above, we uphold the Panel's findings, in paragraphs 7.290
and 7.297-7.303 of the Panel Reports, paragraph 8.1.b. of the Japan Panel Report, and
paragraph 8.6.e of the EU Panel Report, that Chin a acted inconsistently with Article 6.5 of the
Anti-Dumping Agreement because MOFCOM permitte d the full text of the reports contained in
appendix V and appendix VIII to the petition, appendix 59 to the petitioners' supplemental
evidence of 1 March 2012, and the appendix to the petitioners' supplemental evidence of
29 March 2012 to remain confidential without obje ctively assessing the petitioners' showing of
"good cause".

283 China's appellant's submission, para. 276; other appellant's submission, para. 182.
284 Japan's panel request, p. 2; European Union's panel request, p. 2.
285 Japan's first written submission to the Panel, para. 271; European Union's first written submission to
the Panel, para. 85.
286 Japan's first written submission to the Panel, paras. 272 and 280; European Union's first written
287 European Union's response to Panel question No. 67, para. 144; Japan's response to Panel question
288 China's appellant's submission, para. 274; other appellant's submission, para. 180.
289 Joint Working Procedures of the Panels of 22 May 2014, as modified, contained in document
WT/DS454/R/Add.1, WT/DS460/R/Add.1, Annex A-1, para. 7.
290 Appellate Body Report, Thailand – H-Beams, para. 135 (quoting Appellate Body Report, Canada –
Aircraft, para. 185).
291 Appellate Body Reports, Canada – Renewable Energy / Canada – Feed-in Tariff Program, para. 5.215
(quoting Appellate Body Report, EC – Hormones, para. 156; and referring to Appellate Body Report, US –
Certain EC Products, para. 123).

5.4 Disclosure of the essential facts concerning MOFCOM's dumping determination
5.119. The European Union appeals the Panel's rejection of the European Union's claim that China
acted inconsistently with Article 6.9 of the An ti-Dumping Agreement because MOFCOM failed to
adequately disclose the essential facts in connection with the data underlying MOFCOM's
determination of dumping concerning SMST and Tubacex. 292 In its appeal, the European Union
asserts that the Panel erred both in its interpretation and application of Article 6.9.
5.120. We begin by recalling the relevant findings by the Panel before addressing the specific
issues raised by the European Union on appeal, as well as China's contention that the
European Union's challenge goes to the objectivity of the Panel's assessment of the facts and
should therefore have been brought under Article 11 of the DSU.
5.4.1 The Panel's findings
5.121. Before the Panel, Japan and the European Union contended that China acted inconsistently
with Article 6.9 of the Anti-Dumping Agreement because MOFCOM had not disclosed the essential
facts that formed the basis for its dumping determinations.
293 In particular, the complainants
argued that, in its dumping determinations, MOFCOM failed to disclose any information relating to:
(i) the specific cost and sales data used to calculate normal value and export prices underlying the
margin calculations; (ii) adjustments to this data, for instance, to take account of taxes and
freight; and (iii) information on the calculation methodology, namely, the formulae used in
calculations, the data applied in these formulae, and how MOFCOM applied these data in
constructing normal value, export price, and production costs.
294
5.122. In response, China argued that the complainants failed to make a prima facie case and,
instead, relied on general, unsubstantiated allegations without any specific reference to the
disclosure documents. China further contended that, contrary to the European Union's allegations,
MOFCOM had disclosed all essential facts pertaining to its dumping determinations in its
preliminary and final dumping disclosures. In particular, with regard to production costs, SG&A,
and profits, China submitted that MOFCOM had "explained when it accepted the data submitted by
the exporters, and when it resorted to constructed normal values or export prices".
295 According to
China, MOFCOM also indicated when it used the adjustments requested by the exporters, and the
amount of the adjustments made in other instan ces. In addition, China argued that MOFCOM
provided the necessary information for the respon dents to understand the methodology used to
calculate the margins of dumping.296
5.123. The Panel started its analysis of the complainants' claims by referring to WTO
jurisprudence establishing that "the basic data underlying an investigating authority's dumping
determination constitute 'essential facts' within the meaning of Article 6.9."
297 Moreover, the Panel
noted that, in China – Broiler Products , the panel found that "a narrative description of the data
used cannot ipso facto be considered insufficient disclosure, provided the essential facts the
authority is referring to are in the possession of the respondent." 298 On this basis, the Panel found
that Article 6.9 does not require investigating authorities to "prepare disclosures containing the
entirety of the essential facts under consideration" in cases where the relevant essential facts are
in the possession of the respondent.
299 The Panel therefore did not consider that an investigating
authority would necessarily need to disclose "a spread sheet 'duly completed with the data actually

292 In particular, the European Union takes issue with the Panel's findings in paras. 7.234-7.236 and
8.7.d.i. of the EU Panel Report. (European Union's Notice of Other Appeal, para. 10 and fn 14 thereto) We note
that Japan has not appealed the Panel's findings under Article 6.9 of the Anti-Dumping Agreement regarding
this aspect of MOFCOM's determination of dumping margins for Kobe and SMI.
293 In particular, Japan claimed that MOFCOM failed to disclose the data used to determine the existence
of dumping and the dumping margins for SMI and Kobe. (Japan's second written submission to the Panel,
para. 89) The European Union, in turn, argued that MOFCOM failed to disclose the data forming the basis of the
dumping determination for SMST and Tubacex. (European Union's second written submission to the Panel,
para. 53)
294 EU Panel Report, para. 7.226.
295 EU Panel Report, para. 7.230.
296 EU Panel Report, para. 7.230.
297 EU Panel Report, para. 7.235 (referring to Panel Report, China – X-Ray Equipment, para. 7.402).
298 EU Panel Report, para. 7.235 (referring to Panel Report, China – Broiler Products, para. 7.95).
299 EU Panel Report, para. 7.235.

relied on by the investigating authority'", as the European Union suggested. 300 The Panel noted
that, "[w]hile this would be one way of complying with Article 6.9, a narrative description would
also suffice in the appropriate circumstances, provided that such description does not leave
uncertainty as to the essential facts under consideration."
301
5.124. The Panel further observed that MOFCOM had made both preliminary and final dumping
disclosures to the exporters at issue, the narrative of which "described the sales data under
consideration, the basis for determining normal value and export price, and the adjustments made
thereto".
302 Moreover, "MOFCOM specified when it used data or made adjustments requested by
the exporters" and "disclosed actual data when it departed from the data submitted by the
exporters".303 The Panel expressed the view that, "[o]ther than observing that MOFCOM failed to
provide actual data that was already in the respondents' possession, the complainants ha[d] not
identified any flaws in MOFCOM's narrative description, or otherwise explained how such
description would not have been sufficient for the relevant exporters to defend" their interests. 304
Therefore, the Panel saw "no basis … to find that the narrative descriptions provided by MOFCOM
do not satisfy the requirements of Article 6.9 of the Anti-Dumping Agreement".305
5.4.2 Whether the Panel erred in rejecting the European Union's claim under Article 6.9
of the Anti-Dumping Agreement
5.125. As noted, the European Union takes issue with the Panel's interpretation and application of
Article 6.9 of the Anti-Dumping Agreement wi th respect to the data underlying MOFCOM's
determination of dumping concerning SMST and Tubacex.306 The European Union submits, as it did
before the Panel, that the "essential facts supporting an anti-dumping margin determination
include the data underlying the margin calculations and adjustments to the data" 307, as well as
information on the calculation methodology, such as the formulae used in calculations and the data
applied in the formulae. According to the European Union, the lack of disclosure of such facts in
the underlying investigation impaired the interested parties' ability to defend their interests,
because the interested parties did not have "an opportunity to 'provide additional information or
correct perceived errors, and comment on or make arguments as to the proper interpretation of
those facts'".
308 The European Union argues, in particular, that Article 6.9 "requires disclosure of
all the essential facts under consideration which form the basis for the decision whether to apply
definitive measures"
309, and submits, contrary to what the Panel's analysis suggests, that the
"[m]ere possession of the data set from which the facts have been selected is clearly insufficient
for the interested party to defend its interests."310
5.126. In response, China argues that the European Union appears to challenge the Panel's
examination and weighing of the evidence, rather than the Panel's interpretation and application of
Article 6.9.311 China notes that the European Union has not raised a claim under Article 11 of the
DSU concerning this aspect of the Panel's fi ndings, and argues, on this basis, that the
European Union's appeal concerning the Panel's findings under Article 6.9 should be rejected. In
the alternative, China submits that the Panel correctly found that "there are several ways in which
an investigating authority can satisfy" its obligations under Article 6.9.312 China adds that the Panel
did not find that an investigating authority "is excused from disclosing the essential facts if they
are already in the possession of the interested party". 313 For China, the Panel simply distinguished

300 EU Panel Report, para. 7.235 (quoting European Union's first written submission to the Panel,
para. 111).
301 EU Panel Report, para. 7.235.
302 EU Panel Report, para. 7.236.
303 EU Panel Report, para. 7.236.
304 EU Panel Report, para. 7.236.
305 EU Panel Report, para. 7.236.
306 Specifically, the European Union takes issue with paras. 7.234-7.236 and 8.7d.i of the EU Panel
Report. (European Union's Notice of Other Appeal, para. 10 and fn 14 thereto; other appellant's submission,
fn 155 to para. 179)
307 European Union's other appellant's submission, para. 181.
308 European Union's other appellant's submission, para. 187 (quoting Panel Report,
EC – Salmon (Norway), para. 7.805).
309 European Union's other appellant's submission, para. 188.
310 European Union's other appellant's submission, para. 189.
311 China's appellee's submission, para. 323.
312 China's appellee's submission, para. 333.
313 China's appellee's submission, para. 334. (emphasis original)

between two possible manners of complyin g with Article 6.9: (i) the actual provision of specific
data; and (ii) the inclusion of a narrative description of the data used that is in the possession of
the respondents.
5.127. Before embarking on our analysis, we note that, in addition to claiming that China acted
inconsistently with Article 6.9 of the Anti-Dumping Agreement because MOFCOM failed to disclose
the essential facts underlying MOFCOM's determination of dumping for SMST and Tubacex, the
European Union also claimed before the Panel that MOFCOM acted inconsistently with that
provision because it did not disclose information on the calculation methodology applied by
MOFCOM to determine the margins of dumping for the investigated companies. The Panel
reasoned that an interested party would not be able properly to defend its interests if it were not
informed of the methodology applied by the investigating authority to determine the margin of
dumping. The Panel added that "merely disclosing the underlying data under consideration,
without also disclosing the methodology under consideration, would be of little use in clarifying the
factual basis of the investigating authority's determinations."
314 The Panel concluded that, by
failing to disclose the methodology used to calculate the margin of dumping, MOFCOM acted
inconsistently with Article 6.9 of the Anti-Dum ping Agreement. These findings have not been
appealed. Instead, the European Union's appeal co ncerns MOFCOM's alleged failure to disclose the
specific cost and sales data used to calculate the normal value and export prices underlying the
margin calculations, and the adjustments to this data, for instance, to take account of taxes and
freight.
5.128. Turning to China's contention that the Eu ropean Union ought to have brought this claim
under Article 11 of the DSU, we recall the Appellate Body's finding that allegations implicating a
panel's appreciation of facts and evidence fall under Article 11 of the DSU, whereas "[t]he
consistency or inconsistency of a given fact or set of facts with the requirements of a given treaty
provision is … a legal characterization issue" and is, therefore, a legal question.
315 As we
understand it, the European Union's key contention is that the Panel erred in determining that
MOFCOM adequately disclosed the "essential facts" underlying its dumping determinations as
required under Article 6.9. Although there are aspects of the Panel's analysis that concern the facts
that were before MOFCOM, we understand the European Union's appeal to focus on the manner in
which the Panel interpreted and applied Article 6.9 in its assessment of whether MOFCOM's
dumping disclosures complied with the legal standard under that provision. In particular,
we consider that the European Union's appeal ra ises issues as to the meaning and scope of the
investigating authority's duty under Article 6.9 to disclose the "essential facts" under
consideration. Hence, we do not agree with China that the European Union's appeal merely
challenges the Panel's examination and weighing of the evidence, and should therefore have been
brought under Article 11 of the DSU. We turn, th erefore, to examine the issues raised by the
European Union on appeal concerning the Panel' s interpretation and application of the legal
standard under Article 6.9 to MOFCOM's dumping disclosures.
5.129. The first sentence of Article 6.9 of the Anti-Dumping Agreement stipulates that "[t]he
authorities shall, before a final determination is made, inform all interested parties of the essential
facts under consideration which form the basis for the decision whether to apply definitive
measures." The second sentence of Article 6.9 provides that "[s]uch disclosure should take place
in sufficient time for the parties to defend their interests."
316 As to the scope of information that
must be disclosed, the Appellate Body has expl ained that Article 6.9 "cover[s] 'facts under
consideration', that is, those facts on the record that may be taken into account by an authority in
reaching a decision as to whether or not to apply definitive anti-dumping … duties". 317 As to what
kinds of facts are "essential" under Article 6.9, the Appellate Body, in China – GOES , explained
that:

314 EU Panel Report, para. 7.238 (referring to Panel Reports, EC – Salmon (Norway), para. 7.805; and
China – Broiler Products, para. 7.91).
315 Appellate Body Report, EC – Hormones, para. 132.
316 This suggests that disclosure of facts that are essential in the process of reaching a decision must
occur in a timely fashion to give interested parties an opportunity to comment on or challenge the essential
facts that are "under consideration" by the investigating authority in the process of assessing whether or not to
apply anti-dumping measures.
317 Appellate Body Report, China – GOES, para. 240.

Article[] 6.9 … do[es] not require the disclosure of all the facts that are before an
authority but, instead, those that are "essential"; a word that carries a connotation of
significant, important, or salient. In considering which facts are "essential", the
following question arises: essential for wh at purpose? The context provided by the
latter part of Article[] 6.9 … clarifies that such facts are, first, those that "form the
basis for the decision whether to apply definitive measures" and, second, those that
ensure the ability of interested parties to defend their interests. Thus, we understand
the "essential facts" to refer to those facts that are significant in the process of
reaching a decision as to whether or not to apply definitive measures. Such facts are
those that are salient for a decision to apply definitive measures, as well as those that
are salient for a contrary outcome. An authority must disclose such facts, in a
coherent way, so as to permit an interested party to understand the basis for the
decision whether or not to apply definitive measures. In our view, disclosing the
essential facts under consideration pursuant to Article[] 6.9 … is paramount for
ensuring the ability of the parties concerned to defend their interests.
318
5.130. Essential facts are, therefore, "those that are salient for a decision to apply definitive
measures, as well as those that are salient for a contrary outcome." 319 In order to apply a
definitive measure, an investigating authority must find dumping, injury to the domestic industry,
and a causal link between the dumping and the injury. These findings, in turn, are based on
various intermediate findings and conclusions reached by the investigating authority. Whether a
particular fact is essential or "significant in the process of reaching a decision"
320 depends on the
nature and scope of the particular substantive obligations, the content of the particular findings
needed to satisfy the substantive obligations at i ssue, and the factual circumstances of each case,
including the arguments and evidence submitted by the interested parties. 321 An investigating
authority must disclose such facts "in a coherent way" that permits an interested party to
understand the factual basis for each of the intermediate findings and conclusions reached by the
authority, such that it is able properly to defend its interests.
5.131. Thus, an investigating authority is expected, with respect to the determination of dumping,
to disclose, inter alia , the home market and export sales being used, the adjustments made
thereto, and the calculation methodology applied by the investigating authority to determine the
margin of dumping. The mere fact that the investigating authority refers in its disclosure to data
that are in the possession of an interested party does not mean that the investigating authority
has disclosed the factual basis for its determination in a manner that enables interested parties to
comment on the completeness and correctness of the conclusions the investigating authority
reached from the facts being considered, and to comment on or make arguments as to the proper
interpretation of those facts.
322 Thus, while Article 6.9 does not prescribe a particular form for the
disclosure of the essential facts, it does require in all cases that the investigating authority disclose
those facts in such a manner that an interested party can understand clearly what data the
investigating authority has used, and how those data were used to determine the margin of
dumping.
323
5.132. On appeal, the European Union's challeng e focuses on paragraphs 7.235 and 7.236 of the
EU Panel Report, where the Panel set out its underst anding of the interpretation and application of
Article 6.9 of the Anti-Dumping Agreement. The Panel stated:

318 Appellate Body Report, China – GOES, para. 240. (fns omitted; emphasis original)
319 Appellate Body Report, China – GOES, para. 240.
320 Appellate Body Report, China – GOES, para. 240.
321 See Appellate Body Report, China – GOES, para. 241.
322 Appellate Body Report, China – GOES, fn 390 to para. 240; Panel Report, EC – Salmon (Norway),
para. 7.805.
323 While disclosure may take various forms, we note our agreement with the United States that,
"[w]ithout a full disclosure of the entirety of the essential facts under consideration underlying the dumping
determination, it is difficult to see how a party would be in a position to identify whether the determination
contains clerical or mathematical errors, or whether the investigating authority actually did what it purported to
do. Such failure to provide this information would result in an interested party being unable to defend its
interests because it could not identify in the first instance the particular issues that are adverse to its
interests." (United States' third participant's submission, para. 36 (fn omitted; emphasis original))

Previous WTO dispute settlement panels have established that the basic data
underlying an investigating authority dumping determination constitute "essential
facts" within the meaning of Article 6.9. We agree. In addition, the panel in China –
Broiler Products found that a narrative description of the data used cannot ipso facto
be considered insufficient disclosure, provided the essential facts the authority is
referring to are in the possession of the respondent.[*] We agree. In cases where the
relevant essential facts are already in the possession of the respondents, we do not
consider that Article 6.9 requires investigating authorities to prepare disclosures
containing the entirety of the essential facts under consideration. In particular, we do
not consider that the authority need necessarily disclose a spread sheet "duly
completed with the data actually relied on by the investigating authority", as
suggested by the European Union. While this would be one way of complying with
Article 6.9, a narrative description would also suffice in the appropriate circumstances,
provided that such description does not leave uncertainty as to the essential facts
under consideration.
324
[*original fn]396 Panel Report, China – Broiler Products, para. 7.95.
5.133. While the Panel's reading of the scope and meaning of Article 6.9 is not entirely clear, it
appears to us that the Panel considered that a determination of whether an investigating authority
has complied with its obligations under that provision hinges largely on whether the essential facts
under consideration by the investigating authority were in the possession of an interested party
affected by the determination.
325 However, contrary to what the Panel stated, it does not suffice
for an investigating authority to disclose "the essential facts under consideration" 326 but, rather, it
must disclose the essential facts under consideration that " form the basis for the decision whether
to apply definitive measures". To the extent that the Panel suggested that a narrative description
of the data used would constitute sufficient disclosure simply because the essential facts that the
authority is referring to "are in the possession of the respondent", we disagree. Instead, we agree
with the European Union that, "when the investigating authority has selected from amongst the
facts originally provided by the interested party, [that] party has no way of knowing which facts
have been selected."
327 We do not see how the mere fact that the investigating authority may be
referring to data that are in the possession of an interested party would mean that it has disclosed
the essential facts "that are salient for a decision to apply definitive measures, as well as those
that are salient for a contrary outcome … in a coherent way, so as to permit an interested party to
understand the basis for the decision whether or not to apply definitive measures"
328, and to
defend its interests.
5.134. In the light of the above, we find that the Panel erred in its interpretation of Article 6.9 of
the Anti-Dumping Agreement set out in paragr aph 7.235 of the EU Panel Report. The Panel
subsequently relied on this erroneous interpretation of Article 6.9 in finding, in paragraph 7.236 of
the EU Panel Report, that, "[o]ther than observing that MOFCOM failed to provide actual data that
was already in the respondents' possession, the complainants have not identified any flaws in
MOFCOM's narrative description, or otherwise explained how such description would not have been
sufficient for the relevant exporters to defend its interests."
329 We therefore reverse the Panel's
finding, in paragraphs 7.235 and 7.236, and the Panel's conclusion, in paragraph 8.7.d.i. of the
EU Panel Report, rejecting the European Union's claim that China acted inconsistently with
Article 6.9 of the Anti-Dumping Agreement because MOFCOM failed to disclose adequately the
essential facts in connection with the data underlying MOFCOM's determination of dumping
concerning SMST and Tubacex.

324 EU Panel Report, para. 7.235 and fn 396 thereto. (fns 395 and 397 omitted)
325 See EU Panel Report, para. 7.235. We agree with the United States that, "to the extent that the
Panel relied on the fact that such data was already in the possession of a given respondent, this would not
result in the disclosure of such essential facts to other respondents or the domestic industry." (United States'
third participant's submission, fn 27 to para. 36)
326 EU Panel Report, para. 7.235.
327 European Union's other appellant's submission, para. 189. (emphasis original)
328 Appellate Body Report, China – GOES, para. 240.
329 EU Panel Report, para. 7.236.

5.135. This brings us to the question of whether we can complete the legal analysis by ruling on
the European Union's claim that MOFCOM acted inconsistently with Article 6.9 of the Anti-Dumping
Agreement by failing to disclose the data underlying MOFCOM's determination of dumping
concerning SMST and Tubacex.
330 Having reviewed MOFCOM's Preliminary and Final Dumping
Disclosures331, we consider that MOFCOM did not disclose the essential facts underlying its
dumping determinations so as to permit the companies concerned to understand clearly what data
MOFCOM had used, and how that data had been used to determine the margins of dumping for
SMST and Tubacex. Accordingly, we find that Ch ina acted inconsistently with Article 6.9 of the
Anti-Dumping Agreement because MOFCOM failed to disclose adequately the data underlying its
determination of dumping concerning SMST and Tubacex.

330 European Union's other appellant's submission, para. 190.
331 See MOFCOM's Final Dumping Disclosure to SMST (Panel Exhibit EU-25-EN (BCI), internal pp. 2-5);
MOFCOM's Final Dumping Disclosure to the EU (Panel Exhibit EU-27-EN), internal pp. 14-21; and MOFCOM's
Preliminary Determination (Panel Exhibits JPN-7-EN and EU-18), internal pp. 25-29.
WT/DS454/AB/R • WT/DS460/AB/R

5.5 MOFCOM's injury determination
5.136. Each of the three participants has appealed different aspects of the Panel's findings
relating to MOFCOM's injury determination. Before turning to our analysis of the issues raised by
the participants on appeal, we first summarize briefly the relevant obligations under Articles 3.1,
3.2, 3.4, and 3.5 of the Anti-Dumping Agreement regarding the conduct of injury investigations.
332
5.137. The Appellate Body has found that Arti cle 3.1 of the Anti-Dumping Agreement "is an
overarching provision that sets forth a Member's fundamental, substantive obligation" concerning
the injury determination, and informs the more detailed obligations in the succeeding
paragraphs.333 Article 3.1 states:
A determination of injury for purposes of Article VI of GATT 1994 shall be based on
positive evidence and involve an objective examination of both (a) the volume of the
dumped imports and the effect of the dumped imports on prices in the domestic
market for like products, and (b) the consequent impact of these imports on domestic
producers of such products.
5.138. As the Appellate Body has found, the term "positive evidence" focuses on the facts
underpinning and justifying the injury determination. 334 It relates to the quality of the evidence
that the investigating authorities may rely on in making a determination, and requires the
evidence to be affirmative, objective, verifiable, and credible. 335 Furthermore, the Appellate Body
has interpreted the term "objective examination" as requiring an injury investigation under
Article 3 to "conform to the dictates of the basic principles of good faith and fundamental fairness",
and to be conducted "in an unbiased manner, without favouring the interests of any interested
party, or group of interested parties, in the investigation".
336
5.139. Several of the remaining paragraphs of Article 3 then elaborate on the elements that must
be objectively examined, based on positive evidence , pursuant to Article 3.1. Article 3.2 specifies
the content of an investigating authority's consideration regarding the volume of dumped imports
and the effect of such imports on domestic prices. Articles 3.4 and 3.5 concern the consequent
impact of the dumped imports on the domestic industry. Specifically, Article 3.4 sets out the
economic factors that must be evaluated in the examination of the impact of the dumped imports
on the domestic industry, while Article 3.5 requires an investigating authority to demonstrate that
dumped imports are causing injury to the domestic industry.
337
5.140. These paragraphs of Article 3 thus contem plate a "logical progression" in the investigating
authority's examination leading to an ultimate determination of whether dumped imports are
causing material injury to the domestic industry. 338 This process entails a consideration of the
volume of dumped imports and their price effects, and requires an examination of the impact of
such imports on the state of the domestic indust ry as revealed by a number of economic factors
and indices. These various elements are linked through a causation and non-attribution analysis
between the dumped imports and the injury to the domestic industry, taking into account all
factors that must be considered and evaluated.
339

332 Footnote 9 of the Anti-Dumping Agreement defines the word "injury" 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".
333 Appellate Body Report, China – GOES, para. 126 (quoting Appellate Body Report,
Thailand – H-Beams, para. 106).
334 Appellate Body Report, US – Hot-Rolled Steel, para. 193.
335 Appellate Body Report, China – GOES, para. 126 (referring to Appellate Body Report,
336 Appellate Body Report, China – GOES, para. 126 (quoting Appellate Body Report,
337 Appellate Body Report, China – GOES, para. 127.
338 Appellate Body Report, China – GOES, para. 128.
339 Appellate Body Report, China – GOES, para. 128.
WT/DS454/AB/R • WT/DS460/AB/R

5.141. Article 3 does not prescribe a specific methodology to be relied on by an investigating
authority in its determination of injury. 340 Nor is there a prescribed template or format that an
investigating authority must adhere to in making its determination of injury, provided that its
determination comports with the disciplines that apply under the discrete paragraphs of Article 3.
These disciplines are necessary, interlinked elements of a single, overall analysis addressing the
question of whether dumped imports are causing in jury to the domestic industry. Indeed, by its
terms, Article 3.5 states that "[i]t must be de monstrated that the dumped imports are, through
the effects of dumping, as set forth in paragraphs 2 and 4, causing injury" to the domestic
industry. Thus, the inquiries under Articles 3.2 and 3.4 should not be viewed in isolation, as they
are necessary components to answering the ultimate question in Article 3.5 as to whether dumped
imports are causing injury to the domestic industry.
341 The interpretation of Articles 3.2, 3.4,
and 3.5 should therefore be consistent with the role they play in the overall framework of an injury
determination.
5.142. With these considerations in mind, we turn to address the complainants' appeals as they
relate to the Panel's assessment, under Articles 3.1 and 3.2 of the Anti-Dumping Agreement, of
MOFCOM's price effects analysis. Thereafter, we examine the complainants' claims that the Panel
erred in its findings under Articles 3.1 and 3.4 of the Anti-Dumping Agreement regarding
MOFCOM's impact analysis. Finally, we addre ss the appeals by the complainants and China
regarding the Panel's assessment of MOFCOM's causation analysis.
5.5.1 Price effects – Articles 3.1 and 3.2 of the Anti-Dumping Agreement
5.143. Before the Panel, Japan and the European Union submitted that MOFCOM's consideration
of whether there had been a significant price und ercutting by the imports of Grade B and Grade C
HP-SSST was inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement, on three
grounds. First, the complainants argued that MO FCOM's analysis of the price effects of Grade C
dumped imports was analytically and factually fl awed because MOFCOM improperly compared the
price of Grade C dumped imports with the price of domestic Grade C, despite significant
differences between the quantities of imported and domestic products sold. Second, the
complainants asserted that MOFCOM improperly found price undercutting on the basis that the
price of Grade C dumped imports was lower than the price of domestic Grade C products, without
considering evidence suggesting that Grade C dumped imports did not place downward pressure
on domestic prices, or prevent an increase in the prices of those domestic products.
342 Third, the
complainants submitted that MOFCOM improperly extended, without any analysis or explanation,
its finding of price undercutting in respect of Grades B and C to the domestic like product as a
whole, including domestic Grade A.
343
5.144. The Panel addressed the three grounds of the complainants' claims separately. The Panel
concluded that MOFCOM's failure to account proper ly for differences in quantities when comparing
the price of Grade C dumped imports with the domestic Grade C price is inconsistent with
Articles 3.1 and 3.2 of the Anti-Dumping Agreement. 344 However, the Panel rejected the
complainants' claims that MOFCOM acted inconsiste ntly with Articles 3.1 and 3.2 by failing to
consider whether Grade C dumped imports had any price undercutting effect on domestic Grade C
products, in the sense of placing downward pressure on those domestic prices by being sold at
lower prices.345 The Panel also rejected the complainants' claims that MOFCOM acted inconsistently
with Articles 3.1 and 3.2 by improperly extendin g its finding of price undercutting in respect of
Grades B and C to the domestic like product as a whole, including domestic Grade A.346
5.145. On appeal, Japan and the European Union claim that the Panel erred in rejecting their
claim that MOFCOM's determination of price undercutting in respect of Grade C imports was
inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement by failing to consider
whether Grade C dumped imports had any price undercutting effect on domestic Grade C products,

340 Appellate Body Report, EC – Bed Linen (Article 21.5 – India), paras. 113 and 118. Thus, "it is for the
investigating authorities in the first instance to determine the analytical methodologies that will be applied in
the course of an investigation." (See Panel Report, Thailand – H-Beams, para. 7.159)
341 Appellate Body Report, China – GOES, para. 128.
342 Panel Reports, paras. 7.105 and 7.118.
344 Panel Reports, para. 7.115.
345 Panel Reports, para. 7.130.
346 Panel Reports, para. 7.143.
WT/DS454/AB/R • WT/DS460/AB/R

in the sense of placing downward pressure on those domestic prices by being sold at lower
prices.347 The European Union also appeals the Panel's assessment of whether MOFCOM's findings
of price undercutting in respect of Grades B an d C were sufficient to comply with MOFCOM's
obligation to consider whether or not the prices of the dumped imports had a significant effect on
the prices of the domestic product as a whole, including Grade A. 348 We address each of the issues
raised on appeal in turn.
5.5.1.1 The Panel's interpretation of "price undercutting" in its review of MOFCOM's
assessment of price effects for Grade C imports
5.5.1.1.1 The Panel's findings
5.146. Before the Panel, Japan and the European Union asserted that MOFCOM improperly found
price undercutting on the basis that the price of Grade C dumped imports was less than the price
of domestic Grade C, without also considering evidence suggesting that Grade C dumped imports
did not lead to any effect on the domestic prices such as lost sales volumes, downward pressure,
or a prevention in the increase of those domestic prices.
349 The complainants argued that a
determination of price undercutting cannot be based solely on the existence of a mathematical
difference between import and domestic prices. Inst ead, given that Article 3.2 is concerned with
"the effect of the dumped imports on prices", the complainants contended that an investigating
authority must also consider whether any price di fference enabled the dumped imports to have an
effect on domestic prices, such as a "loss of domestic sales volumes or at least [having] placed
downward pressure on domestic prices".
350
5.147. The Panel recalled the Appellate Body's observation that Article 3.2 establishes a "link"
between the price of subject imports and the price of domestic like products by requiring that a
comparison be made between the two.351 The Panel considered that the phrase "whether the effect
of" in Article 3.2 applies only in respect of pric e depression or suppression, on the basis that the
text of Article 3.2 does not refer to "whether the effect of subject imports is price undercutting".352
The Panel considered, therefore, that the questi on of whether there had been significant price
undercutting within the meaning of Article 3.2 "was a simple factual issue" that could be answered
by means of "a comparison of prices for domestic and imported product[s]".353
5.148. The Panel acknowledged the complainants' references to recognized dictionary definitions
of the term "undercut" that spoke to the noti on of "supplanting" or "rendering unstable". 354
However, noting that there was no explicit refere nce to the notion of "supplanting" or "rendering
unstable" in the text or context of Article 3.2, the Panel saw no reason why an investigating
authority should not simply consider whether dumped imports "sell at lower prices than"
comparable domestic products.
355
5.149. The Panel further reasoned that, if an investigating authority were required to show that
price undercutting by dumped imports had the effect of depressing or suppressing prices, as
suggested by the complainants, this would duplicate the other price effects considerations
provided for in Article 3.2. According to the Panel, the fact that Article 3.2 identifies three distinct
price effects, and distinguishes between price undercutting, on the one hand, and price depression
and price suppression, on the other hand, suggest s that there is no need to establish price
depression or suppression when considering the existence of price undercutting, or vice versa.
356

347 Japan's appellant's submission, para. 2; European Union's other appellant's submission, para. 109.
348 European Union's other appellant's submission, para. 134.
349 Panel Reports, paras. 7.105 and 7.118.
350 Panel Reports, para. 7.117.
352 Panel Reports, para. 7.126.
353 Panel Reports, para. 7.126.
354 Panel Reports, paras. 7.127-7.128 (referring to Japan's second written submission to the Panel,
para. 21; and Oxford English Dictionary online, definition of "undercut", available at:
<http://www.oed.com/view/Entry/211547>, accessed 30 January 2014).
355 Panel Reports, para. 7.128.
356 In this regard, the Panel noted that Article 6.3(c) of the SCM Agreement refers separately to price
undercutting, price depression, price suppression, and "lost sales". In the Panel's view, this provision strongly
suggests, therefore, that the phenomenon of lost sales is distinct from price undercutting. (See Panel Reports,
fn 251 to para. 7.129)
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The Panel therefore found that, while price undercutting by imports may lead to lost domestic
sales, or to price depression or price suppressi on, there is no requirement in Article 3.2 to
demonstrate the existence of these other phenom ena when considering the existence of price
undercutting.357
5.150. Based on this analysis, the Panel rejected the claims by the complainants that MOFCOM
acted inconsistently with Articles 3.1 and 3.2 of the Anti-Dumping Agreement by failing to consider
whether Grade C dumped imports had any price undercutting effect on domestic Grade C products,
in the sense of placing downward pressure on those domestic prices by being sold at lower
prices.358
5.5.1.1.2 Arguments on appeal
5.151. On appeal, Japan claims that the Panel erred in its interpretation of Articles 3.1 and 3.2 of
the Anti-Dumping Agreement by finding that the question of whether price undercutting exists is a
"simple factual" question that "can be answered … by a comparison of prices for domestic and
imported product[s]", and that "the existence of price undercutting itself provides the requisite
insight into the effect of the dumped imports (and the relationship of subject import prices with
domestic prices)".
359 Japan submits that the Panel appears to have considered "that an
investigating authority may conclude the price effect analysis under Articles 3.1 and 3.2 by simply
finding that import prices are mathematically lower than the price of a domestic like product." 360
Japan submits that the mere fact of dumped import prices being mathematically lower than
comparable domestic prices does not, in and of itself, provide a "meaningful basis" for conducting
a further causation analysis under Article 3.5 of the Anti-Dumping Agreement.
361
5.152. The European Union, for its part, claims that the Panel erred in finding that the obligation
in Article 3.2 of the Anti-Dumping Agreement can be met, and was met in this case, on the basis
of the fact that, in 2010, the price of the dumped imports under consideration was below the price
of the domestic product being compared.
362 Given MOFCOM's decision to conduct a
grade-by-grade analysis, the European Unio n submits that MOFCOM was required under
Articles 3.1 and 3.2 to consider more than the "mere juxtaposition" of the price of the dumped
imports under consideration and the price of the domestic product being compared. 363 In
particular, it was required to consider whether the juxtaposition of the price of the dumped imports
under consideration and the price of the domestic product being compared, together with other
relevant facts  such as specifically identified quantitati ve differences, inverse price movements, a
sudden and substantial increase in the domestic prices, an increase in the market share of
domestic Grade C products, and an absence of substitutability – have explanatory force for the
effect of the prices of the dumped imports under consideration on the prices of the domestic
product being compared.
364
5.153. By contrast, China agrees with the Panel's interpretation of "price undercutting" in
Article 3.2, and supports the Panel's finding that an investigating authority can "simply consider
whether subject imports 'sell at lower prices than' comparable domestic products".365

357 Panel Reports, para. 7.129.
358 Panel Reports, para. 7.130.
359 Japan's appellant's submission, para. 13 (referring to Panel Reports, para. 7.126).
360 Japan's appellant's submission, para. 13.
361 Japan's appellant's submission, para. 31.
362 European Union's other appellant's submission, para. 113.
363 European Union's other appellant's submission, para. 114 (referring to Appellate Body Report, China
– GOES, paras. 129-132).
364 European Union's other appellant's submission, para. 114.
365 China's appellee's submission, para. 137 (referring to Panel Reports, para. 7.128).
WT/DS454/AB/R • WT/DS460/AB/R

5.5.1.1.3 Analysis
5.154. The second sentence of Article 3.2 of the Anti-Dumping Agreement reads:
With regard to the effect of the dumped imports on prices, the investigating
authorities shall consider whether there has been a significant price undercutting by
the dumped imports as compared with the price of a like product of the importing
Member, or whether the effect of such imports is otherwise to depress prices to a
significant degree or prevent price increases, which otherwise would have occurred, to
a significant degree.
5.155. The second sentence of Article 3.2 begins with the clause "[w]ith regard to the effect of
the dumped imports on prices". The definition of the word "effect" is, inter alia , "something
accomplished, caused, or produced; a result, a consequence".
366 By referring to "the effect of the
dumped imports", Article 3.2 postulates certain inquiries with regard to the effect of those imports
on domestic prices. 367 In particular, an investigating authority is required to consider whether
there has been a " significant price undercutting " by the dumped imports as compared with the
price of a like product of the importing Member; or "whether the effect of such imports is
otherwise to depress prices to a significant degree or prevent price increases, which otherwise
would have occurred, to a significant degree."
368 With regard to the latter inquiry, the
Appellate Body has noted that, to examine whether the effect of dumped imports "is otherwise to
depress prices to a significant degree or prevent price increases ", "an investigating authority is
required to consider whether a first variable – that is, subject imports – has explanatory force for
the occurrence of significant depression or suppression of a second variable – that is, domestic
prices."
369
5.156. The Appellate Body has further noted that the two inquiries under the second sentence of
Article 3.2 are separated by the words "or" and "otherwise".370 The elements that are relevant to a
consideration of whether there has been "significant price undercutting" may, therefore, "differ
from those relevant to the consideration of significant price depression and suppression". 371 We do
not read Article 3.2 as suggesting that the "effect" of price undercutting must either be price
depression or price suppression. Instead, we agree with the Panel 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 phen omena when considering the existence of price
undercutting."372
5.157. Having said this, we recall that the focus of these appeals is on the meaning and scope of
an investigating authority's obligation to consider whether there has been "significant price
undercutting" within the meaning of the second sentence of Article 3.2 of the Anti-Dumping
Agreement.
5.158. Beginning with the ordinary meaning of the term "price undercutting", we note that
dictionary definitions of the word "undercut" include: "sell at lower prices than"; and "make
unstable or less firm, undermine".
373 These definitions cover a range of possible meanings.
However, in order to determine the ordinary meaning of the term "price undercutting", it should be
read in the context in which it appears in Article 3.2. With this in mind, we recall that the
introductory part of the second sentence – i.e. "With regard to the effect of the dumped imports on
prices" – requires an investigating authority to consider whether there has been a significant price
undercutting by the dumped imports as compared with the price of a like product of the importing

366 Appellate Body Report, China – GOES, para. 135 (quoting Shorter Oxford English Dictionary,
6th edn, A. Stevenson (ed.) (Oxford University Press, 2007), Vol. 1, p. 798).
367 Appellate Body Report, China – GOES, para. 135.
368 Appellate Body Report, China – GOES, para. 136.
369 Appellate Body Report, China – GOES, para. 136.
370 Appellate Body Report, China – GOES, para. 137.
371 Appellate Body Report, China – GOES, para. 137.
373 Shorter Oxford English Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007),
Vol. 2, p. 3423.
WT/DS454/AB/R • WT/DS460/AB/R

Member. The meaning of "effect" is "a result" of something else. 374 In the context of Article 3.2,
this suggests inquiries as to the "effect" of dumped imports on domestic prices, and each inquiry
links the dumped imports with the prices of the like domestic products.
375 With respect to "price
undercutting", the Appellate Body has found that Article 3.2 thus expressly establishes "a link
between the price of subject imports and that of like domestic products" by requiring that a
comparison be made between the two.376
5.159. Still in this regard, we observe that the te rm "price undercutting" in Article 3.2 is used in
present participle, suggesting that the inquiry under Article 3.2 concerns pricing conduct that
continues over time. Hence, Article 3.2 does not ask the question of whether an investigating
authority can identify an isolated instance of the dumped imports being sold at lower prices than
the domestic like products. Rather, a proper reading of "price undercutting" under Article 3.2
suggests that the inquiry requires a dynamic assessment of price developments and trends in the
relationship between the prices of the dumped im ports and those of domestic like products over
the entire period of investigation (POI). An examination of such developments and trends includes
assessing whether import and domestic prices are moving in the same or contrary directions, and
whether there has been a sudden and substantial increase in the domestic prices.
5.160. We note that the Panel described the investigating authority's obligation to consider
whether there has been price undercutting as consisting of "a simple factual issue – is there price
undercutting or not? – which can be answered, as Article 3.2 suggests, by a comparison of prices
for domestic and imported product[s]."
377 The Panel also found that an investigating authority
should "simply consider whether subject imports 'sell at lower prices than' comparable domestic
products".378 As we see it, the Panel appears to have assumed that price undercutting, under
Article 3.2, is merely concerned with the question of whether there is a mathematical difference, at
any point in time during the POI, between the pr ices of the dumped imports and the comparable
domestic products. We disagree. As discussed above, while price undercutting involves situations
where imports are being sold at prices lower than the domestic like products, an inquiry into price
undercutting under Article 3.2 is not satisfied by a static examination of whether there is a
mathematical difference at any point in time during the POI without any assessment of whether or
how these prices interact over time. Rather, as noted above, Article 3.2 requires a dynamic
assessment of price developments and trends in the relationship between the prices of the
dumped imports and those of domestic like products over the duration of the POI.
5.161. Moreover, we note that the term "price undercutting" in Article 3.2 is qualified by the word
"significant", which is relevantly defined as "important, notable, consequential".
379 As noted above,
with respect to "price undercutting", Article 3.2 expressly establishes a link between the price of
subject imports and that of like domestic produc ts, by requiring that a comparison be made
between the two. 380 This comparison contemplates a dynamic assessment of price developments
and trends in the relationship between the prices of the dumped imports and those of domestic
like products over the duration of the POI. The significance of the price undercutting found on the
basis of that dynamic assessment is a question of the magnitude of the price undercutting. 381
What amounts to significant price undercutting – that is, whether the undercutting is important,
notable, or consequential – will therefore necessarily depend on the circumstances of each case. In
order to assess whether the observed price undercutting is significant, an investigating authority
may, depending on the case, rely on all positive evidence relating to the nature of the product or
product types at issue, how long the price undercu tting has been taking place and to what extent,
and, as appropriate, the relative market shares of the product types with respect to which the
authority has made a finding of price undercutting. In all cases, an investigating authority must,
pursuant to Article 3.1, objectively examine all positive evidence, and may not disregard relevant

374 The definition of the word "effect" is, inter alia, "something accomplished, caused, or produced; a
result, a consequence". (Shorter Oxford English Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University
Press, 2007), Vol. 1, p. 798) See also Appellate Body Report, China – GOES, para. 135.
375 Appellate Body Report, China – GOES, para. 135.
376 Appellate Body Report, China – GOES, para. 136.
377 Panel Reports, para. 7.126.
379 Shorter Oxford English Dictionary, 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007),
Vol. 2, p. 2833. See also Appellate Body Report, US – Upland Cotton, para. 426; and Panel Report, US –
Upland Cotton, para. 7.1326.
380 Appellate Body Report, China – GOES, para. 136.
381 See e.g. Panel Report, EC – Salmon (Norway), para. 7.638.
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evidence suggesting that prices of dumped imports have no, or only a limited, effect on domestic
prices.382
5.162. Furthermore, we recall that Article 3 contemplates a "logical progression" in the
investigating authority's examination leading to an ultimate determination of whether dumped
imports are causing material injury to the domestic industry. 383 Indeed, as the Appellate Body has
explained, the outcome of the price effects inquir y under Article 3.2 must be one that enables the
investigating authority to advance its analysis so as to serve as a meaningful basis for its
determination as to whether subject imports, throug h such price effects, are causing injury to the
domestic industry. 384 A proper assessment of price effects under Article 3.2 is, therefore, a
necessary building block for the ultimate determination of injury.
5.163. Turning to the case before us, we observe that the Panel, in its interpretation, focused only
on the term "price undercutting" in Article 3.2, and appears not to have accorded any importance
to the word "significant" or its implications for the inquiry required under Article 3.2. We are not
persuaded that an outcome of a price effects inquiry under Article 3.2 that consists of a mere
mathematical comparison is one that could serve as a meaningful basis for an investigating
authority's determination of injury and causation. The fact that Article 3.2 expressly establishes
"a link between the price of subject imports and that of like domestic products, by requiring that a
comparison be made between the two"
385, does not mean that an investigating authority can
comply with its obligations under Article 3.2 by simply considering "whether subject imports 'sell at
lower prices than' comparable domestic products".
386 While an examination of whether there is a
price differential between imported and domestic products may be a useful starting point for an
analysis of price undercutting, it does not provide a sufficient basis for an investigating authority to
satisfy its obligation under Article 3.2.
5.164. In the light of the above, we find that the Panel erred in its interpretation of Article 3.2 of
the Anti-Dumping Agreement in finding that, in its consideration of whether there has been a
significant price undercutting, an investigating authority may "simply consider whether subject
imports 'sell at lower prices than' comparable domestic products".
387 The Panel's finding rejecting
the complainants' claims regarding MOFCOM's analysis of whether there was significant price
undercutting by Grade C dumped imports was base d on the Panel's erroneous interpretation of
Article 3.2.388 We therefore reverse the Panel's findings, in paragraphs 7.130 and 7.144 of the
Panel Reports, paragraph 8.2.a.i of the Japan Pa nel Report, and paragraph 8.7.b.i. of the EU
Panel Report, regarding MOFCOM's finding of price undercutting with respect to Grade C HP-SSST.
5.165. This brings us to the question of whether we can complete the legal analysis, as requested
by the complainants, and find that MOFCOM's consideration of price undercutting in respect of
Grade C HP-SSST is inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement,
including because MOFCOM failed to consider whether Grade C dumped imports had any price
undercutting effect on domestic Grade C products . In previous cases, the Appellate Body has
completed the legal analysis with a view to facilitating the prompt settlement and effective
resolution of the dispute.
389 The Appellate Body has completed the legal analysis when sufficient
factual findings by the panel and undisputed facts on the panel record allowed it to do so.390

382 In this respect, the Appellate Body also clarified that, although there is no explicit requirement in
Article 3.2, a failure to ensure price comparability is inconsistent with the requirement under Article 3.1 that a
determination be based on "positive evidence" and involve an "objective examination" of the effect of dumped
imports on the prices of domestic like products. (Appellate Body Report, China – GOES, para. 200)
383 Appellate Body Report, China – GOES, para. 128.
384 Appellate Body Report, China – GOES, para. 154.
385 Appellate Body Report, China – GOES, para. 136.
386 Panel Reports, para. 7.128.
387 Panel Reports, para. 7.128.
388 See Panel Reports, paras. 7.116 and 7.121.
389 See Appellate Body Reports, US – Countervailing Measures (China), para. 4.82; Australia – Salmon,
paras. 117-136; US – Wheat Gluten, paras. 80-92; and Canada – Aircraft (Article 21.5 – Brazil), paras. 43-52.
390 See Appellate Body Reports, US – Countervailing Measures (China), para. 4.82; US – Gasoline,
p. 19, DSR 1996:I, p. 18; Canada – Periodicals, p. 24, DSR 1997:I, p. 469; EC – Poultry, para. 156; EC –
Hormones, para. 222; US – Shrimp, paras. 123-124; Japan – Agricultural Products II, para. 112; US – FSC,
para. 133; Australia – Salmon, paras. 117-118; US – Lamb, paras. 150 and 172; US – Section 211
Appropriations Act, para. 352; EC and certain member States – Large Civil Aircraft, paras. 1174-1178; and
US – Large Civil Aircraft (2nd complaint), paras. 1272-1274.
WT/DS454/AB/R • WT/DS460/AB/R

5.166. Turning to the case before us, we note China's assertion that, to the extent that the
complainants have made arguments challenging the comparability of the prices between the
Grade C dumped imports and domestic Grade C, we should exclude such arguments from our
consideration.
391 However, we see no reason why, in our assessment of the claims on appeal, we
would be precluded from taking into account the totality of the parties' legal arguments to the
extent that they are relevant to the issue raised on appeal.
5.167. We note the Panel's finding that China acted inconsistently with Articles 3.1 and 3.2 of the
Anti-Dumping Agreement because MOFCOM did not pr operly establish that the prices of imports
and domestic like products were "comparable" for the purpose of considering price undercutting by
imports of Grade C products given that it failed "to properly account for differences in quantities
when comparing the price of Grade C subject imports with the domestic Grade C price".
392 This
finding by the Panel, not appealed by China, implies that MOFCOM could not have had an objective
basis to determine the existence of price undercutting for Grade C HP-SSST.
5.168. Moreover, we note, as did the Panel, that "MOFCOM failed to account for record evidence
that trends in domestic prices by grade had no apparent relationship in terms of magnitude or
direction with trends in import prices." 393 The Panel stated that this was particularly apparent in
respect of domestic Grade C, "the price of which increased by 112.80% from 2009-2010, without
any corresponding movement in prices for subject imports" of Grade C, "which actually fell over
that period".394 As explained above, in order properly to carry out an analysis of whether there had
been significant price undercutting by dumped imports of Grade C, MOFCOM would have been
required, pursuant to Articles 3.1 and 3.2 of the Anti-Dumping Agreement, to undertake a dynamic
assessment of price developments and trends in the relationship between the prices of the
dumped imports of Grade C and those of the domest ic Grade C over the duration of the POI. Yet,
we note that MOFCOM did not explain the basis for its finding that imports of Grade C were
underselling domestic Grade C despite the fact that the price of domestic Grade C "increased
by 112.80% from 2009-2010", while the prices of dumped imports of Grade C " actually fell over
that period".
395
5.169. As explained above, the inquiry under Ar ticle 3.2 is concerned with the effect of the
dumped imports on the prices of domestic like products. It was therefore not sufficient for
MOFCOM to make a finding of price undercutting based only on the fact that, in 2010, there was a
mathematical difference between the prices of the imports of Grade C HP-SSST and those of
domestic Grade C HP-SSST. Instead, MOFCOM ought to have taken into account whether that
mathematical difference amounted to significan t price undercutting in the light of the facts
underlying the investigation and the considerations we explained above. To our minds, an
objective examination would have taken into account all the positive evidence relating to,
inter alia, the contrary price movements of the Grade C imports and domestic Grade C, as well as
the limited period during which the perceived mathematical difference occurred.
5.170. We further recall that the provisions of Article 3 of the Anti-Dumping Agreement
contemplate a "logical progression" in the investigating authority's examination leading to an
ultimate determination of whether dumped imports are causing material injury to the domestic
industry.
396 Accordingly, the outcome of the price effects inquiry under Article 3.2 must be one
that enables the investigating authority to advance its analysis and to have a meaningful basis for
its determination as to whether dumped imports, through such price effects, are causing injury to
the domestic industry.
397 We do not see how MOFCOM, under the specific facts of this case, could
have provided a "meaningful basis" for an analys is of whether the dumped imports were causing
injury without considering "record evidence that trends in domestic prices by grade had no
apparent relationship in terms of magnitude or direction with trends in import prices".
398

391 China's appellee's submission, paras. 139-140 and 174-175.
392 Panel Reports, para. 7.115.
393 Panel Reports, para. 7.186.
394 Panel Reports, para. 7.186.
396 Appellate Body Report, China – GOES, para. 128.
397 Appellate Body Report, China – GOES, para. 154.
398 Panel Reports, para. 7.186.
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5.171. In the light of the above, we find that MOFCOM's assessment of whether there had been a
significant price undercutting by Grade C imports from Japan and the European Union, as
compared with the price of domestic Grade C, is inconsistent with Articles 3.1 and 3.2 of the
Anti-Dumping Agreement.
5.172. Having addressed the first issue raised on appeal under Articles 3.1 and 3.2 of the
Anti-Dumping Agreement, we now turn to the European Union's claim that the Panel erred in
finding that MOFCOM was not required to make a finding of price undercutting for the product as a
whole, including Grade A HP-SSST.

5.5.1.2 Whether MOFCOM was required to ma ke a finding of price undercutting for the
product as a whole
5.5.1.2.1 The Panel's findings
5.173. Before the Panel, the complainants submitted that China acted inconsistently with
Articles 3.1 and 3.2 of the Anti-Dumping Agreement because MOFCOM extended its finding of price
undercutting in respect of imports of Grades B an d C HP-SSST to the domestic like product as a
whole, including domestic Grade A HP-SSST.
399
5.174. The Panel did not agree with the complainants that MOFCOM was required under
Articles 3.1 and 3.2 to find price undercutting in respect of the domestic like product as a whole ,
encompassing the three product types (Grades A, B, and C). 400 The Panel noted that, when an
investigating authority considers the existence of price undercutting for the purpose of Article 3.2,
it need only consider the existence of price undercutting in respect of the dumped imports at issue.
For the Panel, where dumped imports are of different grades, it is appropriate to consider price
undercutting with respect to the comparable domestic grades.
401
5.175. The Panel noted the complainants' argument that Article 3.1 refers to "the effect of the
dumped imports on prices in the domestic market for like products". 402 According to the
complainants, the use of the definite article "the" in conjunction with "domestic market for like
products" necessarily constitutes a reference to the entire domestic market and, therefore, the like
product as a whole. The Panel disagreed and sa w nothing in Article 3.1 to suggest that the
existence of price undercutting must be considered in respect of the entire range of the like
product in the domestic market of the importin g Member. For the Panel, the reference to "the"
domestic market simply meant that prices in the domestic market should be used, rather than
those in any other market. The Panel noted, in that context, that there can be one or more
domestic like products corresponding to the imports subject to an anti-dumping investigation.
Thus, the Panel found that, while the text of Articl e 3.1 "leaves open the possibility of more than
one like product, it does not … establish that pric e undercutting must be found with respect to the
entire range of goods making up the domestic like product(s)."
403
5.176. The Panel also rejected the complainants' argument that MOFCOM improperly found the
relevant price undercutting to be "significant", given that the majority 404 of domestic production
(of Grade A products) was unaffected by such price undercutting. In the Panel's view, this
argument was predicated on the complainants' understanding that MOFCOM was required by
Article 3.2 to establish that dumped imports ha d a price undercutting effect in respect of the
domestic like product as a whole, including domestic Grade A. Relying on the panel's finding in US
– Upland Cotton , the Panel considered that the signific ance of price undercutting by dumped
imports of Grades B and C should be assessed in relation to the price of domestically produced
Grades B and C, and not in relation to other factors, such as the proportion of domestic production
for which no price undercutting was found.
405 Furthermore, the Panel recalled that price
undercutting must be established on the basis of a comparison of the prices of comparable goods.
As a result, there may well be domestic product models or grades for which no price undercutting
is established. The Panel considered that this fact should not preclude a finding of "significant"

400 Panel Reports, para. 7.139.
401 Panel Reports, para. 7.139.
403 Panel Reports, para. 7.141.
404 At fn 270 to para. 7.142 of the Panel Reports, the Panel highlighted that the complainants' estimate
that only about 20% of domestic production concerned Grade B or C products, with the remaining +/-80%
concerning Grade A products. (Japan's first written submission to the Panel, para. 148; European Union's first
written submission to the Panel, para. 243) The Panel also noted that China challenged the accuracy of Japan's
estimates, but did not provide actual numbers. The Panel considered it unnecessary to examine this
discrepancy in any detail, since China, in any event, acknowledged that "the majority" of domestic HP-SSST
production related to Grade A. (China's comments on Japan's response to Panel question No. 84, para. 31)
405 Panel Reports, para. 7.142 (referring to Panel Report, US – Upland Cotton, paras. 7.1325
and 7.1328).

price undercutting. The Panel noted, however, that this fact may become relevant in the
consideration of causation of injury, pursuant to Article 3.5 of the Anti-Dumping Agreement.406
5.5.1.2.2 Arguments on appeal
5.177. On appeal, the European Union notes that there "were no relevant imports of Grade A",
and that most of the domestic sales were of Grade A.
407 Y e t , M O F C O M f o u n d t h a t p r i c e
undercutting by imported Grades B and C had a significant effect on the domestic product, without
conducting any cross-grade analysis. In the European Union's view, the Panel accepted this
conclusion solely on the basis of its erroneous finding that Articles 3.1 and 3.2 of the Anti-Dumping
Agreement do not require any consideration of the effect of the price of the dumped product on
the price of the domestic product.
408
5.178. China counters that the Panel correctly noted that MOFCOM did not make a finding of price
undercutting with respect to the domestic like product as a whole, and that, instead, it found
undercutting only for Grades B and C. 409 In addition, China submits that the European Union's
argument is predicated on the contention that an investigating authority is always to consider price
undercutting for the domestic like product as a whole, and that the Panel properly rejected that
proposition.410
5.5.1.2.3 Analysis
5.179. Turning to the facts of the present dispute, we note that MOFCOM defined the domestic
like product as certain HP-SSST, encompassing three product types or grades referred to by the
Panel as Grades A, B, and C.
411 The Panel noted that MOFCOM "conducted grade-by-grade price
comparisons" and found "price undercutting in respect of Grades B and C". 412 The Panel also noted
that "MOFCOM did not make any finding of price undercutting in respect of Grade A, because this
product was only imported in 2008, in very small quantities."413
5.180. We agree with the Panel that an investigating authority is not required, under Article 3.2 of
the Anti-Dumping Agreement, to establish the ex istence of price undercutting for each of the
product types under investigation, or with respec t to the entire range of goods making up the
domestic like product. 414 That said, an investigating authority is under an obligation to examine
objectively the effect of the dumped imports on domestic prices. As discussed above, with respect
to its consideration of whether there has been a significant price undercutting, an investigating
authority must undertake a dynamic assessment of price developments and trends in the
relationship between the prices of the dumped imports and those of the domestic like product over
the duration of the POI, taking into account all relevant evidence including, where appropriate, the
relative market share of each product type. Impo rtantly, and as discussed above, an investigating
authority's consideration of price effects under Article 3.2 must provide a meaningful basis for
subsequently determining whether the dumped imports are causing injury to the domestic industry
within the meaning of Article 3.5 of the Anti-Dumping Agreement.
415 We therefore disagree with
the Panel that MOFCOM was not required to assess the significance of price undercutting by the
dumped imports in relation to "the proportion of domestic production for which no price
undercutting was found".416

406 Panel Reports, para. 7.142 and fn 273 thereto.
407 European Union's other appellant's submission, para. 138.
408 European Union's other appellant's submission, para. 138 (referring to Panel Reports, para. 7.138).
410 China's appellee's submission, para. 207.
411 MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and EU-30), internal pp. 23-28. In
MOFCOM's Final Determination, Grade A corresponds to TP347HFG, Grade B corresponds to S30432, and
Grade C corresponds to TP310HNbN. We note that MOFCOM's definition of the domestic like product was not
the subject of a claim by the complainants before the Panel.
412 Panel Reports, para. 7.137.
413 Panel Reports, para. 7.137.
414 Panel Reports, para. 7.141.
415 Appellate Body Report, China – GOES, paras. 149 and 154.
416 Panel Reports, para. 7.142.

5.181. In its investigation, MOFCOM observed that, during the POI, the dumped imports and
domestic sales were concentrated in di fferent segments of the HP-SSST market. 417 On the one
hand, the majority of Chinese domestic HP-SSST production related to Grade A. 418 As such, the
majority of domestic sales was of Grade A. The market share held by Grade A dumped imports in
2008 was only 1.45%. 419 There were no Grade A dumped imports thereafter. On the other hand,
during the POI, the dumped imports of Grades B and C each held a market share of around 90%
of its respective market segment. 420 We further recall that Japan argued before the Panel, and
China did not dispute, that Grade B is approximat ely double the price of Grade A, and Grade C is
approximately triple the price of Grade A. 421 In the case before us, we consider that an objective
examination by MOFCOM of whether there had been a significant price undercutting by the
dumped imports as compared with the prices of the domestic like product (encompassing all three
product types) should have taken into account the relevant market shares of the respective
product types. Likewise, a proper analysis of price effects ought to have taken into account the
fact that there were significant differences in the prices of these product types.
 As discussed
above, an investigating authority may not disregard evidence suggesting that the dumped imports
have no, or only a limited, effect on domestic prices.
5.182. In the light of the above, we reverse the Panel's finding, in paragraphs 7.143,
7.144, and 8.7.b.i. of the EU Panel Report; and find instead that MOFCOM's assessment of whether
there had been a significant price undercutting by t h e d u m p e d i m p o r t s , a s c o m p a r e d w i t h t h e
prices of the domestic like product, is inconsistent with Articles 3.1 and 3.2 of the
Anti-Dumping Agreement.

417 Panel Reports, para. 7.182.
419 Panel Reports, para. 7.182 (referring to MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and
EU-30), internal p. 65).
420 Panel Reports, para. 7.182 (referring to MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and
EU-30), internal p. 66 (translation amended by Panel Exhibit CHN-16-EN, and accepted by the complainants in
Panel Exhibits JPN-29 and EU-32)).
WT/DS454/AB/R • WT/DS460/AB/R

5.5.2 MOFCOM's impact analysis – Articles 3.1 and 3.4 of the Anti-Dumping Agreement
5.183. Japan and the European Union claim that the Panel erred in its interpretation and
application of Articles 3.1 and 3.4 of the Anti-Dumping Agreement in rejecting their claims that
MOFCOM was required to undertake a segmented analysis of the impact of dumped imports on the
state of the domestic industry, having found no significant increase in the volume of dumped
imports, and having found price effects with respect to Grades B and C only. In addition, Japan
asserts that the Panel erred in finding that Japan's claim that MOFCOM failed to examine whether
dumped imports provided explanatory force for the state of the domestic industry fell outside the
Panel's terms of reference.
5.184. Before the Panel, the complainants submitted that MOFCOM's impact analysis was
inconsistent with Articles 3.1 and 3.4 of the Anti-Dumping Agreement on several grounds. The
Panel addressed three of the claims pursued by the complainants. The Panel rejected the
complainants' claims that MOFCOM acted incons istently with Articles 3.1 and 3.4 of the
Anti-Dumping Agreement by assessing the impact of dumped imports on the domestic industry
producing all three grades of HP-SSST, even though it found no significant increase in the volume
of dumped imports
422, and found price effects with respect to Grades B and C only. The Panel also
disagreed with the complainants that MOFCOM acte d inconsistently with Articles 3.1 and 3.4 by
failing to weigh properly the positive and negative injury factors. However, the Panel agreed with
the complainants that MOFCOM failed to evalua te the magnitude of the margins of dumping,
contrary to Articles 3.1 and 3.4 of the Anti-Dum ping Agreement. The latter two findings of the
Panel are not the subject of these appeals.
5.185. We begin by addressing Japan's claim under Article 6.2 of the DSU. Thereafter, we will
review the complainants' appeal of the Panel's legal findings and conclusions concerning the
interpretation and application of Articles 3.1 and 3.4 of the Anti-Dumping Agreement.

422 In its Final Determination, MOFCOM noted:
Based on data provided by foreign producers in their Response to Questionnaire for
Producers/Exporters of Other Countries/Regions and relevant subsequent supplemental
materials, during the period of investigation, the import volumes of the subject products from
the EU and Japan decreased year by year from 20,100 tons in 2008 to 16,400 tons in 2009, a
decrease of 18.49% from 2008, and to 4500 tons in 2010, a decrease of 72.79% from 2009.
From January to June 2011, the import volume of the subject products was 2600 tons, down
21.89% year on year.
(Panel Exhibits JPN-2-EN and EU-30, internal p. 43)

5.5.2.1 Japan's claim under Article 6.2 of the DSU
5.186. Japan contends that the Panel acted inconsistently with Article 6.2 of the DSU in finding
that Japan's claim regarding MOFCOM's allege d failure to examine whether dumped imports
provided explanatory force for the state of the dome stic industry under Articles 3.1 and 3.4 of the
Anti-Dumping Agreement was outside its terms of reference. The Panel made this finding on the
basis that the claim was not sufficiently identified in Japan's panel request.
5.187. China requests that we uphold the Panel's finding. In addition, China takes issue with what
it views as Japan's attempt to rely on the argu ments concerning the absence of any explanatory
force in support of its claim on appeal that the Panel erred in rejecting the complainants' claims
that MOFCOM was required by Articles 3.1 and 3. 4 of the Anti-Dumping Agreement to undertake a
segmented impact analysis. China submits that, gi ven that the Panel found Japan's "explanatory
force" claim to be outside its terms of referenc e, this aspect of Japan's appeal should be
rejected.
423
5.188. Japan's panel request states, in relevant part:
Japan considers that the measures at issue are inconsistent with, at least, China's
obligations under the following provisions of the Anti-Dumping Agreement:
1. Articles 3.1, 3.2, 3.4, and 3.5 because China's injury determination was not
based on positive evidence and did not involve an objective examination of the
volume of the dumped imports under investigation, the effect of those imports on
prices in the domestic market for like products, and the consequent impact of those
imports on domestic producers of such products. Specifically:
(a) …
(b) China's analysis of the impact of the dumped imports on the domestic industry:
(i) failed to make an objective examination, based on positive evidence, of the impact
of subject imports on the domestic industry based on the volume of such imports and
their effect on prices; (ii) failed to evaluate the magnitude of the margin of dumping;
and (iii) failed to objectively determine the relative importance and weight to be
attached to relevant economic factors an d indices, and improperly disregarded the
majority of those factors and indices indica ting that the domest ic industry did not
suffer material injury. Accordingly, China acted inconsistently with Articles 3.1 and 3.4
of the Anti-Dumping Agreement.
424
5.189. We recall our discussion in section 5.1.1.2 of these Reports 425 of the requirements that a
complainant must satisfy in its panel request purs uant to Article 6.2 of the DSU. Based on our
reading of the plain language in Japan's panel request, we understand Japan to have made three
claims under Articles 3.1 and 3.4 of the Anti-Dumping Agreement – namely that, in conducting its
impact analysis, China: "(i) failed to make an objective examination, based on positive evidence,
of the impact of subject imports on the domestic industry based on the volume of such imports
and their effect on prices; (ii) failed to evalua te the magnitude of the margin of dumping; and
(iii) failed to objectively determine the relative importance and weight to be attached to relevant
economic factors and indices, and improperly disregarded the majority of those factors and indices
indicating that the domestic industry did not suffer material injury."
426
5.190. Japan contends that its statement in the panel request, that "China's analysis of the
impact of the dumped imports on the domestic i n d u s t r y … f a i l e d t o m a k e a n o b j e c t i v e
examination, based on positive evidence, of th e impact of subject imports on the domestic
industry based on the volume of such imports and their effect on prices", encompassed two
separate claims – namely: (a) that MOFCOM failed to examine "the consequent impact", and thus

423 China's appellee's submission, para. 243 (referring to Japan's appellant's submission, paras. 49,
55-61, and 63-66).
424 Japan's panel request, pp. 1-2.
425 Supra, paras. 5.11-5.16.
426 Japan's panel request, para. 1(b).

a logical connection with its volume and price effects conclusions; and (b) that MOFCOM failed to
examine the "explanatory force" of dumped imports.427
5.191. We do not see, in Japan's panel request, a claim under Articles 3.1 and 3.4 of the
Anti-Dumping Agreement regarding MOFCOM's alleged failure to examine whether dumped
imports provided "explanatory force" for the state of the domestic industry. 428 The reference to
"explanatory force" is drawn from the Appellate Body's interpretation of Article 3.4 in its report in
China – GOES . This reference formed part of the Appellate Body's reasoning in interpreting
Article 3.4 in that dispute and should not be read to create an obligation that is distinct from that
expressed in Article 3.4. Accordingly, we view Japan's submissions, insofar as they refer to
"explanatory force", as setting out arguments, based on the Appellate Body's reasoning in China –
GOES, in support of Japan's claims under Article 3.4. These claims were properly within the Panel's
terms of reference, and were addressed by the Panel.
5.192. Further, we note that China takes issue with what it views as Japan's attempt to rely on
new arguments concerning the absence of any explan atory force in support of its claim on appeal
that the Panel erred in rejecting the complainants' claims that MOFCOM was required by
Articles 3.1 and 3.4 of the Anti-Dumping Agreement to undertake a segmented impact analysis.
We recall that, before the Panel, Japan argued that MOFCOM improperly considered the impact of
dumped imports on the domestic industry as a whole, in respect of all three product grades, even
though it had only found price effects in respect of Grades B and C. In its claim under Article 3.4,
Japan argued that MOFCOM's reliance on its flawed and partial price effects analysis for purposes
of its impact examination does not constitute "an objective examination 'of the explanatory force
of subject imports for the state of the domestic industry' as a whole".
429 We therefore disagree
with China to the extent that it contends that Japan's arguments concerning "explanatory force"
under Article 3.4 are new arguments.
5.193. In sum, we do not consider that Japan's arguments regarding "explanatory force" could
constitute grounds for a separate "claim" under Articles 3.1 and 3.4 of the Anti-Dumping
Agreement. Accordingly, there was no basis for the Panel to consider, as it did, whether such
"claim" was properly within the scope of its terms of reference. Consequently, we declare the
Panel's findings, in paragraphs 6.29-6.31 and footnote 274 of the Japan Panel Report, to be moot
and of no legal effect.

427 Japan's appellant's submission, para. 73.
428 See Panel Reports, paras. 6.29-6.31.
429 Japan's first written submission to the Panel, para. 165. (emphasis added; fn omitted)
WT/DS454/AB/R • WT/DS460/AB/R

5.5.2.2 The Panel's assessment of MOFCOM's impact analysis
5.194. We begin by recalling the relevant findings of the Panel, before turning to the specific
issues raised by the complainants on appeal.
5.5.2.2.1 The Panel's findings
5.195. Before the Panel, Japan and the European Union submitted that MOFCOM's impact analysis
was at odds with, and did not follow from, its volume and price effects analyses. The complainants
asserted that, having found no significant increase in volume whatsoever and price effects with
respect to only Grades B and C, to ensure a logical progression of inquiry, MOFCOM should have
analysed the impact of the dumped imports on ly on the segment of the domestic industry
producing Grades B and C. China disagreed, argu ing that Article 3.4 requires MOFCOM to have
assessed the impact of dumped imports on the domestic industry as a whole . Moreover, China
argued that the two domestic producers making up the domestic industry are "producers of all
three grades of the like product"
430, such that it is not possible to distinguish any part of the
domestic industry that is producing only Grade A.431
5.196. The Panel considered that the complain ants' claims regarding the scope of MOFCOM's
impact analysis were premised on their interp retation of Article 3.2 of the Anti-Dumping
Agreement, and reiterated its finding that, "in finding price undercutting in respect of Grades B
and C, MOFCOM was not required by Article 3.2 to consider the effect of subject Grade B and C
imports on domestic Grade A." 432 The Panel considered on this basis that MOFCOM's failure to
conduct such a cross-grade price analysis did not preclude a finding that the segment of the
domestic industry producing Grade A products co uld be impacted by dumped imports. The Panel
further reasoned that the complainants' approach to Article 3.4 was overly "focused on the causal
connotations of the term 'impact'"
433, and overlooked the obligation in Article 3.4 to evaluate the
state of the "domestic industry" as defined by Article 4.1 of the Anti-Dumping Agreement. The
Panel recalled that, in the present case, "MOFCOM defined the domestic industry as comprising
two domestic producers accounting for a major proportion of total domestic production of the
domestic product like the subject imports."
434 According to the Panel, an evaluation of the state of
the domestic industry envisaged by Article 3. 4 must therefore consider the state of those
two producers, with respect to their production of all types of HP-SSST. Thus, the Panel saw no
basis in Article 3.4 "for limiting this evaluation to the state of those two domestic producers with
respect to their production of only Grades B and C".
435
5.197. The Panel clarified that it was not suggesting that the scope of MOFCOM's price effects
conclusions was of "no relevance to the remainder of MOFCOM's injury analysis". 436 Instead, it
noted that "a limited finding of price undercutting will have obvious implications for an authority's
assessment of whether dumped imports caused material injury to the domestic industry." 437
However, for the Panel, this was "an assessment to be made pursuant to Article 3.5, rather
than 3.4, of the Anti-Dumping Agreement."
438
5.198. Based on the foregoing, the Panel rejected the complainants' claims that China acted
inconsistently with Articles 3.1 and 3.4 of the Anti-Dumping Agreement because MOFCOM was
required to, but did not, undertake a segmented impact analysis and, instead, assessed the impact
o f d u m p e d i m p o r t s o n t h e d o m e s t i c i n d u s t r y a s a w h o l e , e v e n t h o u g h i t f o u n d n o s i g n i f i c a n t
increase in the volume of dumped imports and found price effects with respect to HP-SSST of
Grades B and C only.
439

430 China's second written submission to the Panel, para. 179.
431 Panel Reports, paras. 7.148-7.149.
433 Panel Reports, para. 7.153.
434 Panel Reports, para. 7.153.
435 Panel Reports, para. 7.153.
439 Panel Reports, para. 7.170.
WT/DS454/AB/R • WT/DS460/AB/R

5.5.2.2.2 Arguments on appeal
5.199. On appeal, Japan and the European Union argue that the Panel erred in its interpretation
and application of Articles 3.1 and 3.4 of the Anti-Dumping Agreement because the Panel failed
properly to take into account the logical progression of inquiry contemplated under the various
paragraphs of Article 3. In partic ular, Japan argues that, if an investigating authority, pursuant to
the inquiry under Article 3.2, finds no increase in the volume of imports, and finds price effects
only for certain, but not all, grades of the product, the investigating authority should conduct its
analysis under Article 3.4 on the premise that those grades for which no price effects were found
were not impacted by the dumped imports. In Japan's view, failing to do so would violate an
investigating authority's obligation to make an objective examination of the consequent impact of
the dumped imports based on positive evidence.
5.200. The European Union, for its part, argues that the Panel failed to take into consideration
what the European Union refers to as a "unitary analysis": one which recognizes that it is "highly
problematic" to distinguish between the concept of injury and the concept of causation, given that
only what is caused by the dumped imports is correctly characterized as "injury" within the
meaning of footnote 9 of the Anti-Dumping Agreement.
440 Accordingly, if, in the application of
Article 3.5 of the Anti-Dumping Agreement, an inve stigating authority determines that a particular
thing is a non-attribution factor, then, at the same time, anything caused by that non-attribution
factor is not "injury" within the meaning of footnote 9 of the Anti-Dumping Agreement. The
European Union argues that "[t]his necessarily means that it is not part of the 'impact of the
dumped imports on the domestic industry' within the meaning of Article 3.4."
441 According to the
European Union, in the present case, given that MOFCOM did not find volume and price effects
arising out of imports of Grade A HP-SSST, Grade A should have been considered as a "non-
attribution factor" within the meaning of Article 3. 5, and should therefore not have formed part of
the impact analysis under Article 3.4.
442
5.201. China requests that we reject the appeals by the complainants and uphold the Panel's
findings. China notes that Article 3.4 contemplates that an investigating authority must derive an
understanding of the impact of dumped imports on the basis of the examination of the state of the
industry. China considers that the obligation to derive an understanding of the impact of the
dumped imports on the domestic industry must be distinguished from the obligation to determine
that the dumped imports are causing injury. China emphasizes that "the 'requirement to conduct a
non-attribution analysis regarding all factors causing injury to the domestic industry' is laid down
in Article 3.5, rather than in Article 3.4."
443 Furthermore, China highlights that Article 3.4 requires
an investigating authority to derive an understanding of the impact of dumped imports on the
state of the domestic industry as defined in Ar ticle 4.1 of the Anti-Dumping Agreement. This
requirement applies irrespective of whether the consideration under Article 3.2 reveals price
undercutting with respect to all domestic like products, or only with respect to some of such
domestic like products.
444
5.5.2.2.3 Analysis
5.202. Article 3.4 of the Anti-Dumping Agreement provides:
The examination of the impact of the du mped 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, producti vity, 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.

440 European Union's other appellant's submission, para. 154.
441 European Union's other appellant's submission, para. 155.
442 European Union's response to questioning at the oral hearing.
443 China's appellee's submission, para. 249 (quoting Appellate Body Report,
China – GOES, paras. 128 and 149-150).
444 China's appellee's submission, para. 251.
WT/DS454/AB/R • WT/DS460/AB/R

5.203. As discussed at paragraph 5.140 above, the various paragraphs of Article 3 contemplate a
"logical progression" in the investigating authority's inquiry leading to an ultimate determination of
whether dumped imports are causing material injury to the domestic industry.
445 As part of this
logical progression of inquiry, Article 3.4 requires an investigating authority to examine
"the impact of the dumped imports on the domestic industry". This examination must include
"an evaluation of all relevant economic factors and indices having a bearing on the state of the
industry". Article 3.4 then lists certain factors that "are deemed to be relevant in every
investigation and which must always be evaluated by the investigating authorities".
446 Importantly,
the Appellate Body has stressed that the evaluation of the relevant factors must respect the
overarching principles set out in Article 3.1, requiring investigating authorities to conduct an
objective examination based on positive evidence.
447
5.204. While the second sentence of Article 3.2 requires an investigating authority to consider the
effect of the dumped imports on prices, the focus of Article 3.4 is on the state of the domestic
industry.448 The Appellate Body has clarified that it would be compatible with Article 3.4 for
investigating authorities to evaluate factors having a bearing on the state of the domestic industry
on the basis of an evaluation of specific part s, sectors, or segments within the domestic
industry.449 Such a sectoral analysis "may be highly pertinent, from an economic perspective, in
assessing the state of an industry as a whole".450 As we see it, while there is no exclusive
methodology prescribed for an investigating authority to conduct an 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.
5.205. Article 3.4 does not merely require an ex amination of the state of the domestic industry,
but contemplates that "an investigating authority must derive an understanding of the impact of
subject imports on the basis of such an examination".
451 Consequently, Article 3.4 is concerned
with "the relationship between subject imports an d the state of the domestic industry, and this
relationship is analytically akin to the type of link contemplated by the term 'the effect of' under
Article[] 3.2".452 In other words, Article 3.4 requires an examination of the "explanatory force" of
subject imports for the state of the domestic industry. 453 As noted, the Appellate Body stated in
China – GOES that the inquiries under Article 3.2, and the examination required under Article 3.4,
are necessary in order to answer the ultimate question in Article 3.5 as to whether dumped
imports are causing injury to the domestic industry. The Appellate Body has clarified that, similar
to the consideration under Article 3.2, the examination under Article 3.4 " contributes to , rather
than duplicates, the overall determination required under Article[] 3.5". 454 However, whilst an
investigating authority is required to examine the impact of dumped imports on the domestic
industry pursuant to Article 3.4, it is not required to demonstrate that dumped imports are causing
injury to the domestic industry, which is an analysis specifically mandated by Article 3.5.455
5.206. Turning to the specific facts of this case, we recall that there were no imports of Grade A
HP-SSST after 2008, and that MOFCOM did not make a finding of price undercutting in respect of
Grade A.
456 We also recall that MOFCOM defined the domestic industry as comprising two domestic

445 Appellate Body Report, China – GOES, para. 128.
446 Appellate Body Report, US – Hot-Rolled Steel, para. 194 (referring to Appellate Body Report,
Thailand – H-Beams, fn 36 to para. 128).
447 Appellate Body Report, US – Hot-Rolled Steel, paras. 196-197.
448 We observe that Article 4.1 of the Anti-Dumping Agreement defines the term "domestic industry" as
the "domestic producers as a whole of the like products" or "[domestic producers] whose collective output of
the products constitutes a major proportion of the total domestic production".
449 Appellate Body Report, US – Hot-Rolled Steel, para. 195.
450 Appellate Body Report, US – Hot-Rolled Steel, para. 195 (referring to Panel Report, Mexico – Corn
Syrup, fn 30 to para. 7.154). (emphasis added)
451 Appellate Body Report, China – GOES, para. 149. (emphasis original)
452 Appellate Body Report, China – GOES, para. 149.
453 Appellate Body Report, China – GOES, para. 149.
454 Appellate Body Report, China – GOES, para. 149. (emphasis original)
455 Appellate Body Report, China – GOES, para. 150.
456 Panel Reports, para. 7.137 (referring to MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and
EU-30), internal p. 53).
WT/DS454/AB/R • WT/DS460/AB/R

producers accounting for a major proportion of total domestic production of the domestic product
comprising Grades A, B, and C.457
5.207. As noted, Article 3.4 requires the evaluation of all relevant economic factors and indices
having a bearing on the state of the industry. These factors include actual and potential decline in
sales, market share, and factors affecting domestic prices. Article 3.4, read together with
Article 3.1, instructs investigating authorities to evaluate, objectively and on the basis of positive
evidence, the importance and the weight to be a ttached to all the relevant factors. In every
investigation, this evaluation turns on the "bearing" that the relevant factors have on the state of
the domestic industry.458
5.208. In the present case, MOFCOM found that dumped imports of Grades B and C each held a
market share of around 90% of its respective market segment. 459 The majority of domestic sales,
however, were of Grade A. The market share held by Grade A dumped imports in 2008 was only
1.45%, and there were no Grade A imports thereafter. 460 In the light of these factual findings by
MOFCOM, we note the following finding by the Panel:
We do not mean to suggest that the scope of MOFCOM's price effects conclusions is of
no relevance to the remainder of MOFCOM's injury analysis. As previously noted, a
limited finding of price undercutting will have obvious implications for an authority's
assessment of whether dumped imports caused material injury to the domestic
industry. However, this is an assessment to be made pursuant to Article 3.5, rather
than 3.4, of the Anti-Dumping Agreement.
461
5.209. We agree with the Panel that the results of the inquiries, pursuant to Article 3.2, relating to
the volume of the dumped imports and the effects of the dumped imports on prices are relevant to
the causation analysis required under Article 3.5. However, unlike the Panel, we consider that the
results of these inquiries are also relevant to the impact analysis required under Article 3.4, given
that this provision requires the evaluation of all relevant economic factors and indices having a
bearing on the state of the industry, including ma rket share and factors affecting domestic prices.
Significantly, as discussed at paragraph 5.141 above, the disciplines that apply under Article 3,
while distinct, are interlinked and logically prog ress to answering the question of whether the
dumped imports are causing injury to the domestic industry. As the Appellate Body stated in
EC
 Tube or Pipe Fittings , "Article 3.1 and the succeeding paragraphs of Article 3 clearly indicate
that volume and prices, and the consequent impact on the domestic industry, are closely
interrelated for purposes of the injury determination." 462 Accordingly, we do not agree with the
Panel that, because the results of the inquiry under Article 3.2 are relevant for an investigating
authority's causation and non-attribution analyses under Article 3.5, they are not relevant for the
impact analysis under Article 3.4.
463
5.210. We recall that, in the present case, the majority of Chinese domestic production consisted
of Grade A HP-SSST464, but Chinese producers also produced Grades B and C. We further note that
MOFCOM "defined the domestic industry as comp rising two domestic producers accounting for the
major proportion of total domestic production" of HP-SSST. 465 We agree with the Panel that it was
therefore appropriate for MOFCOM to examine the impact of the dumped imports on the state of
"those two producers, with respect to th eir production of all types of HP-SSST". 466 Contrary to

457 MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and EU-30), internal p. 28. See also Panel
Reports, para. 7.153. The two domestic producers are Jiangsu Wujin Stainless Steel Pipe Group Co., Ltd. and
Changshu Walsin Specialty Steel Co., Ltd.
458 Appellate Body Report, US – Hot-Rolled Steel, paras. 196-197.
459 Panel Reports, para. 7.182 (referring to MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and
EU-30), internal p. 66 (translation amended by Panel Exhibit CHN-16-EN, and accepted by the complainants in
Panel Exhibits JPN-29 and EU-32)).
460 Panel Reports, para. 7.182 (referring to MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and
EU-30), internal p. 65).
462 Appellate Body Report, EC – Tube or Pipe Fittings, para. 115.
463 We note, moreover, that the Panel's reading of Article 3.4 appears to have been premised on its
interpretation of Article 3.2 of the Anti-Dumping Agreement, which we have reversed above. (See Panel
Reports, para. 7.152)
465 Panel Reports, para. 7.153.
466 Panel Reports, para. 7.153.
WT/DS454/AB/R • WT/DS460/AB/R

what the European Union appears to suggest, such an approach would not necessarily mean that
the investigating authority's ultimate determination of injury will include injury that is not
attributable to the dumped imports. 467 Moreover, Article 3.5 expressly requires an investigating
authority to "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."
5.211. Having said this, we note that Article 3.4 does not merely require an examination of the
state of the domestic industry, but contemplates that an investigating authority "must derive an
understanding of the impact of subject imports on the basis of such an examination." 468 The
evaluation of all relevant economic factors and indices having a bearing on the state of the
industry, including market share and factors affecting domestic prices, must be such that it
provides a "meaningful basis"
469 for an analysis of whether the dumped imports are, through the
effects of dumping, as set forth in Articles 3.2 and 3.4, causing injury to the domestic industry.
Depending on the particular circumstances of each case, an investigating authority may therefore
be required to take into account, as appropriate, the relative market shares of product types with
respect to which it has made a finding of price undercutting; and, for example, the duration and
extent of price undercutting, price depression or price suppression, that it has found to exist.
5.212. In the light of the above, we find that the Panel erred in its interpretation of Articles 3.1
and 3.4 of the Anti-Dumping Agreement to the exte nt it found that the results of the inquiries
under Article 3.2 are not relevant to the impact analysis under Article 3.4. We understand the
Panel to have relied on its erroneous interpretation of Articles 3.1 and 3.4 in rejecting, in
paragraphs 7.170 of the Panel Reports, paragraph 8.2.a.ii of the Japan Panel Report, and
paragraph 8.7.b.ii of the EU Panel Report, the complainants' claims that China acted inconsistently
with Articles 3.1 and 3.4 of the Anti-Dumping Agreement because MOFCOM was required to, but
did not, undertake a segmented impact analysis. Accordingly, we reverse these findings by the
Panel. Having found that China acted inconsistently with its obligations under Articles 3.1 and 3.2
of the Anti-Dumping Agreement, and in the light of the Panel's finding that MOFCOM's analysis of
the impact of dumped imports on the domestic industry is inconsistent with China's obligations
under Articles 3.1 and 3.4 because MOFCOM faile d to evaluate properly the magnitude of the
margin of dumping, we do not consider that additional findings under Articles 3.1 and 3.4 are
required to resolve these disputes.
5.5.3 MOFCOM's causation analysis – Articles 3.1 and 3.5 of the
Anti-Dumping Agreement
5.213. Before the Panel, Japan and the European Union claimed that MOFCOM's causation
analysis is inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement for several
reasons. The Panel found that MOFCOM's reference to the market shares held by subject imports
was "not sufficient to establish that subject imports, through price undercutting, had 'a relatively
big impact on the price of the like domestic produc ts', and therefore caused injury to the domestic
industry through their price effects."
470 In addition, the Panel concluded that, because it had found
that certain aspects of MOFCOM's price effects and impact analyses were inconsistent with
Articles 3.2 and 3.4 of the Anti-Dumping Agr eement, MOFCOM's subsequent reliance on those
analyses in the context of its causation determination was inconsistent with Article 3.5 of the
Anti-Dumping Agreement.
471 The Panel also found that China acted inconsistently with Articles 3.1
and 3.5 of the Anti-Dumping Agreement because MOFCOM failed properly to ensure that the injury
caused by the decrease in apparent consumption and the increase in domestic production capacity
was not attributed to the dumped imports.472
5.214. Each of the participants appeals different aspects of the Panel's findings. China alleges that
the Panel erred in concluding that Japan's panel request, as it relates to MOFCOM's reliance on the
market share of dumped imports in order to dete rmine causation, provides a "brief summary of

467 See European Union's other appellant's submission, paras. 154-156.
468 Appellate Body Report, China – GOES, para. 149. (emphasis original)
469 Appellate Body Report, China – GOES, paras. 145 and 154.
470 Panel Reports, para. 7.188.
471 Panel Reports, para. 7.191.
472 Panel Reports, para. 7.204. We note that the Panel referred interchangeably in its discussion to the
"decline" or "decrease in apparent consumption" and the "drop" or "decline in domestic demand". (See e.g.
Panel Reports, paras. 7.169, 7.196, and 7.203)
WT/DS454/AB/R • WT/DS460/AB/R

the legal basis of the complaint sufficient to present the problem clearly", as required by
Article 6.2 of the DSU. 473 China submits that the Panel incorrectly interpreted and applied
Article 3.5 of the Anti-Dumping Agreement in fi nding that MOFCOM improperly relied on the
market share of dumped imports in determining that such imports, through price undercutting,
caused injury to the domestic industry. China also asserts, in this regard, that the Panel acted
inconsistently with Article 11 of the DSU by ruling on a claim for which the complainants failed to
make a prima facie case.
474 For their part, Japan and the European Union contend that the Panel
acted inconsistently with Article 11 of the DSU in finding that the complainants had not brought
independent claims under Article 3.5 of the Anti-Dumping Agreement other than those concerning
MOFCOM's reliance on the market share of du mped imports, and MOFCOM's non-attribution
analysis. We begin by recalling the Panel's findings before turning to the specific issues raised in
these appeals.
5.5.3.1 The Panel's assessment of MOFCOM's causation analysis
5.5.3.1.1 The Panel's findings
5.215. The Panel summarized MOFCOM's causation analysis as follows:

MOFCOM determined that "the large quantiti es of imports of the subject products …
dumped into China at low prices" caused material injury to the domestic industry. The
determination was based on the price effects of the subject imports. MOFCOM did not
find that subject imports had any volume effects on the domestic industry, in light of
the fact that the absolute volume of subject imports declined during the period of
investigation. However, MOFCOM did find that the market share of subject imports as
a whole "remained high at around 50%". MOFCOM also found that the market share
held by subject imports of both Grade B and C was around 90%. MOFCOM considered
this market share relevant in assessing the price undercutting effect of subject
imports. After considering the market share data and pricing information, MOFCOM
found that "the imports of the subject products had a relatively big impact on the price
of domestic like products".
475
5.216. Based on its review of MOFCOM's analysis, the Panel found that "MOFCOM [had] failed to
account for the fact that the market share of subject imports had actually dropped from around
90% in 2008 and 2009 to around 50% in 2010 and [the first half of] 2011, and that domestic
market shares increased correspondingly."
476 The Panel observed that, "[w]hile an investigating
authority might properly determine, given the necessary facts, that high market shares exacerbate
the price effects of dumped imports, an objective and impartial investigating authority would also
consider whether the fact that import market shares are declining significantly indicates that the
price effects are in fact somewhat attenuated."
477
5.217. The Panel recalled that the market share of imported Grade B fluctuated, the market share
of imported Grade C decreased during the POI, and the majority of domestic sales were of
Grade A.478 The Panel also found that the market share held by Grade A dumped imports in 2008
was only 1.45%, and that there were no Grade A dumped imports thereafter. 479 The Panel noted
that, although dumped imports and domestic sales were concentrated in different segments of the
HP-SSST market, "MOFCOM made no finding of cross-grade price effects, whereby price

473 China's other appellant's submission, para. 57.
474 China's appellant's submission, para. 165; other appellant's submission, para. 70.
475 Panel Reports, para. 7.171 (quoting MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and
EU-30), internal pp. 65-67 (translation amended by Panel Exhibit CHN-16-EN and accepted by the
complainants in Panel Exhibits JPN-29 and EU-32); and referring to China's first written submission to the
Panel, paras. 516-518). See also Panel Reports, para. 7.172 (referring to MOFCOM's Final Determination (Panel
Exhibits JPN-2-EN and EU-30), internal p. 66.
476 Panel Reports, para. 7.181 (referring to MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and
EU-30), internal pp. 43-49).
477 Panel Reports, para. 7.181.
478 Panel Reports, para. 7.182 (referring to MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and
EU-30), internal pp. 44 and 66).
479 Panel Reports, para. 7.182 (referring to MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and
EU-30), internal p. 65).
WT/DS454/AB/R • WT/DS460/AB/R

undercutting by subject imports of Grades B and C might be shown to affect the price of domestic
sales of Grade A."480 The Panel stated that it:
… would [have] expect[ed] an objective and impartial investigating authority to have
examined and explained how the 90% market shares of Grade B and C subject imports
enabled those imports, through price effects, to cause injury to the domestic industry
as a whole, notwithstanding the fact that the bulk of domestic production was of
Grade A, the sales and market share of domestic Grade A increased, the negligible
market share of subject imports of Grad e A and the absence of cross-grade price
effects, and despite the decline in the absolute volume of those imports and the
declining market share of Grade C imports and the fluctuating market share of
Grade B.
481
5.218. The Panel added that, in the absence of any such examination or analysis, it remained
"unclear" how the market shares of imports of Grade B and Grade C HP-SSST were "relevant in
assessing whether subject imports caused injury to a domestic industry producing primarily
Grade A".
482
5.219. Responding to China's argument that the existence of cross-grade price correlation is a
"normal feature" for a single product consisti ng of high-end and low-end grades, the Panel
observed that there was no "meaningful analysis" in MOFCOM's Final Determination of whether or
how this feature manifests itself in the specific circumstances of this case.483 Instead, MOFCOM left
open the degree of impact that movements of prices of imported Grades B and C might have on
the price of domestic Grade A, and made no assessment of whether the effect would be minimal,
or sufficiently pronounced to cause prices for domestic Grade A to fall by the amounts that they
did.
484
5.220. The Panel also found that MOFCOM had failed to evaluate record evidence indicating that
trends in domestic prices by grade had no apparent relationship in terms of magnitude or trends in
import prices, noting that "[a]n objective and impartial investigating authority would not have
found price correlation without at least addressing, and explaining, such contrary price
movements."485 The Panel added that, in addition to not making a finding that the prices of
imported Grades B and C had "pushed down" the price of domestic Grade A, "MOFCOM never
considered, and certainly failed to exclude, the equally logical possibility that Grade B and C
subject import prices declined in response to the decline in domestic Grade A prices in 2009 and
2010, in order to maintain the price differential between the various grades."
486
5.221. For these reasons, the Panel concluded that "MOFCOM's reference to the market shares
held by subject imports was not sufficient to establish that subject imports, through price
undercutting, had 'a relatively big impact on the price of the domestic like products', and therefore
caused injury to the domestic industry through their price effects."487 Having found that MOFCOM's
reliance on the market share of dumped imports was "central" to its ultimate determination that
dumped imports, through their price effects, caus ed injury to the domestic industry, the Panel
concluded that the flaws in MOFCOM's analysis of the market share of dumped imports rendered
its causation determination inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping
Agreement.
488

480 Panel Reports, para. 7.182.
481 Panel Reports, para. 7.182.
482 Panel Reports, para. 7.182.
483 Panel Reports, paras. 7.183-7.184.
484 Panel Reports, para. 7.185 (referring to MOFCOM's Final Determination (Panel Exhibits JPN-2-EN
and EU-30), internal p. 48).
485 Panel Reports, para. 7.186 and fn 335 thereto (referring to China's second written submission to the
Panel, para. 155).
486 Panel Reports, para. 7.187.
487 Panel Reports, para. 7.188.
488 Panel Reports, paras. 7.188 and 7.205.

5.5.3.1.2 Japan's panel request and Article 6.2 of the DSU
5.222. We begin by examining China's claim that the Panel erred in concluding that Japan's panel
request, as it relates to MOFCOM's reliance on the market share of dumped imports in order to
determine causation, provides a "brief summary of the legal basis of the complaint sufficient to
present the problem clearly", as required by Arti cle 6.2 of the DSU. According to China, Japan's
panel request, as it relates to MOFCOM's analysis of causation, was limited to "claims" regarding
the lack of volume effects and flaws in MOFCOM's price effects and impact analyses, and did not
include a claim regarding MOFCOM's reliance on the market share of dumped imports.
489
5.223. In response, Japan argues that it properly raised a claim regarding MOFCOM's reliance on
the market share of dumped imports. Japan further disputes China's contention that its claims
under Articles 3.1 and 3.5 of the Anti-Dumping Agreement were limited to a "volume analysis
based claim" and claims based on MOFCOM's pric e effects and impact analyses, which are "purely
consequential" to the alleged violations of Articles 3.2 and 3.4 of the Anti-Dumping Agreement.
490
5.224. Japan's panel request states, in relevant part:
Japan considers that the measures at issue are inconsistent with, at least, China's
obligations under the following provisions of the Anti-Dumping Agreement:
1. Articles 3.1, 3.2, 3.4, and 3.5 because China's injury determination was not based
on positive evidence and did not involve an objective examination of the volume of the
dumped imports under investigation, the effect of those imports on prices in the
domestic market for like products, and the consequent impact of those imports on
domestic producers of such products. Specifically:
…
(c) China's demonstration of the alleged causal relationship between the imports under
investigation and the alleged injury to the domestic industry was not based on an
objective examination of all relevant evidence before the authorities. In particular,
China determined that the allegedly dumped imports are causing injury despite an
absence of a significant increase in the vo lume of dumped imports, and based on its
flawed price effects and impact analyses. Accordingly, China acted inconsistently with
Articles 3.1 and 3.5 of the Anti-Dumping Agreement.
491
5.225. As discussed, the obligations that apply to an investigating authority's determination of
injury are found in Article 3 of the Anti-Dumping Agreement. The first two sentences of Article 3.5
identify the causal link that must be shown in reaching an injury determination. These sentences
expressly require investigating authorities to demonstrate that the dumped imports are causing
injury, and stipulate that such "demonstration of a causal relationship between the dumped
imports and the injury to the domestic inju ry shall be based on an examination of all relevant
evidence before the authorities".
492 Moreover, the disciplines under Article 3.5 are linked to the
fundamental obligations set out in Article 3.1, namely, that an investigating authority must
conduct an "objective examination" based on "positive evidence".
5.226. In relation to its claims under Article 3. 5 of the Anti-Dumping Agreement, Japan stated in
its panel request that MOFCOM's injury determination "did not involve an objective examination of
the volume of the dumped imports under investigation, the effect of those imports on prices in the
domestic market for like products, and the consequent impact of those imports on domestic
producers of such products."
493 Japan submitted, "[i]n particular", that MOFCOM "determined that
the allegedly dumped imports are causing injury despite an absence of a significant increase in the

489 China's other appellant's submission, paras. 58-59 and 61 (referring to Panel Report,
US – Corrosion-Resistant Steel Sunset Review, para. 7.53; and Japan Panel Report, para. 7.188). China also
argues that Japan's subsequent submissions to the Panel confirm the limited scope of Japan's panel request.
(China's other appellant's submission, para. 66)
490 Japan's appellee's submission, para. 16 (referring to China's other appellant's submission, para. 49).
491 Japan's panel request, pp. 1-2.
492 Emphasis added.

volume of dumped imports, and based on its flawed price effects and impact analyses." 494
With regard to MOFCOM's allegedly "flawed price effects and impact analyses", we recall that
paragraphs 1(a) and 1(b) of Japan's panel request read as follows:
(a) In its price effects analysis, China failed to conduct proper analyses with respect to
the three different grades of HP-SSST products under investigation and the HP-SSST
products as a whole, and China improperly concluded that the imports under
investigation had an overall significant effect on the prices of like domestic products.
Accordingly, China acted inconsistently with Articles 3.1 and 3.2 of the Anti-Dumping
Agreement.
(b) China's analysis of the impact of the dumped imports on the domestic industry:
(i) failed to make an objective examination, based on positive evidence, of the impact
of subject imports on the domestic industry based on the volume of such imports and
their effect on prices; (ii) failed to evaluate the magnitude of the margin of dumping;
and (iii) failed to objectively determine the relative importance and weight to be
attached to relevant economic factors and indices, and improperly disregarded the
majority of those factors and indices indicating that the domestic industry did not
suffer material injury. Accordingly, China acted inconsistently with Articles 3.1 and 3.4
of the Anti-Dumping Agreement.
5.227. We are of the view that this language in Japan's panel request, when read together with
the reference to Articles 3.1 and 3.5 of the Anti -Dumping Agreement, is sufficiently clear to
present, in a manner consistent with Article 6.2 of the DSU, a problem concerning MOFCOM's
analysis of whether "the dumped imports are, th rough the effects of dumping, as set forth in
paragraphs 2 and 4, causing injury" to the domestic industry, as required under Article 3.5 of the
Anti-Dumping Agreement. We do not see why Japan would have been obliged to present a
separate "problem" regarding MOFCOM's "reliance on the market share of subject imports" on
separate grounds, distinct from the other issues it raised with regard to MOFCOM's determination
of causation.
5.228. As we understand it, the Panel characterized the issues raised by the complainants
(including Japan), under Article 3.5 of the Anti-Dumping Agreement, as a problem relating to
whether MOFCOM's "reliance on the market share of subject imports" constituted a sufficient basis
for MOFCOM's finding of causation under Article 3.5. In addressing this question, the Panel noted,
for example, that MOFCOM had not explained:
… how the 90% market shares of Grade B and C subject imports enabled those
imports, through price effects, to cause injury to the domestic industry as a whole,
notwithstanding the fact that the bulk of domestic production was of Grade A, the
sales and market share of domestic Grade A increased, the negligible market share of
subject imports of Grade A and the absence of cross-grade price effects, and despite
the decline in the absolute volume of thos e imports and the declining market share of
Grade C imports and the fluctuating market share of Grade B imports. MOFCOM failed
to provide any such explanation. In the absence of any such examination or analysis,
it remains unclear how the market shares of imports of Grade B and C HP-SSST are
relevant in assessing whether subject imports caused injury to a domestic industry
producing primarily Grade A HP-SSST.
495
5.229. The Panel's reasoning quoted above makes clear, in our view, that the Panel referred to
the issues raised by the complainants, both in the context of MOFCOM's price effects and impact
analyses, as well as in the context of causation , as questions going to whether MOFCOM erred in
relying on the "market share" of dumped imports. Rather than referring directly to factors that
MOFCOM did not rely on (or explain) in the context of its causation analysis, the Panel referred to
what MOFCOM, in the Panel's view, did rely on – i.e. the "market share" of dumped imports. The
fact that the Panel described Japan's claim (and the European Union's claim) in this manner does
not mean that it was, therefore, addressing a claim that was outside the scope of its terms of
reference. Nor does it mean that Japan's panel request does not comply with the standard set out
in Article 6.2 of the DSU.

494 Japan's panel request, para. 1(c).
495 Japan Panel Report, para. 7.182.

5.230. China asserts that the expression "in particular", in Japan's panel request, limits the
coverage of the panel request to claims regarding the lack of volume effects, and flaws in
MOFCOM's price effects and impact analyses. 496 We recall that compliance with the requirements
of Article 6.2 of the DSU must be assessed in the light of the language contained in Japan's panel
request as a whole . The second sentence of paragraph 1(c) of the panel request starts with the
expression "in particular", and refers to MOFCOM's determination that "the allegedly dumped
imports are causing injury despite an absence of a significant increase in the volume of dumped
imports, and based on its flawed price effects and impact analyses". We understand the expression
"in particular" to indicate that Japan's claims under Articles 3.1 and 3.5 of the
Anti-Dumping Agreement focused on the manner in which MOFCOM determined that the dumped
imports were causing injury, "despite an absence of a significant increase in the volume of dumped
imports, and based on its flawed price effects and impact analyses".
5.231. China also argues that the reference in Japan's panel request to MOFCOM's causation
determination being "based on" MOFCOM's flawed price effects analysis "unambiguously shows
that the claim is purely consequential to the claim of violation of Article 3.2 as regards the price
effects analysis".
497 In addition, China submits that "the reference to 'flawed' presupposes a
finding that the price effects analysis is found to be violating Article 3.2."498
5.232. As noted above, Japan's panel request refers to MOFCOM's determination that "the
allegedly dumped imports are causing injury despite an absence of a significant increase in the
volume of dumped imports, and based on its flawed price effects and impact analyses ."
499 As the
Appellate Body has explained, while being "nec essary" and forming the "basis" for the overall
causation analysis, the inquiries under Articles 3.2 and 3.4 do not result in duplicating, but rather
contribute to, the causation analysis under Article 3.5. 500 While we understand Japan's claims
under Article 3.2 to have concerned MOFCOM's consideration of the relationship between the
prices of the dumped imports and domestic prices, we read the language in Japan's panel request
to indicate that its claims under Article 3.5 were more broadly concerned with MOFCOM's alleged
failure to demonstrate properly the existence of a "causal relationship" between the dumped
imports and injury to the domestic industry 501 on the basis of an examination of "all relevant
evidence" before the investigating authority including: (i) the volume of the dumped imports and
their price effects listed under Article 3.2; as well as (ii) the results of the evaluation of all the
relevant economic factors and indices having a bearing on the state of the domestic industry, as
required under Article 3.4. Thus, while Japan ma y have also brought consequential claims under
Article 3.5 flowing from errors under Articles 3.2 and 3.4 of the Anti-Dumping Agreement, we
understand Japan's primary claim under Article 3.5 to have related to MOFCOM's failure to make
an overall determination of causation in the light of record evidence regarding the volume, price
effects, and impact of dumped imports (consisting mainly of Grades B and C) on the domestic
industry (producing mainly Grade A HP-SSST).
5.233. In the light of the above, we find that the Panel did not act inconsistently with Article 6.2
of the DSU by addressing Japan's claims under Article 3.5 of the Anti-Dumping Agreement
regarding "MOFCOM's reliance on the market share of subject imports", in paragraphs 7.180-7.188
of the Japan Panel Report.

496 China's other appellant's submission, para. 62. We have discussed the legal standard applicable
under Article 6.2 of the DSU at paras. 5.11-5.16 of these Reports.
497 China's other appellant's submission, para. 64.
498 China's other appellant's submission, para. 64. (emphasis added)
499 Japan's panel request, para. 1(c). (emphasis added)
500 Appellate Body Report, China – GOES, paras. 147 and 149.
501 Appellate Body Report, China – GOES, paras. 147 and 149.
WT/DS454/AB/R • WT/DS460/AB/R

5.5.3.1.3 Whether the Panel made the case for the complainants
5.234. China argues that, in making findings re garding "MOFCOM's reliance on the market share
of subject imports", the Panel acted inconsistently with Article 11 of the DSU by ruling on a claim
that had not been articulated by the complainants, and in relation to which the complainants had
raised no arguments. In the alternative, China argues that the Panel deprived China of its due
process rights and "made the case" for both Japan and the European Union by ruling on a claim in
respect of which the complainants had failed to make a prima facie case.
502
5.235. Referring to their first and second written submissions to the Panel and opening
statements at the first and second meetings of the Panel, the complainants submit that they made
a prima facie case regarding MOFCOM's reliance on the market share of dumped imports, factoring
in the same aspects of MOFCOM's price effects and impact analyses that the Panel considered in its
assessment of the matter at paragraphs 7.181 to 7.188 of the Panel Reports. 503 The complainants
submit that they presented "evidence and legal argument" to establish that MOFCOM's failure to
consider the market share of dumped imports in the context of all relevant evidence, including
evidence relating to price effects and impact, resulted in a causation determination that is
inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement. 504 They argue that China
appears to divide improperly and artificially their overarching claim and arguments under
Articles 3.1 and 3.5 "into pieces", when these claims and arguments should instead be considered
"as a whole".505
5.236. In US – Gambling, the Appellate Body specified that "[a] prima facie case must be based
on 'evidence and legal argument' put forward by the complaining party in relation to each of the
elements of the claim." 506 The Appellate Body further stated that "[a] complaining party may not
simply submit evidence and expect the panel to divine from it a claim of WTO-inconsistency. Nor
may a complaining party simply allege facts without relating them to its legal arguments."
507
Moreover, the evidence and legal argumentation put forward in a prima facie case must be
sufficient to identify the challenged measure and its basic import, to identify the relevant WTO
provision and obligation contained therein, and to explain the basis for the claimed inconsistency
of the measure with that provision.
508 In Canada – Renewable Energy / Canada – Feed-in Tariff
Program, the Appellate Body explained that, "while a panel cannot make the case for a
complainant, it has the competence 'freely to us e arguments submitted by any of the parties – or
to develop its own legal reasoning – to support its own findings and conclusions on the matter
under its consideration'." 509 Once a complainant has made out a prima facie case, a panel is
required to develop its own reasoning in order to make an objective assessment of the matter
before it and is required to set out in its report the basic rationale behind any findings and
recommendations that it makes.
510 Panels and the Appellate Body are not constrained by the
parties' arguments in developing legal reasoning.
5.237. In their first written submissions to the Panel, the complainants argued that MOFCOM's
causation determination lacks any foundation in its analysis of the volume, price effects, and
impact of dumped imports, and stated that "a finding of causation is dependent upon the
outcomes of the investigating authority's analyses of the previous steps – namely, the volume and
price effects of dumped imports and their impact on the domestic industry producing like

502 See China's appellant's submission, para. 165; and other appellant's submission, paras. 91 and 98.
503 Japan's appellee's submission, para. 25; European Union's appellee's submission, para. 241.
504 Japan's appellee's submission, para. 25 (emphasis original; fn omitted); European Union's appellee's
submission, para. 241.
505 Japan's appellee's submission, para. 26; European Union's appellee's submission, para. 242 (quoting
Appellate Body Reports, US – Carbon Steel, para. 127; Korea – Dairy, paras. 124-127; and Thailand –
H-Beams, para. 95). (emphasis added by Japan and the European Union)
506 Appellate Body Report, US – Gambling, para. 140 (quoting Appellate Body Report,
US – Wool Shirts and Blouses, p. 16, DSR 1997:I, p. 336). (emphasis added in US – Gambling)
507 Appellate Body Report, US – Gambling, para. 140 (referring to Appellate Body Report, Canada –
Wheat Exports and Grain Imports, para. 191).
508 Appellate Body Report, US – Gambling, para. 141.
509 Appellate Body Reports, Canada – Renewable Energy / Canada – Feed-in Tariff Program, para. 5.215
(quoting Appellate Body Report, EC – Hormones, para. 156).
510 See Articles 11 and 12.7 of the DSU. Article 12.7 provides in relevant part: "[T]he report of a panel
shall set out the findings of fact, the applicability of relevant provisions and the basic rationale behind any
findings and recommendations that it makes."
WT/DS454/AB/R • WT/DS460/AB/R

products."511 The complainants further referred to alleged flaws in MOFCOM's (i) volume analysis,
(ii) price effects analysis, and (iii) impact analysis to argue that, "by grounding its causation
determination on its volume, price effects, and impact analyses, which did not support a finding of
injury, [MOFCOM/China] failed to conduct an objective examination, based on positive evidence, of
the existence of a causal link between [the su bject imports/HP-SSST impo rts] and [the injury
itself/injury], inconsistently with Articles 3.1 and 3.5 of the Anti-Dumping Agreement."
512 Both
complainants also referred to MOFCOM's determination of causation on the basis of the "market
share" held by dumped imports at the end of the POI.513
5.238. In the light of the above, we consider that Japan and the European Union put forward
sufficient evidence and legal argument to support their claims under Article 3.5 of the
Anti-Dumping Agreement. Accordingly, we find that the Panel did not act inconsistently with
Article 11 of the DSU by ruling on a matter that was not before it, or making the case for the
complainants.
5.5.3.1.4 Whether the Panel erred in find ing that MOFCOM's causation analysis is
inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement
5.239. China alleges that the Panel erred in its interpretation and application of Articles 3.1
and 3.5 of the Anti-Dumping Agreement, and acted inconsistently with Article 11 of the DSU, in
concluding that MOFCOM's reliance on the market share of dumped imports was not sufficient to
establish that these imports had "a relatively big impact on the price of the domestic like
products", and that they caused injury to the domestic industry through their price effects.
514
5.240. China challenges, in essence, two aspects of the Panel's assessment. First, China takes
issue with the Panel's review of MOFCOM's analysis of the market share of dumped imports. In this
context, China raises a claim under Article 11 of the DSU as its primary claim. China then raises a
claim regarding the Panel's interpretation and application of Articles 3.1 and 3.5 of the Anti-
Dumping Agreement, alleging that the Panel erred to the extent that it found that "MOFCOM was
required to assess the nature and extent of th e injurious effects of the dumped imports (as
distinguished from those of other known factors), in order to find that the imports of the subject
products had an impact on the domestic industry through their price effects."
515
5.241. Second, China asserts that the Panel erred in dismissing MOFCOM's finding of "price
correlation" as a sufficient basis for a demonstration of cross-grade price effects, including, in
particular, the requirement to assess how the ma rket shares of Grade B and C dumped imports
enabled those imports, through price effects, to ca use injury to the domestic industry as a whole,
which produces mainly Grade A products.
516 As further analysed below, we understand that most
of China's arguments raised in this context relate to the objectivity of the Panel's assessment of
the matter before it, rather than going to the question of whether the Panel correctly applied the
legal standard under Articles 3.1 and 3.5 of the Anti-Dumping Agreement to the facts of the case.
5.242. In our following analysis, we begin, therefore, by briefly setting out WTO jurisprudence
regarding the requirements of Article 11 of the DSU. We then analyse the arguments raised by
China in the context of its claim of error under Article 11 of the DSU. For each issue raised by

511 Japan's first written submission to the Panel, para. 190; European Union's first written submission to
the Panel, paras. 280-282. (emphasis original)
512 Japan's first written submission to the Panel, para. 209; European Union's first written submission to
the Panel, para. 299.
513 See e.g. Japan's first written submission to the Panel, paras. 198-201. See also European Union's
oral statement at the first Panel meeting, paras. 117-119 and 122-123). In their second written submissions to
the Panel, the complainants referred back to their first written submissions, reiterating that "MOFCOM's
causation analysis was flawed because it did not logically progress from its volume, price effects, and impact
analyses"; and "China's causation determination lacks any foundation in its analysis of the volume, price
effects, and impact of HP-SSST imports." (See Japan's second written submission to the Panel, para. 56; and
European Union's second written submission to the Panel, para. 176)
514 China's appellant's submission, para. 207; other appellant's submission, para. 114.
515 China's appellant's submission, para. 216; other appellant's submission, para. 123. According to
China, such an obligation may exist in the context of a non-attribution analysis, but does not apply in the
context of the first step of the causation analysis, which is the subject of this aspect of China's appeal.
516 See China's other appellant's submission, para. 125.
WT/DS454/AB/R • WT/DS460/AB/R

China, we will also examine separately any arguments that implicate the Panel's application of the
law to the facts.
5.5.3.1.4.1 Article 11 of the DSU
5.243. In previous disputes, the Appellate Body has noted that a panel is required to "consider all
the evidence presented to it, assess its credibility, determine its weight, and ensure that its factual
findings have a proper basis in that evidence". 517 Within these parameters, "it is generally within
the discretion of the [p]anel to decide which evidence it chooses to utilize in making findings."518
5.244. A claim that a panel has failed to conduct an "objective assessment of the matter before it"
is "a very serious allegation". 519 An appellant may not effectively recast its arguments before the
panel under the guise of a claim under Article 11 of the DSU, but must identify specific errors 520
that are so material that, "taken together or singly" 521, they undermine the objectivity of the
panel's assessment of the matter before it.522 A challenge under Article 11 of the DSU must "stand
by itself and be substantiated with specific arguments, rather than merely being put forth as a
subsidiary argument or claim in support of a cl aim of a panel's failure to construe or apply
correctly a particular provision of a covered agreement."
523
5.245. With these considerations in mind, we turn to consider the two specific elements of China's
challenge to the Panel's assessment of MOFCOM's findings on causation.
5.5.3.1.4.2 The Panel's assessment regarding MOFCOM's findings concerning the market
share of imports
5.246. With regard to the market share of dumped imports, the Panel found that:
… although MOFCOM relied on the fact that the market share of subject imports
"remained high at around 50%", MOFCOM failed to account for the fact that the
market share of subject imports had actual ly dropped from around 90% in 2008 and
2009 to around 50% in 2010 and [the first half of] 2011, and that domestic market
shares increased correspondingly. While an investigating authority might properly
determine, given the necessary facts, that high market shares exacerbate the price
effects of dumped imports, an objective and impartial investigating authority would
also consider whether the fact that import market shares are declining significantly
indicates that the price effects are in fact somewhat attenuated.524
5.247. China takes issue with these findings by the Panel, arguing that the Panel "disregard[ed]
the part of MOFCOM's Final Determination addressing causation and distorts the findings reached
by MOFCOM". 525 China points to an excerpt of MOFCOM's Final Determination, stating that, in
2008, 2009, and 2010, dumped imports held a market share of 86.20%, 87.03%, and 47.23%,
respectively, and that, although the market share of imports fluctuated, it remained high at around

517 Appellate Body Reports, China – Rare Earths, para. 5.178 (quoting Appellate Body Report, Brazil –
Retreaded Tyres, para. 185).
518 Appellate Body Reports, US – COOL, para. 299 (quoting Appellate Body Report, EC – Hormones,
para. 135).
519 Appellate Body Reports, China – Rare Earths, para. 5.227 (quoting Appellate Body Report, EC –
Poultry, para. 133).
520 Appellate Body Report, EC – Fasteners (China), para. 442.
521 Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 1318.
522 Appellate Body Reports, China – Rare Earths, para. 5.179. See also Appellate Body Report, EC –
Fasteners (China), para. 499.
523 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China), para. 337 (referring to
Appellate Body Reports, US – Steel Safeguards, para. 498; and Australia – Apples, para. 406). See also
Appellate Body Report, Peru – Agricultural Products, para. 5.66. In case of similarly overlapping claims of error
in the application of a legal standard to the relevant facts of a case and under Article 11 of the DSU, there is no
basis to have an additional examination of whether a panel has conducted an objective assessment of the facts
under Article 11 of the DSU. (Appellate Body Reports, China – Rare Earths, para. 5.174 (referring to
Appellate Body Report, China – GOES, para. 184))
525 China's appellant's submission, para. 213; other appellant's submission, para. 120.
WT/DS454/AB/R • WT/DS460/AB/R

50% in 2010. 526 China states that it fails to see how any objective assessment of the quoted
paragraph can lead to a conclusion that MOFCOM relied on a remaining high market share of 50%,
but did not account for the declining market share of imports.
527 China also argues that the
expression "remained high at around 50%" in itself shows that MOFCOM took into account the
evolution of the market share, contrary to what the Panel suggested.528
5.248. We do not agree with China's characterization of the Panel's reasoning. Contrary to what
China appears to suggest, the Panel in fact agreed with China that "an investigating authority
might properly determine, given the necessary facts, that high market shares exacerbate the price
effects of dumped imports." 529 The Panel added, however, that an objective and impartial
investigating authority would "consider whether the fact that import market shares are declining
significantly indicates that the price effects are in fact somewhat attenuated".
530
5.249. Other than pointing to the expression "r emained high at around 50%" in MOFCOM's Final
Determination to argue that this "in itself … shows that MOFCOM took into account the evolution of
the market share"531, China has not pointed to any analysis or explanation in the passage quoted
above or elsewhere in the Final Determination regarding whether or not such declining market
shares of imports indicated that the price effect s are in fact somewhat attenuated. We therefore
see no error, nor failure to make an objective asse ssment of the matter, in this part of the Panel's
analysis.
5.250. We also do not understand the Panel to have suggested that MOFCOM was required to
assess the nature and extent of dumped imports, as opposed to other known factors, when it
noted that MOFCOM had provided no explanation or analysis of declining market shares of dumped
imports when considering the price effects of such imports. This aspect of the Panel's analysis
related to MOFCOM's assessment of the market sh are of the dumped imports, and not to "other
known factors" that may also be injuring the domestic industry, which must be considered in the
context of a non-attribution analysis.
5.5.3.1.4.3 MOFCOM's finding of price correlation
5.251. China also takes issue with several aspects of the Panel's assessment of MOFCOM's finding
of price correlation, asserting that this finding was sufficient to demonstrate cross-grade price
effects and, consequently, to satisfy MOFCOM's obligation to assess "how the 90% market shares
of Grade B and C subject imports enabled those imports, through price effects, to cause injury to
the domestic industry as a whole, notwithstanding the fact that the bulk of domestic production
was of Grade A [and] the negligible market share of subject imports of Grade A and the absence of
cross-grade price effects".
532 We address each of China's arguments in turn below.
Whether price correlation can be assumed for a single product consisting of multiple
product grades
5.252. With regard to cross-grade price effects, China argues that price correlation is a "normal
feature" for a single product consisting of high-end and low-end grades; hence, China fails to see
why an investigating authority would have been required to do more than MOFCOM did – that is,
to state that Grade A products belong to the sa me category of products as Grade B and Grade C
products and that "the price changes of the three [grades] are to a certain extent correlated with
one another."
533 According to China, there was no eviden ce before MOFCOM to suggest that this
"normal feature" did not manifest itself in relation to HP-SSST. 534 Moreover, China submits that
the Final Determination included a brief discussion of the basis on which MOFCOM found price

526 China's appellant's submission, para. 210; other appellant's submission, para. 117 (referring to
MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and EU-30), internal pp. 65-66).
527 China's appellant's submission, para. 211; other appellant's submission, para. 118.
528 China's appellant's submission, para. 212; other appellant's submission, para. 119.
530 Panel Reports, para. 7.181.
531 China's appellant's submission, para. 212; other appellant's submission, para. 119. (emphasis
added)
532 Panel Reports, para. 7.182.
533 China's appellant's submission, para. 228; other appellant's submission, para. 135 (quoting
MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and EU-30), internal p. 48).
534 China's appellant's submission, para. 228.
WT/DS454/AB/R • WT/DS460/AB/R

correlation. In any event, China submits that Arti cles 3.1 and 3.5 of the Anti-Dumping Agreement
cannot be interpreted as requiring MOFCOM to set out the "obvious", that is, that price correlation
follows as a matter of logic from the fact that the high-end products (Grades B and C) can
substitute for the low-end products (Grade A).
535
5.253. Japan the European Union contend that MOFCOM's finding of cross-grade price effects was
based solely on assertions made by the petitioner s, without any proper evaluation or analysis of
those assertions. The complainants argue that, if such a finding were sufficient to justify
affirmative causation determinations, it would render meaningless the requirements for an
investigating authority to provide "reasoned and adequate" explanations of its findings and to
conduct an "unbiased and objective" analysis.
536
5.254. With respect to China's assertion that th e existence of cross-grade price correlation is a
"normal feature" for a single product consisti ng of high-end and low-end grades, the Panel
observed that there was "no meaningful analysis in MOFCOM's Final Determination of whether or
how this feature manifests itself in the specific circumstances of the product at issue".
537 Instead,
after recording the petitioners' argument that pr ice correlation existed, MOFCOM seemed to have
simply accepted that view "without any consideration of the accuracy thereof". 538 The Panel added
that MOFCOM had asserted that prices of the different grades were to a "certain extent" correlated
with one another, leaving open the degree of im pact that movements of prices of imported
Grades B and C might have on the price of domestic Grade A, and making no assessment of
whether the effect would be minimal, or sufficiently pronounced to cause prices for domestic
Grade A to fall by the amounts that they did.
539
5.255. We recall that the task of a WTO panel is to examine whether the investigating authority
has adequately performed its investigative function, and has adequately explained how the
evidence supports its conclusions. It follows from the requirement that the investigating authority
provide a "reasoned and adequate" explanation for its conclusions that the entire rationale for the
investigating authority's decision must be set out in its report on the determination. This is not to
say that the meaning of a determination cannot be explained or buttressed by referring to
evidence on the record. Yet, in all instances, it is the explanation provided in the written report of
the investigating authorities (and supporting documents) that is to be assessed in order to
determine whether the determination was sufficiently explained and reasoned.
5.256. In the present case, we disagree with Chin a to the extent it suggests that MOFCOM could
simply "assume" that price correlation between diff erent grades of HP-SSST is a "normal feature"
for a single product consisting of high-end and lo w-end grades on the basis of assertions made by
domestic applicants, and without any further discussion that would be reflected in its
determination of whether substitutability of lower- and higher-end HP-SSST actually exists. Nor do
we consider that it was sufficient for MOFCOM merely to state, in its Final Determination, that the
prices of the different grades "were to a certain extent correlated with one another" without any
analysis or explanation, or supporting evidence, of the degree of impact that movements of prices
of imported Grades B and C might have on th e price of domestic Grade A, and without an
assessment of whether the effect would be sufficiently pronounced to cause prices of domestic
Grade A to fall by the amounts that they did. We fail to see how a mere statement by MOFCOM
regarding a "certain extent" of price correlation between different grades of HP-SSST, without any
further explanation, provides a "meaningful basis"
540 for an analysis of whether the subject
imports are, through the effects of dumping, as set forth in Articles 3.2 and 3.4, causing injury to
the domestic industry.

535 China's appellant's submission, para. 230; other appellant's submission, para. 137.
536 Japan's appellee's submission, para. 33; European Union's appellee's submission, para. 251.
537 Panel Reports, para. 7.184.
538 Panel Reports, para. 7.184.
539 Panel Reports, para. 7.185 (referring to MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and
EU-30), internal p. 48).
540 Appellate Body Report, China – GOES, paras. 145 and 154.
WT/DS454/AB/R • WT/DS460/AB/R

5.257. Furthermore, we find no merit in China's assertion that the Panel should have inferred,
"in line with its duties under Article 11 of the DSU", from certain references in MOFCOM's Final
Determination, that MOFCOM had "evaluate[d]" the petitioners' argument and had "concluded that
it agreed with the argument".
541 China argues, in this regard, as follows:
The Panel acknowledges MOFCOM's reference to the Applicants' argument that
"[a] large margin decrease of the prices of [Grade C] and [Grade B] products, both
high-end products, will certainly drive down the price of [Grade A] products, so that a
certain price difference among the three can be maintained" before concluding that
"[Grade A] products belong to the same category of products as [Grade C] and
[Grade B] products; that the price changes of the three are to a certain extent
correlated with one another; that while assessing the impact on the domestic industry
by imports of each individual grade, the Investigation Authority shall also consider the
three grades of products collectively as belonging to the same product category".
542
5.258. Beyond a reference to the petitioners' arguments and MOFCOM's statement that the prices
of the three types of HP-SSST "to a certain extent correlated", we are unable to identify, in the
passage referred to by China, any explanation or reasoning indicating that MOFCOM actually
examined the degree of impact that movements of prices of imported Grades B and C might have
on prices of domestic Grade A, including whether the effect would be sufficiently pronounced to
cause prices for domestic Grade A to fall by th e amounts that they did. In assessing the WTO-
consistency of a decision by an investigating authority, it is not for a panel to develop an
explanation of the basis for the investigating authority's conclusions, nor to "infer" the existence of
such a basis as China seems to suggest from some general economic logic. Rather, it is the task of
a panel to examine whether the investigating authority has adequately performed its investigative
function, and has adequately explained in its published report (and its related supporting
documents) how the evidence supports its conclusions. We therefore do not agree with China to
the extent it suggests that the Panel should have sought to find a basis, in MOFCOM's Final
Determination, for MOFCOM's statement that the prices of the three types of HP-SSST are "to a
certain extent correlated".
5.259. China also argues that the Panel acted inconsistently with Article 11 of the DSU by
characterizing, as ex post rationalization, China's argument that higher-grade imports can
"obviously" substitute for lower-grade domestic products.543 Referring to the oral statements made
by the complainants before the Panel, China argues that even Japan and the European Union
seemed to agree that it is "obvious that the high end products (B and C) can substitute the
low-end grade (Grade A)". We recall MOFCOM's finding that "the price changes of the three
[grades] are to a certain extent correlated with one another"
544, and that there was no discussion,
in MOFCOM's Final Determination, of the basis on which MOFCOM made that finding. We also note
the Panel's finding that there was "no evidence" on the record that there had been "any
consideration" by MOFCOM of whether higher-gra de imported products can substitute for the
lower-grade domestic products.
545 In the absence of any analysis and explanation by MOFCOM
regarding substitutability of the different grades of HP-SSST, we see no error in the Panel's finding
that China's argument regarding "'obvious' substitutability" constituted an " ex post rationalization"
provided by China in the Panel proceedings, "r ather than an element of MOFCOM's analysis". 546
Instead, we are of the view that the Panel pr operly focused on the language and reasoning
contained in MOFCOM's Final Determination regarding price correlation between the different
grades of dumped products, rather than on ex planations provided by China during the Panel
proceedings.
5.260. China further argues that the Panel dismissed China's reference to substitutability on the
basis that MOFCOM did not analyse the extent of actual substitution.547 While acknowledging that
the Panel's focus on actual substitution would be correct if it were analysing the consistency of a
finding of causation based on volume effects, China emphasizes that MOFCOM's causation analysis

541 China's appellant's submission, para. 229; other appellant's submission, para. 136.
542 China's appellant's submission, para. 229; other appellant's submission, para. 136. (fns omitted)
543 China's appellant's submission, paras. 234-235; other appellant's submission, paras. 140-141.
544 MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and EU-30), internal p. 48.
545 Panel Reports, para. 7.184.
546 Panel Reports, para. 7.184.
547 China's appellant's submission, para. 232; other appellant's submission, para. 139.
WT/DS454/AB/R • WT/DS460/AB/R

was based on price effects.548 China submits that, as an investigating authority has discretion as to
how it carries out its causation analysis, there was no need for MOFCOM to carry out any
additional analysis regarding the actual degree of substitution.
549
5.261. The complainants submit that, notwithsta nding whether "actual or logical evidence of
substitutability or price correlation" may exist, the Panel correctly found that there was
"[no] consideration by MOFCOM of how this unspeci fied degree of substitutability, and resultant
price correlation, might enable Grade B and C subject imports to cause injury to the domestic
industry's Grade A operations."550 The complainants also note that, for dumped imports to have an
"effect" on domestic prices, such imports must be "in fact", or "actually", substitutable for the
domestic like products.
551
5.262. The Appellate Body has explained that "[ a]n examination of the competitive relationship
between products is … required so as to determine whether such products form part of the same
market."552 It also noted that a set of products are in the same market when they "are in actual or
potential competition with each other" 553, that "a market comprises only those products that
exercise competitive constraint on each other", and that products would be in the same market
"when the relevant products are substitutable". 554 While the Appellate Body made these
statements in the context of examining claims brought under the Agreement on Subsidies and
Countervailing Measures (SCM Agreement), we read them as supporting the proposition that an
analysis of "substitutability" or "price correlation " may well be required in cases, such as here,
involving a dumped product and a like domestic product consisting of a range of different product
types that are distinguished by considerable price differences. We note, in particular, that, in order
to make a finding of present material injury under Article 3.5 of the Anti-Dumping Agreement, the
investigating authority must demonstrate that the dumped imports (consisting of Grades B and C)
have the "effect" of causing material injury to the domestic industry (producing mainly Grade A).
We do not see how such a finding could be made if the relevant imports are not substitutable for
the domestic like products. Moreover, as note d above, we do not see how MOFCOM, under the
specific facts of this case, could provide a "meaningful basis" for an analysis of whether the
dumped imports are causing injury, without consid ering the degree of impact that movements of
prices of imported Grades B and C might have on the price of domestic Grade A.
5.263. With regard to substitutability of different product types, we note the Appellate Body's
explanation that "whether two products compete in the same market is not determined simply by
assessing whether they share particular physical characteristics or have the same general uses";
and that "it may also be relevant to consider whether customers demand a range of products or
whether they are interested in only a particular product type."
555 We consider these findings to be
pertinent to the present disputes, where Japan argued before the Panel, and China did not dispute,
that "Grade B is about double the price of Grade A, and Grade C is about triple the price of
Grade A."
556 We also note the physical differences in the dumped products, including, for example,
that the higher-grade products B and C are capable of enduring the greater pressures and
temperatures produced in ultra-supercritical boilers, and that the lower-grade product A is used in
lower pressure and temperature environments in supercritical boilers.
557 Given the considerable
price and physical differences between the different product grades at issue, MOFCOM should, at
the very least, have assessed the existence and the extent of substitutability of lower- and
higher-end HP-SSST in order to show that "alleged substitutability demonstrates price correlation"
between each product type. As noted by the Pane l, there was no "consideration by MOFCOM of
how [the] unspecified degree of substitutability, an d the resultant price correlation, might enable
Grade B and C subject imports to cause injury of the domestic industry's Grade A operations."
558

548 China's appellant's submission, para. 236; other appellant's submission, para. 142.
549 China's appellant's submission, para. 237; other appellant's submission, para. 143.
550 Japan's appellee's submission, para. 35; European Union's appellee's submission, para. 253 (quoting
Panel Reports, para. 7.184). (emphasis added by Japan and the European Union)
551 Japan's appellee's submission, para. 36; European Union's appellee's submission, para. 255.
552 Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 1119.
553 Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 1119.
554 Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 1120.
555 Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 1120.
557 See Japan's oral statement at the second Panel meeting, para. 35.
558 Panel Report, para. 7.184.
WT/DS454/AB/R • WT/DS460/AB/R

5.264. Additionally, China argues that there was evidence on the record of actual substitution,
and asserts that the Panel acted contrary to Article 11 of the DSU by disregarding this evidence
simply because it was not referred to in the Final Determination.
559 China points, in particular, to
the following statements made by the investigated Japanese exporters:
Due to significant differences in their mechanical and chemical properties, steel tubes
used in ultra-supercritical power plant boilers ([Grade B] and [Grade C]) significantly
outperform steel tubes used in supercritical power plant boilers ([Grade A]) in the
aspects of steam resistance oxidation thickness and fly ash corrosion resistance.
Consequently, their usages are different. [Gra de B] and [Grade C] products are used
in the superheaters and reheaters of ultra-supercritical power plant boilers (as well as
in the superheaters and reheaters of supercritical power plant boilers), while [Grade A]
products can only be used in the superheaters and reheaters of supercritical power
plant boilers.
560
5.265. China also notes that it referred the Panel to SMI's Injury Questionnaire Response 561,
where SMI states that "the boiler manufacturers in China primarily use … steel products other than
[Grades B and C] to produce the super-heater and re-heater of the supercritical power plant
boiler".
562 The passages to which China refers do not establish that MOFCOM actually explained
and analysed whether imported Grades B and C are substitutable for domestic Grade A HP-SSST,
and the extent of such substitutability. It was not for the Panel to provide such an explanation, nor
to "infer" the existence of one, contrary to what China seems to suggest.
5.266. Furthermore, China submits that the Pane l erred in suggesting that MOFCOM was required
to assess the extent of the effect of the dumped imports in order to find a causal link, including
whether such effect would be "sufficiently pronounced to cause prices for domestic Grade A to fall
by the amounts that they did".
563 Referring to the Appellate Body's findings in US – Hot-Rolled
Steel, China argues that "[a]n investigating authority's 'explanation of the nature and extent of the
injurious effects of the other factors, as distinguished from the injurious effects of the dumped
imports' should be provided in the non-attribution analysis, not in the first part of the causation
determination."
564
5.267. We note that China raised a similar argument regarding MOFCOM's treatment of declining
import volumes, which we have addressed at paragraphs 5.248-5.249 above. With respect to
China's argument as it relates to price correlation , we do not understand the Panel to have
suggested that MOFCOM was required to assess th e nature and extent of dumped imports, as
opposed to other known factors, when it noted that MOFCOM had provided no assessment of the
degree of impact that movements in the prices of imported Grades B and C might have on the
price of domestic Grade A, including whether it would be "minimal, or sufficiently pronounced to
cause prices for domestic Grade A to fall by the amounts they did".
565

559 China's appellant's submission, paras. 238-239; other appellant's submission, paras. 144-145.
560 China's appellant's submission, para. 238; other appellant's submission, para. 144 (quoting Request
for Considering Public Interest in the Anti-Dumping Investigation on Certain High-Performance Stainless Steel
Seamless Tubes by Sumitomo Metal Industries, Ltd. & Kobe Special Tube Co., Ltd., February 2012 (Panel
Exhibit JPN-25-EN), internal p. 4; as referred to in China's responses to Panel questions after the second Panel
meeting, para. 16). (emphasis added by China)
561 SMI's Injury Questionnaire Response (question 8) (Panel Exhibits CHN-20-CH (BCI) and CHN-20-EN
(BCI)).
562 China's appellant's submission, para. 239; other appellant's submission, para. 145 (quoting SMI's
Injury Questionnaire Response (Panel Exhibit CHN-20-EN (BCI)), p. 10 (emphasis added by China); and
referring to China's second written submission to the Panel, paras. 149-150; and responses to Panel questions
following the second Panel meeting, para. 18).
563 China's appellant's submission, para. 242; other appellant's submission, para. 148 (quoting Panel
Reports, para. 7.185).
564 China's appellant's submission, para. 244; other appellant's submission, para. 150 (quoting
Appellate Body Report, US – Hot-Rolled Steel, para. 226).
565 Panel Reports, para. 7.185.
WT/DS454/AB/R • WT/DS460/AB/R

Contrary price movements
5.268. The Panel found that "MOFCOM failed to account for record evidence that trends in
domestic prices by grade had no apparent relationship in terms of magnitude or direction with
trends in import prices."
566 The Panel stated that this was particularly apparent in respect of
domestic Grade C, "the price of which increased by 112.80% from 2009-2010, without any
corresponding movement in prices for subject imports of Grades B and C, which actually fell over
that period."
567 The Panel also noted that the price of domestic Grade A "increased by 9.35% from
2010 to [the first half of] 2011, whereas the price of imported Grade B fell by 10.63% during that
period".568 The Panel expressed concern, noting that "[a]n objective and impartial investigating
authority would not have found price correlation without at least addressing, and explaining, such
contrary price movements."
569
5.269. China takes issue with the Panel's finding, arguing that the Panel erred in its interpretation
and application of Articles 3.1 and 3.5 of the Anti-Dumping Agreement and acted contrary to
Article 11 of the DSU "by finding that MOFCOM should have addressed contrary price movement to
be able to find price correlation that it could rely on to assess the impact of imports of Grades B
and C on the price of domestic Grade A sales".570
5.270. In particular, China asserts that the Panel erred "in law" in finding that the contrary price
movements "precluded" MOFCOM from finding price correlation. 571 China further asserts that the
fact that price movements may not be in line does not detract from the conclusion that they were
influenced by one another.
572 Furthermore, China contends that the Panel ignored the nature of
MOFCOM's finding of price correlation, which related to the effect of the prices of Grades B and C
on the prices of domestic Grade A and was ex pressly linked to MOFCOM's assessment of the
impact on the domestic industry by imports of each individual grade.573
5.271. We have examined China's arguments regarding the Panel's assessment of MOFCOM's
finding of price correlation above. There, we disa greed with China to the extent it suggests that
MOFCOM could simply assume price correlation be tween different grades of HP-SSST on the basis
of assertions made by domestic applicants, and without any further discussion by MOFCOM that
would be reflected in its Final Determination of whether such substitutability of lower- and
higher-end HP-SSST actually exists. Moreover, cont rary to what China suggests, the Panel did not
find that MOFCOM was precluded from findin g price correlation given the contrary price
movements. Instead, the Panel found that "MOFCO M failed to account for record evidence that
trends in domestic prices by grade had no apparent relationship in terms of magnitude or direction
with trends in import prices." 574 We therefore do not agree with China to the extent it argues that
the Panel erred in its examination of this aspect of MOFCOM's analysis. Rather, as we see it, the
contrary price movements that MOFCOM had determined to exist between import and domestic
prices of HP-SSST would have called for some explanation as to why MOFCOM nonetheless
considered that the prices of the three types of HP-SSST "to a certain extent correlated".
The possibility that Grade B and Grade C dump ed imports declined in response to the
decline in domestic Grade A prices
5.272. The Panel found that, in addition to not making a finding that the prices of imported
Grades B and C had pushed down the prices of domestic Grade A, MOFCOM "never considered,
and certainly failed to exclude, the equally logical possibility" that the opposite might be true,
namely that "Grade B and C subject import prices declined in response to the decline in domestic

566 Panel Reports, para. 7.186 (referring to China's second written submission to the Panel, para. 155).
567 Panel Reports, para. 7.186.
568 Panel Reports, para. 7.186.
569 Panel Reports, para. 7.186.
570 China's appellant's submission, para. 252; other appellant's submission, para. 158.
571 China's appellant's submission, para. 249; other appellant's submission, para. 155.
572 China's appellant's submission, para. 249; other appellant's submission, para. 155.
573 China's appellant's submission, paras. 250-251; other appellant's submission, paras. 156-157.
574 Panel Reports, para. 7.186 (referring to China's second written submission to the Panel, para. 155).
WT/DS454/AB/R • WT/DS460/AB/R

Grade A prices in 2009 and 2010, in order to main tain the price differential between the various
grades."575
5.273. According to China, this reasoning by th e Panel distorts MOFCOM's finding and disregards
the wording of MOFCOM's Final Determination, contrary to Article 11 of the DSU. While
acknowledging that MOFCOM's reasoning might be brief, China argues that this does not imply
that MOFCOM did not "explore this issue meaningfully". 576 Taking into account that: (i) MOFCOM
found price correlation on the basis of the applicants' arguments; (ii) "as a matter of logic", the
low-end Grade A cannot substitute Grades B and C; and (iii) MOFCOM found price correlation in
the sense that imported Grades B and C could have an impact on the price of domestic Grade A,
China submits that it fails to see how an objective assessment of the facts could lead to a
conclusion that MOFCOM did not find that the price correlation concerned the impact of the prices
of imported Grades B and C on domestic Grade A prices.
577
5.274. We agree with China that, "as a matter of logic", it would appear that lower-grade
domestic products cannot substitute for higher-grade imported products, while the opposite could
be true. Moreover, we note that, having found price undercutting for Grades B and C, MOFCOM
examined the impact of dumped imports on China's domestic industry, which produces mainly
Grade A. Contrary to what China seems to sugge st, this does not mean, however, that MOFCOM
"meaningfully" evaluated and explained whether, as argued by the petitioners, the prices of
imported Grades B and C had pushed down the pr ices of domestic Grade A. We understand the
Panel to have merely observed that, by not evalua ting this issue, MOFCOM failed to exclude the
possibility that imported Grade B and C prices declined in response to declines in domestic Grade A
prices in 2009 and 2010.
578 We see no error in this statement by the Panel, and do not consider
that the Panel distorted MOFCOM's findings in making this statement.
5.275. China argues that, "to the extent that the Appellate Body considers that the Panel found
that MOFCOM did not examine the fact that the sales and market share of Grade A increased as
set out above, the Panel acted cont rary to Article 11 of the DSU." 579 In the alternative, China
submits that, "to the extent that the Appellate Bo dy considers that the Panel found that MOFCOM
was obliged to examine the fact that the sales and market share of Grade A increased in more
detail than MOFCOM did, the Panel erred in its interpretation and application of Articles 3.1
and 3.5."
580 In addition, with respect to MOFCOM's a ssessment of "the decline in the absolute
volume of those imports and the declining market share of Grade C imports and the fluctuating
market share of Grade B imports", China argues that the Panel erred to the extent that it
considered that MOFCOM did not take these factors into account.581
5.276. Contrary to what China seems to suggest, the Panel did not find that MOFCOM "failed to
take into account", or failed to examine "in sufficient detail", the increase in sales and market
share of domestic Grade A, the negligible market share of dumped imports of Grade A, the decline
in the absolute volume of those imports, the declining market share of Grade C imports, and the
fluctuating market share of Grade B imports. Instea d, the Panel considered that, in the absence of
any examination or analysis provided by MOFCOM in its Final Determination, it remained "unclear
how the market shares of imports of Grade B and C HP-SSST are relevant in assessing whether
subject imports caused injury to a domestic industry producing primarily Grade A HP-SSST."
582 We
see no error in the Panel's finding in this regard.

575 Panel Reports, para. 7.187 (referring to MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and
EU-30), internal p. 66).
576 China's appellant's submission, para. 257; other appellant's submission, para. 163.
577 China's appellant's submission, paras. 254-256; other appellant's submission, paras. 160-162.
578 Panel Reports, para. 7.187 (referring to MOFCOM's Final Determination (Panel Exhibits JPN-2-EN and
EU-30), internal p. 66).
579 China's appellant's submission, para. 260; other appellant's submission, para. 166.
580 China's appellant's submission, para. 261; other appellant's submission, para. 167.
581 See China's appellant's submission, paras. 262-263; and other appellant's submission,
paras. 168-169.
582 Panel Reports, para. 7.182.
WT/DS454/AB/R • WT/DS460/AB/R

5.5.3.1.4.4 Conclusion
5.277. For all these reasons, we uphold the Panel's findings, in paragraphs 7.188 and 7.205 of the
Panel Reports, paragraph 8.1.a.iii of the Japa n Panel Report, and paragraph 8.6.d.iii of the
EU Panel Report, that China acted inconsistently with Articles 3.1 and 3.5 of the Anti-Dumping
Agreement because MOFCOM improperly relied on the market share of dumped imports, and its
flawed price effects and impact analyses, in de termining a causal link between dumped imports
and material injury to the domestic industry, an d made no finding of cross-grade price effects
whereby price undercutting by Grade B and C imports might be shown to affect the price of
domestic Grade A HP-SSST.
5.5.3.1.5 MOFCOM's non-attribution analysis
5.5.3.1.5.1 The Panel's findings
5.278. Before the Panel, Japan and the European Union argued that MOFCOM failed properly to
ensure that injury caused by two known "other factors" – namely: (i) the decline in apparent
consumption; and (ii) the increase in domestic production capacity – was not attributed to the
dumped imports. The complainants submitted that MOFCOM conducted its non-attribution analysis
regarding these two factors with respect to al l grades of HP-SSST taken together, without
considering any possibility that these other factors may have influenced different segments of the
market differently, despite record evidence before MOFCOM demonstrating that imported and
domestic HP-SSST were concentrated in differe nt segments of the market, and despite the
absence of any cross-grade price effects of dumped imports of Grades B and C on the prices of
domestic Grade A. The complainants also contended that MOFCOM's non-attribution analysis would
necessarily be flawed if its initial determination of the causal link between dumped imports and
material injury to the domestic industry itself were flawed.
5.279. The Panel observed that MOFCOM sought to comply with the non-attribution requirement
contained in Article 3.5 of the Anti-Dumping Agreement by considering whether certain other
factors broke the causal link between dumped imports and material injury to the domestic industry
it had found, stating that such methodology provides an appropriate basis for ensuring non-
attribution.
583 Referring to previous jurisprudence by th e Appellate Body, the Panel observed that,
"before it becomes relevant or necessary for an investigating authority to separate and distinguish
the injury caused by other factors from the injury caused by subject imports, the investigating
authority must first properly establish that the dumped imports have caused material injury, and
the 'nature and extent' of the injury caused by su bject imports and the injury caused by the other
factor(s)."
584 Recalling its prior conclusion that MOFCOM had failed properly to establish the causal
link between dumped imports and material injury to the domestic industry, the Panel held that
"MOFCOM could not have meaningfully assessed whether or not injury caused by other factors was
sufficient to break that wrongly-determined causal link." 585 The Panel therefore considered that it
was not necessary to address every aspect of the parties' non-attribution arguments in detail.586
5.280. In the light of the above, the Panel conc luded that MOFCOM's examination of the injury
caused by the decrease in apparent consumption and the increase in domestic production capacity
was "flawed and not objective".
587 Consequently, the Panel held that MOFCOM's non-attribution
analysis of these factors was insufficient, and that its determination was thus inconsistent with
Articles 3.1 and 3.5 of the Anti-Dumping Agreement.588
5.5.3.1.5.2 Arguments on appeal
5.281. China argues on appeal that the Panel's findings relating to MOFCOM's non-attribution
analysis relied entirely on MOFCOM's alleged failure to determine properly the causal link between
dumped imports and material injury to the domestic industry.
589 Referring to its contention that

583 Panel Reports, para. 7.200.
584 Panel Reports, para. 7.201 (referring to Appellate Body Report, US – Hot-Rolled Steel, para. 226).
585 Panel Reports, para. 7.201.
586 Panel Reports, para. 7.202.
587 Panel Reports, para. 7.204.
588 Panel Reports, para. 7.204.
589 China's appellant's submission, paras. 268-269; other appellant's submission, paras. 174-175.
WT/DS454/AB/R • WT/DS460/AB/R

the Panel's findings in relation to MOFCOM's determination of the causal link (including those made
in respect of MOFCOM's finding of price correlation) should be reversed, China contends that the
Panel's finding that MOFCOM's non-attribution analysis is inconsistent with Articles 3.1 and 3.5 of
the Anti-Dumping Agreement should, as a consequence, also be reversed.
590
5.282. Japan and the European Union disagree with China that the Panel's non-attribution findings
in paragraphs 7.200-7.204 of the Panel Reports are "entirely based" on the Panel's findings
regarding MOFCOM's determination of causation.
591 Referring to paragraphs 7.202-7.203 of the
Panel Reports, the complainants submit that the Panel independently addressed certain additional
aspects of their non-attribution arguments, and that China presented no argument as to why these
additional reasons do not support the Panel's conclusion that MOFCOM's non-attribution analysis is
inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement.
592 On this basis, the
complainants contend that, even if the Appellate Body were to reverse the Panel's causation
findings based on China's arguments in these appeals, it would have no basis to reverse the
Panel's finding that MOFCOM's non-attribution analysis is inconsistent with Articles 3.1 and 3.5,
due to the additional reasons provided by the Panel at paragraphs 7.202-7.203 of the Panel
Reports.
593
5.5.3.1.5.3 Analysis
5.283. Article 3.5 of the Anti-Dumping Agreement provides that an investigating authority must,
in its analysis, "examine any known factors other than the dumped imports which at the same
time are injuring the domestic industry" and must ensure that "the injuries caused by these other
factors [are not] attributed to the dumped imports."
594 Article 3.5 therefore requires an
assessment that involves "separating and distinguishing the injurious effects of the other factors
from the injurious effects of the dumped imports".595 Further, if the injurious effects of the dumped
imports are not appropriately separated and distin guished from the injurious effects of the other
factors, "the authorities will be unable to conclude that the injury they ascribe to dumped imports
is actually caused by those imports, rather than by the other factors" and they "would have no
rational basis to conclude that the dumped imports are indeed causing the injury".596
5.284. We have upheld the Panel's findings that China acted inconsistently with Articles 3.1
and 3.5 of the Anti-Dumping Agreement because MO FCOM improperly relied on the market share
of dumped imports, and its flawed price effects and impact analyses, in determining a causal link
between dumped imports and material injury to the domestic industry. As we understand it,
China's claims on appeal concerning the Panel's non-attribution analysis are purely consequential
in the sense that they rely on China's argument s made in the context of challenging the Panel's
finding regarding MOFCOM's causation determination. We have rejected those arguments above,
and therefore we also reject China's appeal insofar as it relates to the Panel's findings regarding
MOFCOM's non-attribution analysis.
5.285. In any event, we do not agree with China that the Panel's findings concerning MOFCOM's
non-attribution analysis relied entirely on MOFCOM's alleged failure to determine properly the
causal link between dumped imports and material injury to the domestic industry. Instead, the
Panel also found that "MOFCOM's analyses of the injurious effects of both the decline in apparent
consumption and the increase in domestic production capacity failed to address the fact that
subject imports were comprised almost exclusively of Grades B and C, while the domestic
industry's operations were focused on Grade A" and that "[t]hose analyses also failed to account

590 China's appellant's submission, para. 270; other appellant's submission, para. 176.
591 Japan's appellee's submission, para. 44 (quoting China's other appellant's submission, para. 175);
European Union's appellee's submission, para. 263 (quoting China's appellant's submission, para. 269).
592 Japan's appellee's submission, paras. 44-46; European Union's appellee's submission,
paras. 263-265.
593 Japan's appellee's submission, para. 46; European Union's appellee's submission, para. 265.
594 See Appellate Body Report, China – GOES, para. 151. Pursuant to the fourth sentence of Article 3.5,
these other factors include the volume and prices of imports not sold at dumped or subsidized 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. (Ibid., fn 241 to para. 151)
595 Appellate Body Report, China – GOES, para. 151 (referring to Appellate Body Report, US –
Hot-Rolled Steel, para. 223).
596 Appellate Body Report, US – Hot-Rolled Steel, para. 223.
WT/DS454/AB/R • WT/DS460/AB/R

for the fact that MOFCOM had not established that subject imports of Grades B and C had injurious
price effects on domestic Grade A."597
5.286. In the light of the foregoing, we uphold the Panel's findings, in paragraphs 7.204
and 7.205 of the Panel Reports, paragraph 8.1.a.iv of the Japan Panel Report, and
paragraph 8.6.d.iv of the EU Panel Report, that China acted inconsistently with Articles 3.1 and 3.5
of the Anti-Dumping Agreement because MOFCOM fail ed to ensure that the injury caused by the
decrease in apparent consumption and the increase in domestic production capacity was not
attributed to the dumped imports.
5.5.3.1.6 Additional "independent" clai ms under Articles 3.1 and 3.5 of the
Anti-Dumping Agreement
5.287. We now turn to the question of whether Japan and the European Union advanced
independent claims under Article 3.5 of the An ti-Dumping Agreement, concerning MOFCOM's
reliance on its Article 3.2 price effects and Article 3.4 impact analyses, or whether such claims
were merely consequential, as found by the Pane l. Having set out the Panel's findings and the
parties' arguments before the Panel, we provide a summary of the claims and arguments on
appeal, followed by an analysis of the complainants' claims on appeal.
5.5.3.1.6.1 The Panel's findings
5.288. The Panel summarized what it referred to as the complainants "consequential claims"
under Article 3.5 of the Anti-Dumping Agreement as follows:
The complainants have made consequential Article 3.5 claims based on alleged
inconsistencies in MOFCOM's Article 3.2 price effects and Article 3.4 impact analyses.
The complainants recall their claims that MOFCOM's price effects and impact analyses
are respectively inconsistent with Articles 3.2 and 3.4 of the Anti-Dumping Agreement.
They submit that, as a consequence, MOFCOM's reliance on those price effects and
impact analyses to determine causation is inconsistent with Article 3.5 of the Anti-
Dumping Agreement.
598
5.289. Having recalled its prior findings that certain aspects of MOFCOM's price effects analysis
are inconsistent with Article 3.2, and that one aspect of its impact analysis is inconsistent with
Article 3.4 of the Anti-Dumping Agreement, the Panel found that MOFCOM's subsequent reliance
on the WTO-inconsistent aspects of its price effects and impact analyses in determining that
dumped imports caused material injury to the domestic industry undermined MOFCOM's causation
analysis, and rendered MOFCOM's causation determination inconsistent with Article 3.5 of the
Anti-Dumping Agreement.
599
5.290. The Panel emphasized, however, that it "had not upheld all aspects" of the complainants'
claims under Articles 3.2 and 3.4, and that those aspects of the complainants' claims under
Articles 3.2 and 3.4 that it had rejected "[could not] form the basis for any consequential
Article 3.5 claims".
600 While the Panel was of the view that many of the issues raised by the
complainants in the context of their Article 3.2 and Article 3.4 claims could have formed "the basis
for independent claims" under Article 3.5, it considered that the complainants had neither
identified any relevant independent Article 3.5 claims in their written submissions, nor identified
arguments explaining how alleged flaws in MOFCOM's price effects and impact analyses resulted in
independent violations of Article 3.5 as distinct from violations of Article 3.2 or 3.4.
601 Accordingly,
the Panel found that the complainants "ha[d] not advanced any independent Article 3.5 claims,
other than those concerning MOFCOM's reliance on market shares, and MOFCOM's non-attribution
analysis, concerning MOFCOM's price effects and impact analyses."
602

597 Panel Reports, para. 7.202.
599 Panel Reports, para. 7.191.
600 Panel Reports, para. 7.192.
601 Panel Reports, para. 7.192.
602 Panel Reports, para. 7.192.
WT/DS454/AB/R • WT/DS460/AB/R

5.5.3.1.6.2 Arguments on appeal
5.291. On appeal, Japan and the European Union take issue with the Panel's findings in
paragraph 7.192 of the Panel Reports, submitting that the Panel failed to make an objective
assessment of the matter before it, as required by Article 11 of the DSU, by failing to examine the
complainants' claims of independent violations of Articles 3.1 and 3.5 of the Anti-Dumping
Agreement arising from MOFCOM's price effects and impact analyses.
603 The complainants further
request us to complete the legal analysis and evaluate on the basis of the Panel's factual findings
and undisputed facts on the record whether independent violations of Articles 3.1 and 3.5 arise in
those instances where the complainants' claims under Articles 3.2 and 3.4 were rejected by the
Panel or the Appellate Body.
604 M o r e s p e c i f i c a l l y , J a p a n r e q u e s t s u s t o f i n d t h a t C h i n a v i o l a t e d
Articles 3.1 and 3.5 of the Anti-Dumping Agreement because: (i) MOFCOM improperly found that
imports of Grade C had explanatory force for price undercutting effects on domestic Grade C; (ii)
MOFCOM improperly extended its findings of price undercutting in respect of Grades B and C to the
domestic like product as a whole; (iii) MOFCOM improperly found the domestic industry as a whole
to be impacted by dumped imports despite finding no price effects with respect to Grade A; and
(iv) MOFCOM failed to examine whether dumped imports had explanatory force for the state of the
domestic industry.
605
5.292. In response, China submits that the Panel correctly concluded that the complainants did
not raise independent claims under Article 3.5 (other than those concerning MOFCOM's reliance on
market shares and MOFCOM's non-attribution analysis). China further argues that the Panel did
not fail to make an objective assessment of the matter before it, as required by Article 11 of the
DSU, and requests us to reject the complainants' appeals.
606
5.5.3.1.6.3 Analysis
5.293. In order to determine whether the Panel erred in finding that "the complainants have not
advanced any independent claims under Article 3.5 of the Anti-Dumping Agreement, other than
those concerning MOFCOM's reliance on market shares, and MOFCOM's non-attribution analysis,
concerning MOFCOM's price effects and impact an alyses", we begin by reviewing the language
found in the complainants' panel requests.
607
5.294. As noted above, after claiming the inconsistency of China's price effects and impact
analyses under, respectively, Articles 3.1 and 3. 2 and Articles 3.1 and 3.4 of the Anti-Dumping
Agreement, Japan stated in paragraph 1(c) of its panel request that:
China's demonstration of the alleged causal relationship between the imports under
investigation and the alleged injury to the domestic industry was not based on an
objective examination of all relevant evidence before the authorities. In particular,
China determined that the allegedly dumped imports are causing injury despite an
absence of a significant increase in the vo lume of dumped imports, and based on its
flawed price effects and impact analyses. Accordingly, China acted inconsistently with
Articles 3.1 and 3.5 of the Anti-Dumping Agreement.
5.295. In paragraph 5 of its panel request, after claiming the inconsistency of China's price effects
and impact analyses under, respectively, Articles 3.1 and 3.2 and Articles 3.1 and 3.4 of the
Anti-Dumping Agreement, the European Union specified its relevant claims under Articles 3.1
and 3.5 as follows:

603 Japan's appellant's submission, paras. 82 and 84; European Union's other appellant's submission,
paras. 165 and 167.
604 Japan's appellant's submission, para. 104; European Union's other appellant's submission, para. 178.
605 Japan's appellant's submission, para. 104 (referring to Japan's comments on the Interim Reports,
para. 61).
606 China's appellee's submission, para. 318.
607 Panel Reports, para. 7.192.
WT/DS454/AB/R • WT/DS460/AB/R

Articles 3.1 and 3.5 of the Anti-Dumping Agreement because China failed to conduct
an objective examination, based on positive evidence, of the causal relationship
between the imports under investigation and the alleged injury to the domestic
industry. China determined that the allegedly dumped imports are causing injury
despite an absence of a significant increase in the volume of dumped imports, based
on improper price effects analyses and based on flawed impact analyses, including
improper evaluation of or failure to consider relevant economic factors and indices
having a bearing on the state of the domestic industry.
5.296. In the light of this language in the complainants' panel requests, we understand the
complainants to have sought to challenge MOFCOM's causation analysis on several grounds,
including on the basis of alleged flaws in MOFCOM's price effects and impact analyses. While the
complainants raised many of the same arguments in support of their claims under Article 3.5 as
they did in support of their claims under Arti cles 3.2 and 3.4 of the Anti-Dumping Agreement
608,
we see no error in the Panel's finding that the complainants had not claimed, before the Panel,
that MOFCOM's price effects and impact analyses, taken alone, resulted in independent violations
of Article 3.5 of the Anti-Dumping Agreement. We therefore uphold the Panel's finding, in
paragraph 7.192 of the Panel Reports, that the complainants had not advanced independent
Article 3.5 claims – other than those concerning MOFCOM's reliance on market shares and
MOFCOM's non-attribution analysis – concerning MOFCOM's price effects and impact analyses.
5.297. Having said that, we understand the key contention underlying the complainants' overall
claims under Article 3.5 to relate to MOFCOM's failure to conduct a cross-grade price analysis . In
particular, we understand the complainants to have claimed that MOFCOM did not address or
explain how the volume and price effects of imports of Grade B and Grade C HP-SSST were
relevant in assessing whether such imports (of Grades B and C) caused material injury to the
domestic industry producing primarily Grade A HP-SSST. The complainants raised the same overall
concern in the context of their claims under Arti cles 3.2 and 3.4 of the Anti-Dumping Agreement,
arguing, inter alia, that: (i) MOFCOM improperly extended its findings of price undercutting in
respect of Grades B and C to the domestic like product as a whole; (ii) MOFCOM improperly found
the domestic industry as a whole to be impacted by dumped imports despite its finding that there
was no price undercutting with respect to Grade A; and (iii) MOFCOM failed properly to examine
whether the dumped imports (consisting primarily of Grades B and C) had explanatory force for
the state of the domestic industry (producing primarily Grade A HP-SSST).
609 While the Panel did
not find that the concerns expressed by the complainants were the subject of "independent claims"
under Article 3.5, the Panel observed in the context of its Article 3.5 analysis, inter alia , that
"MOFCOM made no finding of cross-grade price effects, whereby price undercutting by subject
imports of Grades B and C might be shown to affect the price of domestic sales of Grade A"
610, and
found that the flaws in MOFCOM's analysis of the market share of dumped imports rendered its
causation determination inconsistent with Articl es 3.1 and 3.5 of the Anti-Dumping Agreement. 611
We have agreed with the Panel's reasoning in this regard.
5.5.3.2 Conclusions
5.298. In sum, we find that the Panel did not act inconsistently with Article 6.2 of the DSU by
addressing Japan's claims under Article 3.5 of the Anti-Dumping Agreement regarding "MOFCOM's
reliance on the market share of subject imports" , in paragraphs 7.180-7.188 of the Japan Panel
Report. We also find that the Panel did not act inconsistently with Article 11 of the DSU by ruling
on a matter that was not before it, or making the case for the complainants. We uphold the Panel's
findings, in paragraphs 7.188 and 7.205 of the Panel Reports, paragraph 8.1.a.iii of the Japan
Panel Report, and paragraph 8.6.d.iii of the EU Pa nel Report, that China acted inconsistently with
Articles 3.1 and 3.5 of the Anti-Dumping Agreem ent because MOFCOM improperly relied on the
market share of the dumped imports, and its flawed price effects and impact analyses, in
determining a causal link between dumped imports and material injury to the domestic industry,
and made no finding of cross-grade price effects whereby price undercutting by Grade B and C

608 See Japan's first written submission to the Panel, paras. 186-209; and European Union's first written
submission to the Panel, paras. 277-299. See also Japan's second written submission to the Panel, para. 56;
and European Union's second written submission to the Panel, para. 176.
609 Japan's comments on the Interim Reports, para. 61.
610 Panel Reports, para. 7.182.
611 Panel Reports, paras. 7.188 and 7.205.
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imports might be shown to affect the price of domestic Grade A HP-SSST. We also uphold the
Panel's findings, in paragraphs 7.204 and 7.205 of the Panel Reports, paragraph 8.1.a.iv of the
Japan Panel Report, and paragraph 8.6.d.iv of the EU Panel Report, that China acted inconsistently
with Articles 3.1 and 3.5 of the Anti-Dumping Agreement because MOFCOM failed properly to
ensure that the injury caused by the decrease in apparent consumption and the increase in
domestic production capacity was not attributed to the dumped imports. Finally, we find that the
Panel did not act inconsistently with Article 11 of the DSU in concluding, in paragraph 7.192 of the
Panel Reports, that the complainants had not advanced independent Article 3.5 claims – other
than those concerning MOFCOM's reliance on market shares and MOFCOM's non-attribution
analysis – concerning MOFCOM's price effects and impact analyses.

5.6 Additional working procedures concerning BCI
5.299. We now turn to address the European Union's claim that the Panel erred in its
interpretation and application of Articles 17.7 and 6.5 of the Anti-Dumping Agreement and
Article 18.2 of the DSU, when ruling on certain preliminary issues raised by the European Union
regarding the additional working procedures adopte d by the Panel to protect business confidential
information (BCI).
612 We start by setting out the relevant findings by the Panel and the context in
which the Panel made these findings.
5.6.1 The Panel's findings
5.300. Following consultations with the parties, on 27 September 2013, the Panel adopted
additional working procedures concerning BCI (BCI Procedures). 613 Paragraphs 1 and 2 of the
BCI Procedures originally provided:
(1) These procedures apply to any business confidential information (BCI) that a party
wishes to submit to the Panels. For the purposes of these procedures, BCI is defined
as any information that has been designated as such by the Party submitting the
information, that is not available in the public domain, and the release of which could
seriously prejudice an essential interest of the person or entity that supplied the
information to the Party. In this regard, BCI shall include information that was
previously submitted to China's Ministry o f C o m m e r c e ( " M O F C O M " ) a s B C I i n t h e
anti-dumping investigation at issue in these disputes . However, these procedures do
not apply to information that is available in the public domain. In addition, these
procedures do not apply to any BCI if the person who provided the information in the
course of the aforementioned investigation agrees in writing to make the information
publicly available.
(2) The first time that a party submits to the Panels BCI as defined above from an
entity that submitted that information in the anti-dumping investigation at issue in
these disputes, the party shall also provide, with a copy to the other parties, an
authorizing letter from the entity . That letter shall authorize China, the
European Union and Japan to submit in these disputes, in accordance with these
procedures, any confidential information submitted by that entity in the course of the
investigation at issue.
614
5.301. The European Union objected to two aspects of the BCI Procedures adopted by the
Panel.615 First, the European Union took issue with the language in paragraph 1, quoted above,
according to which BCI, in the WTO panel proceedings, "shall include information that was
previously submitted to … MOFCOM[] as BCI in the anti-dumping investigation at issue in these
disputes."
616 The European Union argued that the effect of this language was to delegate, in
absolute terms, to non-WTO entities or persons (i.e. the parties involved in a domestic anti-
dumping investigation) the issue of whether or not certain information should be granted
additional protection in the context of WTO dispute settlement.
617 Disagreeing with this
proposition, the European Union claimed that it is for WTO Members to request, or not, additional
protection for information that they submit in the context of WTO panel proceedings, and for WTO
panels to rule on such requests. The European Union observed, in this regard, that a WTO Member
may indicate to a panel, for example, that certain information that was previously treated as
confidential by an investigating authority is no longer sensitive, or, conversely, that information
submitted by another WTO Member to a panel should be designated as confidential.
618

612 Panel Reports, para. 1.10. No request for BCI procedures was made in these appellate proceedings.
613 Panel Reports, para. 1.10.
615 Japan did not challenge separately the BCI Procedures adopted by the Panel. However, in response
to the Panel's questioning, Japan indicated that it generally agreed with the European Union's request to
modify paragraphs 1 and 2 of the BCI Procedures. (Panel Reports, para. 7.14; Japan's response to Panel
question No.1)
617 See Panel Reports, para. 7.12.
618 European Union's first written submission to the Panel, paras. 56-57.

5.302. The European Union also objected to the language in paragraph 2 of the Panel's
BCI Procedures, whereby a WTO Member providin g information to the panel that had been
previously submitted to the authority in the underlying anti-dumping investigation as confidential
was required to obtain and provide to the panel evidence of prior written authorization from the
entity that had originally submitted that information to the domestic investigating authority. The
European Union argued that such a requirement wo uld mean that a particular firm, or submitting
entity involved in a domestic anti-dumping proceeding, could "simply withhold the authorization
and effectively limit the information that may be submitted in WTO dispute settlement".
619 The
European Union submitted that Article 17.7 of the Anti-Dumping Agreement makes clear that a
Member is not required to obtain authorization before providing confidential information to WTO
panels.
620
5.303. China responded that the aspects of the Panel's BCI Procedures challenged by the
European Union added to, rather than detracted from, the protection provided by the DSU, and
that the additional protection provided by th e Panel for information previously submitted to
MOFCOM as BCI was in consonance with the conf identiality requirements in Article 6.5 of the
Anti-Dumping Agreement. China further submitted that "an authorizing letter is a necessary
instrument to ensure compliance by the investigating authority with its obligations under
Article 6.5 of the Anti-Dumping Agreement"
621, and that it is not uncommon to require the
presentation of such a letter in WTO dispute settlement proceedings concerning trade remedies.
5.304. The Panel agreed with the European Union that the original wording of the first paragraph
of the BCI Procedures suggested that BCI designat ion is determined by the entity submitting the
information to MOFCOM. The Panel therefore amended paragraph 1 of the BCI Procedures to read,
in relevant part, that "BCI shall include information that was previously treated by … MOFCOM …
as BCI in the anti-dumping investigation at issue in these disputes." 622 However, insofar as the
European Union had argued that the designation of BCI should not depend on the investigating
authority's determination to treat information as confidential in the underlying anti-dumping
proceedings, the Panel considered that the procedures it had adopted did not detract from the
ability of WTO Members to designate information as confidential under Article 18.2 of the DSU. The
Panel considered that, even though the designation of confidential information in anti-dumping
proceedings under Article 6.5 of the Anti-Dumping Agreement is distinct from the designation of
BCI for purposes of DSU proceedings, as contemplated in Article 18.2 of the DSU, these
designations are "closely related".
623 According to the Panel, this relationship finds support in the
text of Article 17.7 of the Anti-Dumping Agreement 624, which, as a special or additional rule and
procedure in Appendix 2 to the DSU, prevails over the DSU to the extent that there is a difference
between these two sets of provisions. 625 The Panel further stated that it understood the term
"confidential information" in Article 17.7 to refer to "the confidential information previously
examined by the investigating authority and treate d as confidential pursuant to Article 6.5" and
subsequently provided to a dispute settlement panel pursuant to Article 17.7.
626 The Panel
considered, therefore, that "Article 17.7 envi sages that confidential information on the
investigating authority's record – obtained from a 'person, body or authority' – may be provided to
a panel, and imposes on the panel a non-disclosure obligation similar to that imposed on the

619 Panel Reports, para. 7.13.
620 Panel Reports, para. 7.13 and fn 33 thereto.
621 Panel Reports, para. 7.15 (quoting China's response to Panel question No. 3, para. 13).
622 Panel Reports, para. 7.18. (emphasis added by the Panel) The Panel noted that China did not oppose
this amendment. (Ibid., fn 46 to para. 7.18 (referring to China's response to Panel question No.1, paras. 3-5))
623 Panel Reports, para. 7.20.
624 Article 17.7 of the Anti-Dumping Agreement provides:
Confidential information provided to the panel shall not be disclosed without formal authorization
from the person, body or authority providing such information. Where such information is
requested from the panel but release of such information by the panel is not authorized, a non-
confidential summary of the information, authorized by the person, body or authority providing
the information, shall be provided.
625 Panel Reports, para. 7.21 (referring to Article 1.2 and Appendix 2 to the DSU; and Appellate Body
626 Panel Reports, para. 7.21.

authority by the last sentence of Article 6.5." 627 Based on this reasoning, the Panel declined to
modify further paragraph 1 of the BCI Procedures in the manner proposed by the European Union.
5.305. With regard to paragraph 2 of the orig inal BCI Procedures, the Panel found that the
provision of confidential information to the Panel did not amount to its disclosure to the public, and
rejected, on this basis, China's argument that WTO Members must provide an authorizing letter
from the entity that submitted the confidenti al information in the underlying anti-dumping
proceedings before they can "provide" such information to a WTO panel in the context of a dispute
under the Anti-Dumping Agreement.628 The Panel therefore accepted the European Union's request
to delete paragraph 2 of the BCI procedures, which set out a requirement for parties to provide an
authorizing letter from the entity that submitted confidential information in the underlying
proceedings, when submitting such informat ion to the Panel. The Panel communicated the
amended BCI Procedures to the parties on 22 May 2014.
629
5.6.2 Arguments
5.306. Although the Panel agreed to make certain amendments to its original BCI Procedures, on
appeal, the European Union submits that the Panel nonetheless erred in its interpretation and
application of Articles 6.5 and 17.7 of the Anti-Dumping Agreement.
630 The European Union
considers, in particular, that the Panel delegated, "in absolute terms", to MOFCOM the power to
decide what information will be granted additi onal protection in the context of WTO dispute
settlement proceedings "without any possibility of review by the Panel". 631 In doing so, the Panel
effectively found that designation of information as confidential by an investigating authority in the
context of municipal anti-dumping proceedings pursuant to Article 6.5 is determinative of
designation pursuant to Article 17.7 in the context of WTO panel proceedings.
632 The
European Union submits, in this regard, that the principles articulated by the panel and the
Appellate Body in EC and certain member States – Large Civil Aircraft , according to which the
question of designation is to be settled by the WT O adjudicator, are grounded in the provisions of
the DSU and "do not vary according to the particular covered agreement that is under
consideration".
633 The European Union also maintains that, contrary to the Panel's suggestion that
there may be a difference between Article 17.7 of the Anti-Dumping Agreement and Article 18.2 of
the DSU such that the special or additional rule in Article 17.7 prevails, the phrase "person, body
or authority" in Article 17.7 of the Anti-Dumping Agreement and the term "Member" in Article 18.2
of the DSU do not mean that there is a difference or conflict between these provisions. For the
European Union, "[t]hese terms are simply consistent with the fact that, pursuant to Article 13.1 of
the DSU, a panel has the authority to seek information or technical advice from any individual or
body which it deems appropriate."
634 The European Union further contends that the Panel acted
inconsistently with Article 11 of the DSU insofar as it foreclosed, through the adoption of the BCI
Procedures, "the possibility for the Panel to make an objective assessment of a relevant matter,
within the meaning of that provision."
635

627 Panel Reports, para. 7.21. (fn omitted) The Panel further considered that, since a panel's review is
limited to the investigating authority's record, in practice, the designation of information under Article 18.2 of
the DSU should generally not arise in a case brought under the Anti-Dumping Agreement, because this issue is
already addressed by Articles 6.5 and 17.7 of the Anti-Dumping Agreement. (Ibid.)
628 Panel Reports, para. 7.28. See also para. 7.27 (referring to China's response to Panel question No. 4,
paras. 25-30).
629 Panel Reports, para. 1.10. The amended Additional Working Procedures of the Panels Concerning
Business Confidential Information can be found in Annex A-2 of the Addendum to the Panel Reports.
630 In particular, the European Union takes issue with the Panel's statement that "the phrase
'confidential information' in Article 17.7 refers to the confidential information previously examined by the
investigating authority and treated as confidential pursuant to Article 6.5 – and which is now provided to a
dispute settlement panel pursuant to Article 17.7." (European Union's Notice of Other Appeal, fn 2 to para. 1)
631 European Union's other appellant's submission, para. 40. See also para. 35 (referring to
Appellate Body Report, EC and certain member States – Large Civil Aircraft, Annex III, Procedural Ruling of
10 August 2010, paras. 7-11 and 13).
632 European Union's other appellant's submission, paras. 41 and 43.
633 European Union's other appellant's submission, para. 57.
634 European Union's other appellant's submission, para. 55.
635 European Union's other appellant's submission, para. 59. The European Union also submits that it
sought certain specific rulings on designation from the Panel, which the Panel did not give. (Ibid.)

5.307. The European Union also objects to the Panel's analysis of the requirement set out in
paragraph 2 of the Panel's original BCI Procedur es regarding the requirement that a WTO Member
provide an authorizing letter from the entity that submitted confidential information in the
underlying anti-dumping proceedings when su bmitting such information to the panel.
636 Even
though the Panel deleted this requirement from its original BCI Procedures, the European Union
submits that the Panel's reasoning effectively implies that, in order for a WTO Member to
designate information previously found to be confidential within the meaning of Article 6.5 as
non-confidential, within the meaning of Article 17.7, a prior written authorizing letter would be
necessary.
637
5.308. China responds that the term "confidential information" under Article 17.7 of the
Anti-Dumping Agreement "refers to information submitted as confidential pursuant to Article 6.5 of
the Anti-Dumping Agreement" 638, and that, regardless of whether or not "good cause" is shown
within the meaning of Article 6.5, an investigating authority may not disclose any information
provided on a confidential basis by a party to an investigation without its authorization.
639
Therefore, in China's view, "as a matter of WTO law" and "regardless of whether or not this is
confirmed in a panel's BCI Procedures", information submitted as confidential to an investigating
authority should be designated as confidential before the panel examining the underlying
anti-dumping proceedings, and should not be di sclosed without "specific permission or formal
authorization" from the party that submitted such information in the underlying anti-dumping
proceedings.
640
5.309. China further submits that the BCI Procedur es did not preclude the possibility to have a
review of the question of designation by a WTO adjudicator on the basis of objective criteria. 641
China observes that a WTO adjudicator can review whether it is information that is designated as
confidential, rather than arguments, claims, or reasoning, and whether additional protection is
warranted for that information. China, however, does not consider that the question of
"designation of information as confidential is subject to review by a WTO adjudicator" 642, in
particular, given the absence of a reference to a showing of "good cause" in either Article 17.7 of
the Anti-Dumping Agreement, or Articles 18.2 an d 13.1 of the DSU. China also argues that the
balance between competing interests in the context of designation of information is struck by:
(i) the ability to designate information as confidential; and (ii) the obligation to provide a
non-confidential summary of such information.
5.6.3 Analysis
5.310. As a preliminary matter, we note China's argument that it may not be necessary for us to
examine the issues raised by the European Un ion on appeal as such examination would not
contribute to the prompt and satisf actory settlement of this dispute.
643 Article 17.12 of the DSU
stipulates that the Appellate Body shall address each of the issues of law and legal interpretations
raised during the appellate proceedings. As we see it, the Panel's analysis of the meaning and
scope of Articles 6.5 and 17.7 of the Anti-Dum ping Agreement and Article 18.2 of the DSU are
clearly issues of law, which, if properly raised on appeal, we are required to address. We consider
the Panel's finding that "the phrase 'confidential information' in Article 17.7 refers to the
confidential information previously examined by the investigating authority and treated as
confidential pursuant to Article 6.5 – and whic h is now provided to a dispute settlement panel
pursuant to Article 17.7"
644 – to be a core element of the Panel's interpretation of Articles 6.5

636 European Union's other appellant's submission, para. 61 (referring to Panel Reports, paras. 7.21
and 7.26-7.29, particularly the finding that "the phrase 'confidential information' in Article 17.7 refers to the
confidential information previously examined by the investigating authority and treated as confidential
pursuant to Article 6.5 – and which is now provided to a dispute settlement panel pursuant to Article 17.7";
and the interpretation of the terms "person, body or authority").
637 European Union's other appellant's submission, para. 67 (referring to Panel Reports, fn 50 to
para. 7.21).
638 China's appellee's submission, para. 367.
639 China's appellee's submission, para. 369.
640 China's appellee's submission, para. 371.
641 China's appellee's submission, para. 374 (referring to European Union's other appellant's submission,
para. 42).
642 China's appellee's submission, para. 374. (emphasis original)
643 China's appellee's submission, paras. 361-362.
644 Panel Reports, para. 7.21.

and 17.7 of the Anti-Dumping Agreement. As such, it is a "legal interpretation developed by the
Panel" in the sense of Article 17.6 of the DSU and, therefore, can be subject to appellate review.
5.311. Turning to our analysis of the issues raised by the European Union on appeal, we recall the
general rule in Article 18.2 of the DSU that provides, inter alia, that written submissions to the
Appellate Body "shall be treated as confidential". We further note that, under Article 12.1 of the
DSU, WTO panels are required to follow the Working Procedures in Appendix 3 to the DSU, unless
they decide otherwise "after consulting the pa rties to the dispute". Panels may decide that
additional procedures are appropriate in a given case and adopt, for example, procedures
providing for additional protection of sensitive business information in order to allow a participant
to present its arguments and evidence without undu e risk of disclosure of such information. In
determining the scope and content of such proced ures, the panel must consider the effect they
may have on the exercise by the panel of its adjudicative duties under the DSU and other covered
agreements, the parties' rights to due process, th e rights of the third parties, and the rights and
systemic interests of other WTO Members.
645 Any additional procedures adopted by a panel to
protect the confidentiality of sensitive business information should go no further than necessary to
guard against a determined risk of harm (actual or potential) that could result from disclosure, and
must be consistent with the relevant provisions of the DSU and other covered agreements
(including the Anti-Dumping Agreement). 646 The obligation rests upon the panel to adjudicate any
disagreement or dispute that may arise under those procedures regarding the designation or the
treatment of information as business confidential. In addition, where necessary, a panel must draw
appropriate inferences from a party's failure to provide requested information to the panel.
5.312. Having said that, we note that the framew ork for the treatment of confidential information
in municipal anti-dumping proceedings is set ou t in Articles 6.5, 6.5.1, and 6.5.2 of the
Anti-Dumping Agreement.
647 In the context of such domestic proceedings, it is for the
investigating authorities to assess objectively whether a submitting party has adequately
substantiated a request to treat certain information as "confidential" within the meaning of
Article 6.5. If the investigating authority determines that an interested party has made a proper
showing of "good cause", the information at issue "shall not be disclosed without specific
permission of the party submitting it". Footnote 17 to Article 6.5 further clarifies that "Members
are aware that in the territory of certain Members disclosure pursuant to a narrowly-drawn
protective order may be required."
5.313. A different set of rules regulates conf idential treatment of information provided by a WTO
Member to a panel or the Appellate Body in the context of WTO dispute settlement proceedings. As
noted, Article 18.2 of the DSU specifically provides that "[w]ritten submissions to the panel or the
Appellate Body shall be treated as confidential, but shall be made available to the parties to the
dispute." Parties to a dispute are free to disclose statements of their own positions to the public,
but "shall treat as confidential information submitted by another Member to the panel or the
Appellate Body which that Member has designated as confidential".
648
5.314. Article 13.1 of the DSU further provides that "[a] panel shall have the right to seek
information and technical advice from any individual or body which it deems appropriate". WTO
Members "should respond promptly and fully to any request by a panel for such information as the
panel considers necessary and appropriate". Confidential information that is provided to a panel
under Article 13.1 "shall not be revealed without fo rmal authorization from the individual, body, or
authorities of the Member providing the information". These provisions apply generally in WTO
dispute settlement proceedings.

645 See Appellate Body Report, EC and certain member States – Large Civil Aircraft, Annex III,
Procedural Ruling of 10 August 2010, paras. 8-9.
646 See Appellate Body Report, EC and certain member States – Large Civil Aircraft, Annex III,
647 See section 5.3 of these Reports.
648 Article 18.2 of the DSU.

5.315. In EC and certain member States – Large Civil Aircraft , the Appellate Body observed that
the confidentiality requirements in Articles 17.10 and 18.2 of the DSU, as well as in
paragraph VII:1 of the Rules of Conduct for the Understanding on Rules and Procedures Governing
the Settlement of Disputes
649, are set out "at a level of generality that may need to be
particularized in situations in which the nature of the information provided requires more detailed
arrangements to protect adequately the confidentiality of that information." 650 Whether a panel
would consider that there is a need to adopt, based on the authority it enjoys under Article 12 of
the DSU, special procedures for the additional protec tion of BCI, will therefore vary from case to
case. Nevertheless, it is important to distinguish between the general layer of confidentiality that
applies in WTO dispute settlement proceedings, as foreseen in Articles 18.2 and 13.1 of the DSU,
and the additional layer of protection of sensitive business information that a panel may choose to
adopt, usually at the request of a party. In the context of WTO disputes brought under the
Anti-Dumping Agreement, Article 17.7 of that Agreement stipulates that "[c]onfidential information
provided to the panel shall not be disclosed without formal authorization from the person, body or
authority providing such information."
651 Thus, while Article 6.5 of the Anti-Dumping Agreement
regulates the issue of designation of information in domestic anti-dumping duty proceedings,
Article 17.7 deals with the issue of confidentiality in an anti-dumping proceeding before a WTO
panel.
5.316. As we see it, in its reasoning, the Panel conflated: (i) the confidentiality obligations under
the Anti-Dumping Agreement setting the framework for confidential treatment of information that
is applicable in the context of domestic anti-dumping proceedings; and (ii) the confidentiality
obligations applicable in WTO dispute settlement proceedings. In addition, the Panel also
conflated: (i) confidentiality requirements generally applicable in WTO proceedings or in
anti-dumping proceedings as foreseen in the above-mentioned provisions of the DSU and the
Anti-Dumping Agreement; and (ii) the additional layer of protection of sensitive business
information provided under special procedures adopted by a panel for the purposes of a particular
dispute.
652 Contrary to what the Panel appears to have suggested, whether information treated as
confidential pursuant to Article 6.5 of the Anti-D umping Agreement, and submitted by a party to a
WTO panel under the confidentiality requirements generally applicable in WTO dispute settlement,
should receive additional confiden tial treatment as BCI is to be determined in each case by the
WTO panel.
5.317. For these reasons, we declare moot and of no legal effect the Panel's findings and legal
reasoning developed in paragraphs 7.21-7.25 and 7.27-7.29 of the EU Panel Report. We do not
consider it necessary to make further findings on this matter in order to resolve the present
dispute.

649 The Rules of Conduct, as adopted by the DSB on 3 December 1996 (WT/DSB/RC/1), are directly
incorporated into the Working Procedures for Appellate Review (WT/AB/WP/6), as Annex II thereto. (See
WT/DSB/RC/2, WT/AB/WP/W/2)
650 Appellate Body Report, EC and certain member States – Large Civil Aircraft, Annex III, Procedural
Ruling of 10 August 2010, para. 8.
651 We note that Article 17.7 is a special or additional rule that prevails to the extent that there is a
difference between the rules and procedures in the DSU (such as Articles 13 and 18 thereof) and Article 17.7 of
the Anti-Dumping Agreement. (See Article 1.2 and Appendix 2 to the DSU)
652 We note, in particular, the Panel's finding that "the phrase 'confidential information' in Article 17.7
refers to the confidential information previously examined by the investigating authority and treated as
confidential pursuant to Article 6.5." (Panel Reports, para. 7.21) The Panel's conflation of the two regimes for
the protection of confidential information is also reflected in its statement that "the European Union has not
explained how another type of 'disagreement about designation' under the BCI Procedures could occur when
information was properly treated as confidential in the underlying anti-dumping proceedings."
 (Panel Reports,

- JPN-103 -

6 FINDINGS AND CONCLUSIONS IN THE APPELLATE BODY REPORT WT/DS454/AB/R
6.1. In the appeal of the Panel Report, China – Measures Imposing Anti-Dumping Duties on
High-Performance Stainless Steel Seamless Tubes ("HP-SSST") from Japan , WT/DS454/R and
Add.1 (Japan Panel Report), for the reasons set out in this Report:
a. with respect to the Panel's findings under Article 6.5 of the Anti-Dumping Agreement,
the Appellate Body:
i. finds that the Panel did not err in its interpretation and application of Article 6.5 of
the Anti-Dumping Agreement;
ii. finds that the Panel did not act inconsistently with Article 11 of the DSU and
Article 17.6(i) of the Anti-Dumping Agreement; and, consequently,
iii. upholds the Panel's findings, in paragraphs 7.290, 7.297-7.303, and 8.1.b. of the
Japan Panel Report, that China acted inconsistently with Article 6.5 of the
Anti-Dumping Agreement because MOFCOM permitted the full text of the reports
contained in appendix V and appendix VIII to the petition, appendix 59 to the
petitioners' supplemental evidence of 1 March 2012, and the appendix to the
petitioners' supplemental evidence of 29 Ma rch 2012 to remain confidential without
objectively assessing the petitioners' showing of "good cause";
b. with respect to the Panel's findings under Articles 3.1 and 3.2 of the Anti-Dumping
Agreement, the Appellate Body:
i. finds that the Panel erred in its interpretation of Article 3.2 of the
Anti-Dumping Agreement in finding that, in its consideration of whether there has
been a significant price undercutting, an investigating authority may simply consider
whether dumped imports sell at lower prices than comparable domestic products;
ii. reverses the Panel's findings, in paragraphs 7.130, 7.144, and 8.2.a.i of the Japan
Panel Report, rejecting Japan's claim that MOFCOM acted inconsistently with
Articles 3.1 and 3.2 of the Anti-Dumping Agreement by failing to consider whether
Grade C dumped imports had any price undercutting effect on domestic Grade C
products, in the sense of placing downward pressure on those domestic prices by being
sold at lower prices; and
iii. completes the legal analysis and finds that MOFCOM's assessment of whether there
had been a significant price undercutting by Grade C imports, as compared with the
price of domestic Grade C, is inconsistent with Articles 3.1 and 3.2 of the
Anti-Dumping Agreement;
c. with respect to the Panel's findings under Articles 3.1 and 3.4 of the Anti-Dumping
Agreement, the Appellate Body:
i. finds that Japan's argument, that MOFCOM failed to examine whether dumped
imports provided explanatory force for the state of the domestic industry, did not
constitute a separate claim under Articles 3.1 and 3.4 of the Anti-Dumping
Agreement; and consequently declares moot and of no legal effect the Panel's
findings in paragraphs 6.29-6.31 and footnote 274 of the Japan Panel Report; and
ii. finds that the Panel erred in its interpretation of Articles 3.1 and 3.4 of the
Anti-Dumping Agreement to the extent it found that the results of the inquiries under
Article 3.2 are not relevant to the impact analysis under Article 3.4; and
consequently reverses the Panel's findings in paragraphs 7.170 and 8.2.a.ii of the
Japan Panel Report;
WT /DS454/ AB/R
- JPN-104 -
d. with respect to the Panel's findings under Articles 3.1 and 3.5 of the
Anti-Dumping Agreement, the Appellate Body:
i. finds that the Panel did not act inconsistently with Article 6.2 of the DSU by
addressing Japan's claims under Article 3.5 of the Anti-Dumping Agreement
regarding "MOFCOM's reliance on the market share of subject imports", in
paragraphs 7 .180-7 .188 of the Japan Panel Report;
ii. finds that the Panel did not act inconsistently w ith Article 11 of the DSU by ruling on
a matter that was not before it, or making the case for Japan;
iii. upholds the Panel's findings, in paragraphs 7.188, 7.205, and 8.1.a.iii of the Japan
Panel Report, that Ch ina acted inconsistently with Articles 3.1 and 3.5 of the
Anti-Dumping Agreement because MOFCOM improperly relied on the market share of
dumped imports, and its flawed price effects and impact analyses, in determining a
causal link between dumped imports and material injury to the domestic industry,
and made no finding of cross-grade price effects whereby price undercutting by
Grade Band C imports might be shown to affect the prices of domestic Grade A
HP-SSST;
iv. upholds the Panel's finding, in paragraphs 7.204, 7.205, and 8.1.a.iv of the Japan
Panel Report, that China acted inconsistently with Articles 3.1 and 3.5 of the
Anti-Dumping Agreement because MOFCOM failed to ensure that the injury caused
by the decrease in apparent consumption and the increase in domestic production
capacity was not attributed to the dumped imports; and
v. finds that the Panel did not act inconsistently with Article 11 of the DSU, in
concluding, in paragraph 7.192 of the Japan Panel Report, that Japan had not
advanced independent Article 3.5 claims - other than those regarding MOFCOM's
reliance on market shares and MOFCOM 's non-attribution analysis - concerning
MOFCOM's price effects and impact analyses.
6.2. The Appellate Body recommends that the DSB request China to bring its measures found in
this Report, and in the Japan Panel Report as modified by this Report, to be inconsistent with the
Anti-Dumping Agreement and the GATT 1994, into conformity with its obligations under those
Agreements.
Signed in the original in Geneva this 25th day of September 2015 by:
Peter Van d ossche
Presiding Member
G:~~
Ricardo Ramirez-Hernandez
Member

- EU-105 -

6 FINDINGS AND CONCLUSIONS IN THE APPELLATE BODY REPORT WT/DS460/AB/R

6.1. In the appeal of the Panel Report, China – Measures Imposing Anti-Dumping Duties on
High-Performance Stainless Steel Seamless Tubes ("HP-SSST") from the European Union ,
WT/DS460/R and Add.1 (EU Panel Report), for the reasons set out in this Report:
a. with respect to the Panel's findings under Articles 2.2.1 and 2.2.2 of the Anti-Dumping
Agreement, the Appellate Body:
i. upholds the Panel's findings, in paragraphs 7.49 and 7.51 of the EU Panel Report,
that the European Union's panel request complies with the requirement in Article 6.2
of the DSU to provide a brief summary of the legal basis of the complaint sufficient
to present the problem clearly in respect of the European Union's claims under
Articles 2.2.1 and 2.2.2 of the Anti-Dumping Agreement; and that these claims were
thus within the Panel's terms of reference;
ii. finds that the Panel did not err in its interpretation and application of Article 2.2.2 of
the Anti-Dumping Agreement;
iii. finds that the Panel did not act inconsistently with Articles 11 and 12.7 of the DSU
and Article 17.6(i) of the Anti-Dumping Agreement; and consequently
iv. upholds the Panel's finding, in paragraphs 7.66 and 8.6.a. of the EU Panel Report,
that China acted inconsistently with Articl e 2.2.2 of the Anti-Dumping Agreement by
failing to determine an SG&A amount for SMST on the basis of actual data pertaining
to production and sales in the ordinary course of trade of the like product;
b. with respect to the Panel's findings under Article 6.7 and paragraph 7 of Annex I to the
Anti-Dumping Agreement, the Appellate Body upholds the Panel's finding, in
paragraphs 7.101 and 8.6.c. of the EU Panel Report, that China acted inconsistently with
Article 6.7 and paragraph 7 of Annex I by rejecting SMST's request for rectification only
on the basis that it was not provided prior to verification;
c. with respect to the Panel's findings under Article 6.5 of the Anti-Dumping Agreement,
the Appellate Body:
i. finds that the Panel did not err in its interpretation and application of Article 6.5 of
the Anti-Dumping Agreement;
ii. finds that the Panel did not act inconsistently with Article 11 of the DSU and
Article 17.6(i) of the Anti-Dumping Agreement; and consequently
iii. upholds the Panel's finding, in paragraphs 7.290, 7.297-7.303, and 8.6.e. of the
EU Panel Report, that China acted inconsistently with Article 6.5 of the Anti-Dumping
Agreement because MOFCOM permitted the fu ll text of the reports contained in
appendix V and appendix VIII to the petition, appendix 59 to the petitioners'
supplemental evidence of 1 March 2012, an d the appendix to the petitioners'
supplemental evidence of 29 March 2012 to remain confidential without objectively
assessing the petitioners' showing of "good cause";
d. with respect to the Panel's findings under Article 6.9 of the Anti-Dumping Agreement,
the Appellate Body:
i. finds that the Panel erred in its interpretation and application of Article 6.9 of the
Anti-Dumping Agreement; and consequently reverses the Panel's findings, in
paragraphs 7.235, 7.236, and 8.7.d.i. of the EU Panel Report, rejecting the
European Union's claim that China acted inconsistently with Article 6.9 of the
Anti-Dumping Agreement because MOFCOM failed to disclose adequately the
essential facts in connection with the data underlying MOFCOM's determination of
dumping concerning SMST and Tubacex; and

- EU-106 -

ii. completes the legal analysis and finds that China acted inconsistently with Article 6.9
of the Anti-Dumping Agreement because MOFC OM failed to disclose adequately the
essential facts in connection with the data underlying MOFCOM's determination of
dumping concerning SMST and Tubacex;
e. with respect to the Panel's findings under Articles 3.1 and 3.2 of the Anti-Dumping
Agreement, and in connection with MOFCOM's price effects analysis, the Appellate Body:
i. finds that the Panel erred in its interpretation of Article 3.2 of the
Anti-Dumping Agreement in finding that, in its consideration of whether there has
been a significant price undercutting, an investigating authority may simply consider
whether dumped imports sell at lower prices than comparable domestic products;
ii. reverses the Panel's findings, in paragraphs 7.130, 7.144, and 8.7.b.i. of the
EU Panel Report, rejecting the European Union's claim that MOFCOM acted
inconsistently with Articles 3.1 and 3.2 by failing to consider whether Grade C
dumped imports had any price undercutting effect on domestic Grade C products, in
the sense of placing downward pressure on those domestic prices by being sold at
lower prices;
iii. completes the legal analysis and finds that MOFCOM's assessment of whether there
had been a significant price undercutting by Grade C imports, as compared with the
price of domestic Grade C, is inconsistent with Articles 3.1 and 3.2 of the
Anti-Dumping Agreement; and
iv. reverses the Panel's findings, in paragraphs 7.143, 7.144, and 8.7.b.i. of the EU
Panel Report; and finds instead that MOFCOM's assessment of whether there had
been a significant price undercutting by th e dumped imports, as compared with the
prices of the domestic like product, is inconsistent with Articles 3.1 and 3.2 of the
Anti-Dumping Agreement;
f. with respect to the Panel's findings under Articles 3.1 and 3.4 of the
Anti-Dumping Agreement, and in connection with MOFCOM's impact analysis, the
Appellate Body finds that the Panel erred in it s interpretation of Articles 3.1 and 3.4 of
the Anti-Dumping Agreement to the extent it found that the results of the inquiries
under Article 3.2 are not relevant to the impact analysis under Article 3.4; and
consequently reverses the Panel's findings in paragraphs 7.170 and 8.7.b.ii of the
EU Panel Report;
g. with respect to the Panel's finding that China acted inconsistently with Articles 3.1
and 3.5 of the Anti-Dumping Agreement, the Appellate Body:
i. finds that the Panel did not act inconsistently with Article 11 of the DSU by ruling on
a matter that was not before it, or, making the case for the European Union;
ii. upholds the Panel's findings, in paragraphs 7.188, 7.205, and 8.6.d.iii of the
EU Panel Report, that China acted inconsistently with Articles 3.1 and 3.5 of the
Anti-Dumping Agreement because MOFCOM improperly relied on the market share of
dumped imports, and its flawed price effects and impact analyses, in determining a
causal link between dumped imports and material injury to the domestic industry,
and made no finding of cross-grade price effects whereby price undercutting by
Grade B and C imports might be shown to affect the price of domestic Grade A
HP-SSST;
iii. upholds the Panel's finding, in paragraphs 7.204, 7.205, and 8.6.d.iv of the EU Panel
Report, that China acted inconsistently with Articles 3.1 and 3.5 of the
Anti-Dumping Agreement because MOFCOM fa iled to ensure that the injury caused
by the decrease in apparent consumption and the increase in domestic production
capacity was not attributed to the dumped imports; and
WT /DS460/ AB/R
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iv. finds that the Panel did not act inconsistently with Article 11 of the DSU, in
concluding, in paragraph 7.192 of the EU Panel Report, that the European Union had
not advanced independent Article 3.5 claims - other than those concerning
MOFCOM's reliance on market shares and MOFCOM's non-attribution analysis -
concerning MOFCOM's price effects and impact analyses; and
h. with respect to the Panel's designation of business confidential information (BCI) and its
adoption of BCI Procedures, the Appellate Body declares moot and of no legal effect the
Panel's findings and legal reasoning developed in paragraphs 7.21-7.25 and 7.27-7.29 of
the EU Panel Report, and does not find it necessary to make further findings on this
matter in order to resolve the present dispute.
6.2. The Appellate Body recommends that the DSB request China to bring its measures found in
this Report, and in the EU Panel Report as modified by this Report, to be inconsistent with the
Anti-Dumping Agreement and the, GATT 1994, into conformity with its obligations under those
Agreements. .
Signed in the original in Geneva this 25th day of September 2015 by:
TI---~
Ricardo Ramirez-Hernandez
Member