CHINA – COUNTERVAILING AND ANTI-DUMPING DUTIES ON GRAIN ORIENTED FLAT-ROLLED ELECTRICAL STEEL FROM THE UNITED STATES
Document: Notification of an Appeal by China under Article 16.4 and Article 17 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), and under Rule 20(1) of the Working Procedures for Appellate Review
Date: 23 July 2012
Document codes: WT/DS414/5
Complainant: U.S.
Respondent: China
Third parties: Argentina, EU, Honduras, India, Japan, South Korea, Saudi Arabia, Vietnam, Russia
Dispute stage: Implementation & Compliance
Agreements cited: Art. VI  GATT 1994Art. 1  Anti-dumpingArt. 10, 11.2, 11.3, 12.7, 12.8, 22.3, 12.7, 12.8, 22.3, 22.5, 15.1, 15.2  Subsidies and Countervailing Measures (SCM)Art. 6.9, 12.2.2, 6.8, Annex II, 6.4, 6.5.1, 3.1, 3.2  Anti-dumping

CHINA – COUNTERVAILING AND ANTI-DUMPING DUTIES ON GRAIN ORIENTED
FLAT-ROLLED ELECTRICAL STEEL FROM THE UNITED STATES

Notification of an Appeal by China
under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 20(1) of the Working Procedures for Appellate Review

 The following notification, dated 20 July 2012, from the Delegation of the People's Republic
of China, is being circulated to Members.

Governing the Settlement of Disputes ("DSU") and Rule 20 of the Working Procedures for Appellate
Review, the People's Republic of China hereby notifies the Dispute Settlement Body of its decision to
appeal to the Appellate Body certain issues of law and legal interpretation covered in the Panel Report
in (WT/DS414) ("Panel Report"). Pursuant to Rule 20(1) of the Working
Procedures for Appellate Review , China is simultaneously filing this Notice of Appeal with the
Appellate Body Secretariat.
2. The measures at issue in this dispute impos ed countervailing duties and anti-dumping duties
on grain oriented flat-rolled electrical steel ("GOES") from the United States. An application for the
initiation of an anti-dumping and countervailing dut y investigation was filed by Chinese petitioners,
alleging the existence of countervailable subsidies and dumping margins that caused or threatened to
cause injury to the domestic Chin ese industry. The Ministry of Commerce for the People's Republic
of China ("MOFCOM") issued an affirmative fina l determination in each of these investigations.
MOFCOM calculated ad valorem subsidy rates of 11.7% and 12% for the respondent companies, and
dumping margins of 7.8% and 19.9%. Furthermore, MOFCOM determined that the domestic industry
was suffering from material injury , and that the injury was caused by the dumped imports of GOES
from Russia and the dumped and subsidized imports of GOES from the United States. MOFCOM
made these determinations in its final determination, Final Determination [2010] No. 21 (10 April
2010).
3. The issues that China raises in this appeal rela te to the Panel's findi ngs and conclusions in
respect of the consistency of the challenged me asures with the Anti-Dumping Agreement and the
Agreement on Subsidies and Countervailing Measures ("SCM Agreement").
4. For the reasons stated below, and as will be deve loped in its submissions and oral statements
to the Appellate Body, China appeals the following e rrors of law and legal in terpretation contained in
the Panel Report and requests the Appellate Body to reverse or modify th e related findings and

conclusions of the Panel. In doing so, China mak es five specific claims, delineated below and to be
detailed in its submissions to the Appellate Body.
1
5. First, China seeks review by the Appellate Body of the Panel's interpretation of Article 3.2 of
the Anti-Dumping Agreement and Article 15.2 of the SCM Agreement as it relates to MOFCOM's
discussion of the existence of adverse price effects. In particular, the Panel erred in interpreting the
phrase "the effect of" from Article 3.2 of the Anti-Dumping Agreement and Article 15.2 of the
SCM Agreement as meaning that an authority must demonstrate that adverse price effects were
caused by dumped or subsidized imports.
2 In doing so, the Panel did not consider the text, context,
and object and purpose of those provisions and those agreements.3
6. Second, China seeks review by the Appellate Body of the Panel's application of Article 3.2 of
the Anti-Dumping Agreement and Article 15.2 of the SCM Agreement as it relates to MOFCOM's
final determinations with respect to price effects. 4 The Panel's application of the legal standard erred
in several fundamental aspects.5 The Panel's errors of law and legal application include:
(a) The Panel erred in interpreting MOFCOM's fi nal determinations in a manner that caused
the Panel to apply the obligations of Article 3.2 and Article 15.2 to facts not found by
MOFCOM. Rather than apply the legal standa rd to MOFCOM's final determinations as
written, the Panel examined findings never made by the authority and instead ignored or
dismissed key factors that MOFCOM had discussed in its determinations.
6

(b) The Panel erred in requiring specific methodologies to satisfy the obligations of
Article 3.2 and Article 15.2. 7 Instead of deferring to the discretion of the authority when
considering price effects, the Panel impos ed several methodological requirements for
evaluating price effects that do not exist in the text of the agreements and were not raised
by the parties to the underlying investigation.

7. Third, China seeks review by the Appellate Body under Article 11 of the DSU of how the
Panel proceeded in this dispute. The Panel acted inconsistently with Article 11 of the DSU in
conducting its analysis of price depression and pr ice suppression by failing to conduct an objective
assessment of the matter. Specifically, the Panel misinterpreted a fundamental MOFCOM finding of
fact, the result of which caused the Panel to fi nd MOFCOM's price depression and price suppression
findings inconsistent with Article 3.2 and 15.2.
8 In doing so, the Panel also erred in failing to
consider the totality of the evidence. The Panel a pproached individual pieces of evidence in isolation
instead of addressing the ways in which MOFCOM's evidence interrelated. 9 Ultimately, the Panel
erred in failing to focus on the MOFCOM decision as written. The Panel went beyond the rationale
contained in the determination itself and relied upon the interpretation advocated by the United States
and the Panel's own new price effects analysis.10

1Pursuant to Rule 20(2)(d)(iii) of the Working Procedures for Appellate Review this Notice of Appeal
includes citations to the paragraphs of the Panel Report containing the alleged errors. These citations, however,
do not prejudice to the ability of China to refer to other paragraphs of the Panel Report in its appeal.
2Panel Report, para. 7.520.
3Ibid. paras. 7.519-7.522, 8.1(f).
4Ibid. paras. 7.536, 8.1(f).
5Ibid. paras. 7.523-7.536.
6Ibid.
7Ibid. paras. 7.528-7.530.
8Ibid. para. 7.542.
9Panel Report, paras. 7.523-7.543.
10Ibid.

8. Fourth, China seeks review by the Appellate Body of the Panel's finding that China acted
inconsistently with its obligations under Article 6.9 of the Anti-Du mping Agreement and Article 12.8
of the SCM Agreement regarding the disclosure of essential facts relating to MOFCOM's price effects
analysis.11 The Panel's finding rested entirely on its e rroneous understanding of the legal obligations
of Article 3.2 of the Anti-Dumping Agreem ent and Article 15.2 of the SCM Agreement. 12 The Panel
adopted a misguided understanding of "essential facts" 13 because the Panel misunderstood the
underlying obligations at issue.
9. Fifth, China seeks review by the Appellate Body of the Panel's finding that China acted
inconsistently with its obliga tions under Article 12.2.2 of the Anti-Dumping Agreement and
Article 22.5 of the SCM Agreement regarding the pu blic notice and explanation of MOFCOM's price
effects analysis. 14 As with China's fourth claim, this Panel finding rested entirely on the Panel's
erroneous understanding of the lega l obligations of Article 3.2 of the Anti-Dumping Agreement and
Article 15.2 of the SCM Agreement. 15 In light of a proper inte rpretation of Article 3.2 and
Article 15.2, MOFCOM adequately provided public notice of its findings regarding the existence of
price depression and price suppression.
10. China respectfully requests that the Appellate Body reverse the findi ngs and conclusions of
the Panel that are based on the errors of law and legal interpretation identified above.

11Ibid. paras. 7.575, 8.1(f).
12Ibid. paras. 7.573-7.574.
13Ibid. para. 7.575.
14Ibid. paras. 7.592, 8.1(f).
15Ibid. paras. 7.591-7.592.