Document: WT/DS399/R Page B-1 ANNEX B EXECUTIVE SUMMARIES OF THIRD PARTIES' WRITTEN SUBMISSIONS Contents Page Annex B-1 Executive Summary of the Third Party Written Submission of the European Union  B-2 Annex B-2 Executive Summary of the Third Party Written Submission of
Document codes: WT/DS399/R
Complainant: China
Respondent: U.S.
Third parties: EU, Japan, Taiwan, Turkey, Vietnam
Dispute stage: Appellate Body
Agreements cited: Art. 16.1, 16.3, 16.4, 16.6  Protocol of AccessionArt. I:1, II, XIX  GATT 1994  Safeguards

ANNEX B

EXECUTIVE SUMMARIES OF THIRD PARTIES'
WRITTEN SUBMISSIONS

Contents Page
Annex B-1 Executive Summary of the Third Party Written Submission of the
European Union B-2
Annex B-2 Executive Summary of the Third Party Written Submission of
Japan B-4

ANNEX B-1

EXECUTIVE SUMMARY OF THE THIRD PARTY WRITTEN
SUBMISSION OF THE EUROPEAN UNION

1. The European Union intervenes in this dispute because of its interest in the correct
interpretation of the Transitional Product-Specific Safeguard Mechanism (the "TPSSM") laid down in
Article 16 of the Protocol on Accession of the People's Republic of China (the "Protocol").
2. The present dispute raises complex factual issues on which the European Union is not in a
position to comment. The European Union will not, therefore, express any views on the compatibility
of the measure in dispute with the requirements of Article 16 of the Protocol.
3. China's First Written Submission stresses certa in textual differences between the TPSSM, on
the one hand, and GATT Article XIX and the AS, on th e other. China's analysis, however, fails to
consider the most important differences.
4. First, China glosses over the crucial fact that, unlike GATT Article XIX, the TPSSM does not
provide that the increase of imports must be the r esult of "unforeseen developments". Furthermore,
China also disregards that, consistent with the omission of that circumstance, Article 16 of the
Protocol does not, unlike GATT Article XIX and the AS, characterise the measures taken pursuant to
the TPSSM as "emergency actions".
5. Second, the TPSSM lays down a different standard of injury. GATT Article XIX and the AS
require that the increase in imports must be such as to cause " serious injury" or threat thereof. In
contrast, under the TPSSM, it is enough if the increase in imports causes " material injury" or threat
thereof. The Appellate Body has observed "the word 'serious' connotes a much higher standard of
injury than the word 'material'".
6. Third, while the TPSSM uses similar words as the AS and GATT Article XIX in order to
describe the requirement of increased imports ("being imported […] in such increased quantities"), the
Appellate Body has underlined that those terms must be interpreted in the specific context in which
they appear. In the case of the AS and GATT Article XIX, that context includes the circumstance that
the increased imports must be the result of "unf oreseen developments", as well as the condition that
they must cause "serious injury". Relying on tho se two contextual elements, the Appellate Body has
concluded that the increase in imports must be "recent" and "sudden". In the TPSSM the terms "being
imported […] in such increased quantities" appear in a very different context. In view of these
contextual differences, the increase in imports required under the TPSSM can be, to paraphrase the
Appellate Body, less recent, less sudden, less sh arp and less significant than that required under
GATT Article XIX and the AS.
7. Last, it is worth noting that Article 16.6 of the Protocol allows China to suspend the
application of substantially equi valent concessions or obligations under the GATT to the trade of a
Member applying a safeguard measure on the basis of a relative increase in the level of imports only
if such a measure remains in effect more than tw o years. In contrast, GATT Article XIX and the AS
allow for the immediate adoption of suspension of concessions in the same situation.
8. When the minor textual differences invoked by China are considered in the light of the
fundamental differences discussed above, it becomes clear that the former do not have the
implications alleged by China.

9. If the TPSSM uses the term "rapidly" it is precisely because, due to the contextual differences
discussed above, there is no requirement that the in crease be "sudden", or at least as "sudden" as
under GATT Article XIX and the AS.
10. Despite the minor grammatical differences highlighted by China, the phrase "imports […] are
increasing" has the same meaning as the phrase "bei ng imported […] in such increased quantities", as
already interpreted by the Appellate Body.
11. Although GATT Article XIX and the AS do not expr essly require that increased imports be a
"significant" cause of injury, the Appellate Body h as clarified that there must be a "genuine and
substantial relationship of cause and effect". On the basis of any of the ordinary meanings of those
terms, China would be wrong in arguing that increas ed imports must be a less "important" cause of
injury under GATT Article XIX and the AS than under the TPSSM. Indeed, some of the ordinary
meanings strongly suggest that, if anything, unde r GATT Article XIX and the AS increased imports
must be an even more "important" cause of injury.
12. Finally, China's restrictive interpretation of the TPSSM finds no support in the "object and
purpose" of the Protocol. The Protocol may "impose obligations on China that are not imposed on
other Members under the WTO Agreement, or are stri cter than those applicab le to other Members".
The TPSSM is one such obligation. Furthermore, th e Protocol constitutes a single 'package' of rights
and obligations. The obligations imposed upon Chin a by the TPSSM have their counterpart in other
provisions of the Protocol conferring rights on Chin a, including provisions that accord a transitional
period to China for implementing certain obligations.

ANNEX B-2

EXECUTIVE SUMMARY OF THE THIRD PARTY
WRITTEN SUBMISSION OF JAPAN

I. INTRODUCTION

1. In this third party submission, Japan would like to present its views on systemic aspects of the
following issues: (a) reasoned and adequate explan ation of importing Members' decision to impose a
transitional safeguard measure; (b) implication of the Agreement on Safeguards and the Article XIX
of the General Agreement on Ta riffs and Trade 1994 (the "GATT"); (c) the substantive obligation to
determine the existence of market disruption; (d) to the extent necessary to prevent or remedy market
disruption; and (e) period of time as may be necessary to prevent or remedy market disruption.

II. DISCUSSION

A. REASONED AND ADEQUATE EXPLANATION OF IMPORTING MEMBERS'
DECISION TO IMPOSE A TRANSITIONAL SAFEGUARD MEASURE

2. Article 11 of the Understanding on Rules and Procedures Governing the Settlement of
Dispute (the " DSU") sets forth the standard of review of the Panel that it "should make an objective
assessment of the matter before it, including an obj ective assessment of the facts of the case and the
applicability of and conformity with the relevant covered agreements."

3. As the Appellate Body stated "an 'objectiv e assessment' under Article 11 of the DSU must be
understood in the light of the obligations of the pa rticular covered agreement at issue in order to
derive the more specific contours of the appropriate standard of review."
1 The covered agreement in
this case is the Protocol.

4. In the context of Agreement on Safeguards , the Appellate Body clarified that the standard of
review of the panel in connection with the specific obligation dictates the actions that an investigating
authority must have taken in its safeguard inves tigation. The Appellate Body found that the Panel
was obliged to assess whether the comp etent authorities had examined all the relevant facts and had
provided a reasoned explanation of how the facts supported their determination.2

5. The rationale under the Agreement on Safeguards , together taking account of case laws
developed under the Agreement on Subsidies and Countervailing Measures and the Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 , would provide a
good framework for this Panel to consider the Member's obligations derived from the Article 11 of the
DSU and specific obligation under Section 16 of the Protocol. The "determination" requirement is
significant in clarifying the importing Member's obligation. Paragraph 16.4 of the Protocol obliges
the importing Member to "determin[e]
" if market disruption exists by reference to the definition of
market disruption that imports of an article are increasing rapidly so as to be a significant cause of
material injury and to "consider objective factors , including the volume of imports, the effect of
imports on prices for like or directly competitive ar ticles, and the effect of such imports on the
domestic industry".3

1 See Appellate Body Report, United States – Countervailing Duty Investigation on DRAMS, para. 184.
2 See Appellate Body Report, Argentina – Footwear (EC), para. 121 (emphasis added).
3 The second sentence of paragraph 16.4 of the Protocol.

6. Paragraphs 16.1, 16.3 and 16.6 do not exp licitly provide that the importing Member must
"determine" particular issues. Even if a provision does not set forth a specific obligation to
"determine", the Appellate Body has explaine d that a general obligation under such provision
nevertheless obliges the Member to provide a reas oned and adequate explanation in its notice to
impose a measure through the context of other provi sions and stated, "Article XIX of GATT and the
Safeguards Agreement must a fortiori be read as representing an inseparable package of rights and
disciplines which have to be considered in conjunction."
4 Since, these provisions are an "inseparable
package of rights and disciplines" to which the importing Member is entitled and to which it is
obliged to obey before imposition of a transitional safeguard measure, as explained by the Appellate
Body, these provisions "have to be considered in conjunction."

7. Paragraph 16.5 of the Protocol requires the importing Member to "provide written notice of
the decision to apply a measure, including the reaso ns for such measure and its scope and duration
."5
This procedural requirement clarifies that satisfaction of the underlying substantive requirements must
be explicitly explained in the written notice of the decision to impose a particular transitional
safeguard measure.

B. IMPLICATION OF THE AGREEMENT ON SAFEGUARDS AND THE ARTICLE XIX OF
THE GATT TO THE PROTOCOL

8. In light of the language of Section 1 of the Protocol and the lack of any express cross-
reference to Article XIX of the GATT or the Agreement on Safeguards, substantive rules to impose a
transitional safeguard measure under Section 16 are separate and independent from the provisions of
these WTO Agreements. The text of Section 16, therefore, as required by Article 31.1 of the Vienna
Convention
6, should be interpreted in accordance with th e ordinary meaning of the language in the
context of Section 16 of the Protocol and the light of its object and purpose.

9. The Panel also should note that "these princi ples of interpretation neither require nor condone
the imputation into a treaty of words that are not ther e or the importation into a treaty of concepts that
were not intended."
7 While Japan agrees that prior panel and Appellate Body reports clarifying the
language of Article XIX of the GATT and the Agreement on Safeguards provide a good basis to
consider the language of Section 16 of the Protocol, the Panel should carefully apply their rationale so
as not to incorporate obligations under these WTO Ag reements in accordance with language that does
not exist in Section 16 of the Protocol.

C. THE SUBSTANTIVE OBLIGATION TO DETERMINE THE EXISTENCE OF MARKET
DISRUPTION

1. Paragraph 16.4 of the Protocol: The Requirement of "Imports of an Article Shall be
Found to Be Increasing Rapidly" to Find the Market Disruption

10. China argues that the use of the present tense in paragraph 16.4 emphasizes the need to look
at the most recent period of time for actions under Article 16 of the Protocol.
8 As set forth in
paragraph 16.4, the importing Member must determine that imports "are increasing". The ordinary
meaning of the term "increase" is "make or become greater in size, amount or degree".9 The Protocol,

4 Appellate Body Report, Argentina – Footwear (EC) , para. 81.
5 Emphasis added.
6 See Article 31.1 of the Vienna Convention on the Law of Treaties.
7 Appellate Body Report, India – Patent (US), para. 45.
9 Concise Oxford English Dictionary, tenth edition, revised, p. 718.

however, does not set forth any particular methodol ogy to determine whether imports are becoming
greater.

11. In the context of the Agreement on Safeguards, the Appellate Body found that "the competent
authorities are required to consider the trends in imports over the period of investigation."
10 T h e
panel in US – Line Pipe drew conclusion based on the following considerations: first, the Agreement
contains no specific rules as to the length of the peri od of investigation; second, the period selected by
the authority allows it to focus on the recent imports; and third, the period selected by the authority is
sufficiently long to allow conclusions to be dr awn regarding the existence of increased imports. 11
This finding may give guidance to this Panel in reviewing the appropriateness of such period of
investigation.

12. China also argues that "The increase cannot be in the past."
12 I t m i g h t b e i d e a l i f t h e
importing Member could base its determination as of the time of imposition, but the nature of the
determination inherently prevents the importing Member from doing so. The Member necessarily
relies on import data for a recent past period, as re cognised by the Appellate Body and panels in the
context of anti-dumping and countervailing duty investigations.13

13. With respect to the term "rapidly," the ordina ry meaning is "happening in a short time or at
great speed".
14 The phrase "increasing rapidly" would mean that the increase should have happened
either over a short period of time or at a sp eed greater than the ordinary speed of increase. No further
guidance was provided in the terms or context of the Protocol. Accordingly, the importing Member
has certain discretion to choose a methodology to assess whether the imports are increasing rapidly.

2. Paragraph 16.4 of the Protocol: A Significant Cause of Material Injury

14. As clarified in the panel , "significant" means something more than just a nominal or marginal
cause
 of the material injury. 15 The use of the article "a" in "a significant cause" in paragraph 16.4
suggests that material injury does not have to be caused solely by the imports of Chinese product. It
would be sufficient to find the market disruption by im ports if they are one of various other factors,
which as a whole, cause the material injury.

15. In the context of the Agreement on Safeguards , the Appellate Body stated that "the language
in the first sentence of Article 4.2(b) does not suggest that increased imports be the sole cause of the
serious injury... Article 4.2(b), as a whole, suggests that "the causal link" between increased imports
and serious injury may exist, even though other factors are also contributing… ".
16 Considering the
similarity of the term "cause" in paragraph 16.4 of the Protocol to the term "causal link" in the first
sentence of Article 4.2(b) of the Agreement on Safeguards , the above-mentioned findings by the
Appellate Body may provide a good basis in considering paragraph 16.4 of the Protocol.

10 Appellate Body Report, Argentina – Footwear (EC), para. 129.
11 See Panel Report, US – Line Pipe, para. 7.201.
13 See Panel Report, Mexico – Anti-Dumping Measures on Rice , para. 7.58; Appellate Body Report,
Mexico – Anti-Dumping Measures on Rice , para. 166; Panel Report, Mexico – Steel Pipes and Tubes,
14 Concise Oxford English Dictionary, tenth edition, revised, p. 1187.
15 See Panel Report, EC – Countervailing Measures on DRAM Chips, para. 7.307.
16 Appellate Body Report, US – Wheat Gluten, para. 67 (emphasis in original).

D. PARAGRAPH 16.3 OF THE PROTOCOL: TO THE EXTENT NECESSARY TO
PREVENT OR REMEDY MARKET DISRUPTION

16. Paragraph 16.3 of the Protocol provides that the measure must be "necessary" and may not
exceed the "extent" to prevent or remedy such ma rket disruption and such necessity and such extent
are determined by "such market disruption". To justify a transitional safeguard measure, the
importing Member must analyze the factors creating market disruption ((i) imports of Chinese
products, which are increasing rapidly; (ii) the material injury to the domestic industry; and (iii)
causal link between these imports and the injury) an d the measure may not extend beyond the extent
to make such factors cease to exist or be prevented from recurrence.

17. Prior findings in the context of Agreement on Safeguards would suggest that the importing
Member would have been required to provide a reasoned and adequate explanation that the
transitional safeguard measure addressed the above -mentioned factors, and it would not exceed the
extent to make such factor cease to exist or being prevented from recurrence.

18. It should be noted that the rationale of A ppellate Body reports on the lack of a general
procedural obligation to demonstrate compliance with Article 5.1 of the Agreement on Safeguards
would not apply to paragraph 16.3 of the Protocol. Unlike Article 5.1 of the Agreement on
Safeguards, the Protocol does not have any exceptions or specific provisions and thus , the procedural
obligation to provide "the reasons for such measure and its scope" applies to all transitional safeguard
measures.

E. PARAGRAPH 16.6 OF PROTOCOL: ONLY FOR SUCH PERIOD OF TIME AS MAY BE
NECESSARY TO PREVENT OR REMEDY THE MARKET DISRUPTION

19. Paragraph 16.6 differs from paragraph 16.3 by providing "as may be necessary" instead of
"(as) necessary". The term "may" is the word "expressing possibility."
17 The words "may be"
therefore provide that the required certainty of the necessity analysis of a transitional safeguard
measure with respect to its period of time to impose would be less than the extent of the measure in
paragraph 16.3. It would be sufficient to show that such period would possibly be needed.

20. As the Protocol does not set forth any particular methodologies on how the importing
Member should examine the appropriate period of the time to impose the transitional safeguard
measure, the importing Member has the discretion. It is required, however, to provide the reasons for
the "duration" in its written notice of the decision, according to paragraph 16.5.

III. CONCLUSION

21. Japan respectfully requests the Panel to examin e carefully the facts presented by the parties to
this dispute in light of Japan's arguments above to ensure the fair and objective application of the
provisions of the Protocol.

17 Concise Oxford English Dictionary, tenth edition, revised, p. 881.