Document: WT/DS397/R Page F-1 ANNEX F ORAL STATEMENTS OF THE PARTIES AT THE SECOND SUBSTANTIVE MEETING OF THE PANEL OR EXECUTIVE SUMMARIES THEREOF Contents Page Annex F-1 Executive Summary of the Op ening Statement of China at the Second Meeting of the Panel F-2
Document codes: WT/DS397/R
Complainant: China
Respondent: EU
Third parties: Brazil, Canada, Chile, Colombia, India, Japan, Norway, Taiwan, Thailand, Turkey, U.S.
Dispute stage: Implementation & Compliance
Agreements cited: Art. 6, 9, 5, 2, 3, 4  Anti-dumpingArt. I, X:3(a), VI:1  GATT 1994Art. XVI:4  Agreement Establishing the World Trade Organization

ANNEX F

ORAL STATEMENTS OF THE PARTIES AT THE SECOND
SUBSTANTIVE MEETING OF THE PANEL OR
EXECUTIVE SUMMARIES THEREOF

Contents Page
Annex F-1 Executive Summary of the Op ening Statement of China at the
Second Meeting of the Panel F-2
Annex F-2 Executive Summary of the Opening Statement of the
European Union at the Second Meeting of the Panel F-10
Annex F-3 Closing Statement of China at the Second Meeting of the Panel F-19
Annex F-4 Closing Statement of the European Union at the Second Meeting of
the Panel F-20

ANNEX F-1

EXECUTIVE SUMMARY OF THE OPENING STATEMENT
OF CHINA AT THE SECOND MEETING OF THE PANEL

I. CLAIMS CONCERNING ARTICLE 9(5) OF COUNCIL REGULATION (EC)
No. 384/96 OF 22 DECEMBER 1995 ON PROTECTION AGAINST DUMPED
IMPORTS FROM COUNTRIES NOT MEMBERS OF THE EC, AS CODIFIED AND
REPLACED BY COUNCIL REGULATION (EC) No. 1225/2009

1. Procedural arguments raised by the EU

1. The EU's first procedural claim, namely that the Panel Request failed to meet the Article 6.2
requirement to provide a brief summary of the lega l basis of the complaint sufficient to present the
problem clearly with respect to its claims relating to Articles 6.10, 9.3 and 9.4 of the AD Agreement
and Article X:3(a) of the GATT 1994, confuses the requirements of Article 6.2 which are merely
procedural with the analysis of the content of the measure at issue which is substantive. The same
comment applies to the EU's second procedural objection, namely that China sought to incorporate
issues dealing with the calculation and determinati on of individual margins within the scope of the
measure at issue while these issues are not covered Article 9(5) of the Basic AD Regulation which is
the measure identified in the Panel Request.

2. The EU's third procedural argument, namely that the Panel should refrain from examining
Article 9(5) of Council Regulation No. 1225/2009 since this measure is outside the Panel's terms of
reference, should be rejected for at least two reaso ns. First, if China's Panel Request covers the
amendments to Council Regulation (EC) No. 384/96, it a fortiori and necessarily covers a subsequent
measure which merely codifies Council Regulation No. 384/96 as amended into one consolidated text.
Second, since Article 9(5) of Council Regulation (EC) No 384/96 as amended is identical in its
content to Article 9(5) of Council Regulation (EC) No. 1225/2009, the latter is necessarily within the
Panel's terms of reference since both measures are "in essence" the same.

2. Substantive Issues

a) The "scope" or "content" of Article 9(5) of the Basic AD Regulation

3. The EU claims that the only issue which results from [Article 9(5)] is, strictu senso , the
imposition of anti-dumping duties on a country-wide basis or on an individual basis and that
Article 9(5) does not deal with the issue of the calculation or determination of individual dumping
margins. Such a restrictive interpretation of the scope of Article 9(5) is manifestly unjustified in
particular when Article 9(5) of the Basic AD Regula tion is seen in the context of the other provisions
of the Basic AD Regulation. None of the provisions quoted by the EU, namely Articles 2, 9(4)
and 9(6) of the Basic AD Regulation, deals with the specific issue of whether the dumping margin for
exporting producers from non-market economy countries is to be determined on an individual or a
country-wide basis. Why? Because this issue is di rectly dealt with by Article 9(5) of the Basic
AD Regulation. This is in fact acknowledged by the EU itself when stating that "[T]he EU authorities
do not calculate individual dumping margins for non-IT suppliers".

4. Finally, the EU erroneously submits th at "[w]hat China pretends […] is that any
consequences from the determination provided by Artic le 9(5) of Council Regulation No 384/96
should be included in the measure at issue". The EU appears to submit that the measure at issue could
only be challenged with respect to one single provi sion of the AD Agreement. A measure, even "as

such", may be found to violate several distinct provisions of the AD Agreement. China is not
challenging issues which are not covered by Article 9(5) of the Basic AD Regulation.

b) Articles 6.10, 9.2 and 9.4 and China's Protocol of Accession

5. The EU claims that Article 6.10 first sentence does not contain a strict obligation requiring
investigating authorities to always determine dumpi ng margins on an individual basis but merely a
"preference" that, by definition (since it is not an obligation), investigating authorities may disregard,
whenever they wish. The EU furt her claims that Article 6.10 second sentence is not an exception to
the rule included in Article 6.10 first sentence but merely includes an "affirmative statement relating
to (i) the conditions for sampling and (ii) the compos ition of the sample". The EU's interpretation is
manifestly flawed: it is contrary to the text of Article 6.10, its structure and context as well as its
negotiating history.

6. The EU bases its view that Article 6.10 firs t sentence only contains a preference on the words
"as a rule". The EU, however, manifestly ignor es the word "shall" which clearly establishes the
mandatory nature of the rule. The terms "as a rule " rather than relaxing the obligation of the first
sentence further strengthens such obligation. The words "as a rule" are necessary as they create the
link between the obligation contained in Article 6. 10 first sentence which constitutes the rule and the
exception to that rule included in Article 6.10 second sentence.

7. The EU argues that the negotiating history of Article 6.10 confirms its reading of the
first sentence. A close examination of the evolut ion of the texts in the successive drafts, however,
clearly shows the firm intention of the drafters to establish a strict obligation for the investigating
authorities to determine an individual dumping margin since even in those cases where sampling is
used, such an individual dumping margin shall be determined for those companies not included in the
sample which provide the necessary information in time except only "where the number of exporters
or producers is so large that individual examina tions would be unduly burde nsome to the authorities
and prevent the timely completion of the investigation".

8. The EU's interpretation is also contrary to the structure of Article 6.10. That the sampling
scenario of the second sentence constitutes the excep tion to the rule included in Article 6.10
first sentence is obvious. Article 6.10 second sentence refers to cases where the number of exporters,
producers, importers or types of products invol ved is so large as to make impracticable " such a
determination" – that is the " determination" of an individual margin of dumping for "each known
exporter or producer concerned" pursuant to Article 6.10 first sentence. Moreover, even in those
cases where sampling is used, Article 6.10.2 re quires investigating authorities to determine an
individual margin of dumping for those exporters or producers not included in the sample but which
submit the necessary information in time. Thus, a nd as confirmed by panels and the Appellate Body
in various disputes, Article 6.10 is structured in the manner of a rule / only exception.

9. In support of its argumen t, the EU provides several ex amples allegedly presenting cases in
which "the preference for the individual determ ination of dumping margins does not need to be
followed". None of them is, however, relevant. Th e examples provided by the EU merely reflect its
own practice and cannot as such legitimize the EU's interpretation. Furthermore, the legality of
the EU's practice appears to be dubious.

10. Furthermore, the WTO case-law to which the EU refers, namely Korea – Certain Paper and
EC – Salmon (Norway) does not support the EU's contention that there are situations other than
sampling where Article 6.10 first sentence does not need to be followed. These Panel Reports merely
clarify the meaning of the term "exporter" and "producer" in Article 6.10 first sentence.

11. Finally, contrary to what the EU submits, Ar ticle 9.2 does not support the view that there are
exceptions to the rule that dumping margins must be determined on an individual basis other than the

sampling scenario. By limiting the exception to the imposition of an individual anti-dumping duty to
those situations where it is impracticable to do so , Article 9.2 supports the view that the rule in
Article 6.10 first sentence is a general obligation having as its sole exception the one set out in
Article 6.10 second sentence.

12. Regarding the application of the reasoning followed by the Panel in Korea – Certain Paper to
Article 9(5) of the Basic AD regulation, it must be pointed out, at the outset, that the Korea – Certain
Paper case is entirely irrelevant in the context of the present dispute. Indeed, the issues examined in
Korea – Certain Paper and in the present dispute are fundamentally different in nature. The most
fundamental difference is that while Korea – Certain Paper deals with the issue of whether different
entities are in a relationship that is close enough to be treated as a single "exporter" or "producer"
within the meaning of Article 6.10 first sentence, th e Article 9(5) test focuses on the relationship of
each identified exporter or producer with the State. The different nature of the two tests is also
demonstrated by the fact that they are app lied sequentially by the EU in its anti-dumping
investigations.

13. Even if the Panel were to consider the Panel Report in Korea – Certain Paper as relevant, it is
obvious that there is no simila rity between the facts in Korea – Certain Paper and the Article 9(5)
test.

14. Finally, it is very important to correct the misleading presentation by the EU of how the
country-wide dumping margin is determined for non -IT exporting producers. Contrary to what
the EU claims, the methodology applied by the EU to determine the country-wide dumping margin in
the case of imports from non-market economy countries is fundamentally different from that applied
by the EU to determine the dumping margin in the case of a group of related companies. In the case
of non-IT exporting producers, the EU does not mere ly examine the information provided by each of
them. Instead, it considers that all co-operating non IT-exporting producers must be treated together
and even assume that all exporting producers whic h do not co-operate are equally non-IT exporting
producers. The investigating authorities only base the dumping margin on the information provided
by the co-operating non-IT exporting producers if th e latter represent more than 80% of all exports
not accounted for by MET or IT suppliers. This is a very high threshold which is not met in most
cases.

15. Regarding Article 9.2
, the arguments put forward by the EU must be rejected. The meaning
of the term "impracticable" put forward by the EU as "ineffective, not feasible or not suited for being
used for a particular purpose" is not consistent with the ordinary meaning of that term. Furthermore,
Article 8.3 of the AD Agreement supports China's position.

16. The EU repeatedly refers to the alleged n eed to identify "the actual source of the price
discrimination" as a justification for imposing a country-wide duty in the case of imports from a non-
market economy country. The EU, however, fails to explain or define this vague concept. China
notes that this concept does not have any legal basis a nd that it cannot be found in either Article VI of
GATT 1994 or in the AD Agreement. As underlin ed by the Appellate Body, the "notion of
dumping […] relates to the foreign producer's or exporter's pricing behaviour". Thus, under the
AD Agreement, only producers or exporters which are found to be dumping can be the "actual source
of the price discrimination".

17. China would also like to briefly address Article 9.4
 of the AD Agreement. In the context of
Article 9.4, if even producers not included in th e sample must receive an individual anti-dumping
duty, it logically follows that producers in the samp le are also entitled to receive such an individual
anti-dumping duty. This a fortiori applies to cases where no sampling is used. Thus, this rule, either
directly in cases where sampling is used or as re levant "context" when interpreting Article 9.2,
confirms that the authorities must apply individual anti-dumping duties for exporters or producers.

18. Regarding China's Protocol of Accession , the EU claims that China's recognition by a large
number of WTO Members as a full market economy c ountry is a "concession" made by other parties
in the framework of bilateral negotiations "pr ecisely because China is not yet a market economy
country". This is clearly a distorting reading of the facts. That many WTO Members have
acknowledged that China is a market economy count ry simply confirms that there is no common
"understanding that China is not yet a market economy country".

II. CLAIMS CONCERNING COUNCIL REGULATION (EC) No 91/2009 OF
26 JANUARY 2009 IMPOSING A DEFINI TIVE ANTI-DUMPING DUTY ON
IMPORTS OF CERTAIN IRON AND STEEL FASTENERS FROM CHINA

1. The EU's determination of the domestic industry violated Articles 4.1 and 3.1 of the
AD Agreement

a) The Information Document

19. As a preliminary issue, China would like to address the relevance and status of the
"Information Document". The facts and determina tions in the Information Document are important
and relevant for the Panel to assess the WTO-consis tency of certain parts of the measure that is
challenged. The Information Document is part of the record. China can therefore refer to it as
relevant evidence in support of its claims.

20. As to the status of this "Information Do cument", the EU's claim that the Information
Document "cannot, and should not, be considered as equivalent to a preliminary determination on the
basis of which provisional measures are imposed under Article 7 of the AD Agreement" is in sharp
contradiction with the description of that document in the cover letter which was sent to all interested
parties together with the Information Document. The EU itself even referred in its SWS to the
Information Document as containing its "preliminary determination".

21. In any event, the Information Document is clearly not, as claimed by the EU, a "working
document" and "thus an informal and essentially in ternal preliminary document". The Information
Document has been drafted with a view to actively inform all interested parties about the
investigation. The EU investigating authorities even requested the interested parties to comment on
the Information Document. It seems reasonable to e xpect that a Document which is prepared with a
view to inform all interested parties about the "p reliminary findings" of the investigating authorities
and on which they are invited to comment is "factually and legally correct".

b) By excluding from the definition of the Community industry all producers that did not make
themselves known within 15 days as of the date of publication of the Notice of Initiation,
the EU violated Articles 4.1 and 3.1 of the AD Agreement

22. The EU claims that "it is not so that any producers were "arbitrarily excluded" from the scope
of the domestic industry" and that "[i]t is not co rrect that more producers came forward and were
subsequently excluded". That statement is contradi cted by the evidence on th e record. Indeed, what
the Information Document shows is that the Community industry was first defined on the basis of
the 114 Community producers that had come forwar d and submitted the necessary information. Of
these 114 companies, only the 86 producers supporting the complaint were included in the domestic
industry. Thus, by excluding from the scope of the domestic industry, all producers which did not
come forward within 15 days as of the date of In itiation, the investigating authorities deliberately
excluded numerous producers that they had initiall y taken into account for the purposes of defining
the Community industry.

23. Even assuming that the investigating authoriti es could legitimately limit the definition of the
domestic industry to those producers which came forw ard within a certain ti me limit, limiting the

composition of the domestic industry to those producers that came forward within 15 days was not
appropriate and constitutes a violati on of both Articles 4.1 and 3.1. First, the 15-day period is the
time period given for producers to lodge requests to be included in the sample, while 40 days is the
deadline granted to the parties to make themselves known. Second, the 15-day limit is very short.
Third, the EU incorrectly linked the possibility of being included in the definition of the Community
industry to the willingness to be included in the sample.

c) By excluding the producers that did not support the complaint, the EU violated Articles 4.1
and 3.1 of the AD Agreement

24. The EU submits that 70 EU producers cam e forward during the 15-day period and that
25 were excluded, not because they did not support the investigation but because (i) they did not
produce the product concerned (ii) they did not wish to cooperate or (iii) they refused to provide, or
did not send, an open version of their reply. Chin a notes that this claim is not substantiated by any
evidence.

25. Furthermore, the EU claims that the EU's position "is not, as stated in the question, that "an
investigating authority may define the domestic i ndustry in an anti-dumping investigation by focusing
exclusively on known producers of the like product expressing support for the application "
(emphasis added). This claim is directly contradi cted by the EU's own longstanding practice in anti-
dumping investigations. China refers to various EC anti-dumping cases which show that support to
the complaint is a necessary condition for a dome stic producer to be included in the domestic
industry.

26. As regards the anti-dumping investigation c oncerning fasteners in particular, China would
like to draw the Panel's attention to the following elements. First, the Information Document shows
that all producers that opposed the investigation or that did not express any opinion were excluded
from the scope of the domestic industry. Second, the fact that the EU investigating authorities limited
the domestic industry to those producers that supported the complaint is further demonstrated by the
definition of the Community industry at Recital 114 as "the Community producers that supported the
complaint and fully cooperated in the investigation". Th ird, the EU claims that if producers which
came forward within the 15-day period were excl uded, it is not because they did not support the
initiation of the investigation. However, it is clear from Recital 114 of the Definitive Regulation that,
even if a producer opposing the complaint would ha ve expressed its willingness to be included in the
sample, it would have been excluded from the definiti on of the domestic industry by the very fact that
it did not support the complaint. Fourth, it is fu rther clear from the Notice of Initiation that only
companies supporting the complaint were to be included in the domestic industry from which the
sample would be selected.

d) The domestic industry as defined by the EU does not include domestic producers whose
collective output constitutes a major proportion of the total domestic production

27. The Definitive Regulation (in particular from th e reference in the last sentence of Recital 114
to Articles 4(1) and 5(4) of the Basic AD Regula tion) shows that the EU investigating authorities
never examined the circumstances in the anti- dumping investigation to determine whether the
producers effectively represented a "major proporti on" and limited themselves to examining the
percentage the production of the producers incl uded in the domestic industry represented in
comparison to the total production of the domestic pr oducers. The considerations to which the EU
refers are merely a posteriori rationalizations.

28. The EU claims that "[a]s with any determinati on by the authorities, the interested parties at
the time of the determination may challenge this de termination. They did not do so". The EU
investigating authorities, however, never informed the interested parties about the details of the

domestic industry's determination. The EU never disclosed the iden tity of the producers which were
included in the scope of the domestic industry.

29. Furthermore, it is fundamentally and legally erroneous to claim that a presumption of "major
proportion" exists when the producers constituting the domestic industry toge ther constitute more
than 25%. Such a presumption has no legal basis and is legally incorrect. Moreover, nothing in the
EU practice suggests that this alleged "presumption" is refutable. On the contrary, the inclusion of an
express reference in Article 4(1) of the Basic AD Regulation to Article 5(4) makes the 25 per cent
threshold a legally binding criterion rather than a "presumption".

30. Finally, as explained in China SWS, the speci fic circumstances of this case show that the
producers making up the domestic industry did not represent a "major proportion".

2. The EU's determinations of dumping violated Article 2.4 of the AD Agreement

31. Contrary to what the EU claims, China do es not argue that "simply because the information
was requested to be provided on the basis of a par ticular PCN, any other method would be unfair or
not even-handed".

32. China first submits that having identified the characteristics in the PCN as being relevant for
the purposes of making the fair comparison, the EU should have examined and determined to which
extent these differences affected price comparability a nd by failing to do so, it violated Article 2.4 of
the AD Agreement. Second, China submits that, to the extent the investigating authorities decided not
to make their comparison on the basis of the PCN, they should have informed the Chinese exporting
producers in order to allow them to claim adjustment s for differences in physical characteristics.
Third, China submits that all the PCN characteristics affected price comparability and thus had to be
taken into account by the investigating authorities when making the comparison.

33. The EU is putting forward a legally erroneous interpretation of Article 2.4 when claiming that
it could limit itself to the "two main characteristics referred to by the interested parties in the course of
the investigation", namely the strength class a nd the distinction between standard and special
fasteners. It is first of all incorrect, as a ma tter of fact, to claim that these were the only
two characteristics referred to by the interested par ties during the investigation. It is furthermore
legally erroneous to state that investigating aut horities could limit themselves to those differences
which they consider to be the most important. Moreover, the fact that the PCN mechanism could not
be used in the dumping determination because the Indi an producer did not provide the information in
this manner does not relieve the investigating author ities from their obligation to take account of the
differences reflected in the PCN to ensure that th e comparison made is a fair comparison. Finally,
China notes that the EU does not comment on the sec ond aspect of China's claim which relates to the
absence of adjustments for differences affecting the "quality" of the products being compared.

3. The EU violated Articles 3.1 and 3.2 of the AD Agreement when making the price
undercutting calculations by comparing products which were not comparable

34. The EU claims that it did comply with Artic les 3.1 and 3.2 in view of the fact that (i)
Article 3.2 does not impose the use of any partic ular methodology when making a price undercutting
determination, (ii) does not even require that ad justments be made and (iii), even assuming that any
requirement to make adjustments exists, in this case the comparison was made on the basis of 5 out of
the 6 PCN features.

35. First, it is simply not correct to claim that Ar ticle 3.2 does not require adjustments to be made.
Second, there is ample evidence that the methodol ogy followed by the EU in its price undercutting
analysis is not unbiased and even-handed.

4. The EU violated the procedural requirements imposed by Articles 6 and 12 of the
AD Agreement

a) General Comments

36. First, the EU claims that several of China' s claims concerning procedural deficiencies are
outside the Panel's terms of reference. However, none of these objections is justified. Second,
contrary to what the EU claims, China has subm itted the necessary evidence and legal arguments to
make its case. Third, the EU claims that, pursuant to paragraph 16 of the Panel's working procedures,
"China is barred from presenting new evidence to the Panel except in the specific circumstances
foreseen by the working procedures". More specifi cally, the EU claims that because China did not
submit the MET/IT questionnaire "as evidence in support of its claim", China failed to make a prima
facie case because it did not present "the MET claim form "no later than during the first substantive
meeting"". The EU appears to make a very dange rous confusion between the rules in the Panel's
Working Procedures regarding the timing of the submission of factual evidence and the requirement
for the complainant to make a prima facie case which is not limited in time. As to the very specific
issue of whether the MET/IT Questionnaire whic h was submitted by China as Exhibit CHN-72 is
admissible, China notes that the purpose of the rule in paragraph 16 of the Panel's Working
Procedures is to ensure that the other party has th e time to inspect the relevant evidence and to
comment on it. Being the author of the MET/IT Questionnaire, the EU knows the content of that
document. Furthermore, that document was necessary for purposes of the rebuttal. It is thus plainly
admissible.

b) The EU failed to disclose the identity of th e complainants and supporters thereby violating
Articles 6.5, 6.2 and 6.4 of the AD Agreement

37. China notes that "good cause" for the confiden tial treatment of the complainants' identity has
not been shown. First, the complainants referred to a potential retaliation of a purely hypothetical
nature in the sense that retaliation could but was not likely to happen. Second, the complainants did
not submit any evidence about such "potential retaliation".

c) The EU violated Articles 6.5, 6.2 and 6.4 of the AD Agreement since the non-confidential
versions of the Community producers' questionnaire responses and the questionnaire response
of the producer in the analogue country were largely deficient

38. Regarding the EU's claim that "the alleged deficiencies in the questionnaire response by the
producer in the analogue third country" should be re jected since "China has in any event failed to
provide evidence in accordance and within the d eadlines set out in paragraph 16 of the Panel's
working procedures", China notes that the Indian producer's questionnaire was submitted together
with China's FWS as Exhibit CHN-53.

39. In order to rebut China's claim that the non-confidential questionnaire response of Agrati
 was
largely deficient, the EU refers to a presentation made by interested parties (Exhibit CHN-21) which
was, however made on 10 April 2008 on the sole basis of the information which was provided by
Agrati in the non-confidential version of its sampling form. However, the information provided in the
sampling form is limited to certain injury factors a nd no information for other injury factors has ever
been provided in the deficient non-confidential version of Agrati's questionnaire response.

40. Regarding Fontana Luigi , the EU questions the evidence put forward by China and claims
that China only submitted Fontana Luigi's initial questionnaire. A more complete questionnaire
would have been attached to the cover letter subm itted as Exhibit EU-25. The date of the stamp on
the front page of Exhibit CHN-60 bears, however, the da te of 02.06.08. This is a date later than that
of Fontana Luigi's letter in Exhibit EU-25, namely 30.05.08. China further notes that the EU does not
provide any evidence in support of its claims. Furthe rmore, the fact that the non-confidential version

of Fontana Luigi's sampling form would include info rmation regarding certain injury factors is not
relevant. Indeed, the information provided in the main questionnaire covers many additional injury
factors other than those referred to in the sampling form.

d) The EU violated Article 6.5 of the AD Agreement by disclosing a document entitled
"Assessment of Market Economy Treatment Claims by nine producers in the PRC"

41. First, the EU's claim that "information that was submitted in those claim forms as
confidential […] remained confidential throughout the i nvestigation" is blatantly contrary to the facts
on the record. Indeed, a significant amount of in formation provided on a confidential basis was
reproduced in the document entitled MET assessment a nd thus was not kept confidential as requested
by the exporting producers. Second, regardi ng the labeling "LIMITED" on the top of the MET
Disclosure Document, the EU submits that it refers to its status as an "internal working document".
According to the EU, "the internal working docu ment ceases to be a "Limited" document once it is
sent out to interested parties as an MET Disclos ure Document". This is a rather surprising
explanation. Indeed, as noted in the origin al Questionnaire for MET/IT as well as on the MET
Disclosure Document, the word "limited" means not only that it is a doc ument for internal use only in
the sense that it is protected in accordance with Article 4 of Counc il Regulation (EC) No 1049/2001
regarding public access to the EP, Council and Commission documents, but also that it is a
confidential document pursuant to Article 19 of the Basic AD Regulation and Article 6 of the
AD Agreement.

ANNEX F-2

EXECUTIVE SUMMARY OF THE OPENING STATEMENT OF
THE EUROPEAN UNION AT THE SECOND
MEETING OF THE PANEL

I. CHINA'S "AS SUCH" CLAIM AGAINST ARTICLE 9(5) OF COUNCIL
REGULATION NO 384/96, AS AMENDED

1. China argues that "whether China is a market economy country or not is totally irrelevant for
this dispute". The European Unio n strongly disagrees. If anything th e uncontested fact that China is
a non-market economy country is the only reason we ar e here today discussing this "as such" claim.
The international rules disciplining the impositi on of anti-dumping measures primarily aim at
addressing the actual source of price discrimination, i.e., a supplier which introduces a product into
the commerce of another country at less than its normal value. This presupposes the existence of
market economy conditions, including a degree of in dependency of the supplie r concerned in setting
its prices, terms and conditions in the ordinary cour se of trade. If that is the case, the supplier's
dumping behaviour and the product in question can be subject to anti-dumping duties in accordance
with the Anti-Dumping Agreement. However, in a situation where market economy conditions are
absent, it is by definition difficult to determine th e mere existence of dumping. This was recognised
by the GATT Contracting Parties when introducing the Ad Note to Article VI of the GATT 1947
in 1955; and was further incorporated into Artic le 2.7 of the Anti-Dumping Agreement. Moreover,
where market economy conditions are not present, it is difficult to apply the anti-dumping rules to
address the actual source of price discrimination effectively. Indeed, in a non-market economy
country, the means of production and the economy, in cluding international trade, are under strict
control by the State. All imports from non-market economy countries are therefore considered to
emanate from a single producer, the State. In view of the State's control over international trade, it
would not be relevant to specify exporting compan ies separately since they collectively constituted
one single supplier or exporting entity, i.e., the State. It is the EU's contention that the Anti-Dumping
Agreement (as well as its predecessors) allows for the imposition of anti-dumping duties on a country-
wide basis against imports from non-market economy countries, precisely in order to address the
actual source of price discrimination, i.e., the State.

2. As for the scope of the measure at issue, the European Union has explained in detail that
Article 9(5) of Council Regulation No 384/96 on its face refers strictu sensu to the imposition of anti-
dumping duties. More precisely, Article 9(5) amount s to a threshold question at the beginning of the
investigation: in view of the specific particularities of non-market economy countries, can the
applicant company be considered as a supplier acting independently from the State (in which case
that IT supplier is considered responsible for an y dumping found and its imports are subject to an
individual anti-dumping duty)? Or, is the applicant company controlled by the State (in which case
that non-IT supplier is considered to be a related export branch of the actual producer and the source
of the alleged price discrimination, and its imports are subject to the country-wide duty rate)? China's
contradictory attempts to bring other issues, such as the individual determination of dumping margins
or how the level of duties is established, within the scope of Article 9(5) should be rejected. A
Member cannot identify a specific measure, bring an "as such" claim against it and pretend that any
consequence or subsequent step derived from the dete rmination provided by that measure is part of it;
and definitively not so when other unchallenged provisions deal specifically with those other issues.

3. The European Union has also shown that Ch ina's claims are based on a wrong interpretation
of the covered agreements. Firs t, Article 9.2 of the Anti-Dumpi ng Agreement permits the imposition
of anti-dumping duties on a country-wide basis also in the particular case of imports from non-market
economy countries. Indeed, absent market economy conditions, the State is considered the actual
supplier and the "source" of the alleged price discr imination, and any "amounts" collected from the
State or its export branches (i.e., non-IT suppliers ) are "appropriate". Second, the possibility to
impose anti-dumping duties on a country-wide basis also follows the general principle or preference
contained in Article 6.10 of the Anti-Dumping Agreement to calculate dumping margins on an
individual basis, and confirms that sampling is not the only situation where this preference does not
need to be followed. Third, in any event, th e third sentence of Article 9.2 of the Anti-Dumping
Agreement also permits the imposition of duties on a country-wide basis when there are several
suppliers and it is "impracticable" to specify indivi dual anti-dumping duties per supplier. Regardless
of the dictionary you take, the notion of "impractic able" implies "something which is not feasible in
practice", "something which cannot be done for practical reasons", or something that is not "able to be
effected, accomplished or done". In other words, suppliers cannot be specified by name and duties
cannot be imposed on an individual basis because of "practical" reasons (i.e., it would render those
duties ineffective, not feasible or not suited for being used for a particular purpose, i.e., offsetting or
preventing dumping from the actual supplier, the State). The context of similar terms in other parts of
the Anti-Dumping Agreement and in other covere d agreements (notably the DSU), and other
provisions, such as Article 6.10, together with the object and purpose of the provisions of the Anti-
Dumping Agreement and the Anti-Dumping Agreement as a whole, fully support this conclusion.
The negotiating history of Article 8 of the Ke nnedy Round Anti-Dumping Code, which China omits,
further confirms that the imposition of anti-dum ping duties on a country-wide basis is permitted,
provided that subsequent refunds could be granted.

4. Article 9(5) of Council Regulation No 384/96 mirrors the language of Article 9.2 of the Anti-
Dumping Agreement as far as possible, and establi shes a mechanism, in a situation where market
economy conditions are absent, to allow for the imposition of anti-dumping duties which accurately
addresses the actual source of dumping in each case (i .e., either the independent MET/IT supplier, or
the State and its export branches). Needless to say, if in the context of a request for a refund an
importer can show that the supplier subject to the country-wide duty rate acts independently from the
State, a refund would be granted (to the extent that the dumping margin has been eliminated or
reduced). Article 9(5) is also in line with Chin a's Protocol of Accession, which recognises China as a
non-market economy and provides that, in the absen ce of "market economy c onditions" investigating
authorities may have recourse to "a methodology that is not based on a strict comparison with
domestic prices or costs in China (…) in determin ing price comparability under Article VI of the
GATT 1994 and the Anti Dumping Agreement". A me thodology for the purpose of determining the
existence of dumping which considers the State as the actual producer of the product concerned and
uses information available to compare export prices of the actual producer with an analogue country
normal value is also "a methodology that is not b ased on a strict comparison with domestic prices or
costs in China".

5. China's claim under Article I:1 of the GATT 1994 should also be dismissed. China argues that
a conflict only exists where "obligations" (as opposed to "rights") in the different agreements cannot
be complied with simultaneously. In the EU's view, this interpretation of conflict is very narrow. The
Anti-Dumping Agreement delimits the situations wh ere those measures can be imposed. Since the
decision to impose anti-dumping duties is a "right" granted to the Member concerned, every decision
to do so would amount to a violation of the MFN principle. This cannot be the case. Finally, China
argues that Article 9(5) of Council Regulation No 384/96 discriminates against non-market economy
countries. In this respect, China ignores that th e European Union also applies country-wide anti-
dumping duties on imports from market economy countries in situations where it is impracticable to
specify individual duties; and that there is a s ubstantive difference between imports from market and

non-market economy countries: the role of the State is different. Consequently, to the extent that the
Panel needs to examine this claim, the Panel should reject it in its entirety.

II. ARTICLE 9(5) OF COUNCIL REGULA TION NO 384/96 "AS APPLIED" IN
COUNCIL REGULATION NO 91/2009

6. This claim made with respect to Council Regul ation No 91/2009 is the same as the "as such"
claim made in connection to Article 9(5), and the Pa nel should address it accordingly. In any event,
since all the applicant companies obtained IT in the Fasteners investigation, the European Union
considers that the measure at issue (i.e., Council Regulation No 91/2009) did not cause any
nullification or impairment to China.

III. STANDING OF THE EU DOMESTIC INDUSTRY

7. As regards China's claim on the standing dete rmination, the European Union considers that
this claim is outside the Panel's terms of reference. On substance: China' s claims, in addition to
misstating the EU's argument, seem to be based on a confusion as to the methodology used by the EU
authorities in examining standing in the Fasteners i nvestigation. Contrary to China's assertions, the
EU authorities checked the EU total production figure and verified the support/opposition to the
application before the initiation of the investig ation in accordance with Article 5.4 of the Anti-
Dumping Agreement. China also claims that th e EU producers expressly supporting the application
accounted for less than 25% of total production of the like product produced by the domestic industry.
In this respect, the European Union observes that China confuses the percentage of total production of
the complainants (26.7%) with the percenta ge of domestic producers expressly supporting the
application (37%). China ignores that 37% is not close to 25% and struggles to argue that the
percentage of total production of the complainants (26.7%) is close to 25% by means of several
assertions. The European Union considers that China' s assertions are irrelevant since the figure of
domestic producers expressly supporting the application is 37%.

IV. DEFINITION OF THE DOMESTIC INDUSTRY

8. From China SWS it can be observed that the ma in, if not only, claim that China is actively
pursuing in this context concerns the alleged viola tion of Article 4.1 for the reason of the fact that
the EU authorities imposed a 15 days deadline on domestic producers to come forward and express
their interest in cooperating in the investigation such that they would be part of the "domestic
industry". The mere fact that China's focus is now entirely on this claim is revealing of the weakness
of China's claims in respect of the definition of the domestic industry in general. First, the EU recalls
that this 15 days-claim was not the subject of consul tations between the parties and is thus outside the
terms of reference of the Panel. China cannot deny that this clai m is nowhere to be found in the
Request for Consultations. Even China will acknow ledge that this matter was not discussed in the
course of the consultations. Any finding of the Panel on this matter would exceed the Panel's mandate
and would amount to a legal error. On the merits , China's claim is obviously flawed for the reasons
expressed in previous submissions. The use of a deadline for purposes of defining the domestic
industry is reasonable and acceptable.

9. China's second claim in respect of the domestic industry definition: In previous submissions,
the EU has already explained at length why China' s claim that 27% of production does not constitute
a major proportion of total domestic production in th is case is based on a flawed interpretation of
Article 4.1, and is premised on the erroneous assumpti on that there exists a preference for a definition
based on 100% of domestic production. Much as Ch ina would have liked to see the text worded
differently, it is simply not so that the "major pr oportion" option is available only if there exists a
"practical impossibility" to obtain the requested information from all producers of the like product.
China erroneously seems to sugg est that there existed any oblig ation on the EU authorities to

demonstrate that 27% was a "major proportion" in the specific circumstances of this case. No such
obligation exists. Since the Anti-Dumping Agreemen t does not require an a priori explanation but
merely requires that the substantive obligation is me t, China's claim of a violation in this case must
fail. Third, the EU has explained before that Ch ina's claim that the domestic industry was not defined
in relation to the period of investigation is flawed . China's SWS merely repeats the same erroneous
arguments and fails to rebut the basic fact that the determination of the major proportion was made
based on the last full year of the period of inves tigation for purposes of the injury determination for
which statistics were available. Fourth, in its SW S China has effectively made a new claim that the
EU made an injury determination with respect to a sample of producers that was not representative.
China realised the fundamental weakness of the claim it had actually made and changed its claim
hoping for a better result; but even the limited procedural rules of th e WTO dispute settlement
process do not allow for this type of claim-shopping at these final stages of the proceedings. In any
case, China's claim is flawed, both in respect of the law and in respect of the facts as the sample was
representative of the domestic industry including bo th small and large producers and representing
producers of the various types of products produced. Fi fth, in respect of China's claim relating to the
alleged need to exclude related producers, the EU notes that China has not event attempted to rebut
the essence of the EU's argument.

V. SELECTION OF THE PRODUCT CONCERNED

10. The context of Articles 6.10 and 2.4 and Appe llate Body jurisprudence confirm the text of
Article 2.1: the product concerned may include diffe rent types or models. When defining the product
concerned as "fasteners" and then distinguishing between different models or types (standard and
special) to ensure comparability, the EU authorities compared "apples to apples".

VI. FAIR COMPARISON UNDER ARTICLE 2.4 OF THE ANTI-DUMPING
AGREEMENT

11. The essence of China's claim has now shifted to the requirement to make "adjustments for
differences in physical characteristics affecting pri ce comparability". However, neither in the course
of the proceedings, nor in its FWS or in the SWS has China indicated why certain of these PCN
factors require such adjustments. The erroneous prem ise of China's claim is that since certain factors
are part of the PCN, adjustments are required for each and every one of these factors. That is simply
incorrect as the PCNs are merely a tool for gather ing information. Importantly, Chinese interested
parties presented arguments on the importance of strength class, even though strength was part of
the PCN. China's logic that none of the interested parties argued in favour of adjustments for the PCN
factors because they assumed that th ese factors would in any case be taken care of through the use of
PCN models is thus contradicted by the actual behaviour of Chinese interested parties in the
investigation. In addition, we recall that the ev idence on the record showed that the cost of quality
control on the side of the Indian producer was higher and that therefore an adjustment in favour of the
Chinese interested parties had to be made.

12. In its SWS, China is introducing a number of new, essentially procedural claims that the EU
authorities should have informed the interested parties of the method used for making the comparison.
In addition to the fact that no such obligation exis ts in the Anti-Dumping Agreement and that no such
claim was included in China's Panel Request, the EU wishes to note that the EU authorities did of
course request all necessary information, and did info rm the interested parties that commented on this
issue that the comparison was not made on the basis of the PCN method.

VII. PRICE UNDERCUTTING

13. China's claim that the EU authorities violated the obligation to consider whether there existed
a significant price undercutting is not properly before the Panel as it was not part of the request for
consultations.

14. On the merits, the EU has already explained in previous submissions why China's allegations
are baseless. Even absent any cl ear guidelines concerning the methodology to follow for the price
undercutting analysis and the broad discretionary power that this implies, it stands from the record
that the comparison that was made by the EU authorities using almost full PCNs was a reasonable and
unbiased method for conducting this price comparison.

VIII. VOLUME OF DUMPED IMPORTS

15. China argues that the EU authorities' volume analysis was inconsistent with Articles 3.1
and 3.2 simply because the EU authorities failed to ex clude the volume of two marginal exporters that
were found not to be dumping. China's SWS does not add anything to the discussion but makes
painfully clear the formalistic approach adopted by China that "the simple fact that the examination
included non-dumped imports makes the examinati on necessarily inconsistent with Articles 3.1
and 3.2 of the AD Agreement". Since the increase in the volume of dumped imports is not a
condition for the imposition of duties, since the Anti-Dumping Agreement does not even require a
finding of whether the volume increased, but merely requires an authority to take this aspect into
consideration in the overall assessm ent of injury which in its to tality is to be based on positive
evidence and an objective examination, the EU submits that this formalistic approach is simply not
warranted in this context.

IX. INJURY FACTORS UNDER ARTICLE 3.4 OF THE ANTI-DUMPING AGREEMENT

16. First, in its SWS, China merely repeats the erroneous argument that the EU authorities
violated their WTO obligations because certain macr oeconomic injury factors were examined using
data from all producers of the domestic industry and other factors were based on information received
from the sampled companies only. Second, China' s prolonged debate about the alleged failure to
examine the factor profitability in an objective mann er is further painful proof of China's erroneous
focus. China disagrees with the conclusion reached by the EU authorities, and suggests that the Panel
does the same. But that is not the Panel's task. Th e Panel's task is to examine whether a reasoned and
reasonable explanation was provided of how the fact s support the determination made. Third, in its
SWS China reiterates its earlier argument that "a fi nding of material injury … cannot solely be based
on one negative factor" and that "having found that all factors showed a positive trend over the period
concerned, the EU should have concluded that the EU industry had not suffered material injury". The
Anti-Dumping Agreement does not preclude a finding of injury on one negative factor alone,
depending on how this factor interrelates with the other factors. The EU authorities did not make
their finding based solely on one negative factor. It is also not so that the EU authorities "found that
all factors showed a positive trend" and this second premise of China's ar gument is thus also in error.
The suggestion that the EU authorities "should have concluded that the EU industry had not suffered
material injury" is not the question before you and is thus not pertinent. The relevant question not
addressed by China is, first, whether the EU evaluated all injury factors of Article 3.4 – yes it did, and
even China does not argue otherwise; and, second, whether the evaluation of the various factors was
reasonable and reasoned. Fourth, China SWS reitera tes the erroneous allegation that European Union
improperly concluded that the inju ry consisted of the displacement from one market segment to
another. As explained in earlier submissions, th e EU authorities did not make such a finding of
market displacement, but related its injury finding to fasteners as a whole.

X. CAUSATION AND NON-ATTRIBUTION

17. In its SWS, China introduces an entirely new set of claims that is nowhere to be found in its
Panel Request or in its FWS – that the EU failed to demonstrate the existence of a causal link since a
"mere coincidence does not establish a causal link" a nd that the EU failed to adduce evidence of why
the domestic producers decided to produce more spec ial fasteners. These new claims of China are
thus outside the Panel's terms of reference, and any finding on these new claims would be a violation
of Article 11 of the DSU.

18. In any case, WTO case law, for example in th e safeguards context, has made it clear that
coincidence in movements in imports and the moveme nts in injury factors would ordinarily tend to
support a finding of causation. In addition, and as explained in the EU's FWS, the EU authorities
provided a reasoned and reasonable e xplanation of the existence of a causal link between the dumped
imports and the injury found to exist. In respect of the non-attribution analysis, China's SWS merely
repeats China's earlier made assertions that certa in factors were not sufficiently separated and
distinguished even though these allegations are clea rly contradicted by the facts on the record. In
respect of the factor export performance, the EU recalls , first, that this factor was not found to be a
factor causing injury; after all export performance w as good. In addition, the impact of this factor
cannot have been significant given the lack of importance of export sales when compared with
domestic sales.

XI. CHINA'S PROCEDURAL CLAIMS UNDER ARTICLES 6 AND 12 OF THE ANTI-
DUMPING AGREEMENT

19. Interpretation of Article 6.2: China's positi on rests on an erroneous legal premise and ignores
case law that addresses precisely the distinction between Article 6.2 and 6.4. First, as examined by
the European Union in its reply to Panel's Quest ion 62, the Appellate Body has considered that
Articles 6.1 and 6.2 together set out the fundamental due process rights to which interested parties are
entitled in anti-dumping investigations. It is not le gally correct that these rights would be laid down
in the first sentence of Article 6.2 as China asserts. It is also not correct that Article 6.2 would contain
two entirely different sets of rights and obliga tions. China also ignores the panel report in Korea –
Certain Paper which addressed precisely this question.

20. Interpretation of Articles 6.4 and 6.9: The European Union cannot but express its
astonishment about how China attempts to rewrite wh at formed the premise of its Article 6.4 and 6.9
claims in its FWS.

China's claim that "the EU's failure to disclos e the identity of the complainants and supporters
violates Article 6.5 of the AD Agreement"

21. First, the European Union is pleased to note th at China admits that its claim does not in fact
cover the volume and/or value of production. Sec ond, China has itself demons trated that interested
parties were given access to the detailed productio n figures of the complainants on a company by
company basis. If China seriously suggests that interested parties were in the possession of detailed
information on the production of all Community pr oducers in order to "check" the information,
nothing prevented them from providing that informati on to the EU authorities in order to question the
figures in Exhibit CHN-42. No suggestion that these figures would be incorrect was ever made. The
identity of the complainants and supporters is th erefore a non-issue from the point of view of the
interested parties' rights of defence. Third, Chin a continues to insist on the potential retaliation being
"hypothetical" although it now acknowledges that "it is only if confidential treatment is refused that it
is possible to know whether retaliation will actually ta ke place or not". This is a crucial admission
because China entirely ignores the fact that the mere threat of retaliation in itself has an adverse effect
on a person or a company. What is required unde r Article 6.5 is "good cause" and the threat of

retaliation surely complies with this requirement. F ourth, China continues to insist that the disclosure
of the identity of the sampled companies so mehow "shows that the companies constituting the
Community industry are either complainants or s upporters". The European Union fails to see any
logic in this argument. The identity of the compla inants and the supporters is manifestly an entirely
separate question from the identity of the sampled companies.

China's claim that "the EU's failure to disclose th e identity of the complainants is inconsistent
with Articles 6.4 and 6.2 of the AD Agreement"

22. These claims are consequential to China's clai m under Article 6.5. To the extent the Panel
would wish to dwell into these claims any further, the European Union trusts the Panel will address
relevant questions to the Parties within the parame ters of due process as clarified by Appellate Body
jurisprudence.

China's claim that "the EU failed to give info rmation concerning the "product types" used for
the normal value calculation, thereby violating Articles 6.4 and 6.2 of the AD Agreement"

23. This claim is premised on the relevance of th e detailed PCNs during the investigation. The
European Union is of the view that the premise of China's claim is incorrect. Furthermore, China's
claim ignores the fact that the information from the company in the analogue country was largely
confidential. China has not cha llenged the treatment of the information as confidential and cannot
therefore demonstrate that there could have been a breach of Articles 6.4 or 6.2.

China's claim that "the EU failed to provide information concerning the normal value
calculation, thereby violating Articles 6.5, 6.2 and 6.4 of the AD Agreement"

24. The European Union does not entirely understa nd how this claim differs from the previous
claim except that the title also cites Article 6.5 of the Anti-Dumping Agreement and that the factual
scope appears more general. In any event, the European Union welcomes China's de facto admission
that a claim under Article 6.5 has b een advanced at most implicitly. It must go without saying that an
implicit claim not coupled with proper argumentati on and evidence cannot fulfil the most elementary
requirements of a prima facie case. Furthermore, even if there were a claim under Article 6.5, it is
still not clear whether a claim would be advanced under the chapeau of Article 6.5 or Article 6.5.1.

China's claim that "the EU failed to provide information concerning the fair comparison being
made, including the adjustments for differences af fecting price comparability, thereby violating
Articles 6.2 and 6.4 of the AD Agreement"

25. China has not challenged the European Union under Article 6.5 of the Anti-Dumping
Agreement. Since China in rea lity must accept that the detailed in formation on the costs of quality
control of the company from the analogue country was properly protected as business confidential
information and assuming arguendo that other conditi ons would be fulfilled, there could not be a
violation of Article 6.4 or 6.2, since these two pr ovisions explicitly acknowledge the need to protect
confidentiality of information.

China's claim that "by failing to provide inform ation concerning the product types, the normal
value determination and the comparison includi ng the adjustments that were made, the EU
violated Article 6.9 of the AD Agreement"

26. China essentially assimilates the obligations in Articles 6.2, 6.4 and 6.5 with those under
Article 6.9. However, Article 6.9 does not deal with the "very same issue" as Article 6.2, 6.4 and 6.5.
This is precisely what many panels have considered incorrect and what China itself argues in its reply
to Panel's Question 62. Furthermore, China is relying on the disclosure documents as evidence both

under Articles 6.4 and 6.9 and those documents were surely in China's possession at the time of the
consultations. If anything, one could perhaps cont emplate that an Article 6.4 claim could develop
from an Article 6.9 claim but the reverse seems entirely unconvincing. In the view of the
European Union, China is trying to rectify an omission, which, however, is now too late. On
substance China adds nothing to its "claim" that stays at the level of a pure assertion.

China's claim that "the EU was in breach of Ar ticle 6.5 since the non-confidential versions of
the Community producers' questionnaire resp onses and the questionnaire response of the
producer in the analogue country were largely deficient"

27. With regard to China's claims in relation to the two Community procedures' non-confidential
version of the questionnaire responses, China's argume nts have already been anticipated in the reply
by the European Union to Panel's Question 72. Sh ould the Panel require an y further evidence, the
European Union is prepared to dwell into the hundreds of pages of information in the non-confidential
file that relate only to these two companies and that China has ignored when presenting its case.
However, in the view of the European Union it is first for the complainant to demonstrate that the
factual premise of its claims is co rrect. With regard to the "claim " in relation to the non-confidential
version of the questionnaire response of the producer in the analogue country, the Panel has only been
presented with two sentences in China SWS and Chin a's Reply to Question 71 from the Panel. In
view of paragraph 16 of the Panel's working procedur es, the European Union is of the view that it is
systemically important that the Panel should not go any further because China had its opportunity to
try to make its case but it failed to even try. In any event, the China's s ubmissions are internally
inconsistent on this point.

China's claim that "the EU was in breach of Articles 6.2 and 6.4 since the non-confidential
versions of the Community producers' questio nnaire responses and the questionnaire response
of the producer in the analogue country were largely deficient"

28. This claim is purely conse quential and dependent on the above claim based on Article 6.5.
The premise of China's argumentation is an allege d incorrect treatment of certain information as
confidential. Therefore, there is no need to address this claim in any further detail.

China's claims that "by failing to make PRODCOM data available in the non-confidential file
and by failing to provide an explanation as to how the estimation of the production in the EU
had been made, the EU violated Article 6.5 of the AD Agreement" and that "by failing to make
PRODCOM data available in the non-confidential file and by failing to provide an explanation
as to how the estimation of the production in the EU had been made, the EU violated
Articles 6.2 and 6.4 of the AD Agreement"

29. In its SWS China has reformulated its claims and arguments significantly. Furthermore, the
European Union has never argued that limited annex C 1-2 could "not be considered as information",
or rather would not contain information. The point the European Union has very explicitly made is
that interested parties have been given access to the relevant EUROSTAT information, including the
fact that the source of information was EUROSTAT. It is the ability to see information that matters
not that it is provided through a given specific docum ent. With regard to the alleged differences
between limited annex C 1-2 and unlim ited annex C 1-1, it is remarkab le to see how China blows this
entirely out of proportion. The unlimited annex contai ned all the relevant information for interested
parties to defend their interests.

China's claim that "through its findings on the domestic industry, the EU violated several due
process rights, including Articles 6.2, 6.4 and 6.9 of the AD Agreement"

30. The title of this "claim" or "claims" is a prime example of the broad brushed way in which
China has acted in this dispute. China does not even bother citing the legal basis of its claims in an
exhaustive way. This is simply not serious and the European Union will treat these claims
accordingly.

China's claim that "the EU violated Article 12.2.2 of the AD Agreement by failing to indicate all
relevant information concerning its IT determinations"

31. Once again for the record, IT was granted because the suppliers met the five criteria listed in
Article 9(5) of Council Regulation No 384/96. This was explained in Council Regulation
No 91/2009.

China's claim that "the EU violated Article 6.5 of the AD Agreement by disclosing a document
entitled 'Assessment of Market Economy Treatment Claims by nine producers in the PRC' "

32. China continues to plead that some of the information in the MET disclosure document would
be confidential and that such information would have been explicitly submitted as confidential by the
companies addressed in the document. Yet, China provides no evidence at all that this would be true.

China's claim that "the EU violated Article 6.1.1 of the AD Agreement by limiting the time
period for the submission of market econo my treatment and/or individual treatment
questionnaire responses to 15 days as of the date of publication of the Notice of Initiation"

33. China has failed to provide the MET claim fo rm as evidence in accordance with paragraphs
16 of the Panel's working procedures. To the extent the Panel would decide not to enforce
paragraph 16 of its working procedures, the Europ ean Union notes that China SWS provides nothing
more than mere speculation as to how granting more time to submit the MET claim might or might
not have affected the conduct of the investigation.

ANNEX F-3

CLOSING STATEMENT OF CHINA AT THE
SECOND MEETING OF THE PANEL

 Mr. Chairman, distinguished Members of the Panel,

 China would like to thank you and the Secretar iat again for your patience and close attention
in hearing our arguments during the last two days and your hard work in this case.

 Mr. Chairman, distinguished Members of the Pa nel, China's decision to resort to the WTO
dispute settlement mechanism to challenge EU an ti-dumping measures was not taken lightly. China,
however, felt obliged to do so because of the manife stly illegal character of the measures at issue and
the significant economic impact they have on China.

 The first measure at issue, namely Article 9(5) of the Basic AD Regulation, is clearly
inconsistent with several provisions of the AD Agreement and has no legal basis whatsoever in
China's Protocol of Accession. The EU, which is among the WTO members which have initiated the
largest number of anti-dumping investigations agains t China, applies this WTO-inconsistent measure
in all its anti-dumping investigations against China. Article 9(5) is plainly discriminatory against
China and constitutes a nullification and impairment of China's benefits under the WTO Agreements.
In addition, Article 9(5) has a very significant practical impact since it has led to the illegal imposition
of high anti-dumping duties on a large number of Chinese exporting producers.

 As regards the second measure at issue, Council Regulation (EC) No. 91/2009, China has
proven that numerous determinati ons made by the EU are incompatible with the EU's WTO
obligations. The substantive claims relating to th e determination of IT, standing, domestic industry,
like product, fair comparison, price undercutting, volume of dumped imports, injury and causation are
all crucial to the way the EU handles anti-dumping inv estigations against China. The same holds true
for the due process claims showing that the EU inv estigating authorities violated several provisions of
Articles 6 and 12 throughout the anti-dumping investigation that led to the measure at issue.

 Over the past few months, the parties have had ample opportunities to submit their evidence,
develop their arguments and discuss in detail the numerous issues raised in this dispute in their written
submissions, their replies to the Panel's questions an d during the substantive meetings with the Panel.
China believes that this process has allowed the pa rties to develop and clarify the numerous factual
and legal aspects of this dispute. China is convin ced that in case certain i ssues remain unclear, the
panel will not hesitate to request further informati on and clarifications from the parties by means of
the written questions. Needless to say , China stands ready to respond to any such requests at the best
of its ability.

 Thank you.

ANNEX F-4

CLOSING STATEMENT OF THE EUROPEAN UNION AT
THE SECOND MEETING OF THE PANEL

Mr Chairman, distinguished Members of the Panel,

1. First of all, the European Union would like to thank you and the Secretariat again for the
work already done. Now is decision and drafting time for you. We acknowledge that the task in front
of you is not an easy one. Indeed, as we have high lighted, China's claims as originally stated it its
Consultations and Panel Requests ha ve considerably changed in th e course of these proceedings and
we are no longer sure as to whet her China seriously (more than pro forma) maintains all of its claims
at this stage. Moreover, China's disregard of the essential rules of procedure, as stated in the DSU and
the Panel's Working Procedures and even the Chairman's precise instructions when filing new exhibits
show very little concern for essential principles of due process. We also once more warn the Panel
about China's misquotation of our arguments as well as the numerous cross-references to China's own
submissions in a futile attempt to show that the relevant facts or arguments have been shown or
explained therein (which often is not the case).
1 We of course trust that the Panel will read our and
China's submissions accordingly and thoroughly, and w ill duly comply with the objective assessment
standard of review as required by Article 11 of the DSU. In this respect, we can only offer our
willingness to assist the Panel in further clarifying any fact or argument we have made.

2. This being said, we would just like to ma ke some brief comments on China's opening oral
statement of yesterday.

3. On China's as such claims against Article 9(5) of Council Regulation No 384/96, we would
like to mention the following points. First, Article 6.2 DSU requires the complaining Member to
plainly connect the specific measure at issue with the specific claim, explaining how and why the
measure at issue violates the WTO Agreements.
2 Absent that connection, the Member concerned (and
in this case the EU) is left wondering how the measure as described by the complaining Member in its
Panel Request can be the source of the alleged nullif ication or impairment. When a Member only has
three weeks to prepare its FWS, and tries to r espond to all the issues raised by the complaining
Member, the efforts made by the respondent party to engage in good faith to resolve the dispute 3 by
attempting to provide a full response to all the issues raised by the complaining Member's FWS
should not be penalised.

4. Second, we observe that China does not cont est the fact that a proposal to repeal Council
Regulation No 384/96 (i.e., the measure at issu e as described by China's Panel Request) was
published in April 2009, well before China request ed consultations and the establishment of the
Panel.
4 Again, we consider that the Panel should onl y examine the specific measu re at issue, rather
than other measures (such as Council Regulation No 1225/2009) or issues which are outside the
Panel's terms of reference.

1 E.g., China's Opening Oral Statement, Second Meeting with the Panel, para. 45 (footnote 46) and
para. 96 (footnote 102).
2 EU SWS, para. 11.
3 DSU, Article 3.10.
4 EU SWS, para. 28.

5. Third, we note that China does not contest that the Panel should examine the scope of
Article 9(5) on its face. 5 The meaning and content of Article 9(5) shows that it addresses a threshold
issue which relates to the imposition of anti-dumping du ties. It serves identifying the actual source of
the alleged price discrimination, either the MET/IT supplier or the State (China Inc.) as the relevant
supplier. Once that determination has been made, ot her relevant rules are applied. Indeed, pursuant
to Articles 2(7) and 18 of Council Regulation No 384 /96, a dumping margin is calculated for MET/IT
suppliers by comparing their export prices with thei r own or an analogue country normal values, to
the extent that the information is available, wh ereas the dumping margin for the State as the relevant
producer in a NME is calculated on the same basis. Following Article 9(4), such dumping margins
serve as a maximum ceiling for the proper duty ra te. In case of sampling, the provisions of
Articles 9(6) and 17 apply. China's description of the content of Article 9(5), as including other issues
such as the individual determination of dumping ma rgins or the level of AD duties is thus wrong and
dangerous.
6 We trust that the Panel will make an appr opriate assessment of the scope of the measure
at issue and will not examine any consequence, re sult or subsequent separate determination which
may or may not be connected to the specific mean ing and content of the measure specified by China
in its Panel Request.

6. Fourth, as regards China's claims, we believe we have shown that Article 6.10 ADA contains
a preference for the individual determination of dumping margins and that sampling is not the only
scenario where an IA can choose not to fo llow that preference or general rule.
7 Contrary to what
China asserts8, the negotiating history of Articles 6.10 and 9.4 that we provided you 9 indicates this.
The examples taken from the EU experience and ot her hypothetical examples show that there are
other situations where the general rule or preferen ce does not need to be followed, and there can be
more where the supplier or company concerned woul d be subject to the residual duty. We also
believe that Korea – Certain Paper and EC – Salmon are relevant in the present dispute since both
cases show that the close relationship between comp anies with a group entitles the IA to determine
one single dumping margin for the whole group. In that respect, the situation in NMEs can be
considered analogous, since the State as the actual producer is the source of the alleged price
discrimination. That is the reason why in our view the manner in which the EU calculates dumping
margins for a group and its related companies in MEs and the manner in which the dumping margin is
calculated for the State and its related export bran ches in NMEs is the same . China attempts to
confuse this matter by making mere assertions, uns upported by any evidence on the record about our
practice (such as "more than 80% of all exports" or "in most cases").10

7. Finally, we have shown that Article 9(5) is consistent with Article 9.2 ADA. China seems to
take issue with the fact that the terms "actual source of the price discrimination" are not treaty terms.
11
However, even China cites the AB Report which states that the notion of dumping relates to the
supplier's pricing behaviour, and ignores that the St ate in NMEs can be considered as a "producer"
and thus as the source of the price discrimination. In this respect, the imposition of AD duties on a
country-wide basis seek to address that source accordingly, an any amount subsequently collected will
be proper, keeping also in mind the possibility for requesting refunds.

8. As regards Council Regulation No 91/2009, we believe we have shown that China's claims
should be disregarded in full. In a nutshell, th e EU authorities properly determined the standing
before the initiation of the investigation; correctly defined the domestic industry by reference to those

5 EU SWS, para. 15.
6 EU SWS, paras 20 – 22.
7 EU SWS, paras 36 – 44.
8 China's Opening Oral Statement, Second Meeting with the Panel, para. 29.
9 Exhibit EU-3.
10 China's Opening Oral Statement, Second Meeting with the Panel, paras 50 and 51.
11 China's Opening Oral Statement, Second Meeting with the Panel, para. 53.

amounting to a major proportion and willing to cooperate with the IAs; compare "apples to apples" in
the dumping and price undercutting analysis; properly examined the injury and causation; and fully
respect the rights of interested parties when having access to file, disclosing the essential facts, etc.

 Mr Chairman, members of the Panel, we tha nk you again for your attention and remain at
your disposal for answering any further questions you may have.