EUROPEAN COMMUNITIES – DEFINITIVE ANTI-DUMPING MEASURES ON CERTAIN IRON OR STEEL FASTENERS FROM CHINA
Document: Report of the Panel
Date: 3 December 2010
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

EUROPEAN COMMUNITIES – DEFINITIVE
ANTI-DUMPING MEASURES ON CERTAIN IRON
OR STEEL FASTENERS FROM CHINA

Report of the Panel

I. INTRODUCTION
1.1 On 31 July 2009, the People's Republic of China ("China") requested consultations 1 with the
European Communities2 (the "EC") pursuant to Articles 1 a nd 4 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes (the "DSU"), Article XXIII:1 of the General
Agreement on Tariffs and Trade 1994 (the "GA TT 1994") and Article 17.3 of the Agreement on
Implementation of Article VI of the Genera l Agreement on Tariffs and Trade 1994 (the
"AD Agreement") with respect to, but not necessarily limited to, 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 European Community, as amende d, and Council Regulation (EC) No. 91/2009 of
26 January 2009 imposing a definitive anti-dumping duty on imports of certain iron or steel fasteners
originating in the People's Republic of China.
1.2 On 12 October 2009, China requested, pursu ant to Articles 4 and 6 of the DSU,
Article XXIII:2 of the GATT 1994 and Article 17.4 of the AD Agreement, that the Dispute Settlement
Body ("DSB") establish a Panel
3 with regard to the following measures:
(a) 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
amended.
(b) Council Regulation (EC) No. 91/2009 of 26 January 2009 imposing a definitive anti-
dumping duty on imports of certain iron or steel fasteners originating in China.
1.3 At its meeting on 23 October 2009, the DSB established a panel pursuant to the request of
China in document , in accordance with Article 6 of the DSU.
1.4 The Panel's terms of reference are the following:
"To examine, in the light of the relevant provisions of the covered agreements cited
by the parties to the dispute, the matter referred to the DSB by China in document
WT/DS397/3 and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements."
1.5 On 30 November 2009, the European Commun ities requested the Director-General to
determine the composition of the panel, pursuant to paragraph 7 of Article 8 of the DSU. This
paragraph provides:
"If there is no agreement on the panelists within 20 days after the date of the
establishment of a panel, at the request of either party, the Director-General, in
consultation with the Chairman of the DSB and the Chairman of the relevant Council
or Committee, shall determine the com position of the panel by appointing the
panelists whom the Director-General consid ers most appropriate in accordance with
any relevant special or additional rules or procedures of the covered agreement or
covered agreements which are at issue in th e dispute, after consulting with the parties
to the dispute. The Chairman of th e DSB shall inform the Members of the

1 WT/DS397/1, Annex G-1.
2 On 1 December 2009, the Treaty of Lisbon amendi ng the Treaty on Europe an Union and the Treaty
establishing the European Community (done at Lisbon, 13 December 2007) entered into force. On
29 November 2009, the WTO received a Verbal Note (WT/L/779) from the Council of the European Union and
the Commission of the European Communities stating that, by virtue of the Treaty of Lisbon, as of
1 December 2009, the European Union replaces and succeeds the European Community.
3 WT/DS397/3, Annex G-2.

composition of the panel thus formed no later than 10 days after the date the
Chairman receives such a request."
1.6 On 9 December 2009, the Director-General accordingly composed the Panel as follows:
 Chairman: Mr. Luiz O. Baptista

 Members: Mr. Michael Mulgrew
 Mr. Arie Reich

1.7 Brazil, Canada, Chile, Colombia, India, Japan, Norway, the Separate Customs Territory of
Taiwan, Penghu, Kinmen and Matsu ("Chinese Taipei "), Thailand, Turkey, and the United States
reserved their rights to participate in the Panel proceedings as third parties.
1.8 The Panel met with the parties on 23-24 Marc h and on 2-3 June 2010. It met with the
third parties on 24 March 2010. The Panel issued its interim report to the parties on 10 August 2010.
The Panel issued its final report to the parties on 29 September 2010.
II. FACTUAL ASPECTS
2.1 China's request for the establishment of a pa nel challenged two measures introduced by the
European Union: (1) Article 9(5) of Council Re gulation (EC) No. 384/96, as amended on protection
against dumped imports from countries not members of the European Community (the "Basic AD
Regulation") and (2) Council Regulation (EC) No. 91/2009 of 26 January 2009 imposing a definitive
anti-dumping duty on imports of certain iron or steel fasteners originating in the People's Republic of
China (the "Definitive Regulation"). Council Regul ation (EC) No. 384/96 was repealed and replaced
by Council Regulation (EC) No. 1225/2009 after th e establishment of this Panel, and China's
submissions address Counc il Regulation No. 1225/2009.
4 China's claims with regard to Council
Regulation 1225/2009 challenge that measure "as such ", while its claims with regard to Council
Regulation 91/2009 challenge the specifics of that measure, which include aspects of the Basic AD
Regulation "as applied".
2.2 China challenged Article 9(5) of the Basic AD Regulation, the provision that deals with the
individual treatment of producers from non-market economy ("NME") countries, including China, in
the context of dumping determinations in anti-dum ping investigations, as well as the application of
that provision in the fasteners investigation at issue in this dispute.
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
A. C
HINA
3.1 China requests the Panel to find that:
(a) With respect to Article 9(5) of Council Regulation (EC) No. 384/96 on protection
against dumped imports from countries not Members of the EC and its amendments,
as codified and replaced by Council Regulation (EC) No. 1225/2009:

4 The European Union considers that Council Regulation No. 1225/2009 is not before the Panel in this
dispute. The description of the contested measures here should not be taken to have any significance for the
Panel's consideration of the European Union's objection in this regard, which is addressed in the Panel's findings
at paragraphs 7.32 to 7.39.

(i) The EC violated Articles 6.10, 9.2, 9.3, and 9.4 of the AD Agreement,
Articles I:1 and X:3(a) of the GATT 1994 and Article XVI:4 of the
Agreement Establishing the WTO as well as Article 18.4 of the
AD Agreement.
(b) With respect to Council Regulation (EC) No. 91/2009 of 26 January 2009 imposing a
definitive anti-dumping duty on imports of certain iron and steel fasteners from
China:
(i) The EC violated Articles 6.10, 9.2, 9.4 of the AD Agreement since it made
the benefit of an individual margin of dumping and the imposition of an
individual anti-dumping duty dependent on compliance with the conditions
listed in Article 9(5) of Council Regulation (EC) No. 384/96 as amended;
(ii) The EC violated Article 5.4 of the AD Agreement because it failed to
properly examine before initiating the investigation whether the standing
thresholds were met and because the complainants did not meet the standing
thresholds;
(iii) In its definition of the domestic industry, the EC violated Articles 4.1 and 3.1
of the AD Agreement because:
 - it improperly excluded from the outset producers that did not make
themselves known within 15 days following the publication of the notice of
initiation and those producers that did not support the investigation from the
scope of the EC's industry;

 - the domestic industry, as defined by the EC, did not include domestic
producers whose collective output of the products constituted a major
proportion of the total domestic production;

 - the domestic industry was not defined in relation to the investigation period;

 - the EC improperly made an injury determination on the basis of a sample of
producers that did not constitute or represent a major proportion of the total
domestic production;

 - the EC improperly included in the domestic industry companies that were
related to Chinese exporting producers of the like product or were themselves
importers of the allegedly dumped product;

 - As a consequence, the EC also violated Articles 3.1, 3.2, 3.4 and 3.5 of the
AD Agreement since the injury determination was not made in relation to a
properly defined domestic industry.

(iv) The EC violated Articles 2.1 and 2.6 of the Anti-Dumping Agreement since it
erroneously considered fasteners produced and sold by EC's industry,
fasteners produced and sold on the domest ic market in India and fasteners
produced in China and sold to the EC as being "alike";
(v) The EC violated Article 2.4 of the AD Agreement since it failed to make a
comparison of the normal value and export price on the basis of the full

product control number (PCN) and because it failed to make the necessary
adjustments for differences that affect the price comparability;
(vi) The EC violated Articles 3.1 and 3.2 of the AD Agreement by failing to make
a product comparison on the basis of the full PCNs and by comparing
standard fasteners without making an y adjustments for the differences
affecting price comparability when determining the price undercutting
margin;
(vii) The EC violated Articles 3.1, 3.2, 3.4, and 3.5 of the AD Agreement in its
examination of the volume of dumped imports;
(viii) The EC violated Articles 3.1 and 3.4 of the AD Agreement in its examination
of the impact of the dumped imports on domestic producers of the like
product;
(ix) The EC violated Articles 3.1 and 3.5 of the AD Agreement because it failed
to properly demonstrate that dumped im ports are, through the effects of
dumping, causing injury to the domestic industry and because it failed to
ensure that injury caused by other factors, in particular the increase in raw
material prices and exports by the EC producers, was not attributed to the
alleged dumped imports;
(x) The EC violated throughout the inv estigation the following procedural
obligations:
 - Articles 6.5, 6.5.1, 6.2, and 6.4 of the AD Agreement because it failed to
disclose the identity and volume of production of the complainants;

 - Articles 6.5, 6.2, 6.4, and 6.9 of the AD Agreement since it failed to disclose
information concerning the normal value determination and the comparison
with export prices including adjustments affecting price comparability;

 - Articles 6.5, 6.2, and 6.4 of the AD Agreement since the non-confidential
versions of the EC's producers' ques tionnaire responses and of the analogue
country producer's questionnaire response were largely deficient;

 - Articles 6.5, 6.2, and 6.4 of the AD Agreement by failing to disclose Eurostat
data as well as any explanations on how it had estimated the EC production;

 - Articles 6.2, 6.4, and 6.9 of the AD Agreement by failing to disclose
information concerning the domestic industry;

 - Article 12.2.2 of the AD Agreement by failing to indicate all relevant
information concerning the individual treatment ("IT") determinations;

 - Article 6.5 of the AD Agreement by disclosing the document entitled
"Assessment of Market Economy Treatment Claims by nine producers in the
PRC" while confidential treatment had been requested;

 - Article 6.1.1 of the AD Agreement by limiting the time period for the
submission of the responses to market economy treatment and/or individual

treatment questionnaires to 15 days as of the date of publication of the notice
of initiation.

3.2 China requests that the Panel recommend that th e DSB request the EC to bring the contested
measures into conformity with its obligations under the AD Agreement and the GATT 1994.
3.3 In addition, China requests that the Panel use its discretion under the second sentence of
Article 19.1 of the DSU by suggesting ways in which the EC could implement the recommendations
and rulings of the DSB. China considers that bot h measures should be withdrawn. As to the first
measure, given the "as such" nature of the viol ation, it should be withdrawn. As to the second
measure, China considers that the nature and scope of the violations of the AD Agreement and of the
GATT 1994 are such that it is inherently vitiated and devoid of any legal basis. Thus, China requests
the Panel to suggest that the EC implement the recommendations and rulings of the DSB by
withdrawing the contested measures.
B. T
HE EUROPEAN UNION
3.4 The European Union requests the Panel to reject all of China's claims and arguments, finding
instead that, with respect to each of them, the European Union act ed consistently with all its
obligations under the AD Agreement, the GATT 1994, and the WTO Agreement.
IV. ARGUMENTS OF THE PARTIES
4.1 The arguments of the parties are set out in their written submissions and oral statements to the
Panel and their answers to questions. Executive summaries of the parties' written submissions, and
their oral statements, or executive summaries thereof, are attached to this report as annexes (see List
of Annexes, page v).
V. ARGUMENTS OF THE THIRD PARTIES
5.1 Brazil, Canada, Chile, Colombia, India, Japan , Norway, Chinese Taipei, Thailand, Turkey,
and the United States reserved their rights to partic ipate in the Panel proceedings as third parties.
Canada, Chile, Thailand, Chinese Taipei, India did not submit third party wr itten submissions and
Brazil, Canada and Thailand did not submit third part y oral statements. The arguments of Colombia,
Japan, Norway, Turkey, and the United States are set out in their written submissions and oral
statements, the arguments of Brazil are set out in its written submission, and the arguments of Chile,
India, and Chinese Taipei are set out in thei r oral statements. Executive summaries of the
third parties' written submissions, and third party or al statements, or executive summaries thereof, are
attached to this report as annexes (see List of Annexes, page v).
VI. INTERIM REVIEW
A. I
NTRODUCTION
6.1 On 10 August 2010, we issued our Interim Report to the parties. On 24 August 2010, China
and the European Union submitted written requests for review of precise aspects of the Interim
Report. On 7 September 2010, China and the Eu ropean Union submitted written comments on each
other's requests for interim review. Neither party requested an additional meeting with the Panel.
6.2 The numbering of footnotes in the Final Report has changed from the Interim Report. The
text below refers to the footnote numbers in the Interim Report regarding wh ich the parties requested
review. Where we have made a change to a footnote in the Interim Report, a reference to the
corresponding footnote number in the Final Report is included (in parentheses) for ease of reference.

The numbering of paragraphs is unchaged from the Interim Report. We have also corrected
typographical and other non-substantive errors thr oughout the Report, including those identified by
the parties, which are not referred to specifically below.
6.3 In order to facilitate understanding of the in terim review comments and changes made, the
following section is structured to follow the organizati on of the Report itself, with the review requests
of the parties, and their comments, addressed sequentially.
B. GENERAL COMMENTS
6.4 The European Union observes that the name of th is case, as set out on the first page of the
Interim Report, is " ", although the European Union request ed that, in the interest of clarity,
the name of the case be changed to "European Un ion – Definitive Anti-Dumping Measures on certain
Iron or Steel Fasteners from China". 5 The European Union notes th at several third parties have
referred to the case in this fashion, and that Chin a did not oppose the European Union's request. The
European Union requests that, as both parties seem to be in agreement on this issue, the Panel modify
the name accordingly, or provide adequate explan ation as to why it has decided to reject the
European Union's request. China did not comment on the European Union's request.
6.5 At the time the underlying investigation to ok place, the European Communities was the
relevant authority and WTO Member. Both the request for consultations and the request for
establishment, as well as the decision of the DSB establishing the Panel, therefore appropriately
referred to the European Communities, and the title of the dispute was correct as of the date of
establishment. As set out in footnote 2 of th e Final Report, the European Union replaced and
succeeded the European Community as of the date of entry into force of the Treaty of Lisbon,
1 December 2009. Our Report refers to the Euro pean Communities where appropriate as a matter of
historical fact, for instance in d escribing the investigation process, the requests for consultations and
establishment, and the establishment and composition of the Panel, all of which occurred prior to the
effective date of the Treaty of Lisbon. However, all the submissions in this panel proceeding were
made by the European Union after that date, and our Report refers to the European Union in that
context. The title of the dispute has no legal con sequence, and indeed, the European Union does not
argue otherwise. To our knowledge, the name of a dispute has never been changed in the past, and
several Panel reports have issued since the entry into force of the Treaty of Lisbon without
incorporating European Union in the title, or in the body of the report. 6 We consider that, rather than
being in the interest of clarity as asserted by the Eu ropean Union, it would be confusing to change the
name originally assigned to this panel proceeding, as different documents pertaining to the dispute
would refer to different names for the dispute, and would moreover be inaccurate as a matter of
historical fact. We therefore deny the European Union's request.
6.6 China notes that "TPKM" is not an official abbr eviation and therefore requests that the Panel
refer to "Chinese Taipei".7 The European Union did not comment on this request.

5 European Union request for interim review, p. 1, citing, European Union, first written submission,
fn 1; and European Union letter dated 29 June 2010.
6 In this regard, we note that in DS316 - EC and certain member States – Large Civil Aircraft , the
report was circulated on 30 June 2010, after the entry in to force of the Treaty of Li sbon, but the name of the
dispute was not changed, and references in the body of the report are to the European Communities. In that
case, all submissions were made before the entry into force of the Treaty of Lisbon. In DS375, EC – IT
Products, the report was circulated on 16 August 2010, after the entry into force of the Treaty of Lisbon, but the
name of the dispute was not changed, and most of the references in the report are to the European Communities,
despite the fact that the interim review submissions were made after the entry into force of the Treaty of Lisbon.
7 China, request for interim review, para. 3.

6.7 In the absence of any objection, and in light of the sensitivities of Members, we grant China's
request.
C. SPECIFIC REQUESTS
6.8 Paragraph 2.1: The European Union requests the Pa nel to take into account the comments
made by the European Union on this paragra ph in its comments on the descriptive part of
29 June 2010.8 China submits that paragraph 2.1 should not be modified for the reasons explained in
its letter commenting on the European Union's co mments on the descriptive part of the Panel's
Report.9
6.9 We note that we did, in fact, take the Europ ean Union's comments on the descriptive part into
account, amending paragraph 2.1 from the original as sent to the parties for comment, so as to be
factually accurate. The European Union has not sp ecified what additional changes it considers should
be made. Therefore, having already taken the European Union's original comments into account
insofar as we deemed it appropriate, and in the ab sence of any new or additional arguments in this
regard, we deny the European Union's request.
6.10 Paragraph 7.11: The European Union requests the Panel to modify this paragraph to use the
same wording as in paragraph 7.15 when re ferring to the European Union's arguments. 10 China did
not comment on this request.
6.11 Given that the requested modification reflect s the European Union's arguments as presented
to the Panel, we have granted the European Union's request and modified this paragraph accordingly.
6.12 Paragraph 7.41: China requests the Panel to amend this paragraph to more accurately reflect
China's arguments.11 The European Union did not comment on this request.
6.13 Given that the requested modification reflects China's arguments as presented to the Panel, we
have granted China's request and modified this paragraph accordingly
6.14 Paragraph 7.43: The European Union requests that th e Panel amend this paragraph in order
to properly reflect its arguments. 12 The European Union notes that it argued that (1) the individual or
country-wide determination of dumping margins, (2) the calculation or how dumping margins are
calculated, and (3) how the proper level of anti-dum ping duties is establishe d (e.g., equal or lower
than the dumping margin found) are three separate issues. China did not comment on this request.
6.15 Given that this request concerns the European Union's arguments as presented to the Panel,
we have granted the European Union's request, a nd have modified the paragraph accordingly. We
note that, to ensure consistency, we have also m odified paragraph 7.44 as a result of our modification
of this paragraph.
6.16 Paragraph 7.44: The European Union requests the Pane l to reconsider its conclusion in the
final sentence of this paragraph. 13 In the European Union's view, even if the scope/operation of the
measure at issue is a disputed matter between the pa rties, this does not imply that the Panel can find
that the legal claims "are within its terms of re ference". At most, the European Union argues, the

8 European Union, request for interim review, p. 2.
9 China, Comments on the European Union's request for interim review, para. 2, citing China's letter
dated 12 July 2010.
10 European Union, request for interim review, p. 2.
11 China, request for interim review, para. 4.
12 The European Union refers in this regard to references in footnote 54 of the Interim Report.
13 European Union, request for interim review, p. 2.

Panel may come to that conclusion "on a preliminary basis, subject to the subs tantive analysis of the
measure at issue". Otherwise, this approach may lead to odd results (e.g., accepting claims within the
panel's terms of reference and then , once examined the substance, re jecting them as not falling within
its mandate). In this respect, th e European Union considers that the Panel should examine first the
scope/operation of the measure at issue as part of the preliminary objections and then decide whether
the claims raised by China are properly within the Panel's terms of reference.
6.17 China argues that the European Union confu ses the issue of whether certain matters are
within the Panel's terms of reference with the substa ntive question of the scope of Article 9(5) of the
Basic AD Regulation. 14 China is of the view that the scope of Article 9(5) of the Basic AD
Regulation is a substantive issue discussed elsewh ere in the Report, and that such substantive
discussion is not relevant for the determination of the Panel's terms of reference. China also disagrees
with the European Union's argument that the a pproach followed by the Panel "may lead to odd
results".15 In China's view, the only thing that matte rs for purposes of Article 6.2 of the DSU is
whether the panel request identifies the specific measures at issue and provides a brief summary of the
legal basis of the complaint sufficient to present the problem clearly. China contends that this is the
only issue that the Panel must determine in order to assess whether certain claims are within its terms
of reference, and the fact that the scope of the measure at issue may not be in line with some of the
claims does not make these claims fall outside the Panel's terms of reference. China thus considers
that the Panel properly examined the issue of the scope of Article 9(5) of the Basic AD Regulation,
the measure at issue, as part of its substantive anal ysis and that the Panel should therefore reject the
European Union's request.
16
6.18 With respect to this paragraph, China itsel f requests that the Panel amend the penultimate
sentence, which China considers is not clear. 17 The European Union considers that that sentence is
clear and asserts that China has not indicated why it is not so.18
6.19 The European Union's request concerns the an alytical approach we followed in resolving
China's claims under Articles 6.10, 9.3 and 9.4 of the AD Agreement concerning Article 9(5) of the
Basic AD Regulation. It is our view that the or der in which different aspects of these claims should
be addressed in our analysis is a decision that is within our own discretion. In this case, we
considered it important to first resolve the jurisdic tional issues raised by the European Union and then
address the substantive aspects of the claims that we concluded were within ou r terms of reference.
We therefore deny the European Union's request.
6.20 We have granted China's request and modified the penultimate sentence so as to clarify,
without changing, its meaning.
6.21 Paragraph 7.47 – footnote 58 : China suggests that the Panel modify the description of the
MET criteria in footnote 58 in order to more accurately reflect the text of Article 2(7)(c) of the Basic
AD Regulation.
19 The European Union suggests that the Panel reproduce the text of Article 2(7)(c) of
the Basic AD Regulation in order to address China's concerns.20
6.22 We have granted China's request, and modified footnote 58 (now footnote 226) accordingly.

14 China, Comments on the European Union's request for interim review, para. 4.
15 China, Comments on the European Union's request for interim review, para. 6.
16 China, Comments on the European Union's request for interim review, para. 8.
17 China, request for interim review, para. 5.
18 European Union, comments on China's request for interim review, p. 1.
19 China, request for interim review, para. 6.
20 European Union, Comments on China's request for interim review, p. 1.

6.23 Paragraph 7.48: The European Union requests the Pa nel to add the phrase "in general"
after "(2)" in this paragraph in order to better re flect the wording of Article 9(5) of the Basic AD
Regulation. China argues that the wording of Article 9(5) is quoted in extenso in this paragraph and
that therefore it is not necessary to add the words "in general" as requested by the European Union.21
6.24 We have granted the European Union's request, and modified this paragraph accordingly.
6.25 Paragraph 7.49: China requests that the Panel amend the last two sentences of
paragraph 7.49 in accordance with the findings of the Panel at paragraphs 7.68 to 7.77 of the Interim
Report.22 The European Union requests the Panel to reject China's requested change. The
European Union points out that in paragraph 7.49, the Panel refers to the text of Article 9(5);
however, China wants the Panel to anticipate its an alysis of how the measure operates (which comes
later and is an issue disputed by the parties) in this paragraph, which is merely descriptive.23
6.26 The European Union itself requests the Panel to amend this paragraph in order to respect the
wording of Article 9(5).24 China did not comment on this request.
6.27 We have granted the European Union's request and modified this paragraph accordingly.
However, since paragraph 7.49 comes before para graphs 7.68 and 7.77, and the scope/operation of
Article 9(5) of the Basic AD Regulation is a contested issue, we have denied China's request.
6.28 Paragraph 7.50: China asserts that the description of how the export price is determined for
non-IT producers is not entirely correct, referring in this respect to paragraph 302 of its second written
submission as well as to paragraph 3 of the Eu ropean Union's answer to Panel question 4. 25 In
particular, China considers it essential to mention that in case cooperation is deemed to be low, the
weighted average export price of cooperating non-IT producers is further weighted with the export
prices based on other sources, e.g. import statistics. The European Union requests the Panel to reject
China's requested change. The European Union has pr oposed specific changes to address this issue in
its comments on the Interim Repor t and requests the Panel to follow them. In addition, the
European Union observes that Chin a's description is also incorrect. Indeed, China insisted in the
course of the proceedings to equate "low cooperation" with "below 80%". China has not adduced any
evidence of the existence of a European Union pr actice on the basis of that precise threshold of
cooperation. There is none, as the European Union clarified inter alia in its response to Panel
question 4.26
6.29 The European Union itself requ ests that the Panel modify paragraph 7.50, asserting that the
description contained in (b)(ii) is inaccurate a nd confusing, and proposes text in this regard. 27 China
disagrees with the wording proposed by the European Union. 28 China considers that it is not correct
to state that the country-wide duty rate is "generally" calculated on the basis of the export prices of the
cooperating non-IT suppliers, asserting that in most cases, the country-wide duty rate is calculated on
the basis of the export prices of cooperating non-IT suppliers and facts available. Second, China
maintains that it is not correct to describe the dete rmination of the export price, when cooperation is
deemed to be low, as being based on the export prices of cooperating non-IT suppliers and "the results
found for non-cooperating suppliers ". According to China, this gi ves the erroneous impression that
the export price is based on the export prices of all NME suppliers, when in fact, the export prices of

21 China, Comments on the European Union's request for interim review, para. 9.
22 China, request for interim review, para. 7.
23 European Union, Comments on China's request for interim review, p. 1.
24 European Union, request for interim review, pp. 2-3.
25 China, request for interim review, para. 8.
26 European Union, Comments on China's request for interim review, p. 2.
27 European Union, request for interim review, pp. 3-4.
28 China, Comments on European Union's request for interim review, paras. 10-11.

the cooperating non-IT producers are simply averaged with best information available such as the
highest margin of dumping or EU import statistics.29 Therefore, China contends, it is simply incorrect
to refer to the "results found for non-cooperating suppliers".
6.30 While the parties disagree as to how the expor t price for non-IT suppliers is determined,
particularly in investigations where cooperation is low, both refer to the European Union's reply to
Panel question 4 as providing an accurate description of the determination of the export price for non-
IT suppliers. We have granted the parties' requests and have modified this paragraph accordingly.
6.31 Paragraph 7.51: China requests the Panel to modify this paragraph in order to more
accurately reflect its arguments. 30 The European Union requests th e Panel to reject the proposed
changes, asserting that it is clear that the Panel correctly summarized the most relevant elements of
China's argument, and that China has not provide d any citations to its submission to show the
contrary.31
6.32 While China does not refer to its submissions in support of the requested modification, since
the request does reflect China's arguments as they were presented to the Panel, we have granted
China's request, modified this paragraph accordin gly and indicated where in China's submissions
those arguments are found.
6.33 Paragraphs 7.51 – 7.59: The European Union observes th at in these paragraphs, as well as
in other sections of the Interim Report 32, there is no citation to the relevant submissions of the parties
where the arguments were made. The Europ ean Union considers that some of those
paragraphs misrepresent the arguments as made by th e parties. The European Union notes that, in
other sections of the Report, citations to the arguments raised by the parties and third parties are made.
The European Union requests the Panel to insert footnotes where appropriate to the relevant
submissions where the parties allegedly made th e stated claims and arguments. China did not
comment on this request.
6.34 We have granted the European Union's request to the extent that we have reviewed the parts
of the Interim Report where parties' arguments are summarized, particularly the part specifically cited
by the European Union in this regard, and added footnotes referring to the parties' submissions, where
we deemed it appropriate.
6.35 Paragraph 7.53: China asserts first that paragraph 7.53 does not accurately reflect what
China said on how the export price is determined for non-IT exporting producers, referring in this
regard to paragraph 302 of its second written submi ssion and paragraph 3 of its answer to Panel

29 China refers in this regard to anti-dumping inves tigations cited in China, second written submission,
footnote 221.
30 China, request for interim review, para. 9.
31 European Union, Comments on China's request for interim review, p. 2.
32 European Union, request for interim review, p. 4. The European Union observes, at fn. 1, that it:
"cannot find the relevant citation to the statements in para. 7.105 ("China argues that there is a
parallel in this regard between Articles 6.10 an d 9.2 which would mean that "impracticable"
under Article 9.2 refers to investigations where, because of the large number of producers, it
would be difficult to manage the implementation of the measure if each supplier is named
individually" ( emphasis added )); or para. 7.129 ("The European Union asserts that
Article 9(5) of the Basic AD Regulation provides for a methodology for determining anti-
dumping duties in investigations against NMEs. It does not contain any rules on how such
methodology should be administered" (emphasis added)). As regards para. 7.129 specifically,
the European Union has not asserted anywhere that Article 9(5) provides for a "methodology"
for determining anti-dumping duties against NMEs."

question 1, and therefore requests that the Panel modify the first sentence. 33 Second, China requests
that the Panel modify paragraph 7. 53 in order to more accurately reflect China's arguments in relation
to its claim in connection with Article 9.3 of the AD Agreement.34
6.36 The European Union notes that China's request for a change of the first sentence accurately
reflects its arguments as stated in China's Second Written Submission, paragraph 302 and its reply to
Panel question 1, paragrap h 3. However, the European Union asserts it could not find any reference
in China's submissions with the suggested language concerning China's other requests. Since China
has failed to provide specific references to its su bmission, the European Union requests the Panel to
reject the proposed changes.35
6.37 While China does not refer to its submissions in support of the requested modification, since
the request does reflect China's arguments as they were presented to the Panel, we have granted
China's request, modified this paragraph accordin gly and indicated where in China's submissions
those arguments are found.
6.38 Paragraph 7.80: In line with its comments concerni ng paragraph 7.50, China requests that
paragraph 7.80 be modified to accurately describ e how the export price is determined for non-IT
exporting producers. 36 For the same reasons as given in r espect of China's request concerning
paragraph 7.50 of the Interim Report, the European Union requests the Panel to reject the change
proposed by China.37
6.39 With respect to this paragraph, the European Union considers that the description of how the
country-wide margin is calculated is inaccurate, a nd for the same reasons as expressed with respect to
paragraph 7.50, the European Union requ ests the Panel to amend this paragraph. 38 China disagrees
with the modification requested by the European Union, as it did with respect to the European Union's
request regarding paragraph paragra ph 7.50. According to China, it is not correct to describe the
export price as being based either on the weighted average export prices of all cooperating producers
or the weighted average export prices of all NME pr oducers. China submits that if cooperation is
deemed to be low, i.e. less than 80% in most c ases, the export price is generally determined on the
basis of the average export price of the cooperating non-IT suppliers and best information available,
e.g. statistics or the highest dumping margin or othe r available information. In China's view, it is
artificial and not in accordance with the practice of the European Union to state that in case
cooperation is low, the export price is based on the weighted average export prices of all NME
producers.39
6.40 In connection with this paragraph, both parties repeat their views about paragraph 7.50 of the
Interim Report, where the determination of export pr ice for non-IT producers is described. As we did
with respect to paragraph 7.50, see paragraph 6.30 above, we have modified paragraph 7.80, which
concerns the same issue, accordingly.
6.41 Paragraph 7.86: The European Union requests that the Panel modify this paragraph in order
to properly reflect the European Union's arguments.40 China did not comment on this request.

33 China, request for interim review, para. 10.
34 China, request for interim review, para. 10.
35 European Union, Comments on China's request for interim review, p. 2.
36 China, request for interim review, para. 11.
37 European Union, Comments on China's request for interim review, p. 2.
38 European Union, request for interim review, p. 4-5.
39 China, Comments on the European Union's request for interim review, para. 12. In this regard,
China refers to footnote 221 of China's second written submission.
40 European Union, request for interim review, pp. 4-5.

6.42 Given that the requested modification reflect s the European Union's arguments as presented
to the Panel, we have granted the European Union's request and modified this paragraph accordingly.
6.43 Paragraph 7.100: The European Union requests that Pa nel to amend this paragraph in order
to reflect the European Union's arguments as cont ained in its submissions, referring specifically to
European Union, first written submission, paragra ph 119 and European Union, second oral statement,
paragraph 15.41 China did not comment on this request.
6.44 Given that the requested modification reflect s the European Union's arguments as presented
to the Panel, we have granted the European Union's request and modified this paragraph accordingly.
6.45 Footnote 83 : The European Union requests the Pane l to delete the observation in this
footnote that the European Union "has not substantiated its argument". 42 In this respect, the
European Union refers specifically to paragraph 148 of its first written submission, where it argued
that the use of the terms "suppliers" an d "sources" in Article 9.2, while the Anti-Dumping Agreement
specifically employs the terms "exporter" and "producer ", must have a meaning, in particular that
anti-dumping measures aim at identifying the supplier which is the actual source of the price
discrimination. The European Un ion observes that it makes an argu ment by implication in this
respect, which it contends is also substantiated in view of the precedent and subsequent paragraphs of
that section. China maintains that there is nothing in the cited section of the European Union's first
written submission which "substantiates" the Europe an Union's argument. China therefore requests
the Panel not to delete the phrase.
43
6.46 We note that, to support its request for a modification of footnote 83 of the Interim Report,
the European Union refers the Panel to paragraph 14 8 of its first written submission, which is already
cited in that footnote. In our view, there is theref ore no need to modify the footnote, and we therefore
have denied the European Union's request. However, for clarity, we have added a cross reference in
footnote 83 (now footnote 281) to paragraph 7.104 of the Report, where we rejected the proposition
that "supplier" means something other than "exporter" or "producer".
6.47 Paragraph 7.117: China requests that this paragraph be modified by adding a sentence. 44
The European Union requests the Panel to reject th e proposed changes, asserting that it is clear that
the Panel correctly summarized the most relevant el ements of China's argument, and that China has
not provided any citations to its submission to show the contrary and the European Union could not
find any reference in China's submissions with the suggested language.45
6.48 While China does not refer to its submissions in support of the requested modification,
China's first and second written submissions contain language to this effect. We have therefore
granted China's request and modified this paragraph accordingly.
6.49 Paragraph 7.138: The European Union notes that this paragraph refers to the Commission of
the European Union ("the Commission") whereas the Panel has referred to the Commission in
previous sections of its Report. The European Unio n requests the Panel to include the full name and
the abbreviation the first time it refers to the Commission in its Report. 46 China did not comment on
the European Union's request.
6.50 We have granted this request, and modified the Report accordingly.

41 European Union, request for interim review, p. 5.
42 European Union, request for interim review, p. 5.
43 China, Comments on the European Union's request for interim review, paras. 13-14.
44 China, request for interim review, para. 12.
45 European Union, Comments on China's request for interim review, p. 2.
46 European Union, request for interim review, p. 5.

6.51 Paragraph 7.143: China requests that the Panel modify this paragraph to accurately reflect
the facts of this case.47 China contends that it is not correct to state that most of the producers did not
make themselves known and that only 46 producer s came forward, asserting that, according to the
Information Document, the Commission received info rmation from more than 114 producers. China
considers that it should be clarified that the 46 Community producers are those which came forward
and provided the requested information and expressed a wish to be included in the sample within
15 days as of the date of initiation of the inves tigation and which supported the complaint. The
European Union requests the Panel to refuse to make the proposed changes, asserting that the Panel
correctly summarized the major elements of the inve stigating authorities' findings on injury referring
each time in a footnote to the relevant recitals of the Definitive Regulation.48
6.52 This paragraph is part of a section where the Panel summarizes the facts of the investigation
at issue, and therefore reflects our understanding of those facts. In our view, China's proposed
alternative text does not add clarity to this paragra ph, is argumentative and is not entirely correct as a
matter of fact. We therefore have denied China' s request, with the exception of a modification to
reflect the fact that 46 cooperating producers expressed their willingness to be included in the sample.
6.53 Paragraph 7.149: The European Union invites the Pane l to reconsider the conclusion that:
"Finally, we do not consider it necessary to make fi ndings under Article 9.4 of the AD Agreement in
respect of China's "as applied" claim, for the sa me reasons that led us to find it unnecessary to make
findings with respect to China's "as such" claim under that provision". 49 The European Union asserts
that China did not include a claim under Article 9.4 of the Anti-Dumping Agreement in its Panel
request and thus this claim, which the European Union argues was included for the first time in
China's first written submission, was out side the Panel's terms of reference. 50 The European Union
notes that China argued that this claim fell with in the Panel's terms of reference because it was
included in the context of its "as such" claim. The European Union considers that, by exercising
judicial economy, the Panel seems to have found th at China's claim under Arti cle 9.4 against Council
Regulation No 91/2009 fell within its terms of reference. If that is the case, the European Union
requests the Panel to provide its views as to why this result should be granted in view of the fact that
this was an issue disputed by the parties. Otherw ise, the European Union invites the Panel to change
its conclusion and find that China's claim under Artic le 9.4 did not fall within its terms of reference
since it was not included in its Panel Request.
6.54 China notes that in reply to the European Union' s objection in its first written submission that
China's claim under Article 9.4 [in relation to the second measure at issue] was outside the Panel's
terms of reference, China explained that Article 9(5) of the Basic AD Regulation which is being
challenged "as such" is also being challenged "as applied" in the framework of the anti-dumping
investigation on imports of certain iron or steel fasteners originating in China. 51 China also notes that
it pointed out that its claim concerning the application of Article 9(5) in the fasteners investigation is
the logical continuation of China's challenge to Artic le 9(5) "as such" and that given that Article 9.4
of the AD Agreement is included in the panel re quest in connection with the claims against
Article 9(5) "as such", China's claim that Article 9(5) "as applied" in the fasteners investigation
violated Article 9.4 is within the Panel's terms of reference. China considers that the Panel expressly
acknowledged this "logical continuation" by descr ibing the claim in its Interim Report as being
"whether Article 9(5) of the Basic AD Regulation, as applied in the fasteners investigation, is
inconsistent with Articles 6.10, 9.2 and 9.4 of th e AD Agreement". China understands that the Panel

47 China, request for interim review, para. 13.
48 European Union, Comments on China's request for interim review, p. 2.
49 European Union, request for interim review, pp. 5-6.
50 The European Union refers in this regard to paragraph 212 of its first written submission.
51 China refers to paragraphs 371 – 383 of its second written submission in this regard.

implicitly concluded that China's claim under Article 9. 4 is within its terms of reference. In China's
view, the Panel may, for the purposes of clarity, state this explicitly in its Report.52
6.55 We agree that the text as originally drafted was unclear, and we therefore have granted the
European Union's request, redrafting this paragr aph to clarify the parties' arguments and our
conclusion.
6.56 Paragraph 7.150: China considers that this paragra ph does not accurately reproduce China's
arguments as set out inter alia in its first and second written subm issions, and therefore requests that
the Panel modify it. 53 The European Union requests the Pa nel to reject the proposed changes,
asserting that it is clear that the Panel correctly su mmarized the most relevant elements of China's
argument, and that China has not provided any precise citations to its submission to show the
contrary.54
6.57 While China does not refer to its submissions in support of the requested modification, since
the request does reflect China's arguments as they were presented to the Panel, we have granted
China's request, modified this paragraph accordin gly and indicated where in China's submissions
those arguments are found.
6.58 Paragraph 7.168: China considers that this paragra ph does not accurately reproduce China's
argument as set out in its answer to Panel question 19, and therefore requests that the Panel modify
it.55 The European Union requests the Panel to reject China's proposed amendments, asserting that the
relevant paragraph of the Panel's Report accurately reflects China's argument as made in China's
answer to Panel question 19.56
6.59 The modification proposed by China does not in any way alter the content of this paragraph,
and we have therefore granted China's request and have modified this paragraph accordingly.
6.60 Paragraph 7.172: China considers that this paragra ph does not accurately reproduce China's
argument as set out in its answer to Panel question 19, and therefore requests that the Panel modify
it.57 For the same reasons as above concerning China' s comments with respect to paragraph 7.168 of
the Interim Report, the European Union requests the Panel to reject the change proposed by China.58
6.61 The modification proposed by China does not in any way alter the content of this paragraph
and we have therefore granted China's request and have modified this paragraph accordingly.
6.62 Paragraphs 7.172 – 7.175 : The European Union recalls its submissions in the course of
these proceedings, where it explained in detail the st eps taken by the investig ating authority in the
fasteners investigation. 59 The European Union asserts that China did not dispute the steps the
European Union asserted it had taken in ascertaini ng production figures prior to initiation. The
European Union requests the Panel to take this into account in its analysis with respect to the quality
of the Commission's determination on standing, proposing that the Panel amend footnote 138 to

52 China, Comments on the European Union's request for interim review, paras. 15-18.
53 China, request for interim review, para. 14.
54 European Union, Comments on China's request for interim review, p. 2.
55 China, request for interim review, para. 15.
56 European Union, Comments on China's request for interim review, p. 2.
57 China, request for interim review, para. 16.
58 European Union, Comments on China's request for interim review, p. 3.
59 European Union, request for interim review, pp. 6-7. The European Union refers in particular to
European Union, first written submission, para. 263; European Union Opening Oral Statement, Second Hearing
with the Panel, para. 22 in this regard.

reflect this. In addition, the European Union requests the Panel to amend paragraph 7.152 by adding a
footnote describing the steps taken.
6.63 China opposes the European Union's request, asserti ng that it is incorrect that "China did not
dispute these steps". China notes that it stated th at the European Union explains "the methodology
used by the investigating authority to examine standing" in abstract terms 60, but did not give any
details about how this examination was carried out in the context of the fasteners investigation. China
asserts that evidence it put forward in its first written submission clearly shows that the
European Union examined the degree of support fo r, or opposition to, the application only after the
initiation of the investigation. Furthermore, th e fact that China disagr eed with the description
provided by the European Union is clear from paragraph 22 of the European Union's opening
statement at the second substantive meeting, where th e European Union stated that "Contrary to what
China asserts, the figure of EU total production co ntained in the Complaint and which was finally
included in the Note to the File was also exam ined by checking the figures in EUROSTAT". China
asserts that the European Union intentionally omitte d the phrase "contrary to what China asserts" in
its comments on the Interim Report. China mainta ins that this phrase clearly shows that China
disagrees with the description provid ed by the European Union. Th erefore, China requests the Panel
not to make the modification requested by the European Union.
61
6.64 Given that this paragraph contains the Europ ean Union's own arguments, we have granted the
European Union's request and modifi ed this paragraph accordingly. However, the steps taken by the
Commission are not uncontested as a matter of fact, and we therefore have denied the
European Union's request to modify footnote 138.
6.65 Paragraph 7.178: China requests that the Panel delete the sentence "China has not disputed
this assertion" from paragraph 7.178. 62 China asserts that it is not correct that it did not dispute the
assertion that "the European Union contends that the company-specific figures in this table do include
a 15 percent margin of error to protect the conf identiality of the production data of individual
producers, but that the totals indicated for complain ants and supporters are the actual, correct figures,
and do not reflect that 15 percent margin". 63 According to China, the European Union submitted no
evidence in support of its statement that the 15% ma rgin only relates to individual company figures
and that, moreover, this justification does not stand in view of the fact that the production figures for
each producer in the document are anonymous.
6.66 The European Union requests the Panel to rej ect the proposed changes, asserting that it is
clear that China did not contest this issue. The European Union asserts that, in response to
question 86 from the Panel after the second hearing, it indicated that the company-specific figures in
question included a 15% margin of error to prot ect the confidentiality of the production data of
individual producers, but that the totals indicated for the complainants and the supporters were the
actual, correct figures. The European Uni on asserts that China did not comment on the
European Union's response, noting that while China refers to its second written submission,
paragraph 490 to argue that it did so, China's second written submission triggered the question from
the Panel.64
6.67 Question 86 was put to the parties after the second substantive meeting with the parties, that is
after the receipt of China's second written submissi on. Therefore, that submission does not establish
that China disputed the European Union's answer to question 86. Moreover, paragraph 490 of China's

60 China refers to paragraph 478 of China, second written submission in this regard.
61 China, Comments on the European Union's request for interim review, paras. 19-21.
62 China, request for interim review, para. 17.
63 China refers in this respect to paragraph 490 of China, second written submission.
64 European Union, Comments on China's request for interim review, p. 3.

second written submission does not in any case rebut th e European Union's contention. In that
paragraph, China asserts that the European Union did not submit evidence in support of its position,
and that since the production figures were listed for each producer anonymously, there is no basis for
the assertion that the 15 percent margin of error was for confidentiality reasons. This does not,
however, address the European Union's contentio n that the overall figure did not include the
15 percent margin of error. We have therefore denied China's request.
6.68 Paragraph 7.205: China requests that the Panel modify this paragraph to more accurately
reflect China's arguments, as set out in para graphs 505 to 528 of its second written submission. 65 The
European Union did not comment on China's request.
6.69 This paragraph is an introduction to our anal ysis of the European Union's preliminary
objection to China's first allegation of error with re gard to the domestic industry, which we ultimately
rejected. In this context, we see no need to e xpand on the brief description of China's arguments in
response to the European Union's objection. We have therefore denied China's request.
6.70 Paragraph 7.213: China requests that the Panel modify this paragraph to more fully and
accurately reflect China's arguments, referring in th is regard to China, Comments on European Union
answer to Panel question 89, paragraph 16 an d paragraphs 533-534 of China, second written
submission.66
6.71 The European Union requests that the Panel re ject China's request, asserting that the Panel
correctly summarized China's position as set forth, inter alia , in paragraphs 533 – 534 of China,
second written submission. The European Union cons iders that the changes China requests are not
reflected in the paragraphs of that submission ci ted by China, and that China misunderstands the
European Union's replies to Panel questions 88 and 89 in asserting that the European Union
acknowledged that "the 318 producers and the additional 54 producers not only received the sampling
form but that they were also asked to state their position vis-à-vis the investigation (in relation to the
standing issue examination)". The European Union maintains that this is not correct, and that the
Panel was right not to include this comment in its Re port. According to the European Union, it is not
the case that the authorities had information about s upport for the complaint or lack thereof by the
producers that were contacted, as it did not ask these producers about their position with respect to the
complaint following initiation, stating that after initiation, this was not a relevant question anymore.67
6.72 China's proposed inclusions do not describe facts found or relied upon by the Panel, but rather
describe China's arguments and interpretation of facts, particularly with respect to the
European Union's answers to Panel questions 88 a nd 89. The Panel is not required to exhaustively
summarize all of a party's arguments in the course of its analysis, which this paragraph is part of. We
have therefore denied China's request.
6.73 Paragraph 7.214, and Footnotes 247 and 249 : China requests that the Panel modify this
paragraph and the footnotes.68 China asserts the this paragraph misrepresents its view, and that it has
never stated that it "accepted" that "at least one producer which was not a complainant, and had
remained silent prior to initiation, was not only included in the domestic industry, but was selected for
the sample". China notes that this information was and is impossible for it to verify since the identity
of the complainants has been kept confidential. Moreover, China asserts that the European Union did
not provide any evidence supporting this factual asser tion, which the Panel could not therefore check.
China asserts that the Panel erred, in footnote 247, in stating that "it is clear that support or lack

65 China, request for interim review, para. 18.
66 China, request for interim review, para. 19.
67 European Union, Comments on China's request for interim review, p. 3.
68 China, request for interim review, paras. 20-22.

thereof as a matter of fact was not enquired into by the Co mmission" (emphasis added). China
asserts that the Commission sent sampling forms to 318 producers and an additional 54 producers,
and also contacted these producers in the framework of its continuing investigation of the "standing"
issue and requested each producer to state its position vis-à-vis the investigation. 69 Thus, China
argues, the Commission enquired about and knew the positions of the producers concerned vis-à-vis
the investigation. Finally, China notes that the Pa nel does not refer to paragraph 76 of China's second
oral statement regarding the European Union practice, which China contends is evidence showing that
support to the complaint is a necessary condition for a domestic producer to be part of the domestic
industry. China requests that the Panel add a reference to this statement in footnote 249.
6.74 The European Union requests the Panel to reject China's requested change, asserting that the
Panel correctly reflected the fact that in its comments on the European Union's answer to Panel
question 89, China "appeared to accept" the fact th at the company referred to by the European Union
in its replies had not supported the complaint but ha d remained silent. The European Union considers
that China's proposed change is based on the e rroneous assertion that the Commission enquired about
producers' position in respect of the complaint. Ac cording to the European Union, that was simply
not the case, which it asserts is clear from the sampling forms submitted to the Panel. The
European Union contends that China's assertions in this regard are incorrect, noting that China did not
submit any evidence to support them. The European Un ion also requests that the Panel reject China's
proposal to reflect the argument that to include on ly supporters of the complaint is standard EU
practice. First, China's argument about the EU's standa rd practice is not relevant in the context of this
"as applied" claim. Second, the European Union cont ends that it is not the case that this is standard
EU practice, and the evidence China submitted of certa in specific cases is not convincing. Third, the
European Union notes that the Panel is not obliged to address each and every argument of a party, and
considers that the Panel was correct not to address this assertion.70
6.75 For the most part, China's proposed text reflect s its own views of the facts, as argued to the
Panel, rather than the Panel's views. While Ch ina continues to assert that the Commission inquired as
to the position of EU producers with respect to the complaint, the only evidence before the Panel, the
sampling forms, does not support that assertion. Given th at this paragraph is part of our analysis, and
that we did not accept China's view of the facts in this context, we see no reason to reflect China's
arguments in further detail. Moreover, while it is true that China referred to other EU anti-dumping
cases in arguing its claim, it made no claim with re spect to EU practice concerning definition of the
domestic industry. Its claim concerned only the decision in this particular investigation. We therefore
see no need to include an aspect of China's argu ment which was not relevant to the Panel's
consideration of the claim actually before it. We ha ve therefore denied China's request. However, to
more fully reflect China's position, we have added a footnote in paragraph 7.214 referring to China's
argument that it was not possible for it to verify whether one producer, which was not complainant
and did not indicate a position in support of or op position to the complaint prior to initiation, was
included in the domestic industry and selected for the sample.
6.76 Paragraph 7.215: China submits that this paragraph also misrepresents the facts of this case
when it refers to "the fact that at least one pr oducer who did not affirmatively state support for the
complaint was included in the domestic industry" and requests that the Panel modify it. 71 C h i n a
makes largely the same ar guments as with respect to paragraphs 7.213 and 7.214, noting that even if
the producer identified by the European Union as having come forward after the initiation did not
mention its position in its sampling form, it did it in its reply to the "standing" inquiry, and requests
that the Report reflect this view. For the same reasons as given in respect of China's comments

69 China refers in this regard to its comments on the European Union's reply to Panel question 89.
70 European Union, Comments on China's request for interim review, pp. 3-4.
71 China, request for interim review, para. 23.

concerning paragraph 7.213 of the Interim Report, the European Union requests the Panel to reject the
change proposed by China.72
6.77 The European Union itself requests the Panel to consider deleting the last two sentences of
this paragraph, as it considers that their relevance to the Panel's finding is not clear. 73 China considers
that the sentences that the European Union asks the Panel to delete are relevant and therefore asks the
Panel to reject the European Union's request. 74 China recalls that its cl aim that the European Union
acted inconsistently with Articles 4.1 and 3.1 of the AD Agreement because the European Union had
excluded from the definition of the domestic indus try certain categories of producers extended not
only to the exclusion of producers that did not suppor t the complaint, but also to those producers that
came forward more than 15 days after the publication of the Notice of Initiation. China notes that the
findings of the Panel in the sentences that the Eu ropean Union requests to have deleted address the
second aspect of China's claim, namely the exclusio n of the producers that came forward more than
15 days after the publication of the notice of initiation.
6.78 For the same reasons as set forth with respect to paragraphs 7.213 and 7.214, we have denied
China's request.
6.79 We have also denied the European Union's re quest. The European Union has not identified
any error or suggested any revisions, but merely cont ends that the relevance of the last two sentences
of this paragraph to the Panel's finding is "not cl ear". The point being made is that while producers
that did not come forward during the 15-day period were not included, this is not the same as
excluding them, and the fact that the Commission di d consider expanding the industry, even if it did
not do so, supports this view. Thus, these two sentences support the Panel's conclusion that the
Commission did not exclude domestic producers that did not support the complaint. We have,
however, modified the last two sentences in order to clarify our views.
6.80 Paragraph 7.219 and footnotes 254, 255 and 256 : China considers that this paragraph is
incorrect in several respects, and requests that the Panel modify it.
75 First, according to China, the
fact that one of the producers included in the domestic industry allegedly was not one of the
complainants and did not express any view before th e initiation of the investigation does not establish
that this producer "did not support the complaint" once it came forward after the investigation was
initiated. Therefore, China suggests that the Pa nel clarify that the producer concerned did not
expressly state support for the complaint in its sampling form . According to China, the fact that the
sampling form did not request the producer to expressly state its support or opposition of the
complaint cannot be considered as sufficient evidence of the fact that this producer did not support the
complaint.
6.81 Second, China requests that the Panel modify footnotes 254 and 256 to clarify that it argued
that any deadline for domestic producers to make themselves known must be "reasonable". 76 Third,
China maintains that it substantiated its claim that the 15-days allowed by the Commission was
insufficient and unreasonable 77, and requests that the evidence and arguments it submitted in relation
to this issue be fully reported. Fourth, China asserts China it provide d evidence of the fact that the

72 European Union, Comments on China's request for interim review, p. 4.
73 European Union, request for interim review, p. 7.
74 China, Comments on the European Union's request for interim review, para. 22.
75 China, request for interim review, paras. 24-28.
76 China refers in this regard to China, answer to Panel question 23.
77 China refers in this regard to China, second written submission, paras. 577 – 581.

Commission inquired and thus necessarily kn ew about the position of that producer vis-à-vis the
investigation78, and requests that the evidence and arguments it has put forward be fully reported.
6.82 For the same reasons as given above in respect of China's comments concerning
paragraph 7.213 of the Interim Report, the European Union requests the Panel to reject the change
proposed by China. According to the Europ ean Union, that China disagrees and made
unsubstantiated assertions about the sufficiency of a 15-day period does not require that the Panel
accept this view. The European Union contends that China made bare assertions about the alleged
bias of the 15 day period, and that "mere speculations" are not sufficient to substantiate an argument.
The European Union also considers that the Pane l was correct to state that "China proffers no
evidence" of its assertion that the Commission e nquired about the position of the producers with
respect to the complaint, contending that the fact that China made an assertion to the contrary does not
mean that it proffered any "evidence". For th e same reasons as explained regarding China's
comments concerning paragraph 7.213 of the Interim Re port, the European Union contends that it is
simply not the case "that the Commission inquired and thus necessarily knew about the position of
that producer vis-à-vis the investigation".
79
6.83 With respect to China's first comment, we ha ve denied China's request, for the reasons
expressed above with respect to paragraph 7.214. With respect to China's second comment, we have
granted China's request by modifying footnote 254 (now footnote 481) to indicate that China did not
object to the application of reasonable deadlines. Footnote 256 is a citation, and we see no reason to
modify it. With respect to China's third comment, we have denied China's request. Paragraphs 577
to 581 of China's second written submission set forth China's arguments as to the insufficiency of the
15-day period, which position is reflected in paragr aph 7.219 of the Interim Report. China asserted
that the time limit was short, making it more likely that complainants and supporting companies
would come forward during that period, rather than opponents, that the Commission's methodology of
linking willingness to be included in the sample to inclusion in the industry was fundamentally biased
because opposing producers would be less likely to be willing to be part of the sample, and that the
15-day period was not the period allowed to "make oneself known", which is 40 days.
80 In our view,
these arguments do not "substantiate" China's position, in the sense that they do not demonstrate that
the posited consequences actually occurred in this case. In the absence of such a demonstration,
including evidence, we are of the view that China's arguments are speculation, and do not substantiate
its position. With respect to China's fourth co mment, we have denied China's request. Despite
China's assertion, paragraph 16 of China's comme nts on the European Union's answer to Panel
question 89 does not contain evidence that the Commission enquired about and knew the position of
the producer in question regarding the complaint, but merely reiterates the arguments China had made
previously, and which we did not accept. China's "understanding" of events is not a fact, but an
argument. As footnote 255 (now footnote 482) re flects our analysis and conclusion concerning the
evidence before us, and accurately reflects the evidence, we see no reason to expand the description of
China's arguments in this regard.
6.84 Paragraph 7.233: The European Union requests the Panel to consider modifying or deleting
the fourth sentence of this paragraph, asserting that it is neither necessary nor appropriate to suggest
that a possible violation of Article 4.1 would necessarily violate Article 3.1.
81 The European Union
considers that Article 3.1 relates to the manner in which an authority examines the state of the
domestic industry ("objective examination") and the quality of the evidence used in this respect
("positive evidence"). The European Union agrees th at if the definition of the domestic industry is

78 China refers in this regard to China, Comments on the European Union's answer to Panel
question 89, para. 16.
79 European Union, Comments on China's request for interim review, p. 4.
80 China, second written submission, paras. 578-580.
81 European Union, request for interim review, pp. 7-8.

inconsistent with Article 4.1, it does not matter whether an objective examination was conducted or
not. But that does not mean that necessarily Artic le 3.1 has been violated. It simply becomes
irrelevant whether Article 3.1 was complied with or not; but that is not the same as finding that this
provision has been violated. China considers that if a domestic industry has been wrongly defined, it
logically follows that the injury assessment made with respect to such a wrongly defined domestic
industry is not consistent with Ar ticle 3.1. This sentence is in line with the Panel's finding in EC –
Salmon (Norway) , paragraph 7.124. China therefore su bmits that the Panel should reject the
European Union's request.82
6.85 This sentence reflects our agreement with the views of the panel in EC – Salmon (Norway) ,
cited in footnote 276, that "[f]urthermore, the EC 's analyses of injury and causation were based on
information relating to a wrongly-defined industry, a nd are therefore necessarily not consistent with
the requirements of Articles 3.1, 3.4, and 3.5". To modify it as proposed by the European Union
would be inappropriate, as it would no l onger be an accurate statement of the Salmon panel's views.
We have therefore denied the European Union's request.
6.86 Paragraph 7.236: China requests that the paragraph be modified to accurately reflect its
arguments.83 The European Union requests the Panel to re ject the proposed changes as it is clear that
the Panel correctly summarized the most relevant elements of China's argument. The
European Union submits that China has not provided any precise citations to its submission to show
the contrary.
84
6.87 China has not substantiated that the text it proposes to delete is inaccurate, and we have
therefore denied its request. We have, however, added a footnote referencing China's second written
submission at paragraphs 681-684, where this argument is expressed.
6.88 Paragraph 7.238: China requests that the Panel modify this paragraph to accurately reflect
its argument.85 According to China, its argument is not that the volume of production is irrelevant,
but rather that "the determination of a sample merely on the basis of the "largest volume that can
reasonably be investigated" is not appropriate to sat isfy the representativity requirement", referring to
paragraph 676 of its second written submission. The European Union did not comment on China's
request.
6.89 The sentence to which China objects reflects our understanding of China's argument, which
goes on to contend that the Commission erred in relying only on volume of production, and should
have used a statistically valid sample. 86 Our understanding of China's argument as implying that
volume of production is irrelevant to the selection of a sample for purposes of injury analysis has not
changed, and we therefore have denied China's request.
6.90 Paragraph 7.283: China requests that the Panel modify this paragraph to accurately and
completely reflect China's arguments.87 The European Union did not comment on China's request.
6.91 This paragraph sets forth the Panel's conclusion, and in that context, we see no reason to
expand the reference to China's arguments, whic h are in any case reported elsewhere. Moreover,
China's proposed additional text in troduces concepts that China did not argue during the proceeding,
and for which it provides no reference, and China's ar gument with respect to a "theoretical basis" of

82 China, Comments on the European Union's request for interim review, para. 23.
83 China, request for interim review, para. 29.
84 European Union, Comments on China's request for interim review, p. 4.
85 China, request for interim review, para. 30.
86 China, second written submission, paras. 678-689.
87 China, request for interim review, para. 31.

the definition of like product, and the "fact that de facto the product concerned and the "like product"
do not consist of the same products" is unclear. We have therefore denied China's request.
6.92 Paragraph 7.285: China requests that the Panel modify this paragraph to accurately reflect
China's arguments.88 The European Union did not comment on China's request.
6.93 Since the requested modification reflects Chin a's arguments as presented to the Panel, we
have granted China's request and modified the paragraph accordingly.
6.94 Paragraph 7.294: China requests the Panel to modify th is paragraph to accurately reflect its
arguments, referring in particular to para graphs 769 - 788 of its second written submission. 89 T h e
European Union requests that the Panel reject the changes proposed by China, as the summary
provided in this paragraph correctly reflects the esse ntial elements of China's claim as presented in
paragraph 766 of China's second written submission.90
6.95 The additional text proposed by China concerns two elements of its claim regarding the
Commission's dumping determination. Given that the first part of China's request concerns China's
own arguments, we have granted this part of China's request and modified this paragraph accordingly.
The second aspect of China's request concerns the procedural aspects of the Commission's
determination, which are the subject of a separate procedural claim addressed elsewhere in the Report,
at paragraphs 7.477-7.483. Therefore, we have denied this aspect of China's request.
6.96 Paragraphs 7.302 and 7.306: With respect to paragraph 7.302, China asserts that it provided
ample evidence of the fact that the differences reflected in the PCN affected price comparability. 91
China requests that the Panel modify this para graph to reflect this evidence and arguments. 92 A s
regards paragraph 7.306, China maintains, as it did with respect to paragraph 7.302, that it provided
evidence that the PCN characteristi cs reflect differences that affect price comparability and requests
that this evidence and its arguments be reported in the Panel's Report but makes no specific textual
suggestions.93 China also maintains that it expressly not ed that "interested parties have stressed
throughout the investigation that it was of fundame ntal importance that the comparison be made on
the PCN basis". 94 China recalls that it explained that, if interested parties did not focus their
comments during the investigation on the characteris tics reflected in the PCN, it was because they
assumed that the comparison was being made on such b asis. China further recalls that it argued that
the absence of specific requests for adjustments conc erning physical differences reflected in the PCNs
was due to the lack of information by the Commission which never informed all interested parties that
the comparison was not being made on a PCN basis but exclusively on the basis of two product
characteristics.95 Finally, China notes that the Panel has not addressed its argument that the failure of
the Commission to inform the interested parties of the comparison method used and of the fact that
the comparison was no longer made on the basis of the PCN but on the basis of other characteristics
itself constitutes a violation of Article 2.4, and in particular of its last sentence.
96

88 China, request for interim review, para. 32. We no te that the suggested chan ge reflects the text of
89 China, request for interim review, para. 33.
90 European Union, Comments on China's request for interim review, p.4.
91 China refers in this regard to China, second written submission, paras. 797 – 806.
92 China, request for interim review, para. 34.
93 China, request for interim review, paras. 35-39.
94 China refers in this regard to China, second oral statement, para. 96 and China, second written
submission, para. 806.
95 China refers in this regard to China, second written submission, paras. 775 – 786.
96 China refers in this regard to China, second written submission, para. 796.

6.97 The European Union requests that the Panel reject China's request to reflect "evidence" which
it contends the Panel rightly pointed out China di d not present. The European Union argues that
China confuses bare assertions with evidence. The European Union refers to, for example,
paragraphs 475 – 477 of its first written submission as we ll as paragraphs 50 – 54 of its oral statement
at the second meeting in which aspects of China's ar guments in paragraphs 34 – 39 of its interim
review comments are addressed. According to the Eur opean Union, it is not appropriate to attempt to
re-litigate this argument at the interim review stage.
6.98 With respect to paragraph 7.302, we note that China's comments merely refer to the relevant
parts of its second written submission where this i ssue is discussed, but do not demonstrate any error
in the Panel's view that China " pointed to no evidence that was befo re the investigating authority" in
support of its position. We therefor e have denied China's request. With respect to paragraph 7.306,
we consider that, in its response to Panel questi on 38(b), China recognized that the Chinese producers
did not make requests for adjustments for diffe rences affecting price comparability, with the
exception of one Chinese producer who made a request with respect to alleged differences in quality,
as indicated in footnote 388 of the Interim Report. With respect to China's concern that the Panel
failed to address its argument that, by failing to inform the Chinese producers of its decision not to
base the dumping determinations on full PCNs, the European Union violated Article 2.4 of the
AD Agreement, we recall that this is the main argument China raises in connection with its claim
under Articles 6.2, 6.4, 6.5 and 6.9 of the AD Ag reement, which is addressed in the Report at
paragraphs 7.477-7.483. For the foregoing reasons, we have deni ed China's request concerning
paragraph 7.306.
6.99 Paragraph 7.313: China suggests several modifications in this paragraph to clarify its
arguments.97 First, China proposes to clarify that its ar gument is not limited to the use of simplified
PCNs but also encompasses the ab sence of any adjustments to ta ke into account the elements
identified in the PCNs which were not taken into account in the comparison, referring in this regard to
China, second written submission, paragraph 849. Sec ond, China requests a clarif ication that the fact
that the information was requested on a PCN basis created a presumption which implied that the
Commission should have examined the PCN factors which were finally not taken into account for
making the price undercutting analysis and concluded that they could not affect the price undercutting
analysis. Third, China requests clarification th at it claimed and provided evidence that the product
characteristics which were not taken into account ha d an impact on consumer perception and market
value. The European Union argues that the Panel co rrectly summarized the most relevant elements of
China's argument in this regard and invites the Panel to reject China's request.
98
6.100 Given that the requested modification reflects China's arguments as presented to the Panel, we
have granted China's request and modified this paragraph accordingly.
6.101 Paragraph 7.314: China suggests that the Panel modify the fourth and fifth sentences of this
paragraph for the sake of clarity. 99 China also requests that the Pane l modify the last three sentences
of the paragraph to reflect China's argument more accurately. The European Union requests the Panel
to reject the proposed changes, arguing that the Panel correctly decided not to reflect China's
confusing assertions with respect to "standard" fasteners. With respect to China's request with respect
to its argument on the adjustment for quality differe nces, the European Union also argues that this
request should be rejected since this paragraph correctly reflects China's arguments in this regard.100

97 China, request for interim review, para. 40.
98 European Union, Comments on China's request for interim review, p. 5.
99 China, request for interim review, paras. 41-42.
100 European Union, Comments on China's request for interim review, p. 5.

6.102 Given that the requested modification reflects China's arguments as presented to the Panel, we
have granted China's request and modified this paragraph accordingly.
6.103 Paragraph 7.327: China requests that the Panel modify this paragraph to accurately
reproduce China's arguments. 101 China also asserts that the Panel did not address its arguments and
evidence that the ch aracteristics identified in th e PCNs which were not taken into account affected
price comparability and consumer perception and had therefore to be fully taken into account. The
European Union contends that this paragraph corr ectly reflects China's arguments and asks the Panel
to reject China's request. In any case, the European Union object s to China's assertion that it
presented "evidence" that "the characteristics iden tified in the PCNs which were not taken into
account affected price comparability and consumer perception ". This, in the view of the
European Union, is simply not correct.102
6.104 Paragraph 7.327 reflects the Panel's understanding of the parties' arguments with respect to
the claim on price undercutting. China's proposed m odification would not clarify our views in this
regard. With regard to China's argument that the Interim Report does not reflect China's arguments
and evidence to the effect that th e characteristics identified in the PCNs which were not taken into
consideration by the Commission affected price co mparability and consumer perception, China has
not specified where in its submissions such arguments were made. We have therefore denied China's
request.
6.105 Paragraph 7.333: China requests that the Panel revise the fourth sentence of this
paragraph to reflect China's arguments more accurately. 103 The European Union did not comment on
this request.
6.106 China's requested change would not affect the substance of this paragraph, and we have
therefore granted China's request and modified this paragraph accordingly.
6.107 Paragraph 7.337: China suggests replacing the phrase "several panel reports" with the
phrase "several panel and Appellate Body reports" in the third sentence. 104 The European Union did
not comment on China's request.
6.108 Given that the requested modification reflects China's arguments as presented to the Panel, we
have granted China's request and modified this paragraph accordingly.
6.109 Paragraph 7.338: China requests that the Panel modify this paragraph to reflect the second
aspect of China's claim more accurately.105 The European Union did not comment on China's request.
6.110 Given that the requested modification reflects China's arguments as presented to the Panel, we
have granted China's request and modified this paragraph accordingly.
6.111 Paragraph 7.348: China suggests adding a footnote re ferring to the Definitive Regulation,
recital 78, at the end of this paragraph.106 The European Union did not comment on China's request.
6.112 We have granted China's request.

101 China, request for interim review, paras. 43-44. China refers in this regard to China, second written
submission, para. 834 and China, answer to Panel question 41.
102 European Union, Comments on China's request for interim review, p. 5.
103 China, request for interim review, para. 45.
104 China, request for interim review, para. 46.
105 China, request for interim review, para. 47.
106 China, request for interim review, para. 48.

6.113 Paragraph 7.351. China requests that the Panel modify this paragraph to reflect its claim
more accurately.107 The European Union did not comment on China's request.
6.114 We have granted China's request and modified this paragraph accordingly.
6.115 Footnote 484: The European Union requests that th e figure "99.9 percent" be bracketed. 108
Alternately, the European Union suggests modifying the text of the footnote to avoid the question of
bracketing. China disagrees with the European Un ion's request to add the word "negligible" to
describe the volume of exports of the two Chin ese exporting producers which were found not to be
dumping. China considers the word "negligible" as having a subjective connotation. China agrees
with the European Union's suggestion to replace the confidential figure of [99.9%] by the words
"almost 100%".109
6.116 The figure "99.9 percent" was not bracketed in paragraph 531 of the European Union's
first written submission, to which it is c ited. The European Union's first written
submission was posted on the European Uni on's web-site as of 16 September 2010,
http://trade.ec.europa.eu/doclib/docs/2010/april/tradoc_145984.pdf. Thus, desp ite this information
having been bracketed at other places in the Eu ropean Union's submissi ons, and notwithstanding
China's agreement, the cited figure is unquestionabl y in the public domain, and there is no basis to
bracket it as confidential information. We therefor e have denied the European Union's request to
bracket the figure, and there is no reason to amend the text to avoid the bracketing issue.
6.117 Paragraph 7.372: China requests that the Panel modi fy the last three sentences of this
paragraph to reflect its arguments more accurately. 110 The European Union requests the Panel to
reject China's proposed amendments as the paragra ph at issue accurately reflects China's argument as
made in paragraphs 439 – 444 of its first written submission.111
6.118 Given that the requested modification reflects China's arguments as presented to the Panel, we
have granted China's request and modified this paragraph accordingly.
6.119 Paragraph 7.373: China requests that the Panel revise this paragraph to reproduce China's
argument in relation to the Commission's conclu sions regarding profitability more accurately. 112 The
European Union requests the Panel to reject China' s proposed amendments as the paragraph at issue
accurately reflects China's argument as made in paragraphs 446 – 447 of its first written submission to
which the Panel refers.113
6.120 Given that the requested modification reflects China's arguments as presented to the Panel, we
have granted China's request and modified this paragraph accordingly.
6.121 Paragraph 7.374: China requests that the Panel revi se this paragraph to describe China's
arguments more accurately and more completely. 114 The European Union did not comment on
China's request.
6.122 Given that the requested modification reflects China's arguments as presented to the Panel, we
have granted China's request and modified this paragraph accordingly.

107 China, request for interim review, para. 49.
108 European Union, request for interim review, p. 8.
109 China, Comments on the European Union's request for interim review, paras. 24-25.
110 China, request for interim review, para. 50.
111 European Union, Comments on China's request for interim review, p. 5.
112 China, request for interim review, para. 51.
113 European Union, Comments on China's request for interim review, p. 5.
114 China, request for interim review, para. 52.

6.123 Paragraph 7.376: The European Union requests that the Panel consider amending the final
sentence of this paragraph to clarify its meaning. 115 China did not comment on the European Union's
request.
6.124 While the European Union does not refer to its submissions in support of the requested
modification, since the request does reflect the Euro pean Union's arguments as they were presented to
the Panel, we have granted the European Union' s request, modified this paragraph accordingly and
indicated where in the European Union's submissions those arguments are found.
6.125 Paragraph 7.394: China requests that the Panel modify this paragraph and add a footnote. 116
China asserts that the statement "while the sp ecific numbers and degree are different, both the
Information Document and the Definitive regulation come to the same essential conclusion, reporting
a significant loss of market share by the European Union industry" in this paragraph does not apply to
sales, requests that the Report reflect this, and su ggests a footnote to clarify the differences between
the Information Document and the Definitive Regula tion in relation to sales, similar to footnote 562
of the Interim Report with respect to market share. The European Union requests the Panel to reject
China's proposed change as it simply represents a c ontinuation of the arguments China made in the
course of the panel proceedings which confused th e Panel as to the findings of the investigating
authorities. The European Union submits that th e opportunity to comment on the Interim Report in
this interim review should not be used for further litigation of the matter. The European Union notes
that China's argument about the alleged discrepan cy between the Information Document and the
Definitive Regulation is addressed in its submissions.117
6.126 China is correct that the Panel's statement con cerns only the discussion of market share in the
Information Document and the Definitive Regulation, as is clearly stated in the text. We therefore
deny China's request in this regard as redundant. Th e reference to the similar conclusions is reported
as a matter of fact, not as an essential aspect of our analysis, and thus the fact that the Information
Document and the Definitive Regulation reported di fferent trends in sales is not relevant to our
conclusion, which as stated, is based on the fact that the parties were aware that the analysis in the
Information Document was preliminary and that the final analysis might be based on different
information. We have therefore denied China's request.
6.127 Paragraphs 7.396-7.397: China requests that the Panel modify these paragraphs to reflect
that it has never claimed that the Commission did not ex amine the level of profitability at all, but that
it maintains that the examination carried out by the Commission was not objective.
118 T h e
European Union maintains that th e Panel accurately dealt with both aspects of China's claim and that
there is therefore no basis for making the suggested changes.119
6.128 The phrase China proposes be deleted reflect s our understanding of China's argument as
asserting that the Commission failed to take the incr ease in profitability into consideration in its
analysis, as well as that the Commission failed to objec tively examine the profitability of the industry.
The contested phrase indicates that, to the extent th at China is making the former argument, it is
incorrect as a matter of fact. Our understanding of China's arguments in this regard has not changed,
and therefore we have denied China's request.

115 European Union, request for interim review, p. 8.
116 China, request for interim review, para. 53.
117 European Union, Comments on China's request for interim review, p. 5. The European Union refers
in this regard to paragraphs 587 – 588 of, we belie ve, its first written submission, and European Union,
second written submission, paras. 194-195.
118 China, request for interim review, para. 54.
119 European Union, Comments on China's request for interim review, p. 5.

6.129 Paragraph 7.404: China requests that the Panel modi fy the first three sentences of this
paragraph, and the footnotes pertaining to those sentences.120 China considers that, as drafted, they do
not correctly reflect the findings on injury reached by the Commission in the Definitive Regulation.
In general, China notes that it would have preferre d the Panel to quote the exact statements included
in the Definitive Regulation. In particular, Ch ina points out that the Commission did not "conclude"
in the Definitive Regulation that "cash flow declined by almost 20 percent from 2005 to the
investigation period", although it recognizes that th is can be deduced from the table provided in
section 5.4 of the Definitive Regulation. Moreover, China contends that the Commission did not state
in its injury analysis that the margins of dumping we re "significant" but rather that they were "above
de minimis ". China further notes that, contrary to wh at the third sentence seems to suggest, the
Commission did not even state, let alone "explai n", in the Definitive Regulation that the positive
developments in relation to stocks and prices did not reflect the significant increase in demand which
might have been expected to result in more rapid positive movement. With respect to the return on
investments, China observes that the Definitive Regulation did include a comment on the relationship
between the development thereof and the increase in demand, but not exactly in the way described in
this paragraph. Furthermore, China points out some references in the footnotes that it contends are
not correct or are incomplete. The European Unio n argues that the Panel correctly summarized the
major elements of the investigating authorities' fi ndings on injury referring each time in a footnote to
the relevant recitals of the Definitive Regulati on and therefore asks the Panel to reject China's
request.121
6.130 We have granted China's request in part, by modifying the paragraph to reflect that the
Commission concluded that the dumping margins were above de minimis, and that given the volume
and the price of the dumped imports, the impact of the margin of dumping could not be considered
negligible. However, with respect to the remainder of China's request, this paragraph reflects our
understanding of the Definitive Regulation conclu sions as a whole, and thus synthesises some
elements of those conclusions, rather than re-sta ting them in the terms used by the Commission.
Merely that an aspect of the Definitive Regulation is not stated as a specific conclusion does not mean
that our understanding in referring to that aspect as a conclusion is incorrect. Similarly, while China
may not view a particular aspect of the Definitiv e Regulation to "explain" certain aspects, we
considered that, as a whole, such an explanati on can be understood from the Definitive Regulation.
We have therefore denied the remainder of China's request.
6.131 Paragraph 7.407: China requests that the Panel modify this paragraph to clarify and reflect
its arguments more accurately. 122 China refers specifically to China, second written submission,
paragraphs 944-947, 948 and 949 and China, answer to Panel question 52, paragraph 172, in this
regard. The European Union sees no reason for the Panel to make the proposed changes as the Panel
accurately summarized the essential elements of China's arguments in respect of the injury analysis.123
6.132 This paragraph is part of the Panel's analys is, and thus it is not necessary to summarize all
aspects of China's arguments in detail. Nonetheless, we have modified paragraph 7.407 to reflect
China's argument more fully, and included additional references to China's submissions.
6.133 Paragraph 7.413: China requests that this paragraph be modified to clarify the distinction
between the two main elements of its first assertion of error and reflect its arguments more accurately
and completely. 124 The European Union asks the Panel to reject China's request since the Panel

120 China, request for interim review, para. 55.
121 European Union, Comments on China's request for interim review, p. 6.
122 China, request for interim review, para. 56.
123 European Union, Comments on China's request for interim review, p. 6.
124 China, request for interim review, para. 57.

accurately summarized the essential elements of China's arguments in respect of the causation
analysis, which, according to the European Union, was not properly before the Panel anyway.125
6.134 Given that the requested modification reflects China's arguments as presented to the Panel, we
have granted China's request and modified this paragraph accordingly.
6.135 Paragraph 7.414: China requests that this paragraph be modified to reproduce its argument
more accurately.126 The European Union did not comment on China's request.
6.136 While China does not refer to its submissions in support of the requested modification, since
the request does reflect China's arguments as they were presented to the Panel, we have granted
China's request, modified this paragraph accordin gly and indicated where in China's submissions
those arguments are found.
6.137 Paragraphs 7.415 et seq: The European Union requests that the Panel reflect its objection to
the way China developed its argument on causa tion and non-attribution in its second written
submission, which the European Union asserts effectiv ely introduced a new claim that was not part of
the request for establishment.127 The European Union explained that China's request for establishment
contains a claim in respect of the non-attribu tion analysis but not on the question of causation
per se.128 The European Union considers that this new claim of China in respect of the establishment
of a causal link between the dumped imports and the injury found to exist is simply outside the Panel's
terms of reference since it was not part of the request for establishment.
6.138 China notes that in its first written submission, it had identified two sets of errors in the
causation analysis129, namely that: "(i) the EC failed to demonstrate that dumped imports are, through
the effects of dumping, causing injury to the domestic industry and (ii) the EC failed to ensure that
injury caused by factors other than dumped imports was not improperly attributed to dumped imports,
in particular the increase in raw material pr ices and the export performance of the Community
industry". According to China, these arguments are properly reflected in paragraphs 7.412 – 7.414 of
the Interim Report. China notes that the European Union did not raise any objection in its first written
submission, at the first substantive meeting or in its second written submission regarding these
two aspects of its claim on causation. In China' s view, the claim discussed by China in its
second written submission was not "new" as alleged by the European Union. China asserts that it
reflected the first aspect of China's claim on cau sation, i.e. that the European Union failed to
demonstrate that dumped imports are, through the e ffects of dumping, causing injury to the domestic
industry, which China had identified and substantia ted in its first written submission. China argues
that the European Union is not entitled to raise such a procedural objection at such a late stage of the
proceedings. In this regard, China recalls the Appellate Body's statement that "when a Member
wishes to raise an objection in dispute settlement pr oceedings, it is always incumbent on that Member
to do promptly. A Member that fails to raise its objections in a timely manner, notwithstanding one or
more opportunities to do so, may be deemed to have waived its rights to have a panel consider such
objections". China contends that if the European Union wished to complain about China's claim, it
was required to raise it in its first written submission, at the latest. Moreover, China contends that by
raising this objection only during the second substantive meeting, the European Union deprived China
of the right to defend itself and to present arguments as to why this aspect of its claim is within the
Panel's terms of reference, thus raising a due process issue. In any case, China submits that the first
aspect of its claim is within the Panel's terms of re ference as its panel request unambiguously refers to

125 European Union, Comments on China's request for interim review, p. 6.
126 China, request for interim review, para. 58.
127 European Union, request for interim review, p. 9.
128 The European Union refers in this regard to European Union, second oral statement, para. 70.
129 China, First Written Submission, paras. 462, 474 – 493.

Articles 3.1 and 3.5 of the AD Agreement and raises a claim of violation of these provisions through
the causation analysis. In China's view, that the European Union violated Articles 3.1 and 3.5 because
(i) the European Union failed to demonstrate that dumped imports are, through the effects of
dumping, causing injury to the domestic industry and (ii) the European Union failed to ensure that
injury caused by factors other than dumped imports was not properly attributed to dumped imports,
are just arguments which substantiate the claim put forward by China.130
6.139 It is clear that China argued both aspects of its claim in its first written submission. We
consider that the European Union should have raised its objection earlier, particularly in a case where
it made numerous similar preliminar y objections. In order to clarify our views, we have modified
footnote 596 (now footnote 841) to reflect the European Union's objection, as set out in its second oral
statement, and that we consider the European Un ion's objection to be untimely and therefore decline
to address it.
6.140 Paragraph 7.416: The European Union requests the Panel to consider this paragraph to
make it clearer and easier to read.131 China did not comment on the European Union's request.
6.141 We have granted the European Union's request a nd redrafted this paragraph to clarify without
altering its meaning.
6.142 Paragraph 7.431: China requests that the Panel add to this paragraph re ferences to the
relevant parts of its submissions to the Panel, where it addressed the reasoning developed by the
Commission in relation to increased raw material prices. 132 The European Union contends that the
Panel should not make the proposed changes as the Panel accurately summarized the essential
elements of China's arguments in respect of the non-attribution analysis.133
6.143 The additional text China proposes to add to pa ragraph 7.431 does not clarify the issue being
addressed in that paragraph, but merely reiterates Chin a's argument. As this paragraph is part of the
Panel's analysis, we see no reason to expand the summary of China's argument. Moreover, the
additional references China proposes to add to footno te 651 of the Interim Report do not relate to the
question being addressed in this paragraph, concerning the effect of increased raw material costs, and
China's alternative explanation in that regard. Question 59 of the Panel concerns the export figures
used by the Commission, and Exhibit CHN-76 does not refer to raw material costs at all. We have
therefore denied China's request.
6.144 Paragraph 7.434: China requests that the Panel revise this to clarify the object of the
statement that "China does not dispute this", a nd add additional references to China's arguments. 134
China notes that it understands the Panel to consider that China does not dispute that the Commission
addressed the question of the export performance of the domestic industry, as noted by the Panel in
the first sentence of the preceding paragraph. However, since the preceding paragraph also
reproduces the considerations of the Commission in the Definitive Regulation, China suggests that the
statement "China does not dispute this" could be mi sinterpreted to mean that China does not dispute
the findings reached in the Definitive Regulation in relation to the export performance of the domestic
industry, which China did dispute. China asserts that it argued that the conclusion reached by the
Commission, that the export performance was not a source of material injury, is not a conclusion
which could have been reached by an unbiased and objective investigating authority on the basis of

130 China, Comments on the European Union's request for interim review, paras. 26-32.
131 European Union. request for interim review, p. 9.
132 China, request for interim review, para. 59. China refers in this regard to China, answer to Panel
question 59 and Exhibit CHN-76, Ch ina, first written submission, para s. 483-486, China, second written
submission, paras. 983-990, and China, answer to Panel question 58.
133 European Union, Comments on China's request for interim review, p. 6.
134 China, request for interim review, para. 60.

the facts on the record. 135 China also requests that the Panel a dd a reference to paragraph 490 of its
first written submission with respect to its argume nt concerning the relevance of the increase in
exports. The European Union did not comment on China's request.
6.145 We have granted China's request and modified paragraph 7.434 to clarify that China did not
dispute that the Commission addressed the ques tion of the export performance of the domestic
industry, and added the requested reference.
6.146 Footnote 658: The European Union considers that this footnote should be revised to indicate
that the export information of sampled producers was considered.136 The European Union notes that it
submitted an internal document that reflected the export performance of sampled producers, which it
argues shows that such information was part of th e authority's considerations. China disagrees with
the European Union's request. China interpre ts the phrase "the European Union does not assert
otherwise" to mean that the European Union do es not assert that "there is an indication in the
Definitive Regulation that the information was actually considered by the Commission in its
analysis". According to Chin a, the European Union has not provided any reference in the Definitive
Regulation showing that the information was actually co nsidered by the Commission in its analysis.
Therefore, China submits that footnote 658 should not be modified.137
6.147 It is true that the European Union submitted, in its answer to Panel question 100, an "extract
from an internal document" which reflects the expor t performance of sampled producers, and there is
no reason not to accept that this information was, as asserted by the European Union "prepared in the
course of the investigation [and summarized] the ve rified data ... for the sampled producers". 138 We
note, however, that the European Union did not s ubmit the actual document to the Panel, and did not
specifically identify it, but only reproduced the information concerning exports in answering the
Panel's question. In any event, the mere fact th at the document existed does not demonstrate that the
Commission considered the information concerni ng sampled producers' export performance reported
in that document in making its decision. Indeed , the fact that the Definitive Regulation refers
exclusively to other information on exports, and gives no hint that any other information was
available to the Commission, suggests to th e contrary that the information in was not actually
considered by the Commission. Finally, while th e European Union now argues that the document
shows that the information was part of the auth ority's consideration, it made no such argument
previously. In submitting the information, the European Union asserted that it "confirms both the lack
of importance of export sales representing only 7. 3 percent of total sales and the healthy state of
export performance evidencing that this factor could not have been a cause of injury" 139, but did not
argue that the Commission in fact took this informati on into consideration, rather than or in addition
to the information actually cited and relied upon in the Definitive Regulation. We have therefore
denied the European Union's request.
6.148 Paragraph 7.440: China requests that the Panel modify this paragraph for clarity. 140 T h e
European Union did not comment on this request.
6.149 Since the proposed modification reflects China' s arguments as presented to the Panel and
provides more clarity, we have granted China's request and modified this paragraph accordingly.

135 China refers in this regard to China, second written submission, paras. 994 and 1000.
136 European Union, request for interim review, p. 9-10.
137 China, Comments on the European Union's request for interim review, paras. 33-34.
138 European Union, answer to Panel question 100, para. 38.
139 European Union, answer to Panel question 100, para. 38.
140 China, request for interim review, para. 61.

6.150 Paragraph 7.447: China requests that the Panel revise the twelfth sentence of this
paragraph in order to avoid possible misunderstanding. 141 China notes that this paragraph states, inter
alia, that "despite China's char acterization" of its "two allegations of violation of Article 6.2, one as a
dependent claim on a violation of Article 6.4 an d one independently", "finding a violation of
Article 6.2 in the context of China's so-calle d "independent" claim under Article 6.2 would also
require a prior finding, in connection with the cl aim under Article 6.5, that the identity of the
complainants and the supporters was wrongly treated as confidential information". China stresses in
this respect that its characterization of one of its claim of violation of Article 6.2 as independent and
the other one as dependent refers to the relationship between a violation of Article 6.2 with a violation
of Article 6.4 and not Article 6.5, and considers that Panel acknowledges, but that the paragraph is not
sufficiently clear in this respect. The European Union did not comment on this request.
6.151 The modification proposed by China does not change the content of this paragraph and we
have therefore granted China's request and modified this paragraph accordingly.
6.152 Paragraph 7.448: China requests that the Panel revise this paragraph to correctly describe
the complaint with respect to pot ential retaliation from customers. 142 The European Union did not
comment on this request.
6.153 We have granted China's request and modified this paragraph accordingly.
6.154 Paragraph 7.449: China requests that the Panel modify this paragraph to clarify that
Exhibit CHN-44 shows that the Commission inform ed those Chinese producers which had expressly
requested that the identity of the complainants be disclosed of its decision to accept the request for
confidentiality of the identity of the complainants and the supporters. 143 The European Union sees no
reason for the Panel to make the proposed chang es as the Panel accurately summarized the facts and
the essence of the disagreement between the European Union and China.144
6.155 We have granted China's request and modified this paragraph accordingly.
6.156 Paragraph 7.452: China requests that the Panel modify this paragraph. 145 China considers
that it incorrectly states that "[t]he complaining European Union producers asserted that they feared
commercial retaliation if such customers found out th at these producers had requested the initiation of
an anti-dumping investigation on fasteners from China, which might have the effect of raising prices
on such fasteners, and thus raising the costs of these customers". According to China, this
explanation was not provided by the complainants in their Complaint. The European Union did not
comment on this request.
6.157 We have granted China's request and modified this paragraph accordingly.
6.158 Paragraph 7.454, footnote 685 : China requests that the Panel modify the statement in
footnote 685.146 China notes that the European Union asser ted that at least one company included in
the sample was not, in fact , either a complainant or supporter of the complaint, but maintains that no
evidence in this regard was provided by the Europ ean Union. The European Union requests the Panel
to reject the proposed changes, arguing that the Panel correctly summarized the most relevant

141 China, request for interim review, para. 62.
142 China, request for interim review, para. 63.
143 China, request for interim review, para. 64.
144 European Union, Comments on China's request for interim review, p. 6.
145 China, request for interim review, para. 65.
146 China, request for interim review, para. 66.

elements of China's argument. The European Union also submits that China has not provided any
citations to its submission to show the contrary.147
6.159 Footnote 685 refers to paragr aph 7.214 of the Report, where the Panel found, as a matter of
fact, that at least one EU producer which was not a complainant or supporter of the complaint was
subsequently included in the sample for the EU indus try. We have denied China's request to modify
footnote 685 of the Interim Report, but modified pa ragraph 7.454 to better reflect China's argument,
which is cited in footnote 684 (now footnote 939).
6.160 Paragraphs 7.477, 7.485 and 7.486 : With respect to paragraph 7.477, China requests that
the Panel modify this paragraph for clarity. 148 China considers it important to clarify that the
information provided by the Commission one working day before the deadline for commenting on the
General Disclosure Document concerning the char acteristics on the basis of which the comparison
was being made was provided only to two Chinese exporting producers who had requested
clarification in this regard repeatedly.149 China notes that this comment applies throughout the section
addressing China's claim that the European Union viol ated Articles 6.2, 6.4, 6.5 and 6.9 by failing to
disclose aspects of the normal value calculation. Wi th respect to paragraphs 7.485 and 7.486, China
requests that the Panel revise paragraph 7.486, for consistency and to avoid confusion. 150 China notes
that paragraph 7.485 states that "the General Disclosure Document makes it clear that the
Commission based its normal value determination on "product types", as opposed to PCNs". China
acknowledges that the General Disclosure Document indeed makes it clear that the Commission based
its normal value determination on "product types", but maintains that the fact that these "product
types" differ from the PCNs is only clear after th e letter of the Commission dated 21 November 2008,
as stated in paragraph 7.489. China notes that this is also clear from paragraphs 7.490 and 7.494.
6.161 The European Union requests the Panel to re ject China's request. The European Union
submits that the proposed changes attempt to improve China's arguments ex post Panel proceedings.
Furthermore, argues the European Union, in para graph 72 of China's comments, China itself proposes
a reference to requests by Chinese exporting producers generally.
151
6.162 We have granted China's request to clarif y that the Commission provided information on
product types only to the two Chinese producers that requested such information by referring, in
paragraphs 7.485 and 7.486, to "two Chinese producers" . With respect to China's request regarding
paragraph 7.485, in our view, this paragraph states the Panel's unders tanding of the General
Disclosure Document, namely that the Commission based its normal value de termination on product
types, not PCNs, but did not explain how those product types were established. 152 We have therefore
denied China's request.
6.163 Paragraph 7.496: China requests that the Panel modify this paragraph to correctly reflect its
claim.153 China considers that the text as drafted is in correct because first, paragraph 7.496 states that
"China contends that the European Union violated its obligations under Articles 6.4, 6.2 and 6.5 of the
AD Agreement by failing to disclose, in the individual and General Disclosure Documents,
information pertaining to the determination of the normal value". However, China maintains that its
claim does not relate to the failure to disclose this information in the disclosure documents, but to the
failure to provide the opportunity to see such in formation, including in the disclosure documents.

147 European Union, Comments on China's request for interim review, p. 6.
148 China, request for interim review, paras. 67-68.
149 China refers in this regard to China, answer to Panel question 38(b).
150 China, request for interim review, paras. 69-70.
151 European Union, Comments on China's request for interim review, p. 6.
152 We note that China's request for interim review re fers to paragraph 7.486 of the Interim Report, at
paragraph 70, but the modification requested pertains to text in paragraph 7.485.
153 China, request for interim review, paras. 71-73.

China refers in this regard to paragraph 1085 of China's second written submission. Second, China
contends that the paragraph does not reflect that requests to get information on the normal value were
made during the investigations, referring in this rega rd to paragraph 279 of China's answer to Panel
question 64 and paragraphs 41-42 of China's replie s to Panel question 101and Exhibit CHN-74. The
European Union argues that the proposed cha nges attempt to improve China's arguments ex post
Panel proceedings and asks the Panel to reject them.154
6.164 With respect to the first elemen t of China's request, we note that this paragraph reflects our
understanding of China's arguments with respect to the claim on the pro cedural aspects of the
Commission's normal value determinations, and we ther efore deny China's request in this regard. As
regards the second element of China's request, given the Panel's legal analysis with respect to this
aspect of China's claim, there is in our view no need to mention China's argument that the Chinese
producers sought to obtain information on normal va lue determinations during the investigation at
issue in this paragraph. We have, however, am ended paragraph 7.461, where China's arguments on
this aspect of the claim are summarized, to mention this aspect of China's argument.
6.165 Paragraph 7.502: China requests that the Panel modify this paragraph. 155 China considers
that it is incorrect to state that the European Union submits that "China's claim under Article 6.9 of the
AD Agreement falls outside the Panel's term s of reference, because this claim […] was not identified
in China's panel request " (emphasis added). In China's view , the European Union's argument in
relation to China's panel request only relates to the fact that China's panel request would not expressly
refer to "product types", referring in this regard to the European Union's first written submission,
paragraph 745. The European Union requests the Panel to reject the proposed changes because the
Panel correctly summarized the most relevant elements of the European Union's arguments.156
6.166 We have granted China's request, and m odified this paragraph to describe the
European Union's argument more specifically.
6.167 Paragraph 7.506: China notes that this paragraph does not refer to the Panel Report in
China – Publications and Audiovisual Products which China considered as relevant for the purposes
of this matter, but makes no specific request in th is regard. The European Union did not comment on
this request.
6.168 China in its second written submission did refer to the Panel Report in China – Publications
and Audiovisual Products .157 However, as China itself put it, this report "elaborated on the ...
statement of the Appellate Body in Mexico – Anti-Dumping Measures on Rice ".158 In our view,
having addressed China's arguments in re liance on the Appellate Body report in Mexico – Anti-
Dumping Measures on Rice , there is no need to also discuss the findings of the panel in China –
Publications and Audiovisual Products on the same issue, and we have therefore denied China's
request.
6.169 Paragraph 7.512: The European Union requests that the Panel amend this paragraph to
accurately reflect the European Union's arguments, re ferring in this regard to its answer to Panel
question 72, paragraphs 174 – 181 and its Comments on China's answer to Panel question 101 [sic],
paragraph 27.159 China contends that in the quoted paragr aphs, it is nowhere mentioned that "[t]he
European Union notes that thereafter, this issue has not been brought to the Commission's attention by

154 European Union, Comments on China's request for interim review, p. 6.
155 China, request for interim review, para. 74.
156 European Union, Comments on China's request for interim review, p. 6.
159 European Union, request for interim review, p. 10. It appears that the European Union may have
intended to refer to question 107.

the Chinese producers". In China's view, this statem ent is directly contradicted by the facts which
have been explained by China on the basis of supporting evidence. In China's first written
submission, China provided evidence through Exhibit CHN-24 showing that Chinese exporting
producers continued to draw the Commission's atten tion to the serious deficiencies of the Community
producers' questionnaire responses even after th e letter was sent by the Commission to the
Community producers in May 2008. China therefore requests that the European Union's request be
rejected.160
6.170 Since the requested modification reflects the Eu ropean Union's arguments as presented to the
Panel, we have granted the European Union's request and modified this paragraph accordingly.
6.171 Paragraph 7.536: With a view to reflecting its argument more accurately, China suggests
the Panel revise this paragraph. 161 The European Union requests th e Panel to reject the proposed
changes as the Panel correctly summarized the most re levant elements of China's argument. Further,
the European Union contends that China has not provi ded any citations to its submissions to show the
contrary.162
6.172 While China does not refer to its submissions in support of the requested modification, since
the request does reflect China's arguments as they were presented to the Panel, we have granted
China's request, modified this paragraph accordin gly and indicated where in China's submissions
those arguments are found.
6.173 Paragraph 7.539: China requests that the Panel modify the first sentence of this paragraph to
more accurately reflect its arguments. 163 The European Union requests the Panel to reject the
proposed changes as the Panel correc tly summarized the most relevant elements of China's argument.
Further, the European Union argues that China has not provided any citations to its submissions to
show the contrary.164
6.174 Given that this paragraph concerns China' s own arguments, and having made a similar
modification to paragraph 7.536, we have granted China's request and modified this paragraph
accordingly.
6.175 Paragraph 7.542: The European Union requests that the Panel amend this paragraph to
accurately reflect its arguments, referring in particular to its first written submission, paragraph 774.165
China did not comment on this request.
6.176 Since the requested modification reflects the Eu ropean Union's arguments as presented to the
Panel, we have granted the European Union's request and modified this paragraph accordingly.
6.177 Paragraph 7.558, footnote 818: China requests that the Panel amend this footnote to clarify
that China disputes the European Union's assertion that "none of the companies involved complained
about disclosure of confidential information". 166 China refers in this regard to its first written
submission, paragraph 622, and Exhibit CHN-61. The European Union maintains that the alleged

160 China, Comments on the European Union's request for interim review, paras. 35-36.
161 China, request for interim review, para. 76.
162 European Union, Comments on China's request for interim review, p. 6.
163 China, request for interim review, para.77.
164 European Union, Comments on China's request for interim review, p. 6.
165 European Union, request for interim review, pp. 10-11.
166 China, request for interim review, para. 78.

evidence China refers to does not concern any of the companies mentioned in the MET Disclosure
Document and asks the Panel to reject the proposed changes.167
6.178 Contrary to the European Union's assertion, the MET Disclosure Document specifically refers
to the Chinese company on whose behalf the lette r in Exhibit CHN-61 raises concerns about the
disclosure of confidential information. 168 It is not clear that any confidential information of that
company was actually disclosed in the document, but nonetheless, it would be more correct to indicate
that one Chinese producer raised concerns about th e disclosure of confidential information in the
MET Disclosure Document, as shown in the attached proposed revisions. We have therefore granted
China's request and modified the text of footnote 818 (now footnote 1092).
6.179 Paragraph 7.575: China requests that the Panel modify this paragraph to reflect its
arguments more accurately.169 The European Union did not comment on China's request.
6.180 We have granted China's request and modified footnote 853 (now footnote 1127) to reflect
that China argued that the fact of verification s upported its contention that the MET/IT claim form
should be considered a "questionnaire" within the meaning of Article 6.1.1 of the AD Agreement.
6.181 Section VIII.A Conclusions : The European Union requests that the Panel insert a section
regarding those claims where the Panel c onsiders that China has failed to make a prima facie case
(e.g., paragraphs 7.497, 7.501 and 7.539). In addition, the European Union considers that
paragraph 8.2(e) in the conclusions should read "Article 6.4 ... with respect to a specific aspect of the
normal value determinations" and not "aspects". 170 China submits that there is no need to include an
additional section regarding the claims for which the Panel considers that China has failed to make a
prima facie case. China argues that the conclusions part of the Panel's Report reflects all findings that
the Panel has made with respect to all the cl aims that China has pursued in this dispute. 171 China did
not comment on the second aspect of the European Union's request.
6.182 With respect to the European Union's request regarding paragraph 8.2(e), we found violations
with respect to more than one procedural aspect of the normal value determination, and therefore we
deny the European Union's request . With respect to the European Union's request regarding our
findings concerning failure to make a prima facie case in certain instances, our conclusions in this
regard are part of our substantive analysis, and are discussed in the body of the Report, but do not
constitute conclusions separate from our overall conc lusions on the respective claims. We have
therefore denied the European Union's request in this regard. However, we have reviewed our
conclusions to ensure that all our findings are approp riately reflected, and to that end, have modified
paragraph 8.3 to state that "China has not establis hed that the European Union acted inconsistently
with ...". This formulation more clearly addresses both claims with respect to which we found that
China did not make a prima facie case, as well as claims with respect to which we rejected China's
arguments on the basis of a more elaborated substantive analysis.

167 European Union, Comments on China's request for interim review, p. 7.
168 Exhibit CHN-19.
169 China, request for interim review, para. 79.
170 European Union, request for interim review, p. 11.
171 China, Comments on the European Union's request for interim review, paras. 37-38.

VII. FINDINGS
A. RELEVANT PRINCIPLES REGARDING STANDARD OF REVIEW, TREATY INTERPRETATION AND
BURDEN OF PROOF
7.1 Before beginning our evaluation of the issues in this dispute, we consider it useful to outline
the legal framework that we will apply in these pro ceedings with respect to the standard of review,
treaty interpretation and burden of proof.
1. Standard of Review
7.2 Article 11 of the DSU provides the standard of re view for WTO panels in general. Article 11
imposes upon panels a comprehensive obligation to ma ke an "objective assessment of the matter", an
obligation which embraces all aspec ts of a panel's examination of the "matter", both factual and
legal.172
7.3 Article 17.6 of the AD Agreement, which sets fort h the special standard of review applicable
to disputes under the AD Agreement, provides:
 "(i) in its assessment of the facts of the matter, the panel shall determine
whether the authorities' establishment of the facts was proper and whether their
evaluation of those facts was unbiased and objective. If the establishment of the facts
was proper and the evaluation was unbiased and objective, even though the panel
might have reached a different conclusion, the evaluation shall not be overturned;
 (ii) the panel shall interpret the re levant provisions of the Agreement in
accordance with customary rules of interpreta tion of public international law. Where
the panel finds that a relevant provision of the Agreement admits of more than one
permissible interpretation, the panel sha ll find the authorities' measure to be in
conformity with the Agreement if it rests upon one of those permissible
interpretations."
Taken together Article 11 of the DSU and Article 17. 6 of the AD Agreement establish the standard of
review we will apply with respect to both the factual and the legal aspects of the present dispute.

7.4 Thus, we will find the challenged anti-dumping de termination to be consistent with the
AD Agreement if we find that the EU investiga ting authorities established the facts properly and
evaluated them in an unbiased and objective manner, and that the determinations in question were
based on a permissible interpretation of the relevant treaty provisions.
173 In our assessment of the
matter, we must limit our review to the "facts made available in conformity with appropriate domestic
procedures to the authorities of the importing Memb er", in accordance with Article 17.5(ii) of the
AD Agreement. We will not undertake a de novo review of the evidence before the investigating
authority during the proceeding, and will not substitute our judgement for that of the EU investigating
authorities even though we might have made a di fferent determination we re we examining the
evidence that was before the investigating authorities ourselves.

172 Article 11 of the DSU provides in part:
"The function of panels is to assist the DSB in discharging its responsibilities under this
Understanding and the covered agreements. Acco rdingly, a panel should make an objective
assessment of the matter before it, including an objective assessment of the facts of the case
and the applicability of and conformity with th e relevant covered agreements, and make such
other findings as will assist the DSB in making the recommendations or in giving the rulings
provided for in the covered agreements."
173 See below, paragraphs 7.6 - 7.8.

7.5 The Appellate Body has clarified a panel's sta ndard of review of the facts pursuant to the
above provisions in the following terms:
"It is well established that a panel must neither conduct a de novo review nor simply
defer to the conclusions of the national au thority. A panel's examination of those
conclusions must be critical and searching, and be based on the information contained
in the record and the explanations given by the authority in its published report. A
panel must examine whether, in the li ght of the evidence on the record, the
conclusions reached by the investigating au thority are reasoned and adequate. What
is 'adequate' will inevitably depend on the f acts and circumstances of the case and the
particular claims made, but several general lines of inquiry are likely to be relevant.
The panel's scrutiny should test whether the reasoning of the authority is coherent and
internally consistent. The panel must unde rtake an in-depth examination of whether
the explanations given disclose how the inv estigating authority treated the facts and
evidence in the record and whether there was positive ev idence before it to support
the inferences made and conclusions reached by it. The panel must examine whether
the explanations provided demonstrate that the investigating authority took proper
account of the complexities of the data before it, and that it explained why it rejected
or discounted alternative explanations and in terpretations of the record evidence. A
panel must be open to the possibility that th e explanations given by the authority are
not reasoned or adequate in the light of ot her plausible alternative explanations, and
must take care not to assume itself the role of initial trier of facts, nor to be passive by
'simply accept[ing] the conclusions of the competent authorities.'"
174 (Footnote
omitted.)
2. Rules of Treaty Interpretation
7.6 Article 3.2 of the DSU provides that the dis pute settlement system serves to clarify the
provisions of the covered agreements "in accordance with customary rules of interpretation of public
international law". It is generally accepted that these customary rules are reflected in Articles 31-32
of the Vienna Convention on the Law of Treaties ("Vienna Convention "). Article 31(1) of the
Vienna Convention provides:
"A treaty shall be interpreted in good faith in accordance with the ordinary meaning
to be given to the terms of the treaty in their context and in the light of its object and
purpose."
7.7 A number of WTO reports address the application of these provisions on treaty interpretation
in dispute settlement in the WTO. It is clear that interpretation must be based above all on the text of
the treaty175, but that the context of the treaty also play s a role. It is also well-established that these
principles of interpretation "neither require nor cond one the imputation into a treaty of words that are
not there or the importation into a treaty of concepts that were not intended". 176 Furthermore, panels
"must be guided by the rules of treaty interpretati on set out in the Vienna Convention, and must not
add to or diminish rights and obligations provided in the WTO Agreement".177

174 Appellate Body Report, United States – Investigation of the International Trade Commission in
Softwood Lumber from Canada – Recourse to Article 21 .5 of the DSU by Canada ("US – Softwood Lumber VI
(Article 21.5 – Canada)"), WT/DS277/AB/RW, adopted 9 May 2006, para. 93.
175 Appellate Body Report, Japan – Taxes on Alcoholic Beverages ("Japan – Alcoholic Beverages II "),
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97, p. 11.
176 Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical
Products ("India – Patents (US)"), WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, 9, para. 45.
177 Appellate Body Report, India – Patents (US), para. 46.

7.8 In the context of disputes under the AD Agreem ent and its separate standard of review, the
Appellate Body has stated that:
"The first sentence of Article 17.6(ii), echoing closely Article 3.2 of the DSU, states
that panels 'shall' interpret the provisions of the AD Agreement 'in accordance with
customary rules of interpretation of public international law.' Such customary rules
are embodied in Articles 31 and 32 of the Vienna Convention on the Law of Treaties
('Vienna Convention' ). Clearly, this aspect of Article 17.6(ii) involves no 'conflict'
with the DSU but, rather, confirms that th e usual rules of treaty interpretation under
the DSU also apply to the AD Agreement. …
The second sentence of Article 17.6(ii) … presupposes that application of the rules of
treaty interpretation in Articles 31 and 32 of the Vienna Convention could give rise to,
at least, two interpretations of some provisions of the AD Agreement, which, under
that Convention, would both be ' permissible interpretations.' In that event, a measure
is deemed to be in conformity with the AD Agreement 'if it rests upon one of those
permissible interpretations."178 (emphasis in original)
7.9 Thus, under the AD Agreement, a panel is to fo llow the same rules of treaty interpretation as
in any other dispute when considering the interpreta tion of the AD Agreement. The difference is that
Article 17.6(ii) provides explicitly that if a panel fi nds more than one permissible interpretation of a
provision of the AD Agreement, it shall uphold a measure that rests on one of those interpretations.
3. Burden of Proof
7.10 The general principles applicable to burden of proof in WTO dispute settlement require that a
party claiming a violation of a provision of the WT O Agreement by another Member assert and prove
its claim.179 China, as the complaining party in this dispute, must therefore make a prima facie case
of violation of the relevant provisions of the WT O agreements it cites, which the European Union
must refute. We note, however, that it is generally for each party asserting a fact, whether
complainant or respondent, to provide proof thereof. 180 In this respect, therefore, it is for the
European Union to provide evid ence for the facts which it asserts. We also recall that a prima facie
case is one which, in the absence of effective refu tation by the other party, requires a panel, as a
matter of law, to rule in favour of the party presenting the prima facie case. As noted below, the
European Union has asserted with respect to a number of claims that China has failed to make a prima
facie case. Should we agree, we need not analyse such claims further, but will dismiss them.
B. TERMS OF REFERENCE OF THE PANEL
7.11 The European Union argues that a number of the claims addressed in China's first written
submission are not within the Panel's terms of refere nce either because (1) they were not identified in
China's panel request consistently with the requireme nts of Article 6.2 of the DSU, or (2) they were
not subject to consultations. China responds that all the claims that the European Union argues are
outside the Panel's terms of reference are in fact within the terms of reference.

178 Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel
Products from Japan ("US – Hot-Rolled Steel"), WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, 4697,
paras. 57 and 59.
179 Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses
from India ("US – Wool Shirts and Blouses "), WT/DS33/AB/R and Corr.1, adopted 23 May 1997,
DSR 1997:I, 323, para. 337.
180 Appellate Body Report, US – Wool Shirts and Blouses, para. 337.

7.12 Given the significant number of terms of referenc e objections raised by the European Union,
and in order to avoid repetition, we consider it appropriate to outline at the outset the legal standard
under which we will assess such objections. We w ill then apply that standard to the specific
objections raised by the European Union below, when we address th e claims to which each specific
objection pertains.
7.13 The first set of terms of reference objections raised by the European Union pertains to China's
panel request. We note that under Article 7.1 of th e DSU, it is the complaining party's request for
establishment of a panel – that is, the panel request - that determines the terms of reference of a WTO
panel. Article 6.2 of the DSU provides, in relevant part:
"The request for the establishment of a pane l shall be made in writing. It shall
indicate whether consultations were held, identify the specific measures at issue and
provide a brief summary of the legal basis of the complaint sufficient to present the
problem clearly."
Therefore, a panel request must identify the specific measures at issue and must provide a brief
summary of the legal basis of the complaint sufficient to present the problem clearly . Together, these
two elements constitute the "matter referred to the DSB", which forms the basis of a panel's terms of
reference under Article 7.1 of the DSU. It is importa nt that the panel request be sufficiently clear for
two reasons: first, it defines the jurisdiction of th e panel, since only the matter(s) raised in the panel
request fall within the panel's terms of reference; and second, it serves the due process objective of
notifying the parties and potential third par ties of the nature of a complainant's case.
181 To ensure the
fulfilment of these objectives, a panel has to exam ine the panel request carefully "to ensure its
compliance with both the letter and the spirit of Article 6.2 of the DSU".182

7.14 The Appellate Body's analysis in Korea – Dairy offers guidance as to how a panel should
address the issue of whether a panel request provid es "a brief summary of the legal basis of the
complaint sufficient to present the problem clearly" in accordance with Article 6.2 of the DSU. First,
the issue is to be resolved on a case-by-case basis.
183 Second, the panel must examine the panel
request very carefully to ensure its compliance with both the letter and the spirit of Article 6.2 of the
DSU.184 Third, the panel should take into account the nature of the particular provision at issue – i.e.,
where the Articles listed establish not one single, di stinct obligation, but rather multiple obligations,
the mere listing of treaty Articles may not satisfy the standard of Article 6.2.185
7.15 Thus, with respect to the European Union's argu ment that certain claims addressed in China's
first written submission were not identified in its pa nel request consistently with the requirements of
Article 6.2 of the DSU, we shall base our assessment on the principles outlined above. This will
require us, in each instance, to consider the text of China's panel request to determine whether it
identifies the specific measure, and provides a brief summary of the legal basis of the complaint, and
potentially whether the European Union has been prej udiced by the formulation of the panel request.
Moreover, as stated by the Appellate Body, compli ance with the requirements of Article 6.2 of the

181 Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut (" Brazil – Desiccated
Coconut"), WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167, p. 22; Appellate Body Report,
United States – Continued Existence and Application of Zeroing Methodology (" US – Continued Zeroing "),
WT/DS350/AB/R, adopted 19 February 2009, para. 161.
182 Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution
of Bananas ("EC – Bananas III "), WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, 591, para. 142.
183 Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy
Products ("Korea – Dairy"), WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, 3, para. 127.
184 Appellate Body Report, Korea – Dairy, para. 130.
185 Appellate Body Report, Korea – Dairy, para. 124.

DSU must be demonstrated on the basis of the text of the panel request read as a whole, and defects in
the panel request cannot be cured in the subsequent submissions of the parties.186
7.16 The second set of terms of reference objections raised by the European Union relates to
consultations. The European Union asserts that some of the claims which it acknowledges are
sufficiently set out in China's panel request, are nonetheless outside the Panel's terms of reference
because they were not subject to consultations. In support of its assertions, the European Union refers
to alleged inadequacies in China's request for consu ltations and/or asserts th at no consultations took
place with respect to certain claims.
7.17 This portion of the European Union's terms of reference objections raises the question of the
relationship between a complaining party's request for consultations and the panel's terms of
reference. We note that the DS U does not contain a provision that directly addresses this issue.
Article 4 of the DSU, entitled "Consultations", provides in relevant part:
"4. Any request for consultations shall be submitted in writing and shall give the
reasons for the request, including identification of the measures at issue and an
indication of the legal basis for the complaint. ...
7. If the consultations fail to settle a dispute within 60 days after the date of
receipt of the request for consultations , the complaining party may request the
establishment of a panel . The complaining party may request a panel during the 60-
day period if the consulting parties jointly consider that consultations have failed to
settle the dispute." (emphasis added)
Article 17 of the AD Agreement also contains provisions regarding cons ultations between WTO
Members in disputes under that Agreement, providing in relevant part:

"17.1 Except as otherwise provided herein , the Dispute Settlement Understanding
is applicable to consultations and the settlement of disputes under this Agreement. ...
17.3 If any Member considers that any benef it accruing to it, directly or indirectly,
under this Agreement is being nullified or impaired, or that the achievement of any
objective is being impeded, by another Memb er or Members, it may, with a view to
reaching a mutually satisfactory resolution of the matter, request in writing
consultations with the Member or Members in question . Each Member shall afford
sympathetic consideration to any request from another Member for consultation.
17.4 If the Member that requested consulta tions considers that the consultations
pursuant to paragraph 3 have failed to achiev e a mutually agreed solution, and if final
action has been taken by the administering authorities of the importing Member to
levy definitive anti-dumping duties or to accept price undertakings, it may refer the
matter to the Dispute Settlement Body ("DSB")." (emphasis added)
7.18 Thus, Article 4.4 of the DSU provides that a request for consultations has to identify the
measures at issue and indicate the legal basis of th e complaint. Article 4.7 of the DSU, in turn,
stipulates that if parties fail to settle the dispute w ithin 60 days from the receipt of the consultations
request, the complaining party may request the establishment of a panel. Article 17.1 of the
AD Agreement states that the DSU applies to the consultations and the settlement of disputes that

186 Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant
Carbon Steel Flat Products from Germany (" US – Carbon Steel "), WT/DS213/AB/R and Corr.1, adopted
19 December 2002, DSR 2002:IX, 3779, para. 127.

arise under the AD Agreement. Article 17.3 of the AD Agreement provides that if a Member
considers that any benefit accruing to it, directly or indirectly, under the AD Agreement is nullified or
impaired, or that the achievement of any objectiv e is impeded by another Member, it may request
consultations with the Member concerned. Article 17.4 states that if parties fail to settle the dispute
through consultations, the complaining Member may refer the matter to the DSB to seek the
establishment of a panel. Finally, Article 17.5 pr ovides that the DSB would, in such a situation,
establish a panel to resolve the dispute.
7.19 In our view, none of these legal provisions supports the proposition that a complaining
Member is precluded from identifying in its panel re quest claims not specifically identified in its
request for consultations. Article 6.2 of the DSU requires that a panel request must indicate whether
consultations were held, but neither it nor any other provision of the DSU indicates that the scope of
the request for consultations determines the precise scope of the subsequent panel request.
7.20 We note that the effect of a complaining Member's request for consultations on a panel's
terms of reference has been discussed extensively in prior panel and Appellate Body reports. In
Canada – Aircraft , for instance, the respondent argued that certain claims raised with respect to
measures that were not identified in the complaining Member's request for consultations fell outside the
panel's terms of reference. The panel rejected this argument. The panel underlined the fact that a panel's
terms of reference were determined by the complaining Member's panel request, adding that as long as
the request for consultations and the panel request concerned the same "dispute", the claims raised in the
panel request would fall within its te rms of reference even if they were not raised in the request for
consultations. In the panel's view, "this approach [sought] to preserve due process while also
recognising that the "matter" on which consulta tions are requested [would] not necessarily be
identical to the "matter" identified in the request for establishment of a panel".
187 It follows from this
reasoning that the scope of a request for consultations and that of a panel request do not have to be
identical. The panel's findings on this particular issue were not appealed.
7.21 A similar issue arose in Brazil – Aircraft . The respondent in that case argued that certain
subsidy programmes not iden tified in the complaini ng Member's request for consultations were not
within the panel's terms of reference, even though they were identified in the panel request. The panel
noted that under the DSU, the terms of reference of a WTO panel were determined by the complaining
Member's panel request, not its request for consultations. While acknowledging the importance of the
consultations in terms of clarifying the situati on between the parties to the dispute, the panel
nevertheless reasoned that "to limit the scope of th e panel proceedings to the identical matter with
respect to which consultations were held could undermine the effectiveness of the panel process".
188
According to the panel:
"[A] panel may consider whether consultati ons have been held with respect to a
"dispute", and that a preliminary objection may properly be sustained if a party can
establish that the required consultations had not been held with respect to a dispute.
We do not believe, however, that either Artic le 4.7 of the DSU or Article 4.4 of the
SCM Agreement requires a precise identity between the matter with respect to which

187 Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft ("Canada – Aircraft"),
WT/DS70/R, adopted 20 August 1999, upheld by Appellate Body Report WT/DS70/AB/R, DSR 1999:IV, 1443,
para. 9.12.
188 Panel Report, Brazil – Export Financing Programme for Aircraft ("Brazil – Aircraft"), WT/DS46/R,
adopted 20 August 1999, as modified by Appellate Body Report WT/DS46/AB/R, DSR 1999:III, 1221,
para. 7.9.

consultations were held and that with r espect to which establishment of a panel was
requested." 189 (emphasis added)
On appeal, the Appellate Body agreed with the panel's reasoning:

"We do not believe, however, that Articles 4 a nd 6 of the DSU, or paragraphs 1 to 4
of Article 4 of the SCM Agreement, require a precise and exact identity between the
specific measures that were the subject of consultations and the specific measures
identified in the request for the establishment of a panel . As stated by the Panel,
"[o]ne purpose of consultations, as set forth in Article 4.3 of the SCM Agreement, is
to 'clarify the facts of the situation', and it can be expected that information obtained
during the course of consultations may enable the complainant to focus the scope of
the matter with respect to which it seeks estab lishment of a panel." We are confident
that the specific measures at issue in this case are the Brazilian export subsidies for
regional aircraft under PROEX . Consultations were held by the parties on these
subsidies, and it is these same subsidies that were referred to the DSB for the
establishment of a panel. We emphasize th at the regulatory instruments that came
into effect in 1997 and 1998 did not change the essence of the export subsidies for
regional aircraft under PROEX ."190 (footnote omitted, italic emphasis in original,
underline emphasis added)
7.22 More recently, the Appellate Body, in US – Upland Cotton, underlined the importance of not
allowing the request for consultations to inappropriately limit the scope of the dispute, observing:
"As long as the complaining party does not expand the scope of the dispute, we
hesitate to impose too rigid a standard for the "precise and exact identity" between the
scope of consultations and the request for the establishment of a panel, as this would
substitute the request for consultations for the panel request . According to Article 7
of the DSU, it is the request for the estab lishment of a panel that governs its terms of
reference, unless the parties agree otherwise."191 (footnotes omitted, emphasis added)
7.23 In Mexico – Anti-Dumping Measures on Rice, the respondent argued that the complainant had
broadened the scope of the legal basis of the compla int in the panel request compared with the request
for consultations and asked the pane l to find that the claims associated with the new legal provisions
cited in the panel request were outside the panel's te rms of reference. The panel declined the request,
stating:
"In our view, the fact that certain provi sions were added to the list of alleged
violations in the request for establishment compared to the request for consultations is
a consequence of the consultation process which serves the purpose of clarifying the
facts of the situation enabling the complain ant to focus the scope of the matter with
respect to which it seeks the establishment of a panel. It does not mean that no
consultations were held on the matter, as the only difference between the request for
consultations and the request for establishmen t consists of the fact that a number of
closely related legal provisions alleged to have been violated were added. The
measures remained the same and so did the legal basis for the complaint, as is evident
from the narrative provided in the request for establishment. In our view,

190 Appellate Body Report, Brazil – Export Financing Programme for Aircraft ("Brazil – Aircraft "),
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161, para. 132.
191 Appellate Body Report, United States – Subsidies on Upland Cotton (" US – Upland Cotton "),
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, 3, para. 293.

consultations were thus held on the matter on which the establishment of a Panel was
requested. We therefore reject Mexico's request in this respect."192
The Appellate Body upheld the panel's findings in this regard. The Appe llate Body recalled its
previous findings on this issue and pointed out that the reasoning of prior reports regarding the
difference between the scope of the request for consu ltations and the panel request with respect to the
specific measures at issue equally applied to the difference between these two documents with respect
to the legal basis of the complaint. The Appellate Body emphasised that the role of consultations was
to allow the exchange of information necessary to refine the contours of the dispute, as a result of
which the complaining Member might reformulate its claims in its panel request. According to the
Appellate Body:

"[It] is not necessary that the provisions refe rred to in the request for consultations be
identical to those set out in the panel requ est, provided that the "legal basis" in the
panel request may reasonably be said to have evolved from the "legal basis" that
formed the subject of consultations. In ot her words, the addition of provisions must
not have the effect of changing the essence of the complaint."193 (emphasis added)
7.24 Based on the foregoing, we consider that ther e does not have to be precise identity between
China's request for consultations and its panel request , either with regard to the specific measures at
issue or with regard to the legal basis of the comp laint. As long as the request for consultations and
the panel request concern "the same matter" or, pu t differently, as long as the legal basis of the panel
request "may reasonably be said to have evolved from the legal basis identified in the request for
consultations", a claim not specifically identified in China's request for consultations, but properly
identified in the panel request, will fall within our terms of reference.
7.25 Finally, with regard to consultations, we r ecall that China, in Exhibit CHN-65, submitted a
list of questions that were allegedly sent to the European Union prior to consultations and were
discussed during consultations. China submitted this document in response to the factual assertion
made by the European Union that some claims iden tified in China's panel request were not discussed
during consultations. 194 This raises the question of what determines the scope of consultations
between the parties to a dispute: the request for consultations or what is actually discussed in such
consultations? We note that this particular issue also arose in US – Upland Cotton . The factual
circumstances presented in US – Upland Cotton were very similar to those presented in these
proceedings. The complaining party in that dispute presented to the panel a list of questions that had
been submitted in writing to the respondent during consultations . In determining whether the
complainant had broadened the scope of the dispute in its panel request, the panel took this list into
consideration in considering what had actually b een discussed during the co nsultations between the
parties.195 The Appellate Body, however, disapproved the panel's actions in this regard, concluding that

192 Panel Report, Mexico – Definitive Anti-Dumping Measures on Beef and Rice , Complaint with
Respect to Rice ("Mexico – Anti-Dumping Measures on Rice "), WT/DS295/R, adopted 20 December 2005, as
modified by Appellate Body Report WT/DS295/AB/R, DSR 2005:XXIII, 11007, para. 7.43.
193 Appellate Body Report, Mexico – Definitive An ti-Dumping Measures on Beef and Rice , Complaint
with Respect to Rice ("Mexico – Anti-Dumping Measures on Rice "), WT/DS295/AB/R, adopted
20 December 2005, DSR 2005:XXII, 10853, para. 138.
194 The European Union objected to the submission of this document by China and requested a decision
from the Panel on this matter. The Panel's decision allowing the submission, but noting that the decision was
"without prejudice to our cons ideration of [the exhibit's] relevance to, or the weight we may accord to it in our
consideration of the preliminary jurisdictional objections raised by the European Uni on" was sent to the Parties
on 7 May 2010. See Annex H.
195 Panel Report, United States – Subsidies on Upland Cotton ("US – Upland Cotton "), WT/DS267/R,
Corr.1, and Add.1 to Add.3, adopted 21 March 2005, as modified by Appellate Body Report WT/DS267/AB/R,
DSR 2005:II, 299, para. 7.61.

panels should limit their analysis regarding the sc ope of consultations to the written request for
consultations. The Appellate Body considered that to examine what happened in consultations would be
contrary to Articles 4.6 and 4.4 of the DSU, which provide, respectiv ely, that consultations shall be
confidential and that the request for consultations be made in writing and no tified to the DSB. The
Appellate Body also noted that often it would be difficult for a panel to find out what was discussed in
consultations because there is no public record of those discussions and parties often disagree about
what was discussed.196
7.26 Taking the Appellate Body's reasoning into cons ideration, we find that it would not be
appropriate to look into what was actually discu ssed between China and the European Union in the
consultations between the parties, and we will ther efore limit our analysis regarding the scope of
consultations to the text of China's request for consultations.
7.27 In addition to its terms of reference objections based on the alleged shortcomings in China's
panel request and the alleged lack of consultations, the European Uni on also contends that the Panel
cannot rule on claims raised in connection w ith Council Regulation No. 1225/2009 because this
Regulation was not identified as a measure in China's panel request. We address this objection below
in connection with the China's "as such" claims against the mentioned Regulation. 197 Similarly, we
address the European Union's "preliminary" objecti ons based on China's alleged failure to set out a
prima facie case with respect to several claims in the course of addressing the specific claims to which
those objections pertain.
C. CLAIMS REGARDING COUNCIL REGULATION NO. 1225/2009 (THE BASIC AD REGULATION)
AS SUCH
1. Preliminary Objections
7.28 The European Union raises two sets of preliminar y objections with regard to China's claims
regarding the Basic AD Regulation. First, th e European Union submits that Council Regulation
No. 1225/2009 was not identified as a specific measu re in dispute in China's panel request, and
therefore it is not within the Panel's terms of refe rence. The European Union asserts that the measure
which was identified in China's panel request, Coun cil Regulation No. 384/96, as amended, has been
repealed, and therefore requests us not to make fi ndings on China's claims in connection with that
Regulation. If we decide to make findings, the Eu ropean Union considers that we should refrain from
making any recommendations on claims in connection with that Regulation.
7.29 Second, the European Union argues that Ch ina's panel request does not satisfy the
requirements of Article 6.2 of the DSU, because it does not present the problem clearly, and therefore
China's claims under Articles 6.10, 9.3 and 9.4 of the AD Agreement and Article X:3(a) of the
GATT 1994 are not properly before the Panel. Chin a disagrees with the European Union and submits
that both Council Regulation No. 1225/2009 and all the claims raised in China's first written
submission are within the Panel's terms of reference.
(a) Whether Council Regulation No. 1225/2009 Is Properly Before the Panel
7.30 The European Union maintains that Council Regulation No. 1225/2009 is not properly before
the Panel because it was not identified as a specific measure at issue in China's panel request. It
follows that the Panel cannot make findings with resp ect to the claims that China raises in connection
with this Regulation. According to the European Union, the Panel could make findings regarding the

196 Appellate Body Report, US – Upland Cotton, para. 287.
197 See paragraphs 7.30-7.39.

repealed Council Regulation No. 384/96, but should refrain from making recommendations in this
regard, since Council Regulation No. 384/96 has been repealed.
7.31 China notes that Article 9(5) of Council Regulation No. 1225/2009 is identical to Article 9(5)
of Council Regulation No. 384/96. In China's view, "the [European Union] adopts a purely
formalistic approach which ignores the fact that the measure being ch allenged, namely Article 9(5), is
identically worded in both Council Regulation (EC) No 384/96 as amended and Council Regulation
(EC) No 1225/2009". 198 Therefore, China asserts that Article 9(5) of Council Regulation
No. 1225/2009 is properly before the Panel and the Panel should address the claims raised by China in
connection with this Regulation. China submits th at the need for the prompt settlement of disputes
and to provide security and predictability would be undermined if the Panel were to agree with the
European Union's views.
7.32 We begin by observing that it is undisputed that both China's request for consultations 199 and
its panel request 200, dated 4 August and 13 October 2009, r espectively, identify Council Regulation
No. 384/96 of 22 December 1995, as amended, as the measure at issue in connection with the "as
such" claims in this dispute. We recall that this Panel was established by the DSB on
23 October 2009. Council Regulation No. 384/96 was repealed by Council Regulation No. 1225/2009
of 30 November 2009, which entered into force on 11 January 2010 – that is, both the repeal of
Council Regulation No. 384/96 and the entry into force of Council Regulation No. 1225/2009
occurred after the establishment of this Panel. It is al so undisputed that Article 9(5) of the Council
Regulation No. 384/96 is almost identi cal to Council Regulation No. 1225/2009. 201 The changes
made by Council Regulation No. 1225/2009 to Arti cle 9(5) of Council Regulation No 384/96, as
amended, are indicated by bold italics below:
"An anti-dumping duty shall be imposed in the appropriate amounts in each case, on
a non-discriminatory basis on imports of a product from all sources found to be
dumped and causing injury, except as to for imports from those sources from which
undertakings under the terms of this Regul ation have been accepted. The Regulation
imposing the duty shall specify the duty for each supplier or, if that is impracticable,
and in general where Article 2(7)(a) applies, the supplying country concerned.
Where Article 2(7)(a) applies, an individua l duty shall, however, be specified for the
exporters which can demonstrate, on the basis of properly substantiated claims that:
(a) in the case of wholly or partly foreign owned firms or joint ventures,
exporters are free to repatriate capital and profits;
(b) export prices and quantities, and c onditions and terms of sale are freely
determined;
(c) the majority of the shares belong to private persons . State; state officials
appearing on the board of Ddirectors or holding key management positions shall
either be in minority or it must be dem onstrated that the company is nonetheless
sufficiently independent from State interference;
(d) exchange rate conversions are carried out at the market rate; and

199 WT/DS397/1, Annex G-1.
200 WT/DS397/3, Annex G-2.
201 See European Union, answer to Panel question 12 , where the European Union identified the textual
changes indicated above in bold italics.

(e) State interference is not such as to permit circumvention of measures if
individual exporters are given different rates of duty."202
7.33 In our view, these minor textual differences clear ly do not affect the scope and operation of
this provision.203 The issue therefore is whether Council Regulation No. 1225/2009 falls outside our
terms of reference purely because it is not specifically identified in China's panel request. In this
regard, we emphasize that, while the enactment of Council Regulation No. 1225/2009, repealing and
replacing the earlier Council Regulation, No. 384/ 96 of 22 December 1995, as amended, was
proposed before, Council Regulation No. 1225/2009 w as not in fact enacted, and did not come into
effect, until after China submitted its panel request and this Panel was established.
7.34 We note that one of the objectives of Article 6. 2 of the DSU is to ensure the due process
rights of the respondent in dispute settlement proceed ings. It is clear that those rights would be
undermined where the text of the panel request do es not sufficiently inform a responding Member of
the measure at issue and the nature of the claims raised by the complaining Member. This, however,
clearly is not the case in the present proceedings. China raised certain claims in connection with a
specific provision of Council Regulation No. 384/96 in both its request for consultations and its panel
request. While it is true that this Regulation w as subsequently repealed, it was immediately replaced
by Council Regulation No. 1225/2009 which contains , in almost identical terms, and in identical
substance, the same provision as was specifically iden tified in China's panel request. This repeal and
replacement took place after China submitted its panel request, and after this Panel was established.
To require China in such circumst ances to restart the dispute settleme nt process, potentially requiring
a new request for consultations 204, would defeat the purpose of the DSU to provide for the "prompt
settlement of situations in which a Member consid ers that benefits accruing to it" under a covered
Agreement are being impaired by another Member's measure, as provided for in Article 3.3 of the
DSU. Thus, we consider the European Union's objecti on to be formalistic, rather than substantive. In
the circumstances of this dispute, the due process ri ghts of the European Union cannot be considered
to have been undermined by allowing the dispute to go forward challenging the replacement measure
rather than the measure named in the panel request. Indeed, to sustain the European Union's objection
would not be consistent with the effective functi oning of the WTO dispute settlement system, as it
might lead to inappropriate legal manoeuvres to avoid dispute settlement, inconsistent with the
obligation of Members to engage in dispute settleme nt "in good faith in an effort to resolve the
dispute".205 We therefore consider that Council Regula tion No. 1225/2009 is properly before us and
will base our findings and recommendations on China's "as such" claims on the relevant parts of that
Regulation.
7.35 The European Union posits that China described the specific measure at issue in a very
specific and narrow manner in its panel request. Specifically, the European Union notes that China
did not refer to "replacements, related measures or implementing measures". Likewise, notes the
European Union, "China did not identify the ma tter by using broader terms such as "individual
treatment" or "individual treatment regime or practic e" of the European Union in its panel request". 206
It follows, in the European Union's view, that the specific measure at issue in connection with China's
"as such" claims is limited to Article 9(5) of Council Regulation No. 384/96, as amended. 207 For the

202 European Union, answer to Panel question 12.
203 Indeed, the European Union does not contend otherwise.
204 It is foreseeable that a request for establishment naming a different measure than the request for
consultations might be challenged as raising a matter as to which consultations were not held.
205 DSU, Article 3.10. To be clear, we are not suggesting that the European Union engaged in any such
manoeuvring in this dispute. There is no reason for us to think that the European Union's decision to repeal and
replace Council Regulation No. 384/96 bore any relationship whatsoever to this dispute, and China has not
suggested otherwise. Our concern is for the potential consequences of our decision.
206 European Union, first written submission, para. 40.
207 European Union, first written submission, para. 40.

European Union, since Council Regulation No. 1225/2009 did not amend Article 9(5) of Council
Regulation No. 384/96, it falls outside the Panel's terms of reference. Again, we consider the
proposition advocated by the European Union to be formalistic, and we do not believe that this
consideration is decisive. The European Union' s approach suggests that had China included, for
instance, the words "and any replacements thereo f", Council Regulation No. 1225/2009 would have
fallen within the Panel's terms of reference. We decline to take such a mechanistic approach to
determining our jurisdiction on the basis of the pane l request. Instead, we consider it appropriate to
look at the difference between the old and the new Article 9(5) to determine whether, in light of any
textual differences between the two, the due pr ocess rights of the European Union would be
undermined were we to proceed to resolve th is dispute with respect to Council Regulation
No. 1225/2009, rather than Council Regulation No. 384/96. Since the two texts are virtually identical,
and with respect to substance, the two iterations of the provision in question may be deemed identical,
we are of the view that the European Union's due process rights are well preserved.
208
7.36 The European Union cites several panel a nd Appellate Body reports in support of its
arguments in this context. For instance, it notes that, in EC – Chicken Cuts (Brazil) 209, the
complainants in their submissions to the panel pres ented claims with respect to measures that had not
been identified in their panel requests. 210 The panel found that since the complainants' panel requests
were not worded sufficiently broadly, they c ould not be interpreted as containing these new
measures.211 However, we note that the circumstances of the present proceedings are significantly
different from those in EC – Chicken Cuts (Brazil) . Unlike in that dispute, here the text of the "new"
measure is virtually identical to the old one, and substantively it is identical. Thus, there is no
question, in our view, whether the panel request can be interpreted as containing a "new" measure.
7.37 The European Union also cites the panel report in China – Publications and Audiovisual
Products.212 However, the issue in that dispute also diffe rs significantly from the issue before us. In
the paragraph specifically cited by the European Uni on, that panel noted that the Appellate Body had
found that "references in a panel request to amendments, related meas ures, or implementing
measures" could bring certain measures within a pane l's terms of reference even if such measures had
not been identified in the panel request. 213 In the present proceedings, however, the question is not
whether the identification of Council Regulation No. 384/96 "as amended" brings Council Regulation
No. 1225/2009 within our terms of reference despite it not having been specifically identified in the
panel request. Rather, the question is whether th e identification of Council Regulation No. 384/96 in
the panel request limits our terms of reference so as to preclude our considera tion of its substantively
identical replacement, Council Regulation No. 1225/2009 . We therefore consider that the discussion
in that panel report is not pertinent to the issue presented in these proceedings.
7.38 We note that the spirit of previous WTO reports concerning whether amendments to specific
measures identified in a panel request or new m easures introduced subsequent to a panel request
would fall within a panel's terms of reference actually supports our approach in this regard. While in

208 Equally, the inclusion of language such as "and any replacements thereof" would not, in our view,
be sufficient to bring within a panel's terms of re ference a replacement measur e which was fundamentally
different in substance from the identified measure.
209 European Union, first written submission, footnote 32.
210 Panel Report, European Communities – Customs Classification of Frozen Boneless Chicken Cuts ,
Complaint by Brazil ("EC – Chicken Cuts (Brazil)"), WT/DS269/R, adopted 27 September 2005, as modified by
Appellate Body Report WT/DS269/AB/R, WT/DS286/AB/R, DSR 2005:XIX, 9295, para. 7.16.
211 Panel Report, EC – Chicken Cuts (Brazil), paras. 7.28-7.29.
212 European Union, first written submission, footnote 33.
213 Panel Report, China – Measures Affecting Trading Rights and Distribution Services for Certain
Publications and Audiovisual Entertainment Products ("China – Publications and Audiovisual Products "),
WT/DS363/R and Corr.1, adopted 19 January 2010, as modified by Appellate Body Report WT/DS363/AB/R,
para. 7.18.

those cases, the principal issue was whether the text of the request can be understood to refer to other
measures than those named, here, the issue is whethe r the failure to refer to a subsequent replacement
of the named measure, identical in substance, pr ecludes us from considering it. It is now well
established that a measure which is not identified in the complainant's panel request may nonetheless
fall within a panel's terms of reference if it is suffi ciently closely related to the measure identified in
the panel request, such that the respondent can be f ound to have had adequate notice of the nature of
the claims that the complainant might raise during the panel proceedings. 214 We consider that to
conclude, in this dispute, that a subsequent meas ure which is substantively identical to the measure
identified in the panel request falls within our terms of reference is consistent with this reasoning. It
is true that China's panel request does not contai n language such as "and am endments or subsequent
measures", but given that the new and the old measures are substantively identical, we do not consider
this to be significant.
7.39 Finally, we are of the view that our resolution of this issue is consistent with the requirement
of Article 11 of the DSU that a panel "make an obj ective assessment of the matter before it, including
an objective assessment of the f acts of the case and the applicability of and conformity with the
relevant covered agreements, a nd make such other findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in the covered agreements". It also serves the
principle laid down in Article 3.3 of the DSU, to ensure prompt settlement of disputes between WTO
Members, which is "essential to the effective f unctioning of the WTO and the maintenance of a
proper balance between the rights and obligations of Members". We therefore conclude that Council
Regulation No. 1225/2009 is properly before us in this dis pute, and will make our findings and
recommendations with respect to that measure.
(b) Whether All Claims Raised by China in Connection With the Basic AD Regulation are
Within the Panel's Terms of Reference
(i) Arguments of the Parties
European Union
7.40 The European Union maintains that under the DSU, it is not enough to summarily identify the
legal basis of the complaint, the identif ication must present the problem clearly. 215 T h e
European Union asserts that claims raised by China under Articles 6.10, 9.3 and 9.4 of the
AD Agreement and under Article X:3(a) of the GAT T 1994 are not properly before the Panel because
the relevant parts of China's panel request do not present the problem clearly as required under
Article 6.2 of the DSU. More specifically, the Eu ropean Union submits that, with respect to these
four claims, China failed to plainly connect the specific measure at issue to the legal provisions
claimed to have been infringed. 216 It follows, in the European Unio n's view, that these claims are not
within the Panel's terms of reference.

214 See, for instance, Panel Report, Japan – Measures Affecting Consumer Photographic Film and
Paper ("Japan – Film"), WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, 1179, para. 10.8; Appellate Body
Report, Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products ("Chile –
Price Band System"), WT/DS207/AB/R, adopted 23 October 2002, DSR 2002:VIII, 3045 (Corr.1, DSR 2006:XII,
5473), para. 135; Appellate Body Report, United States – Measures Relating to Zeroing and Sunset Reviews –
Recourse to Article 21 .5 of the DSU by Japan (" US – Zeroing (Japan) (Article 21.5 – Japan )"),
WT/DS322/AB/RW, adopted 31 August 2009, para. 113 ("We share the Panel's view that the use of the term
"closely connected" earlier in paragraph 12 of the panel request provides additional support for finding that
"subsequent closely connected measures" refers to periodic reviews of the anti-dumping duty order on ball
bearings, which were conducted after the reviews listed in the panel request.")
215 European Union, first written submission, para. 48.
216 European Union, first written submission, para. 51.

China
7.41 China contends that its panel request satisfies the requirements of Article 6.2 with regard to
the claims subject to the European Union's objec tion. According to Chin a, the European Union
confuses the procedural obligations contained in the DSU with the substantive analysis of the measure
at issue, as well as claims with arguments. Acco rding to China, "Article 6.2 merely requires the
complaining party to identify in its Panel Request th e specific measure at issue and the claims so as to
enable the defending party to know the problem at issue". 217 Specifically, China argues that
Article 6.2 does not require that the scope of the specific measure at issue correspond to the scope of
the legal provision claimed to have been violated.218 China argues that from China's panel request, the
European Union knew very well the specific measure at issue and the legal provisions identified as
having been violated, and asserts that the contents of the European Union's first written submission
demonstrate this. China maintains that the Europ ean Union's arguments concern the substantive issue
of whether Article 9(5) of the Basic AD Regulation addresses the calculation of dumping margins,
which this Panel is called upon to decide, rather than the procedural requirements of the DSU.
219
China also claims that the European Union has fail ed to demonstrate that China's alleged failure to
present the problem clearly prejudiced its ability to defend its interests. 220 China therefore requests
the Panel to find that the four claims that the Eur opean Union takes issue with are properly before the
Panel.
(ii) Arguments of Third Parties
Brazil
7.42 Brazil notes that a panel request performs two f unctions: a) it informs the respondent of the
nature of the claims raised by the complainant, and b) it determines the jurisdiction of the panel.
According to Brazil, "the essence of the dispute is to be presented in the panel request in such a way
that the responding Member can be reasonably exp ected to understand the case being brought against
it".221 With respect to the European Union's argume nt that China's claims under Articles 6.10, 9.3
and 9.4 of the AD Agreement are outside the Panel' s terms of reference, Brazil submits that the
European Union conflates the threshold examination of the panel request with the substantive analysis
of China's claims. In Brazil's view, China's panel requ est provides the gist of what is at issue and this
is also confirmed by the contents of China's first wr itten submission. Further, Brazil contends that the
European Union has not shown that its due pro cess rights have been prejudiced by the alleged
inadequacies in China's panel request.
(iii) Evaluation by the Panel
7.43 We note that the premise for the European Un ion's preliminary objection with respect to
China's claims under Articles 6.10, 9.3 and 9.4 of th e AD Agreement is the allegation that the specific
measure at issue, i.e., Article 9(5) of the Basic AD Regulation, addresses only the imposition of anti-
dumping duties , whereas the three provisions of the AD Agreement cited by China concern the
determination of dumping margins or the establishment of the level of anti-dumping duties .222 Since,
according to the European Union, the specific measure at issue does not address the calculation of
dumping margins, the European Union argues that claims under the provisions of the AD Agreement
which deal with the calculation of margins fall outside our terms of reference.

220 China, second written submission, paras. 41-46.
221 Brazil, written submission, para. 4.
222 See, European Union, first written submission, paras. 53, 54, 58 and 62.

7.44 In this regard, we agree with China that the European Union confuses the identification of the
claims in the panel request with the arguments th at are to be developed in the subsequent panel
proceedings. We find it relevant and important in this regard that the European Union dedicates a
significant portion of its substantive arguments re garding these three claims to its effort to
demonstrate that Article 9(5) of the Basic AD Regulation does not concern the calculation of dumping
margins and therefore does not fall within the scope of the obligations set forth under these three
provisions. Indeed, it is clear to us that whether Ar ticle 9(5) of the Basic AD Regulation is limited to
the imposition of dumping duties, or also relat es to the calculation of dumping margins or the
establishment of the level of anti-dumping duties, is a di sputed matter that must be resolved as part of
the substance of this case, rather than a matter to be assumed in the context of resolving a preliminary
objection.223 We note that this argument is the only basi s for the European Union's terms of reference
objection in this context. We therefore find that China's claims under Articles 6.10, 9.3 and 9.4 of the
AD Agreement are within our terms of reference.
7.45 With regard to China's claim under Article X:3(a) of the GATT 1994, the European Union
makes similar arguments. It contends that ther e is no connection between the specific measure at
issue, i.e., Article 9(5) of the Basic AD Regulation, and th e obligations set out under Article X:3(a) of
the GATT 1994. According to the European Union, "China's panel request fails to explain how the
"provisions" of Article 9(5) of Council Regula tion No 384/96 are not administered in a uniform,
impartial and reasonable manner". 224 Here too, we are of the view that the European Union confuses
the identification of a claim with the arguments that may be presented in support of a claim. The
European Union maintains that the obligation set out under Article X:3(a) of the GATT 1994 cannot
apply to laws, regulations, decisi ons and rulings themselves, but only to their administration. We
recall that what matters for purposes of Article 6. 2 of the DSU is whether a claim is described
sufficiently clearly in the panel request so that the respondent is informed of the nature of the claim
and can prepare its arguments accordingly. Whether the description of the claim makes legal sense is
something to be scrutinized by the Panel in the course of the panel proceedings, on the basis of the
arguments developed by the parties and the eviden ce presented. We note that China's panel request,
on page 2, clearly identifies a claim under Artic le X:3(a) of the GATT 1994 with respect to
Article 9(5) of the Basic AD Regulation. We theref ore consider this claim to be within our terms of
reference as well.
2. Relevant Provisions of Council Regulation No. 1225/2009
7.46 Council Regulation No. 1225/2009, the Basic AD Regulation, is the currently-in-force EU
legislative instrument that lays down the substa ntive and procedural requirements pertaining to anti-
dumping investigations in the European Union. Article 2 of the Basic AD Regulation addresses the
determination of dumping, including the determinati on of normal value. The basic rule set out in
Article 2(1)-(6) for the determination of norma l value essentially replicates the provisions of
Article 2.2 of the AD Agreement, and applies to market economy countries, whether or not Members
of the WTO.
7.47 Paragraph 7 of Article 2 contains specific ru les on the determination of normal value in
investigations conducted against non-market economies ("NMEs"). It groups those countries into two
categories: those NMEs that are WTO Member s and those NMEs that are not, and establishes
different rules for determining normal value for these two categories:

223 We note that we do not mean to suggest that we agree with European Un ion's characterization of
China's claims as concerning the calculation of dumping margins, but that even assuming this to be the case, the
scope of Article 9(5) of the Basic AD Regulation is not so clear as to preclude us from considering them.
224 European Union, first written submission, para. 67.

(a) Paragraph 7(a), which applies to NMEs that are not Members of the WTO, including
Azerbaijan, Belarus, North Korea, Tajikistan, Turkmenistan and Uzbekistan, provides
that for these countries, normal value is determined "on the basis of the price or
constructed value in a market economy third country, or the price from such a
third country to other countries, includ ing the Community, or where those are not
possible, on any other reasonable basis, including the price actually paid or payable in
the Community for the like product, dul y adjusted if necess ary to include a
reasonable profit margin".
(b) Paragraph 7(b), which applies to Kazakhs tan and NMEs that are Members of the
WTO as of the date of initiation of a given investigation, including China, provides
that if one or more producers
225 subject to the investigation demonstrate that "market
economy conditions prevail" for them, nor mal value is determined for those
producers in accordance with th e basic rules set out in paragraphs 1-6 of Article 2,
that is, the rules applicable to market economy countries. Otherwise, normal value
will be determined on the basis of paragraph 7(a), i.e., the rules that apply to NMEs
that are not Members of the WTO, including for any producers who are unable to
demonstrate that "market economy conditions prevail" for them.
Paragraph 7(c) sets out the criteria on the basis of which a foreign producer would be expected to
demonstrate that it operates according to market economy principles, and thus that "market economy
conditions prevail" for it, in which situation, the fi rst option under paragraph 7(b) will be applied, and
a determination of normal value in accordance with th e rules applicable to market economy countries
will be made for that producer. These criteria are generally referred to as the "market economy test"
("MET").
226 There are no claims in this dispute with respect to the market economy test, either as
such, or as applied in the investigation.

7.48 Central to China's "as such" claims in this dis pute is paragraph 5 of Article 9 of the Basic AD
Regulation, which explains the modalities for the imposition of anti-dumping duties. It provides, in
relevant part:
"An anti-dumping duty shall be imposed in the appropriate amounts in each case, on
a non-discriminatory basis on imports of a product from all sources found to be
dumped and causing injury, except for imports from those sources from which
undertakings ... have been accepted. The Regulation imposing the duty shall specify
the duty for each supplier or, if that is impracticable, and in general where
Article 2(7)(a) applies, the supplying country concerned." (emphasis added)
Thus, Article 9(5) requires that in principle a dut y be specified for each such "supplier". It then
introduces two exceptions to this principle: (1) wher e it is impracticable to specify the duty for each

225 In this report, we use the word s "producer" and "exporter" interchangeably, with both referring to
companies that are subject to an anti-dumping investigation in the European Union.
226 Under Article 2(7)(c), a request for market economy treatment must be made in writing and must
contain sufficient evidence that the producer operates und er market economy conditions, that is if: a) decisions
of firms regarding prices, costs and inputs, including for instance raw materials, cost of technology and labour,
output, sales and investment, are made in response to ma rket signals reflecting supply and demand, and without
significant State interference in this regard, and costs of major inputs substantially reflect market values, b)
firms have one clear set of basic acco unting records which are independently audited in line with international
accounting standards and are applied for all purposes, c) the production costs and financial situation of firms are
not subject to significant distortions carried over from the former non-market economy system, in particular in
relation to depreciation of assets, other write-offs, barter trade and payment via compensation of debts, d) the
firms concerned are subject to bankruptcy and property laws which guarantee legal certainty and stability for the
operation of firms, and e) exchange rate conversions are carried out at the market rate.

supplier, and (2) in general, where Article 2(7)(a) of the Basic AD Regulation applies – that is, where
normal value is determined on the basis of analogue c ountry prices or one of the other methods in that
provision. In these cases, the Regulation imposing th e duty shall specify a duty rate for the supplying
country concerned, that is, a single "country-wide" duty rate will be specified, which will apply to all
imports from that country.

7.49 Article 9(5) provides for an exception to the specification of a country-wide duty rate. It
provides:
"Where Article 2(7)(a) applies, an individual duty shall, however, be specified for the
exporters which can demonstrate, on the basis of properly substantiated claims that:
"(a) in the case of wholly or partly foreign owned firms or joint ventures,
exporters are free to repatriate capital and profits;
(b) export prices and quantities, and c onditions and terms of sale are freely
determined;
(c) the majority of the shares belong to private persons; state officials appearing
on the board of directors or holding key ma nagement positions shall either be in
minority or it must be demonstrated that the company is nonetheless sufficiently
independent from State interference;
(d) exchange rate conversions are carried out at the market rate; and
(e) State interference is not such as to permit circumvention of measures if
individual exporters are given different rates of duty."
These criteria are generally referred to as the "ind ividual treatment ("IT")" test. If a producer
demonstrates that it meets these conditions and is thus entitled to IT, the EU authorities will specify
an individual duty rate for that producer. Exporters who do not satisfy the IT test will be subject to
the country-wide duty rate.

7.50 In sum, when an exporter from a WTO Member that the European Union treats as a NME is
subject to an anti-dumping investigation conducted by the European Union, the following possibilities
with respect to the determination of normal value and the imposition of duty apply:
(a) If the exporter satisfies the MET, then its normal value will be determined on the
same basis as for producers in market economies. A dumping margin for that
producer will be calculated by comparing that normal value to the export prices of
that producer, and an individual duty rate will be applied to that producer.
(b) If the exporter fails the MET ("NME expor ter"), then its normal value will be
determined on the basis of an alternat ive method (typically based on prices in an
analogue third country). Whether the export price used in calculating the dumping
margin will be based on the exporter's own export sales will depend on whether the
exporter requests and is granted IT.
(i) If the NME exporter makes such a request and demonstrates that it meets the
criteria in Article 9(5) of the Basic AD Regulation, the NME exporter will
have an individual duty rate applied to it, calculated on the basis of a
comparison of the alternative-met hod normal value with its own export
prices.

(ii) Otherwise, the non-IT NME exporter will be subject to a country-wide duty
rate. The determination of the export price used to calculate that country-
wide duty rate will depend on the level of cooperation on the part of the non-
IT exporters altogether. If the level of cooperation is high, i.e. if the
cooperating non-IT exporters account for close to 100 percent of all exports,
the export price will be based on a weighted average of the actual price of all
export transactions effected by these e xporters. If, however, the level of
cooperation is low, i.e. if the non-IT exporters account for significantly less
than 100 percent of all exports, the Co mmission will resort to facts available
to complete the missing information. The selection of the facts available will
depend on the gravity of non-cooperati on and may include statistical import
data.
227
3. Whether Article 9(5) of the Basic AD Regulati on is inconsistent with Articles 6.10, 9.2,
9.3 and 9.4 of the AD Agreement
(a) Arguments of the Parties
(i) China
7.51 China argues that the first sentence of Ar ticle 6.10 of the AD Agreement requires
investigating authorities, as a rule, to calculate an individual margin of dumping for each
exporter/foreign producer of the allegedly dumped imports. 228 Exceptionally, under the second
sentence, it allows the use of a sample where the number of exporte rs, producers, importers or types
of products involved is high.229 In China's view, sampling is the only exception to the rule set forth in
the first sentence of Article 6.10. 230 Therefore, according to China, by providing that exporting
producers from NMEs are subject to a country-wide dumping margin unless they are able to
demonstrate that they meet the five criteria of Artic le 9(5) violates Article 6.10. According to China,
even though the text of Article 9(5) of the Basic AD Regulation refers to "an individual duty" rather
than "an individual margin of dumping", the ap plication of an individual duty necessitates the
calculation of an individual margin of dumping.
231 China asserts that, as a result, Article 9(5) of the
Basic AD Regulation violates Article 6.10 of the AD Agreement.232
7.52 China argues that just as Article 6.10 requires the calculation of individual dumping margins,
Article 9.2 of the AD Agreement requires the au thorities to name individual suppliers in the
imposition of anti-dumping duties.233 Exceptionally, this provision permits the authorities to name the
supplying country where naming individual suppliers would be impracticable. China notes Article 9.4
of the AD Agreement, which provides for the imposition of anti-dumping duties in cases where
sampling is used, and argues that when Article 9.2 is read in conjunction with Article 9.4, it becomes
clear that the only instance in which the authoriti es would be permitted to assign country-wide duties
is when sampling is used in the investigation.
234 According to China, therefore, by subjecting the
assignment of individual duty rates to the fulfilment of certain conditions, Article 9(5) of the Basic
AD Regulation violates Article 9.2 of the AD Agreement.

227 European Union, answer to Panel question 4.

7.53 China notes that the margins of dumping for Chinese producers that do not qualify for IT
under Article 9(5) of the Basic AD Regulation are calculated on the basis of a comparison of the
normal value calculated for the analogue country with the average export prices of all cooperating
non-IT exporting producers which, in most cases, will be further averaged with best information
available such as, e.g., import statistics.
235 China contends that this calculation is inconsistent with the
requirements of Article 2 of the AD Agreement because it is not based on the individual export prices
of the relevant producers. As a result, those exporting producers which have company-specific export
prices which are higher than the average export price used for non-IT exporting producers will be
subject to a duty which exceeds their dumping margin established under Article 2 of the
AD Agreement. China claims that, as a result, the duties imposed on the basis of such margins violate
the principle set forth in Article 9.3 of the AD Ag reement, that the anti-dumping duty imposed shall
not exceed the margin as established under Article 2.
236
7.54 China asserts that Article 9(5) of the Basic AD Regulation is inconsistent with Article 9.4 of
the AD Agreement for two reasons. First, the dumping margins calculated for non-sampled producers
will reflect the weighted average of the margins ca lculated for the sampled producers which, to the
extent sampled producers are not granted IT, will be inconsistent with Article 2 of the AD Agreement
because they will be based on the export prices of all cooperating foreign producers, as opposed to
those of the individual producers. 237 Second, Article 9(5) of the Basic AD Regulation runs counter to
the obligation contained in the last sentence of Artic le 9.4 of the AD Agreement in that Article 9(5)
subjects the right to request individual margins to conditions that are not found in Article 9.4 of the
AD Agreement.238
(ii) European Union
7.55 The European Union contends that the obligation set forth in the first sentence of Article 6.10
is purely procedural. It requires the authorities to calculate an individual margin for each known
exporter or producer but does not address how such calculation should be made. The calculation of
margins is addressed elsewhere in the Agreement. 239 The nature of the obligation contained in
Article 6.10 is different from the nature of the issue raised by China, namely the assignment of
individual, as opposed to country-wide, duty rat es. The imposition of duties is addressed under
Article 9 of the Agreement. 240 Accordingly, the European Union maintains that Article 9(5) of the
Basic AD Regulation does not fall within the scope of the obligation set out in Article 6.10 of the
AD Agreement.
241
7.56 On substance, the European Union posits that sampling, allowed under the second sentence of
Article 6.10, is not the only exception to the gene ral rule set out in the first sentence of this
provision.242 For instance, the European Union argu es that Article 6.10 permits investigating
authorities to treat separate companies as a single entity which is the actual source of dumping.243 The
European Union asserts that other exceptions to the general rule are also possible, including, the
European Union contends, that provided for in Article 9(5) of the Basic AD Regulation. Therefore,
Article 9(5) of the Basic AD Regulation is not inconsistent with Article 6.10 of the AD Agreement.244

236 China, first written submission, paras. 85-86.
237 China, first written submission, paras. 89-90; China, second written submission, paras. 302-303.
238 China, first written submission, paras. 91-92.
239 European Union, first written submission, paras. 133-135.
240 European Union, first written submission, para. 136.
241 European Union, first written submission, para. 138.
242 European Union, first written submission, paras. 140-142.
243 European Union, first written submission, para. 147.
244 European Union, first written submission, paras. 153-154.

7.57 The European Union contends that Article 9(5) of the Basic AD Regulation does not fall
within the scope of the obligation set forth under Article 9.2 of the AD Agreement because the latter
does not require an anti-dumping duty to be compan y-specific, but merely that the suppliers be
"named".245 In the alternative, the European Union ma intains that, contrary to China's argument,
Article 9.4 of the AD Agreement cannot be inte rpreted to identify the only instance where the
investigating authorities can impose anti-dumping duties for the supplying country. 246 T h e
European Union notes that the third sentence of Ar ticle 9.2 allows authorities to name the supplying
country when several suppliers are involved and it is impracticable to name all of them. 247 According
to the European Union, "impracticable" refers to situations where the duty would not address the
source of dumping and therefore would be ineffective.248 The European Union therefore contends that
Article 9(5) of the Basic AD Regula tion is not inconsistent with Artic le 9.2 of the Agreement since it
serves to identify when it would be impracticable to assign individual duties and therefore country-
wide duties should be assigned.
249
7.58 The European Union also asserts that Article 9(5) of the Basic AD Regulation does not fall
within the scope of the obligation set forth un der Article 9.3 of the AD Agreement, because
Article 9(5) of the Basic AD Regulation does not address the calculation of dumping margins or the
relationship between anti-dumping duties and dumping margins. 250 Assuming that Article 9(5) of the
Basic AD Regulation is related to the obligation set forth in Article 9.3 of the AD Agreement, the
European Union maintains that China's claim unde r Article 9.3 is depende nt on its claims under
Articles 6.10 and 9.2. Since, in the European Union's view, Article 9(5) of the Basic AD Regulation
does not violate those two provisions, there ca n be no violation of Article 9.3 either. 251 T h e
European Union disagrees with China's argumen t that the single anti-dumping duty imposed on a
country-wide basis will necessarily lead to the collection of duties in excess of the relevant margin of
dumping.252 The European Union asserts, in this regard , that "in case of imports from China, the
proper duty rate for the actual supplier is subj ect to the maximum ceiling of the dumping margin
found for that supplier based on the weighted av erage of the intermediate results found for
cooperating non-IT suppliers and the results obtained for the non-cooperating suppliers".253
7.59 The European Union submits that Article 9(5) of the Basic AD Regulation does not
necessarily require the use of sampling and therefor e does not fall within the scope of the obligation
set forth under Article 9.4 of the AD Agreement.254 Assuming that the Panel disagrees with this view,
the European Union submits that China's claim under Article 9.4 of the AD Agreement is entirely
dependant on its claims under Articles 6.10 and 9.2 of the AD Agreement. Since, in the
European Union's view, Article 9(5) of the Basi c AD Regulation is not inconsistent with the
obligations set forth under those two provisions, China's claim under Article 9.4 of the AD Agreement
should also be rejected. 255 Further, the European Union di sagrees with China's argument that
Article 9(5) of the Basic AD Regulation results in the assignment of duties to cooperating non-
sampled suppliers in excess of the weighted average of the margins of dumping of the sampled
suppliers.256

245 European Union, first written submission, paras. 99- 101.
246 European Union, first written submission, paras. 103-105.
247 European Union, first written submission, para. 107.
248 European Union, first written submission, paras. 108-116.
249 European Union, first written submission, para. 122.
250 European Union, first written submission, paras. 158-159.
251 European Union, first written submission, para. 160.
252 European Union, first written submission, para. 162.
253 European Union, first written submission, para. 163.
254 European Union, first written submission, paras. 166-168.
255 European Union, first written submission, para. 169.
256 European Union, first written submission, para. 171.

(b) Arguments of Third Parties
(i) Brazil
7.60 Brazil submits that Article 9(5) of the Basi c AD Regulation is not inconsistent with the
relevant WTO disciplines. According to Brazil, the provisions of Article 2 and those of Article 6.10
of the AD Agreement only apply in investigations d ealing with producers that operate in accordance
with market economy principles. Where the authorities determine that market economy principles do
not prevail in the country of export, they may use a methodology that does not take into consideration
the domestic prices in that country. Brazil finds supp ort for this view in paragraph 15(a)(i) of China's
Protocol of Accession. Brazil submits that where the producer shows that it operates independently
from the State, it should be entitled to an individual margin of dumping as required under
Article 6.10. Brazil considers that the panel report in Korea – Certain Paper lends support to this
view. Further, Brazil maintains that where th e test developed by that panel is applied vis-à-vis
exporters from a non-market economy country, the burden shifts to such exporters to demonstrate that
they operate independently from the State. Thus Brazil considers that Article 9(5) of the Basic AD
Regulation is not inconsistent with Article 6.10 of the AD Agreement. Turning to Article 9 of the
AD Agreement, Brazil submits that there is no provision in this Article which requires the
determination of individual anti-dumping duties. Th e only obligation that Brazil infers from Article 9
is that the duty should not ex ceed the margin established in acco rdance with Article 2 of the
AD Agreement. But this is independent from the methodology applied in the determination of that
margin. Brazil therefore concludes that Article 9( 5) of the Basic AD Regulation is not inconsistent
with the obligations contained in Article 9 of the AD Agreement either.
(ii) Colombia
7.61 Colombia submits that the European Union has shown that Article 9(5) of the Basic AD
Regulation does not fall within the scope of appli cation of Article 6.10 of the AD Agreement because
it deals with the imposition of anti-dumping duties, and not the calculation of dumping margins.
Further, Colombia contends that the investiga ting authorities are entitled to treat as one entity
producers that are found to be related to the Stat e and to calculate a single margin of dumping for
them. It follows that Article 9(5) of the Basic AD Regulation is not inconsistent with Article 6.10.
According to Colombia, under Article 9.2 of the AD Agreement, authorities are allowed to impose
anti-dumping duties either on an individual or nati on-wide basis. Article 9(5) of the Basic AD
Regulation explains the conditions under whic h the Commission of the European Union
("Commission") will apply individual, as opposed to country-wide, duties. Therefore, it is not
inconsistent with the obligation set forth under Article 9.2 of the AD Agreement.
(iii) India
7.62 India's understanding of the obligation embodied in Article 6.10 of the AD Agreement is that
this provision requires investigating authorities to calculate individual margins of dumping for each
known exporter or producer. India presents the view that sampling is but one exception to this
principle and seeks clarity from the Panel in this re gard. India notes the second paragraph of the Note
Ad Article VI of the GATT 1994 and paragraph 15(a )(i) of China's Protocol of Accession, and argues
that should the Panel interpret the word "sale" used in the Protocol of Accession as referring both to
domestic and export sales, this may confirm the view that sampling is not the only exception to the
general rule provided for in the first sentence of Article 6.10.
(iv) Japan
7.63 Japan draws a link between paragraph 15(a)(ii) of China's Protocol of Accession and the
conditions contained in Article 9(5) of the Basi c AD Regulation to qualify for IT. According to

Japan, if the conditions set forth under Article 9( 5) of the Basic AD Regulation correspond to the
conditions contained under paragraph 15(a)(ii) of China's Protoc ol of Accession to show that market
economy conditions prevail in a given industry and if the calculation of a country-wide duty under
Article 9(5) of the Basic AD Regulation is equiva lent to using a methodology that is not based on a
strict comparison with domestic prices within the m eaning of paragraph 15(a)(ii) of China's Protocol
of Accession, the Panel should find that the Europ ean Union did not violate Articles 6.10, 9.2, 9.3
and 9.4 of the AD Agreement. Japan invites the Pane l to clarify the relationship between Article 9(5)
of the Basic AD Regulation and paragraph 15(a)(ii) of China's Protocol of A ccession. Further, with
respect to Article 6.10, Japan agrees with the Eu ropean Union that, as clarified by the panel in
Korea – Certain Paper , this provision allows authorities to treat related companies as a single
producer or exporter. However, in Japan's view , this reasoning relates to the definition of a
"producer" or "exporter" under Article 6.10 and has no bearing on the relationship between the first
and second sentences of this provision. Japan is of the view that sampling is the only exception to the
general rule set forth in the first sentence of Article 6.10.
(v) Turkey
7.64 Turkey notes that the first sentence of Artic le 6.10 of the AD Agreement provides for a
general rule and that the second sentence introduces an exception to this rule, namely the use of
sampling. Turkey, however, does not consider samp ling to be the sole exception to this rule.
According to Turkey, the AD Agreement contains ru les that apply to anti-dumping investigations
conducted against companies from market economy countri es. It is therefore normal that Article 6.10
does not contain an exception for NMEs. Turkey argues that in countri es where there is State
intervention in the economy, such intervention aff ects not only costs and domestic prices but also
export prices. As a result, in investigations ca rried out against producers from such countries, the
investigating authorities are permitted to disregar d the actual export prices in the calculation of
dumping margins.
(vi) United States
7.65 The United States notes that, in principle, Artic le 6.10 requires investigating authorities to
calculate individual dumping margins for each kno wn exporter or producer. This requires the
investigating authorities to identify the producers and e xporters in the first place. The United States
submits that in making this determination, the author ities should be allowed to take into consideration
economic realities and to treat multiple entities as one if the facts demonstrate that the companies are
sufficiently related. According to the United St ates, these realities also include the kind of economy
in which the companies operate. The United States maintains that there is ample evidence showing
significant State intervention in the Chinese economy. Thus, it becomes more important to analyze
well the structures and operations of Chinese compan ies in order to determine whether they are
independent from the State. The United States consider s that to the extent that Article 9(5) of the
Basic AD Regulation is designed to examine the re lationship between the producers and the State in
the exporting country, it would not be inconsistent with Article 6.10 of the AD Agreement. The
United States finds support for its views in the panel decision in Korea – Certain Paper.
7.66 The United States contends that Article 9 of the AD Agreement does not preclude
investigating authorities from imposing and applying a singly duty to a group of companies. Article 9
refers to the imposition of duties on products, not i ndividual producers or exporters. Further, the
United States contends that in order to decide which duty will be applied to which company, the
investigating authorities have to know whether a gr oup of companies function as a single entity. If it
is determined that this is the case, there is nothing in Article 9 that would preclude the authorities
from treating such companies as a single entity in respect of the imposition and collection of anti-
dumping duties.

7.67 The United States maintains that Article 9(5) of the Basic AD Regulation does not fall within
the scope of Article X:3(a) of the GATT 1994 because it does not address the administration of any
legal instrument.
(c) Evaluation by the Panel
(i) The Scope/Operation of Article 9(5) of the Basic AD Regulation
7.68 We note that the parties disagree as to the sc ope/operation of Article 9(5) of the Basic AD
Regulation. The gist of the disagreement is whether this provision determines whether NME
exporters will have individual dumping margins calculated as well as which exporters will have
individual duty rates applied, or whether it is li mited to determining whic h exporters will have an
individual duty rate and which ones will be subject ed to a country-wide duty rate. China's claims
under Articles 6.10, 9.3 and 9.4 of the AD Agreement are premised on the view that Article 9(5) of
the Basic AD Regulation determines whether the Commission will calculate individual or country-
wide dumping margins, in addition to determining whether individua l or country-wide duty rates will
be applied. In this regard, we recall that the meaning of the national law of a WTO Member is a
matter of fact for panels to establish.
257 We note that the European Union has not provided any
evidence of the meaning of Article 9(5) of the Basic AD Regulation, such as, for instance, an
interpretation from the EU courts ha ving relevant jurisdiction. Thus, we consider that it falls upon us
to clarify the scope/operation of Article 9(5) of the Basic AD Regulation as a factual matter before
engaging in a substantive analysis of China's claims.
7.69 The European Union submits that Article 9(5) of the Basic AD Regulation deals exclusively
with the imposition of anti-dumping duties, and does not concern the calculation of dumping margins
at all. At the beginning of an investigation, NME producers are invited to fill out and submit to the
Commission "the MET/IT claim form" in order to demonstrate, inter alia , that they meet the
conditions set out under Article 9(5) of the Basic AD Regulation for IT. If these conditions are met,
the Commission will assign an individual duty rate to that producer. If the conditions are not met, the
producer will be subject to a country-wide duty. Acco rding to the European Union, this is all that
Article 9(5) of the Basic AD Regulation does. Other issues, such as the calculation of dumping
margins and determination of the levels of th e duties to be imposed, are, according to the
European Union, governed by other provisions of the Basic AD Regulation, not Article 9(5). It
follows from the European Union's argument that Ch ina's claims under Articles 6.10, 9.3 and 9.4 of
the AD Agreement have to be dismissed because the specific measure at issue is not related to the
obligations set out in these three provisions.
7.70 China disagrees. According to China, the scope of Article 9(5) of the Basic AD Regulation is
not limited to determining whether the NME producer s will receive individual or country-wide anti-
dumping duties. Whether the Commission will dete rmine an individual or country-wide dumping
margin for exporters is also governed by this provision.
7.71 We recall that Article 9(5) of the Basic AD Re gulation provides that NME producers that fail
the IT test will be subject to the imposition of a country-wide anti-dumping duty. NME producers
that pass the IT test, on the other hand, will have their own individual duty rates imposed. We
recognize that, on its face, the text of Article 9(5) does not mention dumping margins. But, looking at
the operation of this provision as a whole, in the context of an anti-dumping investigation conducted
by the European Union, we agre e that, as China argues, Article 9(5) not only determines whether a

257 See, for instance, Panel Report, United States – Anti-Dumping and Countervailing Measures on
Steel Plate from India ("US – Steel Plate "), WT/DS206/R and Corr.1, adopted 29 July 2002, DSR 2002:VI,
2073, para. 7.90; Appellate Body Report, India – Patents (US), paras. 65-67.

particular NME producer will be subjected to an individual or country-wide duty, but necessarily also
determines whether the Commission will calculate an individual dumping margin for that producer.
7.72 As a general matter, it is clear to us that there is a close and necessary link between the
calculation of a margin of dumping and the imposition of an anti-dumping duty. Article 2 of the
AD Agreement sets out the rules that apply to the calculation of dumping margins. These rules
generally address the substantive aspects of margin cal culations. Article 2.1 contains the definition of
dumping. Article 2.2 lays down detailed principles for the determination of normal value, including
for such complex matters as sales below cost and low volume of sales that arise in determining normal
value. Article 2.3 provides guidance for those situ ations where the export price may be deemed to be
unreliable, as a result of which the authorities can r esort to constructed export price. Article 2.4
stipulates that a fair comparison has to be carried out between normal value and export price and sets
out rules for how that comparison is to be undertaken.
7.73 Article 9 of the AD Agreement, entitled "Imposition and Collection of Anti-Dumping
Duties," sets out the disciplines governing the impos ition of anti-dumping duties. Of the specific
provisions set forth under Article 9, paragraph 3 seems most closely linked to the calculation of
dumping margins, setting out the principle that an anti-dumping duty cannot exceed the margin of
dumping established under Article 2 of the AD Agreement. Article 9.2 stipulates that the authorities
should normally name the individual suppliers of the product concerned in connection with the
imposition of a duty, but allows the naming of the country if naming individual suppliers would be
"impracticable". Article 9.4 explains how, in i nvestigations where the authorities use sampling as
provided for under Article 6.10 of the AD Agreemen t, maximum duty rates should be calculated for
producers and exporters not examined as part of the sample.
258
7.74 It seems to us that, normally, an investiga ting authority would calculate the margin of
dumping and impose the consequent anti-dumping duty on the same basis. In other words, it seems
logical to us that an investigating authority would impose an anti-dumping duty on a producer-
specific basis only if the underlying margins were also calculated on a producer-specific basis.
Conversely, if the margins have been calculated on a country-wide basis, one would expect the
authorities to also impose the duty on a country-wide basis. The European Union's argument, that the
basis on which duties are ultimately to be imposed is not determinative of, and indeed is somehow
entirely separate from, the basis on which margins are calculated, seems counterintuitive. In our
view, it would not make sense for an investigating authority to calculate individual dumping margins
for producers with respect to which the national legislation requires the imposition of country-wide
anti-dumping duties.
259 Indeed, in response to questioning in this regard the European Union
explained:
"The EU authorities do not calculate individual dumping margins for non-IT
suppliers."260 (emphasis added)

258 Thus, the rules in Article 9.4 are, in the context of foreign producers and exporters who are not
individually examined as a part of the sample in an investigation, the functional equivalent of the rules in
Article 2 for calculating dumping margins, as they establish the maximum rate of duty that may be applied for
these companies.
259 Conversely, if the underlying margins have not been calculated on a producer-specific basis, then
any anti-dumping duties could only be applied on an "individual basis" in the most nominal sense, as the duty
applied "individually" to each producer would presumably be the same for all of them.
260 European Union, answer to Panel question 6(a). The European Union went on to observe
"[h]owever, the export prices of non -IT suppliers are generally used to determine the dumping margin for the
actual supplier, i.e., the State". European Union, answer to Panel question 6(a). Thus, it seems clear that the EU
authorities collect the individual export prices of non-IT suppliers, but simply use them on an average basis to
determine a country-wide dumping margin.

7.75 The European Union went on to state that:
"Non-IT suppliers are considered to be re lated through the State, the actual supplier
and source of the alleged price discrimination. Thus, the country-wide dumping
margin calculation aims at calculating the dumping margin for the actual supplier." 261
(emphasis added)
Thus, the European Union acknowledges that the application of Article 9(5) of the Basic AD
Regulation entails the calculation by the EU author ities of a country-wide margin and the consequent
imposition of a country-wide duty vis-à-vis non-IT producers. Nonetheless, the European Union
asserts that "the calculation of an individual dum ping margin for the State and its related export
branches (i.e., non-IT suppliers) or for MET/IT suppliers is not established by reason of the operation
of Article 9(5) ... the calculation of the individual dumping margin for the State and the MET/IT
suppliers is carried out by reason of the operatio n of Articles 2(7) and 18 of Council Regulation
No 384/96[.]"
262 We note, however, that the issue before us is not the mechanics of the calculation of
dumping margins but rather whether the Commission calculates an individual margin and assigns an
individual duty to individual Chinese producers. Nothing in either of the Articles cited by the
European Union pertains to whether or not an i ndividual margin will be calculated for any foreign
producer or exporter, and the European Union does no t assert otherwise. These provisions only relate
to the mechanics of the calculation of dumping marg ins, and this argument therefore is not pertinent
to our inquiry.

7.76 Thus, our understanding of the EU legislation is that whether or not the Commission will
calculate individual dumping margins and assign individual anti-dumping duties with respect to
exporters from NMEs is addressed exclusively in Artic le 9(5) of the Basic AD Regulation. No other
provision in the Basic AD Regulation or any other el ement of the EU legislation has been brought to
our attention which would produce this particular result.
263
7.77 Based on the foregoing considerations we conc lude that Article 9(5) of the Basic AD
Regulation concerns not only the imposition of anti-dumping duties but also the calculation of
margins of dumping. More specifically, where this provision requires that a country-wide duty be
imposed on NME producers that fail the IT test, it is undisputed that the Commission calculates only a
country-wide dumping margin for such producers, and not individual dumping margins. With respect
to producers that pass the IT test, an individual margin is calculated a nd an individual duty is
imposed. We therefore consider that , in operation, the result of the IT test in Article 9(5) of the Basic
AD Regulation determines the nature of the marg in calculation the EU authorities will undertake,
either individual or country-wide . Having clarified this factual issue, we now proceed to the
substantive assessment of China's claims against Article 9(5) of the Basic AD Regulation.
(ii) Substantive Analysis
7.78 China maintains that Article 9(5) of the Basi c AD Regulation violates Articles 6.10, 9.2, 9.3
and 9.4 of the AD Agreement since it requires th at NME producers from China be subject to a
country-wide margin of dumping and a country-w ide anti-dumping duty unless they can demonstrate
that they meet all of the conditions for IT set out in that provision.

261 European Union, answer to Panel question 6(b).
262 European Union, answer to Panel question 82.
263 It seems to us, for instance, th at should the Commission be challenged in the relevant EU court for
failing to grant individual treatment to such exporters in a particular case, it would have to rely on Article 9(5)
of the Basic AD Regulation in defending its action.

7.79 We recall that, under the Basic AD Regulation, in an anti-dumping investigation involving a
non-market economy, the NME producers are first subj ect to the market economy test, to determine
whether the Commission will base the determination of normal value for them on a consideration of
the domestic prices of these producers. If a producer passes this test, its normal value will be based
on that producer's domestic prices and the export prices that will be compared to that normal value
will be based on that exporter's own export prices – it is treated exactly as if it were a producer from a
market economy country. If a producer fails the M ET, the domestic prices of that producer are not
taken into consideration in the dete rmination of its normal value, wh ich is determined on an alternate
basis.
7.80 That producer is next subject to the IT test, which determines whether an individual margin
will be calculated and an individual duty will be im posed with respect to that producer or whether a
country-wide margin will be calculated, and the prod ucer will be subject to a country-wide duty. The
IT test only applies to producers who fail the MET. As we have concl uded above, pursuant to
Article 9(5) of the Basic AD Regulation, that a c ountry-wide duty will be imposed with respect to
producers that fail the IT test en tails that the Commission will calc ulate a country-wide margin for
such producers. As described in para. 7.50(b)(ii) ab ove, the determination of the export price used to
calculate that country-wide margin will depend on th e level of cooperation on the part of the non-IT
exporters altogether. If the leve l of cooperation is high, i.e. if the cooperating non-IT exporters
account for close to 100 percent of all exports, the export price will be based on a weighted average of
the actual price of all export transactions effected by these exporters. If, however, the level of
cooperation is low, i.e. if the non-IT exporters account for significantly less than 100 percent of all
exports, the Commission will resort to facts available to complete the missing information. The
selection of the facts available will depend on the gravity of non-cooperation and may include
statistical import data.
7.81 Thus, as a technical matter, the Commission calculates one single dumping margin for NME
producers that fail the IT test. The Commission then imposes a single "country-wide" duty rate for
those producers, which may be less than that margin if the EU authorities determine that a lesser duty
would suffice. For NME producers that pass th e IT test, the Commission will compare the same
normal value, but with these producers' own export prices. Thus, as a technical matter, the
Commission calculates individual margins for NME pr oducers that pass the IT test and individual
duties are imposed, which may be less than the i ndividual margins calculated if the EU authorities
determine that a lesser duty would suffice.
7.82 China's claims under Articles 6.10, 9.2, 9.3 an d 9.4 of the AD Agreement, therefore, only
concern the export price aspect of dumping determin ations for NME producers. China contends that
disregarding the export price of non-IT producers and instead taking into consideration the weighted
average export price of a group of Chinese producers as the single export price, and calculating a
country-wide dumping margin and a country-wide duty le vel on that basis, is inconsistent with the
cited provisions of the AD Agreement.
7.83 China's arguments under all four provisions of the AD Agreement at issue are premised on the
view that the AD Agreement requires individual tr eatment for producers subject to an investigation
with respect to the dumping determination. China contends that this individual treatment obligation
requires the investigating authorities, as a rule, to take into consideration a producer's own export
prices in the calculation of that producer's individual dumping margin, and to base the duty rate for
that producer on that individual margin.
264 China acknowledges that Articles 6.10 and 9.2 provide for
exceptions to the individual treatment principle, but maintains that where these exceptions do not
apply, the investigating authorities have to provide individual treatment to foreign producers.

264 Or, of course, a lesser duty may be imposed. Since this may occur regardless of the basis on which
the dumping margin is calculated, and is not at issue in this case, we do not address this circumstance.

7.84 Given that the gist of China's claim pertains to the fact that Chinese producers that fail the IT
test are not accorded individual margins and individu al duties by the European Union, we consider it
appropriate to start our assessment with the provision of the AD Agreement that is the most directly
related to the issue of individual treatment and move on, to the extent necessary, to the other
provisions raised by China. In our view, the provisi on that is most directly relevant to China's claim
is Article 6.10 of the AD Agreement. Article 6.10 provides, in pertinent part:
"6.10 The authorities shall, as a rule, determine an individual margin of dumping
for each known exporter or producer concerned of the product under investigation. In
cases where the number of exporters, producers, importers or types of products
involved is so large as to make such a determination impracticable, the authorities
may limit their examination either to a reasonable number of interested parties or
products by using samples which are statis tically valid on the basis of information
available to the authorities at the time of the selection, or to the largest percentage of
the volume of the exports from the country in question which can reasonably be
investigated. ...
6.10.2 In cases where the authorities have limited their examination,
as provided for in this paragraph, they shall nevertheless determine
an individual margin of dumping for any exporter or producer not
initially selected who submits the necessary information in time for
that information to be considered during the course of the
investigation, except where the number of exporters or producers is
so large that individual examinations would be unduly burdensome to
the authorities and prevent the timely completion of the investigation.
Voluntary responses shall not be discouraged."
7.85 Article 6.10 clearly concerns individual treatme nt of producers and exporters subject to anti-
dumping investigations, setting out the principle that the investigating authorities shall, "as a rule",
"determine", i.e., calculate, an individual dumping margin for "each known producer or exporter ... of
the product under investigation". It also provid es that where the number of producers, exporters,
importers or product types is "so la rge" as to make it impracticable to calculate individual margins,
the investigating authorities may limit their examination either to a reasonable number of interested
parties or products by using samples which are statis tically valid, or to the largest percentage of the
volume of exports from the exporting country in ques tion. The "limited examination" provided for in
this Article is generally referred to as "sampling", even where a statistically valid sample is not used,
but the second alternative for limiting examination is used.
265
7.86 With respect to China's clai m under Article 6.10 of the AD Agreement, the disagreement
between the parties centres on whether sampling is the only exception to the general obligation to
calculate individual margins for each known producer or exporter set out in the first sentence. China
argues that Article 6.10 requires investigating authorities to calculate an individual dumping margin
for each known exporter or producer except where, as stated in the second sentence of this provision,
the authorities resort to sampling because of the la rge number of exporters, producers, importers or
product types. Although the European Union argues that Article 6.10 does not apply here, we have
rejected that view, concluding above that Article 9(5) of the Basic AD Regulation does in fact address
the calculation of margins.
266 The European Union also objects to China's substantive arguments.

265 Article 6.10 also contains provisions regarding the selection of the foreign producers/exporters to be
included in a sample, and the right of producers not included in the sample selected to have an individual margin
calculated for them nonetheless, unless to do so would be unduly burdensome for the investigating authorities.
These provisions are not at issue in this dispute.
266 See paragraphs 7.68-7.77.

The European Union does not disagree that the prin ciple laid down under Article 6.10 is that an
individual margin be calculated for each known pr oducer. It considers that Article 6.10, first
sentence, contains the expression of a preference , as a general rule, not a st rict obligation which must
be complied with in each and every case. However, it argues that sampling is not the only exception
to this preference. 267 Specifically, the European Union main tains that in non-market economies, the
State may be found to be the source of dumping. In such cases, the investigating authorities can, in
effect, treat the State as a "producer", calculate a single margin of dumping and duty rate for the State,
and assign that country-wide duty to producers that cannot demonstrate that they are independent
from the State.
7.87 China's argument raises two issues: (1) whether sampling as described in the second sentence
of Article 6.10 constitutes the only exception to the principle laid down in the first sentence, and
(2) whether a State may be seen as a producer a nd a single margin may be established and a duty
imposed on exports from that State unless individua l exporters can demonstrate their independence
from the State according to a set of criteria estab lished by the importing Member conducting an anti-
dumping investigation.
7.88 We note that the first sentence of Article 6.10 provides that the investigating authorities must,
"as a rule", calculate an individual dumping ma rgin for each known exporter or producer of the
product under investigation. The second senten ce states that where the number of exporters,
producers, importers or types of product involved is so large as to make an individual determination
impracticable, the authorities may base their determina tions on an examination of a statistically valid
sample or the largest percentage of the volume of the exports from the country at issue which can
reasonably be investigated. In light of the text and its structure, it is clear to us that the second
sentence of Article 6.10 introduces an exception to the principle laid out in the first sentence. The
question that the European Union raises, however, is whether sampling is the sole exception to the
principle of individual dumping determinations, or whether there may be other exceptions.
7.89 With respect to the relationship between the first and the second sentences of Article 6.10, the
European Union argues:
"The second sentence
 of 6.10 on sampling is not an exception to this general rule.
Rather, the second sentence is si mply an affirmative statement relating to (i) the
conditions for sampling and (ii) the composition of the sample. There is no direct link
between the general principle of the first sentence and the possibility of sampling in
the second sentence. These two sentences ar e simply two affirmative statements of
what an investigating authority ought to do in general (individual margin
determination), and what it is allowed to do (sampling)."
268
According to the European Union, there may be additional situations, other than sampling, which may
justify not calculating an individual margin for a produ cer. In this regard, the European Union refers
to the fact that a new exporter which is related to an exporter of a product subject to an anti-dumping
duty is not entitled to request the calculation of an individual margin; that individual producers that
are related to one another are not entitled to in dividual margins under Article 6.10; that the
investigating authorities may calculate different marg ins for a producer and an exporter that sells the
products of that producer; that the authoriti es may base their margin determinations for a non-
cooperating producer on facts available; that no margin would be calculated for an exporter which is a
"mere trader" in the subject product; that the auth orities may be unable to gather information with

267 European Union, second written submission, para. 38.
268 European Union, answer to Panel question 7.

respect to some producers; and that a margin may sometimes be determined on the basis of a
constructed normal value and/or constructed export price.269

7.90 We are not convinced by the European Union' s arguments. The wording of Article 6.10,
particularly the fact that the ex ception is stated immediately after the rule, seems to suggest that
sampling is the sole exception to the rule of indi vidual margins. Moreover, the examples that the
European Union gives as potential other exceptions to the rule in the first sentence of Article 6.10 are
directly based on other provisions of the AD Agreemen t, and as such, we are of the view that they
cannot be considered even potentially as "excepti ons" to the obligation to calculate individual
dumping margins. Rather, they are specific right s and obligations otherwise provided for in the
AD Agreement. For instance, Article 9.5 provides th at new exporters of a product subject to an anti-
dumping duty are entitled to an expedited review to determine an individual dumping margin for
them, except for new exporters that are related to an exporter that was subject to the underlying
investigation and for which a duty has thus already b een imposed. Since this situation is specifically
provided for, we see no reason why the non-calculation of an individual margin in this context should
be considered as a possible exception to the first senten ce of Article 6.10. Similarly, the fact that the
investigating authorities may calculate different marg ins for a producer and an exporter that sells the
products of that producer cannot be interpreted as being an additional exception to the first sentence
of Article 6.10. Rather, that situation seems to f it the general rule, that an individual margin of
dumping is calculated for each foreign producer and e xporter of the product. Similarly, the fact that
dumping determinations may be based on facts ava ilable under Article 6.8 would seem irrelevant to
the question before us – in such case s, it is the failure of an indivi dual foreign producer or exporter to
provide information that justifies the use of fact s available, and the margin applied to that non-
cooperating party is "individual" in that sense, regardless of how it may be calculated. It goes without
saying that if the investigating authorities are not awar e of a particular producer, an individual margin
cannot be calculated for it.
270 Indeed, the first sentence of Article 6.10 only requires the
determination, as a rule, of an individual margin of dumping for "known" producers or exporters, so
questions about the scope of any "exceptions" to th at rule for unknown exporters simply do not arise.
Finally, the use of constructed normal value and/ or export price are situations governed by the
relevant provisions of Article 2 and there is thus no reason to rely on an exception to the obligation set
forth in the first sentence of Article 6.10 to justify their use.
7.91 The remaining argument put forward by the European Union in this regard, i.e., that where
several producers are related, the investigating aut horities do not have to calculate individual margins
for such producers, requires further consideration. The European Union submits that Article 9(5) of
the Basic AD Regulation, through the IT test, allows the Commission to ascertain whether several
producers are related to the State and therefore wh ether that group of suppliers, namely the State,
should be subjected to a single margin calculation and a single duty rate. The way the
European Union sees it, the relationship between non-IT suppliers and the State is similar to the
relationship that the panel in Korea – Certain Paper found between several legally distinct entities
producing the product, but for which the Korean investigating authorities had calculated a single
margin, treating them as a single producer. In this regard, the European Union posits:
"Thus, like in Korea – Certain Paper, the reasoning behind these criteria is to identify
the actual source of price discrimination
, the single supplier of the product concerned.
Only by doing so, the anti-dumping duty imposed will address the actual source of
price discrimination effectively."271 (underline emphasis added)

269 European Union, answer to Panel question 7.
270 Imports from producers not known to the investigating authority will generally be subject to an "all-
others" duty rate, subject to possible review under Article 9.5.
271 European Union, answer to Panel question 10.

7.92 We recall that in the anti-dumping investigation at issue in Korea – Certain Paper , the
Korean investigating authorities had treated thr ee separate legal entities exporting the product under
consideration as a single exporter, and calculated a single margin of dumping and imposed a single
anti-dumping duty rate on them. The issue in that case was whether Article 6.10 allowed
investigating authorities to treat separate legal en tities as a single exporter, calculate a single margin
of dumping, and impose a single anti-dumping duty rate on them. The panel recalled that the
AD Agreement did not address anywhere whether each separate legal entity had to be treated as an
individual producer or exporter in the context of an anti-dumping investigation. Based on an analysis
of the text of Article 6.10 in light of its contex t, particularly Articles 9.5, 2.3 and 2.1 of the
AD Agreement, the panel concluded that Article 6.10 did not preclude investigating authorities from
treating multiple legal entities as a single producer or exporter for purposes of an anti-dumping
investigation. The panel, however, underlined that in order to do so, "[the investigating authorities
have] to determine that these companies are in a relationship close enough to support that
treatment".
272 The panel then concluded that "Article 6.10, read in its context, and in particular with
Article 9.5, could permissibly be interpreted to a llow such treatment in other circumstances where the
structural and commercial relationship between the co mpanies in question is sufficiently close to be
considered as a single exporter or producer".273
7.93 We note that the reasoning of the panel in Korea – Certain Paper was based on the structural
and commercial relationship between separate le gal entities producing the e xported product, and was
focussed on determining whether, despite the form of distinct entities, they were in fact appropriately
treated as a single producer or expo rter for purposes of the first senten ce of Article 6.10. In our view,
the operation of Article 9(5) of the Basic AD Regulat ion is fundamentally different. The criteria laid
down in Article 9(5) of the Basic AD Regula tion do not go to the structural and commercial
relationships between distinct legal entities. We recall that the relevant criteria in Article 9(5) of the
Basic AD Regulation are, inter alia: whether producers are allowed to repatriate capital and profits;
whether export prices and quantities are freely determin ed; the involvement of the State in ownership
of companies; and whether exchange rate convers ions are carried out at market rates. These
conditions relate to the role of the State in the way business is conducted in a given country, as
opposed to the criteria considered by the panel in Korea – Certain Paper , which relate to the
commercial relationship between nominally distinct companies. The European Union's approach
essentially presumes that the State should be cons idered as a "parent company" for potentially
thousands of distinct legal entities producing and ex porting a product under inv estigation, and only if
these entities can demonstrate their independence w ill they receive an individual dumping margin
calculation. We do not consider this to be a plau sible application of the reasoning of the panel in
Korea – Certain Paper.
7.94 Having said that, we do not by any means exclude the possibility that in a given investigation
the investigating authorities might determine that one or more nominally distinct producer(s) or
exporter(s) is/are, in fact, sufficiently related to the State to justify concluding that they are a single
producer or exporter. In such a situation, the authorities could well treat the producer(s)/exporter(s)
and the State as a single exporter, calculate a single dumping margin for, and assign a single duty to,
that single exporter. As we have noted above, how ever, the criteria in Article 9(5) of the Basic AD
Regulation do not in our view serve the purpose of fi nding this type of relationship between the State
and individual exporters. Rather, Ar ticle 9(5) of the Basic AD Regulation presumes that this type of
relationship exists, and requires the fulfilment of all the specified criteria by each individual exporter
seeking individual treatment in order to avoid the consequences of this presumption.

272 Panel Report, Korea – Anti-Dumping Duties on Imports of Certain Paper from Indonesia ("Korea –
Certain Paper"), WT/DS312/R, adopted 28 November 2005, DSR 2005:XXII, 10637, para. 7.161.
273 Panel Report, Korea – Certain Paper, para. 7.162.

7.95 Thus, there is an important difference be tween the test applied by the panel in Korea –
Certain Paper and the one applied under Article 9(5) of the Basic AD Regulation with respect to the
burden of proof. Under the test applied by the panel in Korea – Certain Paper , the investigating
authorities have to show that there is a suffici ently close structural and commercial relationship
between individual producers to justify treating them as a single entity. If this cannot be
demonstrated, the authorities, pursuant to the first sentence of Article 6.10, must treat each legal entity
as a separate producer/exporter, and calculate individual dumping margins for each of them. An
investigating authority applying this test starts from the premise that each exporter or foreign producer
will be considered separately. Should it appear that this is not the case in a particular investigation,
the investigating authority must obtain evidence on the basis of which it can affirmatively conclude
that two or more of these nominally distinct en tities are appropriately treated as a single exporter or
producer. Under Article 9(5) of the Basic AD Regulation, however, the starting point is the
presumption that NME producers are related to the State, as a result of which nominally distinct
producers will not be considered separately in an y investigation. In every case involving NME
producers, the burden is on each such producer seeki ng individual treatment to provide evidence with
respect to the Article 9(5) criteria sufficient to overcome the presumption to the satisfaction of the
Commission. The difference in the starting points of the two tests, and the different evidentiary
burdens involved, in our view, show how different these two tests are.
7.96 In this regard, the European Union maintains that:
"In the context of market economy countries, the close relationship between the
separate legal entities has to be examined on a case by case basis. In contrast, in non-
market economy countries, since the role of the State is different than in market
economy countries, the presumption of State control is the general rule."
274 (footnote
omitted)
We are not convinced by this argument and the European Union has not pointed to any legal basis that
would support it. 275 In our view, applying such a presumption to NME producers would seriously
undermine the logic of Article 6.10 which requires th at individual margins be calculated for each
known producer unless the conditions set forth in its second sentence apply and sampling can be used.

7.97 In addition, we note that China has submitte d undisputed evidence that the Commission does,
in fact, apply a test such as was applied by the investigating authority in Korea – Certain Paper in the
context of investigations involving both market and non-market economy countries, in order to
determine whether nominally distinct companies sh ould be treated as a single exporter or producer.
The examples submitted by China show that the Commission applies the IT test in addition
 to this test
– that is, the Commission first determines which, if any, groups of companies should be considered as
a single producer or exporter, and then applies the IT test to each "single" producer or exporter it finds
on the basis of that test. 276 This clearly shows that the Commission itself distinguishes the test aimed
at determining whether separate legal entities s hould be treated as a single producer/exporter for
purposes of dumping determinations, from the IT test under Article 9(5) of the Basic AD Regulation
which determines whether individual margins should be calculated and individual duties assigned to
NME producers.

274 European Union, answer to Panel question 84.
275 We note that, while the European Union and certain other WTO Members treat China as a non-
market economy in the context of anti-dumping investigations, there are a number of other WTO Members that
do not.
276 China, answer to Panel question 3.

7.98 Based on the foregoing, we find that Article 9(5) of the Basic AD Regulation is inconsistent
with Article 6.10 of the AD Agreement in that it conditions the calculation of individual margins for
producers from NMEs on the fulfilment of the IT test.
7.99 Having resolved China's claim under Article 6.10, we note that Article 9.2 of the
AD Agreement also concerns individual treatment , albeit with respect to duty imposition, and
therefore turn next to China's claim under this provisi on. China asserts that Article 9(5) of the Basic
AD Regulation is inconsistent with Article 9.2 of the AD Agreement because it subjects non-IT
producers to a country-wide duty rate. According to China, Article 9.2 lays down the general
principle that anti-dumping duties have to be imposed on an individual basis, as this is the only way to
ensure that the amount of the duty imposed is "appr opriate" as required under Article 9.2. The use of
"amounts" in the plural also supports the view that duties have to be imposed individually, that is, for
each producer. In this regard, China considers there to be a parallel between Articles 6.10 and 9.2:
since margins have to be calculated on an individual basis, duties should also be imposed on that
basis.
7.100 The European Union submits that the Panel s hould reject China's claim under Article 9.2,
asserting that Article 9(5) of the Basic AD Regulati on does not fall within the scope of the obligation
set forth in that provision, because China's claim under Article 9.2 is premised on the incorrect
assumption that the AD Agreement takes a company-sp ecific approach with respect to the imposition
of anti-dumping duties. This premise being false, the European Union contends that the Panel need
not assess the substantive arguments raised by China in this regard. Should the Panel reject the
European Union's objection in this regard, the Eu ropean Union maintains that Article 9.2 of the
AD Agreement does not require a company-specific approach to the imposition of anti-dumping
duties. Assuming that there is such a general requirement, the European Union maintains that
Article 9.2 does nonetheless allow the imposition of country-wide duties. In this regard, the European
Union's arguments focus on the word "impracticable" in Article 9.2. The European Union maintains
that "impracticable" in the context of Article 9. 2 entails that Members are allowed to impose anti-
dumping duties on a country-wide basis in cases where the specification of individual anti-dumping
duties per supplier would be ineffective. This would be the case, in particular, when the imposition of
individual anti-dumping duties per exporter would rende r 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.
277
7.101 China disagrees with this interpretation and subm its that "impracticable" in the context of
Article 9.2 refers to situations where it is not possible, as a practical matter, to impose individual
duties with respect to every producer. Although im practicability would normally occur as a result of
there being many individual producers subject to th e duty, China does not excl ude the possibility that
impracticability may also stem from factors other than the number of producers.
7.102 With respect to the preliminary objection raised by the European Union to the effect that
Article 9(5) of the Basic AD Regulation does not fall within the scope of the obligation contained in
Article 9.2 of the AD Agreement, we note that China argues that Article 9.2 requires, in principle, that
anti-dumping duties be imposed on an individual basis. In other words, what the European Union
suggests is a preliminary issue is in fact the main substantive argument that China raises in connection
with its claim under Article 9.2 of the AD Agreement. We therefore reject this preliminary objection
and proceed to address the substance of China's claim.

277 European Union, first written submission, para. 119; European Union, opening oral statement at the
second meeting, para. 15.

7.103 Article 9.2 reads:
"When an anti-dumping duty is imposed in respect of any product, such anti-dumping
duty shall be collected in the appropriate amounts in each case, on a
non-discriminatory basis on imports of such product from all sources found to be
dumped and causing injury, except as to imports from those sources from which price
undertakings under the terms of this Agreem ent have been accepted. The authorities
shall name the supplier or suppliers
 of the product concerned. If, however, several
suppliers from the same country are involved, and it is impracticable to name all these
suppliers, the authorities may name the supplying country concerned." (emphasis
added)
Thus, Article 9.2 starts out by outlining the basi c parameters with respect to the imposition of anti-
dumping duties. The first sentence states that duti es should be collected in appropriate amounts and
on a non-discriminatory basis from all sources found to be dumping and causing injury except with
respect to imports from sources for which a price unde rtaking has been accepted. We consider that
the word "sources" contained in the first sentence of Article 9.2 refers to pr oducers and exporters of
the product subject to the anti-dumping investigation.
278 We note that the term "sources" is used twice
in this sentence, first referring to sources f ound to be dumping and then referring to sources from
which price undertakings have been accepted. Unde r Article 8 of the AD Agreement, undertakings to
revise prices or cease exports at dumped prices can be accepted only from individual exporters,
following at least a preliminary determination of dumping. 279 It is therefore clear to us that the use of
the phrase "sources from which price undertakings have b een accepted" is a reference to exporters or
foreign producers who export the product subject to the anti-dumping investigation. 280 This, in our
view, also informs the interpretation of the first reference to "sources" and we consider that both
references to "sources" under the first sentence of Ar ticle 9.2 are references to exporters or foreign
producers who export the product subject to the an ti-dumping investigation. Moreover, we have
concluded above that dumping, in the sense of the calculation of a margin of dumping, is as a rule
determined for individual foreign producers or expor ters of the product subject to the anti-dumping
investigation.

7.104 We note that the second and third sentences of Article 9.2 are more directly relevant to
China's claim. The second sentence lays down th e principle that the authorities should name the
individual suppliers with respect to the imposition of the duties. Similar to our understanding of the
word "sources" in the first sentence of this provision, we consider that the "suppliers" referred to in
the second and third sentences are the individual forei gn producers or exporters of the product subject
to the anti-dumping investigation.
281 The third sentence introduces an exception to this rule,

278 In this regard, we note the European Union's argum ent that "sources" can be interpreted as referring
to the State where it is the State that is the source of the actual price disc rimination. European Union, second
written submission, para. 54. We would agree that the term "sources" may refer to the State in a case where it is
demonstrated, in the particular investigation, that the St ate is the actual producer or exporter of the product in
question. However, as discussed elsewhere in our findings, we disagree that the State can be presumed to be the
source of price discrimination in a non-market economy.
279 This is in contrast to the parallel provision of the SCM Agreement, Article 18, which specifically
provides for the acceptance of undertakings from the go vernment of the exporting Member to eliminate or limit
the subsidy, or take other measures concerning its effects. In our view, this differ ence reflects the fact that
subsidization is a matter of government action, while dumping is, in general, a consequence of pricing decisions
by commercial enterprises.
280 We recognize that Article 8 refers only to "exporte rs". However, in our view, this reference clearly
includes those foreign producers who export the product subject to the anti-dumping investigation, as there
would be no reason to consider undertakings from producers who do not export.
281 In this regard, we note the European Union's ar gument that the use of the terms "suppliers" and
"sources" in Article 9.2 "indicates that anti-dumping measures aim at identifying the supplier which is the actual

providing that where naming individual suppliers w ould be impracticable, the authorities may name
the supplying country. In our view, this sentence suggests that in investigations involving multiple
producers, the authorities may find it impracticable to name all the producers individually with respect
to the imposition of the duties and, instead, may consider it appropriate to name the supplying
country. The grounds on which the authorities would made such a finding, however, are not readily
apparent from the text. In other words, what is meant by "impracticable" is not explicit, and each
party assigns a different meaning to this word in the context of Article 9.2.
7.105 China argues that there is a parallel in this re gard between Articles 6.10 and 9.2 which would
mean that "impracticable" under Article 9.2 refers to investigations where, because of the large
number of producers, it would be difficult to manage the implementation of the measure if each
supplier is named individually. According to the European Union, however, under Article 9.2, it
would be impracticable to assign individual rates to individual producers if that would undermine the
effectiveness of the measure. This would be the case, it argues, where the source of the price
discrimination is the State, not the individual produ cers. In such situations, the duty would only be
effective if it targets the real source of the problem, i.e., the State, which, according to the
European Union, is what Article 9(5) of th e Basic AD Regulation is intended to do. The
European Union argues that, through the IT test, Article 9(5) aims at identifying circumstances in
which the State is the source of the price discriminat ion and provides that in such situations the duty
should be imposed with respect to the State, not the individual producers that are related to the State.
7.106 We are not convinced by the European Union's argument that Article 9(5) of the Basic AD
Regulation aims at finding the source of price discrimination. By "price discrimination", we
understand the European Union to refer to differe ntiation between the normal value and the export
price of a product. Since normal value for a NME producer is not based on the producer/exporter's
own prices, and thus is not within its control, th is leaves us to understand that the European Union's
argument is that Article 9(5) of the Basic AD Regul ation identifies situations where the export prices
of a product are set by the State, rather than by the producer itself. However, while one of the
relevant criteria, whether export prices are freely dete rmined, seems relevant in this regard, it is only
one of the criteria in Article 9(5) of the Basic AD Regulation, and we recall that for a NME producer
to be accorded an individual margin, it must satisfy all of the criteria. Thus, even if a given NME
producer is able to freely determine its export pric es, which would suggest that the State is not the
source of the price discrimination, it will fail the IT test if it fails to satisfy some of the other criteria,
such as the repatriation of capital and profits, the determination of export prices and quantities, and
conditions and terms of sale. In such a circumstance, it is difficult to see how it can be concluded that
the "source" of the price discrimination is the State.
7.107 Turning to Article 9.2, we note that the third sen tence of this provision consists of two parts.
The first part contains two conditions: that there be several suppliers from the same country and that
it be impracticable to name all these suppliers in connection with the imposition of the duty. The
second part establishes the outcome where these tw o conditions are met – that the authorities can
name the supplying country concerned when impos ing an anti-dumping duty. Thus, this sentence
may be interpreted as meaning that where two c onditions are met, the investigating authorities may
deviate from the rule embodied in the preceding sentence of Article 9.2 and may name the supplying
country with respect to the duty being imposed. The first condition refers to the existence of several
suppliers. Several means, inter alia, "more than two but not many".
282 Thus, we consider that this

source of the price discrimination, regardless of the fact that, strictu sensu, there may be several separate legal
entities or "exporters" shipping the product concerned to other countries". European Union, first written
submission, para. 148. The European Union, however, has not substantiated this argument. We understand this
statement to mean that "suppliers" refers to something other than exporters and, as mentioned above, disagree
with it. See paragraph.7.104.
282 The New Shorter Oxford English Dictionary, Clarendon Press, 1993.

refers to investigations where more than two pr oducers are to be subject to anti-dumping duty.
"Impracticable" means, inter alia, "not practicable; unable to be carried out or done; impossible in
practice".283 Seen in light of the first condition in the first part of this sentence, in our view,
"impracticable" refers to it being difficult or im possible to name all producers individually with
respect to the imposition of an anti-dumping duty. More over, we recall that this sentence states that if
"several suppliers from the same country are in volved, and it is impracticable to name all these
suppliers, the authorities may name the supplying c ountry concerned". (emphasis added) It seems
clear to us that "these suppliers" refers back to the immediately preceding identification of "several
suppliers from the same country". Thus, unless th e authorities consider that because of the large
number of producers involved it would be impracticable to name them individually, we conclude that
the rule set forth in the second sentence of Artic le 9.2 would apply and the authorities would be
required to name each producer individually, which in our view entails the imposition of an individual
anti-dumping duty. When the third sentence of Article 9.2 is read in its totality, the European Union's
argument that "impracticable" refers to situati ons where individual treatment would undermine the
effectiveness of the measure becomes untenable.284
7.108 Our interpretation finds support when Article 9.2 is read in light of Article 6.10 as context.
We note that there is an important similarity betw een Articles 9.2 and 6.10. Article 6.10 requires that
an individual margin be calculated with respect to each known producer or exporter and Article 9.2
requires that each supplier be named individually with respect to the imposition of an anti-dumping
duty. Although one concerns margin calculations and the other duty imposition, we consider that
these two provisions relate to the same general oblig ation, namely the obligation to provide individual
treatment to producers in the context of anti-dum ping proceedings. Thus, Article 6.10 represents
relevant context for the interpretation of Article 9.2.
7.109 We note that, compared with Article 9.2, Artic le 6.10 contains more detailed provisions with
respect to individual treatment. As we have explai ned above, Article 6.10 provides that, in principle,
the authorities should calculate an individual ma rgin for each known exporter or producer. The
second sentence of Article 6.10 provides fo r an exception where the number of, inter alia, exporters
or producers is so large as to make such individual calculations impracticable, allowing authorities to
limit their examination either by using a statistic ally valid sample or by examining the largest
percentage of the volume of dumped imports that can reasonably be investigated. This sentence links
the word "impracticable" to the large number of producers or exporters. That is, under Article 6.10
what makes individual dumping calculations impracti cable is set out in the provision itself – a large
number of producers or exporters. Unlike Article 6.10, Article 9.2 does not contain such clear
guidance as to what is meant by "impracticable" with respect to the naming of supplier(s). However,
given the, to us, clear similarity between th e functions of Articles 6.10 and 9.3, we think
"impracticable" under Article 9.2 shoul d be interpreted consistently with the meaning of this word as
used in Article 6.10. This supports our view that impracticability under Article 9.2 refers to situations
where, because of the large number of suppliers, th at is, producers or exporters, it would be difficult
to assign a duty to each of them individually, in which case the authorities are permitted to name the
supplying country, that is, assign a country-wide duty.
7.110 We recognize that there is a difference between the texts of Articles 6.10 and 9.2:
Article 6.10 refers to "exporters or producers" whereas Article 9.2 refers to "suppliers". In this regard,
we recall that Article 9.2 has remained unchanged si nce it was agreed as Article 8(b) of the Kennedy
Round Anti-Dumping Code in 1967, while Article 6. 10 was negotiated in the Uruguay Round. Thus,
we see Article 6.10 as a further elaboration of the not ion of individual treatment originally contained

283 The New Shorter Oxford English Dictionary, Clarendon Press, 1993.
284 We note in this regard that we consider the European Union's reliance on a draft revision of the New
Shorter Oxford Dictionary, dated December 2009, in arguing that impracticable should be understood to mean
ineffective, to be entirely unpersuasive.

in what is now Article 9.2 of the AD Agreement. For this reason, in addition to those set out above285,
we consider that the term "supplier" under Article 9. 2 is equivalent to "expor ter" or "producer" under
Article 6.10.
7.111 Finally, we note that, the application of cust omary rules of interpretation to the text of
Article 9.2 does not result in any ambiguity, and thus does not require resort to supplementary means
of interpretation. 286 We will nonetheless briefly address the European Union's arguments in that
regard. The European Union notes that the Kennedy Round Anti-Dumping Code 287 incorporated the
interpretative note to Article VI of the GATT 1947 by specifying (as does Article 2.7 of the
AD Agreement) that the provisions on the determinat ion of dumping were "without prejudice to" the
interpretive note.
288 The European Union asserts that other provisions were also introduced to address
the lack of independency of operators from the State in international trade, referring in this regard to,
inter alia, Article 8 of the Kennedy Round Anti-Dumping Code, which introduced the possibility to
name the supplying country concerned when it was impracticable to name all the suppliers 289 and
which is currently reflected in almost identical te rms in Article 9.2 of the AD Agreement. According
to the European Union, this:
"codified the understanding of the GATT Cont racting Parties that, in some cases, and
in particular with respect to non-market economy countries, the actual producer was
the exporting country as such and, thus, it was necessary to specify anti-dumping
duties on a country-wide basis to address the actual source of price discrimination.
Indeed, in a non-market economy country, the State control over the means of
production and State intervention in the economy, including international trade, imply
that all the means of production and natural resources belong to one entity, the State.
All imports from non-market economy countries are therefore considered to emanate
from a single producer, the State."
290
In the view of the European Un ion, this meant that with resp ect to anti-dumping duties against
producers from NMEs, "it would not be relevant to name exporting companies separately since they
collectively constituted one single supplier or exporting entity, i.e., the State". 291 W e f i n d t h i s
proposition to be unconvincing. Assuming it were appropriate and necessary to consider the
negotiating history, we do not agree that the "incor poration" of the Ad Note to Article VI of the
GATT 1947 in the Kennedy Round Anti-Dumping C ode demonstrates that Article 9.2 allows
investigating authorities to name the State in connection with the imposition of anti-dumping duties in
investigations involving producers from NMEs. As no ted by China, other elements of the negotiating
history suggest that Article 8 of the Kennedy R ound Anti-Dumping Code was intended to ensure that
anti-dumping duties were imposed only on those firms found to be dumping.292 We simply cannot see

285 See paragraph 7.104.
286 We note that the European Union takes the same view, albeit with respect to its own interpretation
of the text. European Union, second written submission, para. 59.
287 Kennedy Round Agreement on Implementation of Article VI of the General Agreement on Tariffs and
Trade, TN.64/98, 20 June 1967.
288 European Union, first written submission, para. 11. The interpretive note provides, in relevant part:
"It is recognized that, in the case of impo rts from a country which has a complete or
substantially complete monopoly of its trade and where all domestic prices are fixed by the
State, special difficulties may exist in determining price comparability for the purposes of
paragraph 1, and in such cases importing contracting parties may find it necessary to take into
account the possibility that a strict comparison with domestic prices in such a country may not
always be appropriate."
289 European Union, first written submission, para. 12.
290 European Union, first written submission, para. 12 (footnote omitted).
291 European Union, first written submission, para. 12.
292 China, second written submission, paras. 193-197.

that merely because the Ad Note and Article 8 of the Kennedy Round Anti-Dumping Code were
being addressed at the same time demonstrates that they necessarily address the same issues.

7.112 Based on the foregoing considerations, we conc lude that Article 9.2 of the AD Agreement
requires the investigating authorities to name th e individual suppliers, that is, the producers or
exporters, on whom anti-dumping duties are imposed , except that where the number of producers or
exporters is so large that it would be impracticab le to do so, the authorities may name the supplying
country. We read these provisions in parallel with the requirements of Article 6.10 of the
AD Agreement relating to the determination of dumpi ng margins, and conclude that Article 9.2 does
not, contrary to the European Union's view, a llow the imposition of a single country-wide anti-
dumping duty in an investigation involving a non-market economy. We recall that Article 9(5) of the
Basic AD Regulation requires that a country-wide duty be imposed with respect to producers or
exporters from NMEs unless such producers or exporters show, on the basis of the criteria set out in
that provision, that they are independent from their State. We therefore find that Article 9(5) of the
Basic AD Regulation violates the obligation laid down in Article 9.2 of the AD Agreement.
7.113 Having found that Article 9(5) of the Basic AD Regulation is inconsistent with the obligations
set forth under Articles 6.10 and 9.2 of the AD Ag reement, we now turn to China's claims under
Articles 9.4 and 9.3.
7.114 Article 9.4 governs the imposition of anti-dumpi ng duties in investigations where, in
accordance with Article 6.10, sampling has been used in the calculation of dumping margins. In other
words, Article 9.4 sheds light on the consequences with respect to duty imposition of using a sample
at the margin calculation stage. Article 9.4 essen tially limits the duty rate for producers not sampled
to a maximum of the weighted average ma rgin calculated for the sampled producers.
293 A s t o
Article 9.3, we note that the chapeau of this provisi on, which is at issue here, establishes the principle
that "[t]he amount of the anti-dumping duty sha ll not exceed the margin of dumping as established
under Article 2".
7.115 China contends that Article 9(5) of the Basic AD Regulation is inconsistent with Article 9.4
of the AD Agreement for two reasons: 1) because it allows the Commission to calculate the margin
of dumping for non-sampled producers based on th e margins of sampled producers which, to the
extent some of those sampled producers have fa iled the IT test, are not based on their individual
export prices; and 2) because it subjects the calcu lation of an individual duty, which non-sampled
producers are entitled to request under the last sentence of Article 9.4, to the fulfilment of the IT test.
The European Union submits that China's claim under Article 9.4 is dependent on its claims under
Articles 6.10 and 9.2 of the AD Agreement, and asserts that since Article 9(5) of the Basic AD
Regulation is not inconsistent with any of these tw o provisions, it cannot be inconsistent with the
obligations set forth in Article 9.4 either.
294
7.116 We note that both arguments put forward by Chin a replicate its arguments in connection with
its claims under Articles 6.10 and 9.2 of the AD Agreem ent. The first argument takes issue with the
fact that the application of Article 9(5) of the B asic AD Regulation to the sampled producers could, in
some circumstances, also render the duty assigned to the non-sampled producers WTO-inconsistent.

293 Article 9.4 excludes from th at weighted average zero and de minimis margins and margins
determined on the basis of facts available.
294 The European Union also argu es that China's description of how the Commission calculates the
margin for non-sampled cooperating producers is wrong. According to the European Union, what the
Commission does in such investigations is compare the export prices of non-IT producers with the normal value
for the analogue country (which the Eu ropean Union calls "intermediate re sults"), then calculate individual
margins for producers that pa ss the MET and IT tests; and then ca lculate the weighted average of the
"intermediate results" and the individual dumping margins in order to obtain the margin that will be applied to
non-sampled cooperating producers. European Union, first written submission, para. 171.

The second argument states that there would be a violation of Article 9.4 where a non-sampled
producer requesting the calculation of an individual dut y is subjected to the IT test under Article 9(5)
of the Basic AD Regulation. Given that China has presented no new or independent arguments in
support of its claim of violation of Article 9.4, we are of the view that a finding of violation of
Article 9.4 would add nothing to the resolution of this dispute, nor would it help in any potential
implementation. We therefore c onsider it appropriate to exercise judicial economy and decline to
address this claim.
7.117 Turning finally to China's claim under Article 9.3, we note China's argument that the
calculation of a country-wide dumping margin for producer s that fail the IT test is inconsistent with
Article 2.3 of the AD Agreement, which, China cont ends, requires that margin calculations be based
on the individual export prices of such producers. According to China, the imposition of a duty on the
basis of a margin that is inconsistent with the requ irements of Article 2, in turn, violates Article 9.3,
which requires that the duty imposed should not ex ceed the margin as established under Article 2.
China claims that those exporting producers whic h have company-specific export prices which are
higher than the average export price used for non- IT exporting producers will be subject to a duty
which exceeds their dumping margin establis hed under Article 2 of the AD Agreement.
295 T h e
European Union once more submits that China's clai m under Article 9.3 is dependent on a finding of
violation of Articles 6.10 and 9.2, and asserts that since Article 9(5) of the Basic AD Regulation is not
inconsistent with these two provisions, there is no vi olation of Article 9.3 either. In addition, the
European Union argues as a substantive matter that since the duty imposed under Article 9(5) of the
Basic AD Regulation is not higher than the margin found for the State, there can be no violation of
Article 9.3. Further, it contends that since Ch ina's assumption that Article 6.10 requires individual
dumping margins is erroneous, Article 9(5) of the Basic AD Regulation cannot be found to be
inconsistent with Article 9.3 of the AD Agreement.
7.118 We have found Article 9(5) of the Basic AD Regul ation to be inconsistent with Articles 6.10
and 9.2 of the AD Agreement, which in our view cont ain provisions that are more directly relevant to
the dispute than Article 9.3. Finding a violation of Article 9.3 would not contribute to the resolution
of this dispute or aid in implementation. We ther efore consider it appropriate to exercise judicial
economy and refrain from making findings with resp ect to China's claim under Article 9.3 of the
AD Agreement.
4. Whether Article 9(5) of the Basic AD Regulation is inconsistent with Article I:1 of the
GATT 1994
(a) Arguments of Parties
(i) China
7.119 China notes that Article 9(5) of the Basic AD Regulation only applies to some WTO
Members, including China, and not to all. Accordin g to China, as a legal instrument that governs the
conduct of anti-dumping investigations, this Regula tion constitutes a law or formality within the
meaning of Article I:1 of the GATT 1994.
296 China asserts that this provision requires that any
advantage, favour, privilege or immunity granted by any contracting party to any product originating
in any other country shall be accorded immediately and unconditionally to the like product originating
in the territories of all other contracting parties. China therefore argues that by not automatically
giving the Chinese producers the right to have individual dumping margins calculated and individual

duty rates imposed on them, Article 9(5) of the Basic AD Regulation violates the Most Favoured
Nation ("MFN") principle embodied in Article I:1 of the GATT 1994.297
(ii) European Union
7.120 The European Union submits that if the Pane l finds that the AD Agreement permits WTO
Members to subject the right to an individual margin of dumping to the fulfilment of certain
conditions in investigations invol ving NMEs, by virtue of the lex specialis principle, there can be no
violation of Article I:1 of the GATT 1994. 298 Independently, the European Union also argues that
treating two different situations in two different ways would not necessarily violate the MFN principle
in Article I:1 of the GATT 1994. According to th e European Union, "imports from market and non-
market economy countries may be subject to different treatment in the context of the anti-dumping
rules precisely because they are different in nature . Therefore, by definition, no discrimination can
arise".299
(b) Arguments of Third Parties
(i) Colombia
7.121 Colombia contends that Article 9(5) of the B asic AD Regulation is not inconsistent with the
obligation set forth under Article I.1 of the GATT 1 994 because it is in conformity with the second
paragraph of Ad Article VI of the GATT 1994.
(c) Evaluation by the Panel
7.122 We recall that Article 9(5) of the Basic AD Regulation, which subjects the imposition of an
individual duty rate for NME exporters to the fu lfilment of certain conditions, only applies to
producers from certain NMEs, including China. Producers from other WTO Members, i.e., so-called
"market economy countries", are entitled to indivi dual treatment without having to fulfil the
conditions set forth under Article 9(5) of the Basic AD Regulation.300
7.123 Article I:1 of the GATT 1994 reads:
"With respect to customs duties and charges of any kind imposed on or in connection
with importation or exportation or imposed on the international transfer of payments
for imports or exports, and with respect to the method of levying such duties and
charges, and with respect to all rules a nd formalities in connection with importation
and exportation, and with respect to all matte rs referred to in pa ragraphs 2 and 4 of
Article III, any advantage, favour, privilege or immunity granted by any contracting
party to any product originating in or destined for any other country shall be accorded
immediately and unconditionally to the like product originating in or destined for the
territories of all other contracting parties." (emphasis added)
Thus, Article I:1 of the GATT 1994 requires that any privilege granted to imports of any country be
accorded immediately and unconditionally to the lik e products originating in or destined for the
territories of all other WTO Members. This "most- favoured-nation" ("MFN") principle is considered

297 China, first written submission, paras. 97-98.
298 European Union, first written submission, para. 173.
299 European Union, first written submission, para. 175; European Union, second written submission,
para. 78.
300 We recall that producers from NMEs not Members of the WTO are subject to a different set of
rules, but of course, Article I:1 of GATT 1994 does not apply to them.

to be "a cornerstone of the GATT and is one of the pillars of the WTO trading system". 301 The MFN
principle requires WTO Members to treat like pr oducts equally irrespective of their origin. 302 Based
on the text of Article I:1, it is clear to us that for there to be a violation of the MFN obligation, the
complaining party must show that "there [is] an a dvantage, of the type covered by Article I and which
is not accorded unconditionally to all "like products" of all WTO Members".303

7.124 Turning to the facts of the present dispute, firs t we note that Article 9(5) of the Basic AD
Regulation constitutes a rule or formality, mainta ined by the European Union in connection with
importation. It is clear to us that this rule affects imports from certain countries, since it sets out
criteria for determining whether the export prices of producers subject to anti-dumping investigations
will be taken into consideration, individual margins of dumping calculated, and individual anti-
dumping duties imposed upon importation of the relevant product to the European Union. Second, we
consider that determining and imposing individual duties for producers subject to an anti-dumping
investigation, that is basing the duties for such producers on individual margins established on the
basis of their own export prices rather than the average export price of a group of producers from the
same country, is an advantage within the meaning of Article I.1 of the GATT 1994. This is because
such individual treatment ensures that an exporte r is not subjected to a duty higher than its own
dumping margin, as would be the case for some expor ters with a country-wide duty imposed on the
basis of a margin calculated on averag e export prices. Third, as noted above
304, Article 9(5) of the
Basic AD Regulation lists the WTO Members, including China, whose producers subject to anti-
dumping proceedings in the European Union are not automatically accorded the right to have
individual dumping margins and anti-dumping duties, but rather must fulfil the conditions set out in
Article 9(5) of the Basic AD Regulation in order to have individual dumping margins calculated for
and anti-dumping duties imposed on them. Thus, it is clea r that the application of Article 9(5) will, in
certain situations, result in imports of the same product from different WTO Members being treated
differently in anti-dumping investigations conducted by the European Union. Thus, we consider that
Article 9(5) violates the MFN obligation of Article I:1 of the GATT 1994.
7.125 The European Union submits that "imports from market and non-market economy countries
may be subject to different treatment in the c ontext of the anti-dumping rules precisely because they
are different in nature. Therefore, by definition, no discrimination can arise". 305 We disagree. In our
view, in anti-dumping investigations, imports from NMEs may be treated differently from imports
from market economy countries only to the extent the WTO Agreement or some other relevant
provision allows such different treatment. 306 The European Union, however, has not demonstrated
that any provision of the AD Agreement, or any other provision of the WTO Agreement, allows for
the different treatment of imports from NMEs provided for in Article 9(5) of the Basic AD
Regulation. Nor has the European Union demonstrated that there is a relevant difference in the nature
of imports from NMEs that justifies different treatment – it asserts this to be the case, but in our view,

301 Appellate Body Report, Canada – Certain Measures Affecting the Automotive Industry ("Canada –
Autos"), WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, DSR 2000:VI, 2985, para. 69.
302 Appellate Body Report, European Communities – Conditions for the Granting of Tariff Preferences
to Developing Countries ("EC – Tariff Preferences"), WT/DS246/AB/R, adopted 20 April 2004, DSR 2004:III,
925, para. 89.
303 Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry ("Indonesia – Autos"),
WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1 and 2, adopted 23 July 1998, and Corr. 3 and 4,
DSR 1998:VI, 2201, para. 14.138.
304 See paragraph 7.46.
305 European Union, first written submission, para. 175.
306 We recall, for instance, that the Ad Note to Ar ticle VI of the GATT 19 94 allows for different
treatment with respect to the determination of normal value in anti-dumping investigations against Members that
have a complete or substantially complete monopoly of their trade. Similarly, paragraph 15 of China's Protocol
of Accession to the WTO permits different treatment w ith respect to the determination of normal value in
investigations conducted against Chinese producers provided certain conditions are met.

this is merely an assumption, without a sufficient factual basis. 307 In the absence of an explicit
authorization to do so, or a sufficient factual basi s showing that a difference in the nature of the
imports concerned, any differentia l treatment on the basis of the origin of goods, including on the
basis of the nature of the economy in the exporting country, would violate the MFN principle.
7.126 Referring to the GATT panel report in US – MFN Footwear , the European Union argues that
treating one category of products differently from another category of products does not violate the
MFN obligation of Article I:1 of the GATT 1994. 308 However, as that panel also noted 309, treating
differently like products originating in different countries violates Article I:1. In this case, it is clear
that the Basic AD Regulation treats different count ries differently, and thus potentially treats like
products from different countries differently. In this regard, we find it significant that the Basic AD
Regulation explicitly lists the countries the producers of which will be subject to the IT test, referring
to NMEs that are WTO Members which also includes China. This suggests that the Regulation itself
demonstrates that this rule only applies to a pre-determined group of WTO Members, without
consideration of the specific circumstances in individual cases.
7.127 On the basis of the foregoing, we conclude th at Article 9(5) of the Basic AD Regulation
violates the MFN principle contained in Article I:1 of the GATT 1994.
5. Whether Article 9(5) of the Basic AD Regulation is inconsistent with Article X:3(a) of
the GATT 1994
(a) Arguments of the Parties
(i) China
7.128 China submits that its claim under Article X:3( a) of the GATT 1994 is directed against the
manner in which the Commission administers Article 9(5) of the Basic AD Regulation. 310 C h i n a
contends that Article 9(5) of the Basic AD Regulati on falls within the scope of Article X:3(a) of the
GATT 1994 which refers to "laws, regulations, decisions and admini strative rulings of general
application".311 China observes that the methodology for the calculation of the country-wide margin
of dumping varies depending on the degree of cooperation on the part of the foreign producers subject
to an investigation. Where the level of cooperati on is considered to be high, the Commission bases
the country-wide margin at the level of the high est margin calculated for a cooperating producer.
When, however, the level of cooperation is low, other methodologies are used. Therefore, China
submits, Article 9(5) of the Basic AD Regulation is not administered in a uniform manner in all anti-
dumping investigations.312 China also maintains that Article 9(5) of the Basic AD Regulation is not
administered in a reasonable manner in anti-dumpi ng investigations against Chinese exporters since
the dumping determinations against such exporters are usually made by the Commission on the basis
of facts available even where the conditions set out under Article 6.8 of the AD Agreement are not

307 In this regard, we note that the fact that pr oducers in a non-market economy may be able to
demonstrate that they operate on market economy principles, and may, under Article 9(5) of the Basic AD
Regulation, be able to demonstrate that they are independen t of the State, suggests to us that it is not as clear as
the European Union would have it that the mere fact that the economy of a WTO Member is classified by
another Member (but not, by any means, all Members) as a NME can be, without a specific factual showing, a
sufficient justification for different treatment under Article I:1 of the GATT 1994.
308 European Union, first written submission, para. 177.
309 GATT Panel Report, Footwear from Brazil ("US – MFN Footwear "), DS18/R, adopted
19 June 1992, BISD 39S/128, para. 6.11.
312 China, first written submission, paras. 107-112.

met.313 In China's view, such non-uniform and unreas onable application of Article 9(5) of the Basic
AD Regulation is inconsistent with the obligation contained in Article X:3(a) of the GATT 1994.
(ii) European Union
7.129 The European Union asserts that Article 9(5) of the Basic AD Regulation provides for a
methodology for determining anti-dumping duties in investigations against NMEs. It does not contain
any rules on how such methodology should be administered. Since the specific measure at issue does
not fall within the scope of the obligation cont ained in Article X:3(a) of the GATT 1994, the
European Union contends that the Panel should reject China's claim.
314 In this regard, the
European Union also finds it puzzling that China has raised this as an "as such" claim. The
European Union submits that normally an "as such" claim is one directed at measures that mandate a
particular result which is WTO-inc onsistent, which, according to the European Union, is not the case
with respect to Article 9(5) of the Basic AD Regulation. 315 Assuming that Article 9(5) of the Basic
AD Regulation does address the administration of the methodology, the European Union submits that
a methodology that varies depending on the level of cooperation on the part of foreign exporters
cannot per se be considered as non-uniform. According to the European Union, the application of
Article 9(5) of the Basic AD Regulation leads to the same result where the circumstances are the
same, and therefore is applied in a cons istent manner in all investigations.
316 The European Union
also counters China's assertion that Article 9(5) of the Basic AD Regulation is administered in an
unreasonable manner. The European Union contends that this aspect of China's claim is devoid of
any legal basis.317
(b) Arguments of Third Parties
(i) United States
7.130 The United States submits that to the extent th at China challenges Article 9(5) of the Basic
AD Regulation as such under Article X:3(a) of the GATT 1994, the specific measure at issue does not
fall within the scope of the obligation contained in the legal provision invoked by China. The
obligation set forth under Article X:3(a) of the GATT 1994 pertains to the administration of the
instruments identified in Article X:1. According to the United States, laws and regulations may only
be challenged under Article X:3(a) where they addre ss the administration of another legal instrument.
Since Article 9(5) of the Basic AD Regulation does not address the administration of another legal
instrument, it is not, in the view of the United States, challengeable under Article X:3(a).
(c) Evaluation by the Panel
7.131 China's claim under Article X:3(a) of the GATT 1994 is two-fold. First, China contends that
the manner in which the European Union administer s Article 9(5) of the Basic AD Regulation is non-
uniform because the method used for the calculation of the country -wide dumping margin for NME
producers that fail the IT test depends on the level of cooperation of those producers. Second, China
asserts that the administration of this provision is unreasonable because the Commission resorts to
facts available in the calculation of the country-w ide margin of dumping for the non-IT producers.
The European Union submits that Article 9(5) of the Basic AD Regulation does not address the
administration of the provisions contained therein. It is, therefore, not clear which provision in that
Article China challenges in connection with this clai m. The European Union also takes issue with the

313 China, first written submission, paras. 113-114.
314 European Union, first written submission, paras. 182-186.
315 European Union, first written submission, para. 68.
316 European Union, first written submission, para. 192.
317 European Union, first written submission, para. 193.

fact that China's claim is directed at Article 9(5) of the Basic AD Regulation "as such", arguing that a
claim under Article X:3(a) of the GATT 1994 normally sh ould take issue with the administration of a
measure, not with the measure itself.
7.132 Article X:3(a) of the GATT 1994 provides:
"Each contracting party shall administer in a uniform, impartial and reasonable
manner all its laws, regulations, decisions and rulings of the kind described in
paragraph 1 of this Article."
Thus, Article X:3(a) lays down the principle th at WTO Members should administer their laws,
regulations, decisions and rulings that affect trade in a uniform, impartial and reasonable manner. In
our view, this obligation aims at ensuring that laws, regulations, decisions and rulings that are
substantively consistent with a Member's WTO oblig ations are also implemented in an appropriate
manner so that exporters from other Members can pr edict the treatment their exports will be accorded
under the regime to which their trade will be subjected in the territory of that Member.

7.133 We recall our finding that Article 9(5) of the B asic Regulation is inconsistent "as such" with
Articles 6.10 and 9.2 of the AD Agreement.
318 China's claim under Article X:3(a) of the GATT 1994
concerns the manner in which this measure is administered by the Commission. Having found
Article 9(5) of the Basic Regulation to be "as such" inconsistent with the European Union's
obligations under Articles 6.10 an d 9.2 of the AD Agreement, we see no reason to consider whether
this WTO-inconsistent measure is administer ed in a uniform and reasonable manner by the
European Union. We therefore apply judici al economy with respect to China's claim under
Article X:3(a) of the GATT 1994.
6. Whether Article 9(5) of the Basic AD Regulation is inconsistent with Article XVI:4 of
the WTO Agreement and Article 18.4 of the AD Agreement
(a) Arguments of the Parties
(i) China
7.134 China asserts that since Article 9(5) of the Basic AD Regulation is in consistent with the
provisions of the AD Agreement and the GATT 1994 discussed above, it follows that it is also
inconsistent with Article XVI:4 of the WTO Agreement and Article 18.4 of the AD Agreement, which
require WTO Members to ensure the conformity of their laws, regulations and administrative
procedures with their WTO obligations.
319
(ii) European Union
7.135 The European argues that since Article 9(5) of the Basic AD Regulation is not inconsistent
with any of the obligations cited by China, it can not be inconsistent with the obligations set forth
under Article XVI:4 of the WTO Agreement and Articl e 18.4 of the AD Agreement and that therefore
this claim should be rejected.320
(b) Evaluation by the Panel
7.136 Article XVI:4 of the WTO Agreement reads:

318 See paragraphs 7.98 and 7.112 above.
320 European Union, first written submission, paras. 195-196.

"Each Member shall ensure the conformity of its laws, regulations and administrative
procedures with its obligations as provided in the annexed Agreements."
Article 18.4 of the AD Agreement similarly provides:

"Each Member shall take all necessary steps, of a general or particular character, to
ensure, not later than the date of entry in to force of the WTO Agreement for it, the
conformity of its laws, regulations and ad ministrative procedures with the provisions
of this Agreement as they may apply for the Member in question."
7.137 Thus, Article XVI:4 of the WTO Agreement re quires WTO Members to ensure that their
laws, regulations and administrative provisions are c onsistent with the provisions of the agreements
annexed to the WTO Agreement, and Article 18.4 of the AD Agreement imposes the same obligation
with respect to laws, regulations and administra tive procedures pertaining to the conduct of anti-
dumping investigations. We have concluded above321, that Article 9(5) of the Basic AD Regulation is
inconsistent with Articles 6.10 and 9.2 of the AD Agreement. We therefore also find that the
European Union has acted inconsistently with Ar ticle XVI:4 of the WTO Agreement and Article 18.4
of the AD Agreement by failing to ensure the confor mity of its laws, regulations and administrative
procedures with its obligations under the relevant Agreements.
D. CLAIMS REGARDING COUNCIL REGULATION 91/2009 ("THE DEFINITIVE REGULATION")
1. Background of the Investigation at Issue
7.138 Council Regulation (EC) No. 91/2009 of 26 January 2009, the Definitive Regulation, imposed
a definitive anti-dumping duty on imports of certain ir on or steel fasteners originating in the People's
Republic of China. 322 The Definitive Regulation sets out the background of the investigation, and
explains the basis for the imposition of the anti-dumpi ng duties in the investigation at issue, including
the considerations, evidence, and reasoning underl ying the determinations of the EU investigating
authority, the Commission, on dumping, injury, and causal link, as well as on matters such as like
product and domestic industry, and the resolution of ar guments raised by the parties. China raises a
number of claims with regard to various aspects of the Definitive Regulation. Before addressing
those claims, we set out below our understanding of the proceedings in the investigation.
7.139 On 26 September 2007, the Commission received a complaint from the European Industrial
Fasteners Institute, the complainan t, for the initiation of an anti-du mping investigation on imports of
steel fasteners originating in China. 323 Evidence submitted in connec tion with the application was
deemed sufficient and an investigation was in itiated on 9 November 2007. On 4 August 2008, the
Commission provided the interested parties with an Information Document 324 detailing preliminary
findings as of that point in the investigation and inviting them to make comments. No provisional
measures were imposed, as the Commission considered that certain aspects of the investigation
needed further examination. On 18 September 2008, a public meeting was organized in which all
interested parties participated.
7.140 The Commission used sampling in making its dumping determination. A total of 110 Chinese
producers made themselves known by the relevant deadline, 15 days from initiation, and were
considered as cooperating parties. The sample selected for purposes of the dumping determination

321 See paragraphs 7.98 and 7.112.
322 Exhibit CHN-4.
323 The Commission defined the "product concerned", that is, the product imported from China that was
the subject of the investigation, in recital 40 of the Definitive Regulation, Exhibit CHN-4.
324 Exhibit CHN-17.

initially included nine Chinese producers. All nine producers applied for market economy treatment
("MET"). The Commission determined that four of the nine producers provided false information and
denied their MET requests. The remaining five Chinese producers were denied MET on the grounds
that they did not meet the criteria set out in Article 2(7)(c) of the Basic AD Regulation. These five
producers also requested, and were granted, individual treatment ("IT") under Article 9(5) of the Basic
AD Regulation. Five additional Chinese producers not selected for the sample submitted replies to
the questionnaire, requesting that the Commission ca lculate individual margins for them pursuant to
Articles 9(6) and 17(3) of the Basic AD Regulati on. One of these companies did not produce the
product under investigation, and its request was not accepted. The Commission concluded that one of
the remaining four companies provided misl eading information and was considered as non-
cooperating, and therefore denied its request. 325 The remaining three producers requested MET, but
their requests were denied. These three producers also requested IT, which requests were granted. 326
Thus, the Commission undertook to individually examine eight Chinese producers in total in making
its dumping determination.
7.141 Since none of the individually-examined Chinese producer was granted MET, the
Commission determined the normal value on the basi s of information concerning an analogue third
country, India. The data pertaining to one coope rating Indian producer of the subject product was
used in the determination of normal value. Th ere is no dispute concerning the determination of
normal value in this case.
7.142 For all examined Chinese producers having been gr anted IT, export prices were, in principle,
calculated under normal rules provided for in Article 2(8) of the Basic AD Regulation, i.e., on the
basis of the price actually paid or payable for the product when sold for export from the exporting
country (China) to the European Union. The Commission found that the export prices reported by
two Chinese exporting producers were not reliable and resorted to constructed export price for them.
Dumping margins for the five sampled producers gr anted IT were based on a comparison of the
normal value calculated for the analogue country with each company's weighted average export price.
A weighted average of those margins was calculated and app lied to the non-sampled Chinese
producers, except for the three non- sampled producers that were granted IT. Individual dumping
margins were calculated for these, based on a co mparison of the normal value for the analogue
country with each company's weighted average export price. For two of these companies, the
calculated margin was zero, while a margin above de minimis was calculated for the third.
7.143 With respect to the determination of inju ry, the Commission found there were some
300 producers of fasteners in the European Union, most of whom did not make themselves known to
the Commission in response to the no tice of initiation. However, 46 cooperating producers did come
forward expressing their willingness to be included in the sample. Of these, one did not provide
sufficient information during verification to be c onsidered cooperating. The remaining 45 producers
were found to constitute the domestic industry. The producers that supported the complaint and
cooperated with the Commission represented 27 per cent of total production of the like product in the
EU.
327 Given the number of producers in the domestic industry, the Commission used sampling in
investigating and assessing injury. Based on its anal ysis of the information before it, the Commission
determined that dumped imports from China caused material injury to the domestic industry.

325 Definitive Regulation, Exhibit CHN-4, recital 78.
326 Late in the proceedings, some exporters argued that these companies should be treated as part of the
sample, or that the sample should have been enlarged, rather than receiving individual examination under
Article 17(3) of the Basic AD Regulation. The Commission rejected this argument, concluding that the sample
was sufficient. Definitive Regulation, Exhibit CHN-4, recital 21.
327 Total production of the like product was estimated to be 1,421,602 tonnes in 2006. Definitive
Regulation, Exhibit CHN-4, recital 113.

2. Whether Article 9(5) of the Basic AD Regulation, as applied in the fasteners
investigation, is inconsistent with Articles 6.10, 9.2 and 9.4 of the AD Agreement
(a) Arguments of the Parties
(i) China
7.144 China acknowledges that in the fasteners i nvestigation the Commission granted the IT
requests of the eight Chinese producers examined. However, China contends that subjecting such
treatment to the conditions set forth under Article 9(5) of the Basic AD Regulation was inconsistent
with Articles 6.10, 9.2 and 9.4 of the AD Agreement.
328 The bases of China's claims under these three
provisions of the AD Agreement are identical to tho se China raised in connection with its claims of
inconsistency of Article 9(5) of the Basic AD Regula tion "as such". That is, China submits that for
the same reasons that Article 9(5) of the Basi c AD Regulation is "as such" inconsistent with
Articles 6.10, 9.2 and 9.4 of the AD Agreement, it s application in the fasteners investigation was
inconsistent with these provisions.329
(ii) European Union
7.145 The European Union argues that China's clai m under Article 9.4 of the AD Agreement is
outside the Panel's terms of reference because it was not included in China's panel request. 330 T h e
European Union notes that China's "as applied" claims repeat its "as such" claims regarding
Article 9(5) of the Basic AD Regulation, and asserts that since the "as such" claims are unfounded, the
Panel should also reject China's "as applied" claims regarding the Definitive Regulation.
331 T h e
European Union submits that, even if the Panel finds that Article 9(5) of the Basic AD Regulation is
inconsistent with the AD Agreement or the GAT T 1994 cited by China "as such", since all the
Chinese producers that requested IT in the investigation at issue were granted such treatment, China is
challenging a non-existent measure. The European Union therefore requests the Panel to reject
China's "as applied" claims regarding Article 9(5) of the Basic AD Regulation.332
(b) Evaluation by the Panel
7.146 As set out in our findings above 333, we have concluded that Article 9(5) of the Basic AD
Regulation is inconsistent with Ar ticles 6.10 and 9.2 of the AD Agreement. The issue raised by this
claim is whether the application of Article 9(5) of the Basic AD Regulation in the fasteners
investigation was also inconsistent with Articles 6.10 and 9.2 of the AD Agreement.
7.147 We recall, and both parties agree, that in the fasteners investigation all Chinese producers that
requested IT were granted such treatment. This raises the question of whether the application of
Article 9(5) of the Basic AD Regulation was nevertheless inconsistent with the cited provisions in this
investigation. As noted, the European Union ma intains that China is challenging a non-existent
measure since all the IT requests were granted. China, on the other hand, submits that it challenges
the non-automatic character of the decision by th e Commission to grant IT to the Chinese exporters
subject to this investigation, and thus the issue it raises is properly before the Panel.
7.148 In our view, the fact that all the IT requests were granted in the underlying investigation does
not preclude us from considering whether the applic ation of Article 9(5) of the Basic AD Regulation

328 China, first written submission, paras. 177, 184 and 187.
330 European Union, first written submission, para. 212.
331 European Union, first written submission, para. 210.
332 European Union, first written submission, paras. 213-217.
333 See paragraphs 7.98 and 7.112 above.

in the investigation was inconsistent with the AD Ag reement. Having found that this provision of EU
regulation is inconsistent with Articles 6.10 and 9.2 of the AD Agreement as such, it is difficult to see
how its application in this inves tigation could be considered consis tent with the obligations of the
European Union under the AD Agreement. We theref ore conclude that, having found Article 9(5) of
the Basic AD Regulation to be inconsistent with Ar ticles 6.10 and 9.2 of the AD Agreement, and for
the same reasons, its application in the fasteners investigation was also inconsistent with these
two provisions.334
7.149 We recall that we applied judicial economy with respect to China's claim under Article 9.4 of
the AD Agreement in connection with Article 9(5) of the Basic AD Regulation "as such". 335 For the
same reasons, we consider it appropriate to exerci se judicial economy and decline to make a finding
on China's claim under Article 9.4 in the context of the fasteners investigation. Since we do not
address this claim substantively, we do not cons ider it necessary to address the European Union's
terms of objection in this regard.
3. Whether the European Union violated Articl e 5.4 of the AD Agreement in its standing
determination
(a) Arguments of the Parties
(i) China
7.150 China claims that the Commission's determination on standing was inconsistent with the
requirements of Article 5.4 of the AD Agreement, and puts forward three main arguments in support
of its claim. First, China submits that the Comm ission failed to examine whether the figure for total
EC production was reliable and correct. 336 By not checking the adequacy and accuracy of this figure
the Commission failed to conduct an "examinati on" on the issue of standing as required under
Article 5.4. Second, China argues that the Commiss ion failed to examine, prior to initiation, whether
the application had been made by or on behalf of the domestic industry. In China's view, the
Commission made its standing determination after th e initiation of the investigation. Third, China
maintains that the Commission's decision on standing was wrong since the EU producers supporting
the application accounted for less than 25 per cent of total production. In this regard, China asserts
that the 27 per cent share cited in the Definitiv e Regulation includes the production accounted for by
producers that made themselves known within the 15 day period following initiation provided for
domestic producers to come forward and indicate thei r willingness to cooperate in the investigation.
China also contends that a 15 per cent margin of error in the calculation of the production accounted
for by the producers supporting the application also undermined the accuracy of this calculation.
Further, China maintains that the Eurostat da ta used to calculate the total EU production
underestimated total production.

334 In addition, there is, in our view, a possibility that the very existence of Article 9(5) of the Basic AD
Regulation as part of the legal framework that applies to anti-dumping investigations conducted by the European
Union might have affected participation by Chinese exporters in the fasteners investigation, and/or the quality
and quantity of information Chinese exporters provided to the Commission. Specifically, we consider that the
very existence of the test embodied in Article 9(5) of the Basic AD Regulation, as well as the nature of that test,
including the criteria established and its application in other investigations, may well have discouraged other
Chinese producers from coming forward and cooperating and from requesting IT in the investigation at issue.
This further supports our view that the application of Article 9(5) of the Basic AD Regulation in this
investigation was inconsistent with Articles 6.10 and 9.2 of the AD Agreement.
335 See paragraph.7.116.

(ii) European Union
7.151 The European Union submits that China's claim under Article 5.4 is not within the Panel's
terms of reference because: a) it was not subject to consultations337; b) China's panel request does not
identify it consistently with the requ irements of Article 6.2 of the DSU 338; and c) the Notice of
Initiation of the investigation at issue, which sets out the Commission's determination on the issue of
standing, is not a measure identified in China's panel request.339
7.152 Responding to the substance of China's argume nts, the European Union argues that the
Commission did examine standing prior to the in itiation of the investigation, and that the
complainants represented 37 per cent of the total EU production of the like product. Specifically, the
European Union contends that prior to the in itiation the Commission contacted all EU producers
identified in the complaint and asked them to submit their production figures and indicate their
position as to the initiation of an investigation. Th ese producers were also asked to flag any missing
names in the list of producers. The producers thus brought to the attention of the Commission were
also contacted and asked to submit the same info rmation. All the information obtained from the
producers was analysed prior to initiation.340 The results of this process were summarized in the Note
to the File dated 8 November 2007. The European Union argues that China's claim that the figures
used for the calculation of the total EU production were not reliable should be rejected because China
has failed to make a prima facie case in this regard. 341 The European Union contends that, contrary
what China asserts, the total EU production figur e submitted in the complaint was examined by
checking the figures in Eurostat. 342 Moreover, the European Union maintains that the Commission's
reliance on Eurostat data to estimate total EU production of the like product was reasonable and
objective, given that these statistics were not prepared solely for the purpose of this investigation, but
rather are systematically and objectively collated over time and are used by different entities.343
(b) Evaluation by the Panel
(i) Terms of Reference
7.153 As mentioned above, the European Union raises three sets of terms of reference objections
with respect to China's claim on th e issue of standing. China disag rees with the European Union and
argues that China's claim with respect to standing is within the Panel's terms of reference.
7.154 First, the European Union argues that this cl aim is outside the Panel's terms of reference
because it was not subject to consultations. The Eu ropean Union submits that in its request for
consultations, China affirmed the fact that the Commission had found that the domestic industry
accounted for 27 per cent of the total EU production and did not raise a claim in connection with the
obligation set forth in the third sentence of Article 5.4 of the AD Agreement. In its panel request,
however, China both challenged the finding made by the Commission that the domestic industry
represented 27 per cent of the total EU production and made a claim with respect to the obligation set
forth in the third sentence of Article 5.4. Accord ing to the European Union, "[t]his double alteration
of determination and obligation necessarily [changed] the essence of the complaint".
344
7.155 China's request for consultations reads, in relevant part:

337 European Union, first written submission, paras. 242-246.
338 European Union, first written submission, paras. 249-252.
339 European Union, first written submission, paras. 253-254.
340 European Union, first written submission, para. 263.
341 European Union, first written submission, para. 269.
342 European Union, opening oral statement at the second meeting, para. 22.
343 European Union, first written submission, para. 267.
344 European Union, first written submission, para. 246 (emphasis in original).

"The EC initiated the AD investigation with the s upport of producers accounting for
only 27 per cent of the total domestic production, rendering the said investigation
inconsistent with Article 5.4 of the AD Agreement".345 (emphasis added)
China's panel request reads in pertinent part:

"Article 5.4 of the AD Agreement because the EC initiated the anti-dumping
proceeding on the basis of a complain t by the Community producers allegedly
representing 27% of the total domestic production in the EC while (i) the EC failed to
examine properly before the initiation whethe r the application has been made by or
on behalf of the domestic industry and (ii) the EC improperly concluded that the
application had been made by or on behalf of the domestic industry" 346 (emphasis
added)
7.156 Article 5.4 of the AD Agreement provides:
"5.4 An investigation shall not be in itiated pursuant to paragraph 1 unless the
authorities have determined, on the basis of an examination of the degree of support
for, or opposition to, the application expressed 13 by domestic producers of the like
product, that the application has been made by or on behalf of the domestic
industry.
14 The application shall be consider ed to have been made "by or on
behalf of the domestic industry" if it is supported by those domestic producers whose
collective output constitutes more than 50 pe r cent of the total production of the like
product produced by that portion of the domestic industry expressing either support
for or opposition to the application. Ho wever, no investigation shall be initiated
when domestic producers expressly supporting the application account for less than
25 per cent of total production of the like product produced by the domestic industry.
We note that, generally speaking, the obligation set forth in Article 5.4 pertains to determining
whether the complaint (the "application" in Article 5.4) has been lodged "by or on behalf of" a
domestic industry, and establishes numerical criteria for that determination, based on the proportion of
domestic production of the like product attributab le to the producers supporting and opposing the
complaint. The first sentence of this provision sets out the general rule that no investigation can be
initiated unless the authorities determine that the appli cation has been made by or on behalf of the
domestic industry producing the like product in the importing country. The following two sentences
introduce the specific numerical criteria for this determination, both of which must be satisfied.

7.157 We note that China's request for consultations st ates that by initiating the investigation with
the support of producers accounting for "only" 27 pe r cent of total production, the European Union
acted inconsistently with Article 5.4 of the AD Agreement. The language in the panel request is more

345 WT/DS397/1, Annex G-1, p.2.
346 WT/DS397/3, Annex G-2, p.3.

detailed. It expresses disagreement with the dete rmination that the domestic industry supporting the
complaint accounted for 27 per cent of total producti on, and explains in clearer terms the specific
allegations put forward by China. We recall th at following the legal framework we set out above 347
the issue is whether or not the claim presented in China's panel request may reasonably be said to
have evolved from the legal basis identified in the request for consultations.
7.158 The request for consultations suggests that Ch ina considers that a finding that producers
accounting for 27 per cent of domestic production suppor t the complaint is not enough to support the
conclusion that the complaint has been made by or on behalf of the domestic industry. The panel
request, however, clearly takes issue with the conc lusion that producers accounting for 27 per cent of
domestic production actually supported the complaint, although it is not clear whether this is because
these producers did not actually support the compla int, or because they did not actually account for
27 per cent of total domestic production of the like product. In that sense, there is a difference
between the two requests. In our view, however, despite this difference, the claim in the panel request
can reasonably be found to have evolved from the legal basis identified in the request for
consultations.
7.159 The request for consultations identifies a legal basis for China's complaint – a violation of
Article 5.4 of the AD Agreement with respect to th e determination of standing. The panel request
more specifically sets out a claim of violation of Ar ticle 5.4 of the AD Agreement with respect to the
determination of standing. In our view, the questi on to be resolved in determining whether the claim
was the subject of the consultations is whether the legal basis of the claim in the panel request may
reasonably be said to have evolved from the legal b asis identified in the request for consultations.
Although in this case, the legal basis set out in the request for consultations and the claim set out in
the panel request may have been premised on di fferent aspects of the obligation set forth in
Article 5.4, in our view, they pertain to the same i ssue, namely the consistency with Article 5.4 of the
Commission's standing determination. We do not cons ider that the difference between the request for
consultations and the panel request changed the essen ce of China's claim. We therefore reject the
European Union's argument that this claim is outsi de the Panel's terms of reference because it was not
subject to consultations.
7.160 Second, the European Union maintains that Chin a's panel request does not identify this claim
consistently with the requirements of Article 6.2 of the DSU. The EU's objection in this regard
pertains to the summary of the legal basis of th e complaint, not the identification of the specific
measure at issue. The European Union submits that "it is impossible to ascertain with any certainty
which of the several obligations or rights referenced in Article 5.4 and footnotes 13 and 14, or for that
matter Article 4.1, of the Anti-Dumping Agreement forms the basis of China' s claim, in a manner that
permits one to ascertain the problem clearly".
348
7.161 As explained above, although Artic le 5.4 contains a general ob ligation to ensure that the
complaint is made by or on behalf of the dom estic industry producing the like product in the
importing country, in our view that obligation has sev eral aspects, each of which may be the focus of
a claim of violation of this provision. Looking at China's panel request, we note that the request takes
issue with three aspects of the Commission's dete rmination on standing. It suggests that the
calculation of the 27 per cent figure may not have been correct; that the Commission failed to
examine whether the application had been made by or on behalf the EU industry; and that the
Commission improperly concluded that the application was made by or on behalf of the EU industry.
We also note that, in the subsequent panel pro ceedings, China developed its claim on standing along
the lines of the legal basis for that claim outlined in its panel request. We therefore consider that the
"brief summary" of the legal basis for China's claim of violation of Article 5.4 of the AD Agreement

347 See paragraphs 7.11 to 7.27 above.
348 European Union, first written submission, para. 249.

in its panel request was sufficient to comply with the requirements of Article 6.2 of the DSU and
reject the European Union's argument in this regard.
7.162 Third, the European Union asserts that the Commission's determination on standing was
contained in the Notice of Initiation, and given that China's panel request does not identify the Notice
of Initiation as a specific measure at issue, China's claim on standing falls outside the Panel's terms of
reference.
7.163 There is no dispute that the Definitive Regulati on reiterates the basis for the initiation of the
investigation, including that the complaint was l odged "on behalf of producers representing a major
proportion, in this case more than 25 per cent, of the total Community production of certain iron or
steel fasteners". 349 The European Union's argument imp lies that this statement is not a
"determination" of standing, and thus the fact that this is mentioned in the Definitive Regulation is
insufficient to bring it within our terms of referenc e. We disagree. However, even if we did not
consider the statement in the Definitive Regulation to be sufficient to bring China's standing claim
before us, we would nonetheless find it to be within our terms of reference, for the following reasons.
7.164 Article 17.4 of the AD Agreement provides that a Member may refer a matter on which
consultations have been held to dispute settlement "if final action has been taken by the administering
authorities of the importing Member to levy de finitive anti-dumping duties or to accept price
undertakings [or] a provisional measure has a signi ficant impact and the Member that requested
consultations considers that the [provisional] me asure was taken contrary to the provisions of
[Article 7.1] ...". In Guatemala – Cement I , the Appellate Body pointed out that "[a]ccording to
Article 17.4, a "matter" may be referred to the DSB only if one of the relevant three anti-dumping
measures is in place". 350 While the panel in that case had concluded that Article 17.4 was a timing
provision, governing when a matter could be referred to the DSB351, the Appellate Body concluded that
the provision required that the matter referred to the DSB concern claims regarding one of these three
types of measures, that is, a definitive anti-dumping measure, a price undertaking, or a provisional anti-
dumping measure (with conditions).
352 In this context, the Appellate Body clarified that a "matter"
consists of the measure(s) at issue and the claims identified by the complaining Member in connection
with such measures.
7.165 Thus, it seems clear to us that Article 17.4 w ould not allow a Member to bring a case citing a
notice of initiation as the measure at issue, or at l east not without also citing one of the three measures
specified in Article 17.4. However, this does not limit a complaining Member's right to bring claims
about any aspect of the anti-dumping investigation in question. We note in th is regard the Appellate
Body's statement that:

349 Definitive Regulation, Exhibit CHN-4, recital 1.
350 Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding Portland Cement from
Mexico ("Guatemala – Cement I "), WT/DS60/AB/R, adopted 25 November 1998, DSR 1998:IX, 3767 , para. 79
(emphasis in original).
351 Panel Report, Guatemala – Anti-Dumping Investigation Regarding Portland Cement from Mexico
("Guatemala – Cement I "), WT/DS60/R, adopted 25 November 1998, as modified by Appellate Body Report
WT/DS60/AB/R, DSR 1998:IX, 3797, para. 7.18.
352 Appellate Body Report, Guatemala – Cement I, paras. 77-80. Subsequent decisions have made clear
that a Member may bring claims concerning the legislation of the importing Member (Panel Report, United
States – Section 129(c)(1) of the Uruguay Round Agreements Act ("US – Section 129(c)(1) URAA "),
WT/DS221/R, adopted 30 August 2002, DSR 2002:VII, 2581, para. 6.22), as well as other acts or omissions that
can be deemed a "measure" of the importing Member. Appellate Body Report, United States – Sunset Review of
Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan (" US – Corrosion-
Resistant Steel Sunset Review"), WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3, para. 81.

"This requirement to identify a specific anti-dumping measure at issue in a panel
request in no way limits the nature of the claims that may be brought concerning
alleged nullification or impairment of benef its or the impeding of the achievement of
any objective in a dispute under the Anti-Dumping Agreement."353
Thus, we consider that in a dispute concerning a final anti-dumping measure, as this one undisputedly
does, a complaining Member may raise any alleged violations of the WTO Agreement arising out of
the initiation or conduct of, as well as the determinations made and actions taken in the course of, the
underlying anti-dumping investigation.

7.166 This is exactly what happened in this dispute. In its panel request, China identified the final
anti-dumping measure imposed by the European Un ion as a specific measure at issue and raised
numerous claims alleging violati ons of various provisions of th e AD Agreement involving various
actions and decisions of the Commission at various stages of the investigation, including the
determination of standing supporting the initiation of the investigati on at issue. In our view, all of
these claims, regardless of whether they were initially set out in the Notice of Initiation or some other
document, arise out of the anti-dumping investigation in which the Definitive Regulation is before us
in this dispute. We therefore reject the European Union's objection in this regard.
7.167 Based on the foregoing, we conclude that Chin a's claim with respect to the Commission's
standing determination is within our terms of reference and proceed to consider that claim.
(ii) Substantive Analysis
7.168 We note that China's first and second arguments are interconnected. One takes issue with the
timing of the Commission's determination and the ot her with the quality of it. As regards timing,
China acknowledges
354 that the Notice of Initiation shows th at the Commission considered and took a
decision on standing prior to initiation. China nonetheless asserts that the Commission only examined
whether the application had been made by or on behalf of the domestic industry once the investigation
had been initiated.
7.169 We note that with respect to standing, the Notice of Initiation provides, in pertinent part:
"1. Complaint
The complaint was lodged on 26 September 2007 by the European Industrial
Fasteners Institute (EIFI) ( 'the complainant ') on behalf of producers representing a
major proportion, in this case more than 25 %, of the total Community production of
certain fasteners of iron or steel."
355
Thus we consider that the Notice of Initiation clearly shows that the Commission did make a
determination in this regard prior to initiation.

7.170 China asserts, however, that this determina tion was somehow made subsequent to the
initiation of the investigation. To support this vi ew, China refers to the part of the Definitive
Regulation which describes how the Commission looked into the issue of standing after the initiation
of the investigation. Recital 26 of the Definitive Regulation reads:

353 Appellate Body Report, Guatemala – Cement I, para. 79.
354 China, answer to Panel question 19.
355 Exhibit CHN-14, p. 267/31.

"The issue of the standing of the Community industry was questioned by some
importers in the Community and also by some exporting producers. Indeed, certain
interested parties provided, after the publication of the Notice of Initiation
, lists of
Community producers that allegedly had not been consulted as to their support or
otherwise for the proceeding. A questionna ire was subsequently sent to all such
producers. Moreover, several companies came forward on their own initiative without
having received a questionnaire. However, none of the responses received from these
producers has reduced the level of standing mentioned in the preceding recital. In
fact, many of these companies supported the complaint."356 (emphasis added)
In our view, this statement shows that, although the Commission made a determination on standing
prior to the initiation of the investigation, the issu e was revisited in response to the allegations made
by some importers and exporters that the investig ation had been initiated without ensuring that there
was standing. However, it is undisputed that, whatev er the extent of this post-initiation inquiry may
have been, the European Union did not, in fact, substantively change its conclusion that there was
standing.357

7.171 The fact remains that a determination was made on this issue prior to initiation. The mere
fact of revisiting after initiation a determination wh ich had to be and was made prior to initiation does
not, in our view, undermine the validity of the pre-in itiation determination of st anding. We therefore
reject China's argument in this regard.358
7.172 With respect to the quality of the Commission's determination, China argues that the Notice
of Initiation only demonstrates that the Commission considered and made a decision on standing, but
does not necessarily show that the Commission "exa mined" this matter and made a "determination"
on the basis of such examination as required under Article 5.4. 359 China posits that unless the
European Union produces the documents that we re before the Commission when the standing
determination was made, it should be assumed that no adequate examinati on was conducted on this
issue.360 We recall, however, that it is for China to make a prima facie case of violation of a covered
agreement before the burden shifts to the European Union to rebut China's case. In our view, China
has failed to make a prima facie case that the European Union fa iled to examine the question of
standing.
7.173 China does not argue that an investigating au thority is barred from using the information
submitted in the complaint for purposes of determining standing. 361 As China sees it, however,
"examination" under Article 5.4 requires at least th at the investigating aut horities check the adequacy
and accuracy of the information th at forms the basis for the standi ng determination. According to
China, the European Union failed to conduct this type of examination.
7.174 We note that the test that China refers to is found in Article 5.3 of the AD Agreement which
requires the authorities to examine the "adequacy and accuracy" of the evidence submitted in the
complaint in order to determine whether it would be justified to initiate an investigation. We also
note that China has not raised a claim under Article 5.3. However, even assuming that there were

356 Definitive Regulation, Exhibit CHN-4, recital 26.
357 The European Union, while acknowledging that the Commission engaged in this inquiry,
characterizes it as being a "mistake" as it caused "confu sion". European Union, answer to Panel question 31.
China does not argue that the European Union was required to revisit the determination of standing, or that it
erred in maintaining its original decision. We therefore do not address either of these issues.
358 As noted, China makes no claim that the European Union was required to reconsider the issue of
standing after initiation, or allege any violations in the context of the reconsideration that took place in this case.
361 China, answer to Panel question 20.

such a claim, we are of the view that China h as not submitted any evidence demonstrating that the
Commission failed to check the accuracy and adequacy of the information in the application which
was used for standing purposes.362
7.175 It is undisputed that the Commission relied on Eurostat data provided in the complaint in
determining total EU production of the like product. China does not argue that Eurostat statistics per
se constituted a non-objective source of data in terms of determining total EU production. 363 China's
arguments in this regard are limited to the asserti on that the Commission failed to take active steps in
order to make sure that the production data obtai ned from Eurostat were reliable and correct. We
note, however, that China does not even assert that there was reason to doubt the reliability of that
information in this investigation which the Commission disregarded. 364 As a consequence, China's
argument that the Commission did not examine whether the producers supporting the application
accounted for at least 25 per cent of the total EU production cannot stand.
7.176 China's third argument is that the Commission's decision on standing was wrong since the EU
producers supporting the application as a matter of fact accounted for less than 25 per cent of total EU
production of the like product. In this regard, China first asserts that, in its determination on standing,
the Commission took into account production account ed for by producers that made themselves
known following the initiation of the investigation. To support this view, China refers to recital 114
in the Definitive Regulation, which reads:
"2. Definition of the Community industry
(114) The production of the Community producers that supported the complaint and
fully cooperated in the investigation re presents 27,0 % of the production of the
product concerned in the Community. It is therefore considered that these companies
constitute the Community industry within the meaning of Articles 4(1) and 5(4) of the
basic Regulation."
365
According to China:

"[T]he Community producers referred to in this statement include not only those
companies listed in the Complaint as "complainants" or "supporters" but also those
who made themselves known within 15 days af ter the initiation of the investigation.
In view of this, it is more than likely that the standing threshold of 25% would not
have been met if the production volume of companies which only made themselves
known after the initiation of the investigation had been disregarded."
366

362 In this regard, we would like to note the well-es tablished principle of WTO jurisprudence that "the
quantum and quality of evidence required at the time of initiation is less than that required for a preliminary, or
final, determination of dumping, injury, and causa tion, made after investigation". Panel Report, Mexico – Anti-
Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States ("Mexico – Corn Syrup "),
WT/DS132/R, adopted 24 February 2000, and Corr.1, DSR 2000:III, 1345, para. 7.57; Panel Report, United States
– Final Dumping Determination on Softwood Lumber from Canada ("US – Softwood Lumber V"), WT/DS264/R,
adopted 31 August 2004, as modified by Appellate Body Report WT/DS264/AB/R, DSR 2004:V, 1937,
363 See paragraph 7.179 below.
364 China does not dispute that the Eurostat data are regularly collected and mainta ined for reasons
other than the conduct of this, or any other, anti-dump ing investigation, and are routinely relied upon by the EU
investigating authorities.
365 Definitive Regulation, Exhibit CHN-4, recital 114.

7.177 China's allegation has no basis in fact. Firs t, we note that recital 114 of the Definitive
Regulation pertains to the definition of domestic industry, not standing. Second, we note the
European Union's argument, which China has not countered, that, as shown in a Note for the File
prepared at the time the standing determination was made
367, the share of EU production accounted
for by producers expressly supporting the compla int, which the Commission calculated prior to
initiation, was 37 per cent, not 27. 368 Third, we recall our finding that the Commission made its
determination on standing prior to initiation, as reflected in the Notice of Initiation. 369 Thus, China's
assertion that the Commission, in its standing determ ination took into consideration the production of
EU producers that made themselves known after the initiation, is unfounded as a matter of fact.
7.178 Next, China contends that there was a 15 per cen t margin of error in the calculation of the
production accounted for by the producers supporting the application, which also undermined the
accuracy of this calculation. In this regard, Ch ina refers to a communication from the Commission in
which it is stated that the figure representing to tal production accounted for by the Complainants is
subject to a 15 per cent margin of error for confidentiality reasons. 370 China argues that this is
"sufficient to cast doubt on the complainants [sic] standing". 371 In response to questioning on this
issue by the Panel, the European Union states that the 15 per cent margin of error was intended to
protect company-specific confidential information of the EU industry. In this regard, the
European Union refers to the table found in Exhi bit CHN-42 which contains a list of complainants
and supporters of the complaint, together with th eir production figures, as well as the total figures for
complainants and supporters. 372 The European Union contends th at the company-specific figures in
this table do include a 15 per cent margin of error to protect the confidentiality of the production data
of individual producers, but that the totals indi cated for complainants and supporters are the actual,
correct figures, and do not reflect that 15 per cent ma rgin. China has not disputed this assertion. We
therefore reject China's allegation that the 15 per cent margin of error undermined the reliability of the
Commission's calculation.
7.179 Finally, China argues that the Eurostat data used to estimate total EU production of the like
product underestimated that production. As previous ly noted, China does not question the objectivity
of the process whereby the data are collected by na tional authorities. It contends, however, that
Eurostat statistics do not provide a proper basis for measuring total domestic production of fasteners
because they only reflect production sold, as oppo sed to total production, and do not include
production of small and medium enterprises.373
7.180 We note that the AD Agreement does not contain rules governing the sources or collection of
data to be used in an investigation. Article 3. 1 requires that an injury determination be based on
positive evidence and include an objective examination of the relevant injury factors. However,
China does not argue, much less demonstrate, that th e Eurostat statistics are not positive evidence, or

367 The Note for the File reads, in relevant part, th at "the request is supported by Community producers
representing in total more than 37% of Community produ ction in 2006 and more than 41% in the first half
of 2007". Exhibit EU-6, p. 1.
368 European Union, first written submission, para. 26 6; European Union, second oral statement,
para. 23. We recognize that there is a discrepancy between the 27 per cent and 37 per cent support figures cited
in the Definitive Regulation, and the Note to the File. However, China has not made any arguments in this
regard. Moreover, we note that the Note to the File is not the determination at issue, and the 37 per cent referred
to in that document is not the subject of China's claim. While we do not know the reasons for this discrepancy,
we consider it of no importance in these circumstances.
369 See paragraph 7.169 above.
370 Exhibit CHN-39, p.1.
372 European Union, answer to Panel question 86. The list does not disclose the names of EU
producers.
373 China, first written submission, paras. 217-219; China, answer to Panel question 87(a).

that they were not objectively examined. Rather, Ch ina's argument is that the investigating authority
should have relied on some other data in determining standing. In our view, however, these
arguments do not suffice to make out a violation of Article 5.4.
7.181 With respect to this aspect of China's claim, we questioned China regarding whether, in
China's view, there was a better s ource of data for the estimation of domestic production of the like
product, available to the Commission at the time , but which the Commission failed to take into
consideration. China refers to three alternative s ources. First, China mentions a study concerning the
fastener market in Italy, produced by DATABAN K which, China argues, was submitted to the
Commission during the fasteners investigation and which the Commission could have checked prior
to initiation. Second, China points to evidence concerning the EU automotive industry which was
submitted to the Commission during the fastener s investigation and which the Commission could
have taken into account prior to initiation. Th ird, China posits that the Commission could have
requested information from various producers associations in the EU member States.374
7.182 We disagree that any of these was necessar ily a better source of information on EU
production of fasteners, much less that the Commi ssion could have and shoul d have relied on one of
these sources rather than the Eurostat data. Firs t, it does not appear that information from these
sources would have been more accurate and more comple te than Eurostat statistics. In this regard, we
note that the first source China mentions pertains to domestic production of fasteners in only one EU
member State, the second to only one sector of the domestic industry, and the third is entirely
hypothetical. Second, China's argument that the Commission could have checked these sources is, in
our view, pure speculation. China has not demons trated that these sources were available to the
Commission prior to initiation, which is when the standing determination was made.
375 Even
assuming that the information in these sources bette r reflected total EU production of fasteners, a
proposition we have rejected, we cons ider it would be inappropriate to base a finding of violation of
Article 5.4, concerning a decision made prior to in itiation, on the investigating authority not having
considered information brought to its attention after the determination has been made and the
investigation initiated. Thus, none of China's argu ments shows that there were credible alternative
sources of information regarding total EU producti on of fasteners, at the time the standing
determination was made, of which the Commission wa s aware and which it declined to take into
consideration. We therefore find that China's allegations in this regard have no basis.
7.183 Based on the foregoing, we reject China's claim that the Commission's standing determination
was inconsistent with Article 5.4 of the AD Agreement.
4. Whether the European Union violated Arti cles 4.1 and 3.1 of the AD Agreement in
defining the domestic industry
(a) Arguments of the Parties
(i) China
7.184 China raises five allegations of error with re gard to the domestic industry definition in the
investigation at issue.

374 China, answer to Panel question 87(c).
375 As noted above, paragraph 7.181, China itself acknowledges that the study concerning the fastener
market in Italy, produced by DATABANK, was submitted to the Commission during the investigation, not prior
to initiation. China, answer to Panel question 87(c). China has not otherwise alleged that the Commission was
aware of this study prior to initiation.

7.185 First, China asserts that the Commission violated Articles 4.1 and 3.1 of the AD Agreement
by excluding from the domestic industry definitio n producers that made themselves known after the
15-day deadline following the publication of the No tice of Initiation, and those that did not support
the complaint. 376 According to China, the European Uni on thus considered that an investigating
authority may exclude individual domestic producers of the like product, or groups of such producers,
from the domestic industry, provided that the produc ers included in the industry account for a major
proportion of domestic production of the like product. 377 China considers this position inconsistent
with Article 4.1, which in China's view does not allow exclusion of producers from the domestic
industry for reasons other than those set out in subparagraphs (i) and (ii) of Article 4.1, and
inconsistent with Article 3.1, as it does not allow th e investigating authority to carry out an objective
examination of the effects of dumped imports.378
7.186 Second, China argues that the domestic industry as defined by the Commission did not
include domestic producers of the like product ac counting for a "major proportion" of total EU
production as required under Article 4.1 of the AD Agreement. 379 China's claim in this regard is
based on two grounds. First, China asserts that th e data relied on by the European Union to estimate
the volume of total domestic production did not re flect the actual total production in the European
Union, and in fact largely underestimated that production. 380 In this respect, China relies on the same
arguments it raised in connection with its argume nts concerning the Commission's determination of
standing – that the Eurostat data concerned the volu me of production sold, rather than total volume of
production, and do not include production of small and medium-sized enterprises. 381 Second, China
asserts that a 27 per cent share of total domestic production does not constitute a "major proportion"
within the meaning of Article 4.1. In this regard, China argues that the European Union's
presumption, as set out in Article 5(4) of the B asic AD Regulation, that 25 per cent constitutes a
"major proportion" within the meaning of Article 4.1, is not correct. 382 China argues that "major"
means "important, serious or significant", and thus "major proportion" must refer to an "important,
serious, or significant" part of total domestic producti on. In addition, China considers that the use of
the word "proportion" entails that the domestic pr oducers included in the major proportion must be
"representative" of the whole. 383 In its first written submission, China argued that it was obvious that
27 per cent cannot be regarded as significant. 384 In any event, China argu es that, even granting that
27 per cent of total domestic production may constitut e a "major proportion" within the meaning of
Article 4.1, this can only be the case if the overall circumstances of the case indicate that the
proportion of domestic production at issue is sufficient to be deemed "major". China contends that
the European Union failed to consider this questio n at all, simply relying on the presumption that
25 per cent is sufficient.385
7.187 Third, China contends that the Commission violated Article 3.1 of the AD Agreement by not
defining the domestic industry in relation to the Investigation Period, 1 October 2006-
30 September 2007.386 China notes that the data relied on by the European Union in considering the
question of major proportion related to calendar year 2006, rather than the Investigation Period.

376 China, first written submission, paras. 239-240.
378 China, first written submission, paras. 243-244.
381 China, first written submission, para. 249. See China, First written submission, paras. 218-222.
382 China, first written submission, paras. 262-265, China, second written submission, paras. 593, 616-
622.
383 China, second written submission, paras. 597-598 , 632; answer to Panel question 22, para. 95;

China contends that the domestic industry must be de fined in relation to the same period that is used
for assessing the injury factors. 387 China recognizes that there is no express requirement in the
AD Agreement requiring the use of the investiga tion period for the definition of the domestic
industry, but argues that since the injury determin ation is made with respect to the data for the
domestic industry for the investigation period, it follows that the domestic industry must be defined in
relation to the same period.388
7.188 Fourth, China argues that th e European Union violated Articles 3.1 and 4.1 of the
AD Agreement by basing its injury determination on a sample of domestic producers that was not
representative. In this regard, China argues that a sample in the context of an injury determination
must comply with the requirements of Article 4.1 of the AD Agreement, and that the sample in this
cased was made up of six producers accounting for 17.5 per cent of total domestic production of the
like product, and thus violated Article 4.1. 389 In addition, China argu es that the sample, since it
consisted of only six producers representing only 17.5 per cent of total domestic production, could
hardly be considered as "representative" of total domestic production, and thus was inconsistent with
Article 3.1 of the AD Agreement, which requires th at the injury determination be based on positive
evidence and an objective examination of the volume, price effects, and impact of dumped imports. 390
China specifically disagrees with the European Union's view that the sample selected must be
representative of the domestic industry as defined by the investigating authority, but need not be
representative of domestic producers as a whole. 391 China argues that, to the extent the sample
selected was based on a definition of domestic industr y itself inconsistent with Articles 3.1 and 4.1 of
the AD Agreement, it is necessarily inconsistent with Article 3.1. 392 China further contends that the
European Union acted inconsistently with Article 3.1 by selecting the sample based on volume of
production as the sole criterion, arguing that this is not appropriate to satisfy the requirement of
representativeness.393 In any event, China asserts that th e output of the domestic producers selected
for the sample does not constitu te the largest volume of production of the like product in the
European Union which would reasonably be investigated.394
7.189 Fifth, China considers that the European Union acted inconsistently with Article 4.1 of the
AD Agreement by not excluding from the domestic indus try definition producers that were related to
the exporters or importers or were themselv es importers of the product under consideration.395 In this
regard, China notes the undisputed fact that certain of the producers in the domestic industry, and
included in the sample, were related parties. China asserts that the European Union erroneously
concluded that the Chinese subsidiaries of these producers were established predominantly to serve
the Chinese market, and that the interests of these producers remain ed centred in the
European Union.396 According to China, the European Union failed to objectively examine the
relationship between the EU producers and their Chin ese subsidiaries, and thus abused its discretion
under Article 4.1 by not excluding those re lated producers from the domestic industry. 397 While
China acknowledges that Article 4.1 does not impo se an obligation on investigating authorities to
exclude related domestic producers, it considers that the investigating authorities do not have
unlimited discretion in deciding whether or not exclusion is warranted in a particular case, and that the

388 China, second written submission, paras. 654, 657.
390 China, first written submission, paras. 279-282.
396 China, first written submission, paras. 286-290.
397 China, first written submission, paras. 291-295.

determination must be based on an objective examination of positive evidence, pursuant to
Article 3.1.398
(ii) European Union
7.190 The European Union argues that China's first allegation of error is not within the Panel's
terms of reference because it was not subject to cons ultations. According to the European Union, the
request for consultations did not set forth a claim that failure to include domestic producers who came
forward more than 15 days after initiation was inconsistent with Artic les 4.1 and 3.1 of the
AD Agreement.399
7.191 With respect to the substance, the European Union contends that, contrary to China's
argument, Articles 4.1 and 3.1 of the AD Agreemen t do not require an investigating authority to
define the domestic industry so as to include all producers, or even the largest possible group of
producers.
400 The European Union notes that while Chin a refers to several different documents in
support of its arguments, the investigating authorit y's determination with respect to the domestic
industry is set out in the Definitive Regulation, and asserts that the Panel should focus on the
information therein in evaluating China's claim.
401 The European Union asserts that Articles 4.1 and
3.1 of the AD Agreement impose no obligation on an investigating authority to include all domestic
producers, regardless of when they make themselves known. In the European Union's view, there is
no hierarchy between the two ways of defining dom estic industry under Article 4.1, either by
including all producers, or by including those whose production constitutes a major proportion of total
domestic production of the like product. 402 The European Union acknowledges that an investigating
authority may not exclude categories of producers which actually produce a like product, but asserts
that the Commission did not do so in this case. 403 Moreover, in the European Union's view, this does
not mean that if the producers it includes constitute a major proportion of total domestic production of
the like product, the investigating authority must look further to include additional producers of the
like product.404 The European Union asserts that the Commission contacted all known producers of
the like product, and invited them to participate in the investigation, but set a deadline of 15 days for
producers to come forward and indicate willingness to participate, and did not include producers who
made themselves known after the 15-day deadline. 405 The European Union considers that once it was
clear in this investigation that the producers w ho came forward within the 15-day period accounted
for a major proportion of total domestic production there was no need to add more producers to the
domestic industry. In the European Union's view , producers who come forward after the deadline do
not constitute a "category" of producers who ma y not be excluded from the domestic industry.
406 The
European Union considers that Article 3.1 of the AD Agreement does not impose any obligations with
respect to the definition of the domestic industry, but merely requires an objective examination based
on positive evidence of the impact of the dumped imports on the domestic industry, and thus the

398 China, second written submission, paras. 689-690.
399 European Union, first written submission, para. 285.
400 European Union, first written submission, para. 279.
401 European Union, first written submission, paras. 280-281.
402 European Union, first written submission, para. 298.
403 Specifically, in response to questions from the Panel, the European Union maintained that it did not
exclude producers who did not express support for the investigation, as a group, from the domestic industry,
asserting that as a matter of fact, at least one such producer was included not only in the domestic industry, but
in the sample. European Union, answer to Panel question 89, para. 19.
404 European Union, first written submission, para. 301.
405 European Union, first written submission, para. 302. The European Union notes that during the
Panel's first substantive meeting with the parties, China indicated that it accepts that investigating authorities
may impose deadlines on interested pa rties to come forward and make their interest in participating in the
investigation known. European Union, second written submission, para. 90.
406 European Union, second written submission, para. 100.

European Union contends that the Article 3.1 asp ect of China's claim is entirely dependant on its
claim with respect to the definition of the domestic industry. 407 Finally, the European Union notes
that because the Commission was goi ng to use sampling in its injury determinations, there was no
reason to add additional producers to the domestic industry definition.408
7.192 With regard to China's second allegation of e rror, the European Union asserts that the
Eurostat data provided a reasonable estimate of total EU production of the like product, referring to its
arguments in this regard with respect to the standing determination.409 Moreover, the European Union
submits that in the circumstances of this investig ation, 27 per cent did represent a major proportion of
total production within the meaning of Article 4.1 of the AD Agreement. 410 The European Union
notes that the AD Agreement does not define the term "major proportion", and contends that China's
argument that the domestic industry should prefer ably include all domestic producers of the like
product is not correct. 411 In the European Union's view, there is noting in the term "proportion" that
requires that producers accounting for a major proportion of total domestic production of the like
product in some way "represent" all producers.
412 The European Union contends that China failed to
make a prima facie case that 27 per cent is not a major propor tion in this case, asserting that not only
is the legal premise of China's argument wrong, it is not true that the European Union limited itself or
failed to include as many producers as possible, an d China has failed to provide any evidence why
27 per cent is necessarily insufficient.413 The European Union contends that 27 per cent is "important,
serious or significant" in view of the record of the investigation. 414 Moreover, European Union
considers that the "circumstances of the case" that are relevant to determining whether a particular
proportion is sufficient to be considered "major" in any case do not include the number of producers
of the like product.415
7.193 With regard to China's third allegation of error, the European Union asserts that China errs in
its description of the facts. The European Union not es that China refers, in connection with this claim
to the period of investigation for the dumping determ ination, and that this is not the period used for
assessment of the injury factors.416 The European Union agrees that the period of investigation for the
dumping determination was the period 1 October 2006 to 30 September 2007, but maintains that the
period for the assessment of the injury factors w as from January 2003 to October 2007. This period
included calendar year 2006, the period with respec t to which the determination of domestic industry
was made, and which was the last full year prio r to initiation for which data was available. 417
Moreover, the European Union submits that China' s claim should be rejected because Article 3.1 of
the AD Agreement does not require that the assessmen t of "major proportion" be based on the period
of investigation for dumping determinations.418
7.194 In response to China's fourth allegation of erro r, the European Union argues that China fails
to make a prima facie case of a violation, since Article 4.1 of the AD Agreement does not require that
the sample used for injury determinations represent a major proportion of total production. 419 The

407 European Union, first written submission, paras. 306-307.
408 European Union, first written submission, para. 284.
409 European Union, first written submission, paras. 313, 265-274.
410 European Union, first written submission, para. 316.
411 European Union, first written submission, para. 32 6, referring to China, first written submission,
para. 256.
412 European Union, second written submission, para. 101.
413 European Union, first written submission, paras. 330-334.
414 European Union, first written submission, para. 337.
415 European Union, second written submission, para. 122.
416 European Union, first written submission, para. 354.
417 European Union, second written submission, para. 128.
418 European Union, first written submission, paras. 359-363.
419 European Union, first written submission, paras. 374-377.

European Union notes that Article 4.1 does not refer to sampling at all, and that to read Article 4.1 as
requiring that a sample of the domestic industry must represent a major proportion of total domestic
production makes no sense, as it ignores the essence of sampling as a concept.
420 Thus, the
European Union argues, China's argument confuses the notion of the domestic producers as a whole,
and the domestic industry as a whole. According to the European Union, a proper sample must be
representative of the domestic industry as a whole. However, the European Union contends that, if
the domestic industry is defined as producers of a major proportion of total domestic production of the
like product, a proper sample must be representative of that industry, but need not be representative of
the domestic producers as a whole.421
7.195 With regard to China's fifth allegation of error, the European Union contends that the
Commission heard and considered the views of the EU importers and Chinese exporters that some
related domestic producers should be excluded from the domestic industry in the investigation at
issue, but made a reasoned determination to the contrary. 422 Further, the Europ ean Union argues that
Article 4.1 of the AD Agreement does not require the exclusion of related producers from the
definition of domestic industry, but simply allows such exclusion if circumstances justify this. 423 In
addition, the European Union argues that Article 3.1 imposes no obligation with respect to an
investigating authority's decision whether to ex clude related domestic producers from the domestic
industry, and asks the Panel to reject this aspect of China's claim as well.
(b) Arguments of Third Parties
(i) Colombia
7.196 Colombia takes the view that Article 3.1 of the AD Agreement does not prescribe a
methodology that must be followed by an investiga ting authority in conducting an injury analysis.
However, the discretion afforded an investigating authority does not mean it can use arbitrary or not
verifiable methods.424 Colombia considers that the objective examination principle demands a correct
assessment of the effect of the dumped imports, and to make that evaluation, investigating authorities
are required to conduct a correct determination of the domestic producers/domestic industry in every
case, which analysis shall be conducted accord ing to Article 4.1 of the AD Agreement. 425 Colombia
agrees with the European Union that under Article 4.1, the domestic industry may be defined so that
either all eligible producers (domestic producers as a whole), or those producers that represent "a
major proportion" of the eligible domestic production, are included, and that either of these definitions
is valid.426 However, using one or the other alternative does not allow the investigation to be limited
to a segment of the domestic industry.427 The requirement to conduct an investigation over the totality
of the domestic industry does not, however, prevent investigating authorities from either sampling or
examining a domestic industry by part, sector or segment. 428 Colombia also agrees, referring to the
report in EC – Salmon (Norway), that an investigating authority may proceed on the basis of a sample,
so long as the sample is representa tive, such that an objective examination under Article 3.1 can be
undertaken.429 Colombia considers that an investigating authority should rely on statistical methods

420 European Union, first written submission, paras. 380-381.
421 European Union, first written submission, para. 384-394.
422 European Union, first written submission, para. 397.
423 European Union, first written submission, paras. 404-405.
424 Colombia, written submission, paras. 65-67.
425 Colombia, written submission, para. 72.
426 Colombia, written submission, para. 73.
427 Colombia, written submission, para. 74, citing, Appellate Body Report, US – Hot Rolled Steel ,
para. 190.
428 Colombia, written submission, para. 77
429 Colombia, written submission, paras. 79-80.

when selecting the domestic producers to be part of a sample. 430 For Colombia the burden of proof to
show that a sample is representative of the indus try, in order to fulfil the objective examination
requirement of Article 3.1 of the AD Agreement, lies on the national authorities and has to be
interpreted in the context of the obligations under Article 5.4 of the AD Agreement.431
(ii) Japan
7.197 Japan indicates that the definition of the dom estic industry has broa d implications for
antidumping investigations, including the de terminations of injury and causation. 432 Japan considers
that China's arguments relating to Article 4.1 of the AD Agreement raise three key issues.
7.198 With respect to the first issu e, whether the European Union violated Article 4.1 of the
AD Agreement by excluding from the outset from the domestic industry companies that did not
support the investigation, Japan's primary concern is ensuring fairness in the investigation process. 433
Without commenting on the specific facts of this ca se, Japan believes that domestic producers that do
not support an AD complaint but fully cooperate in an AD investigation may not from the outset be
excluded from the domestic industry. Japan consid ers that the European Union's interpretation of
"domestic industry" to mean that so long as the producers included in the domestic industry constitute
"a major proportion" of the domestic production of the like product, investigating authorities are not
required to include any other domestic producers of the like product in the "domestic industry" could
allow investigating authorities to define the domestic industry in a results-oriented way, for example,
by including only unprofitable producers (e.g., complainants) and excluding profitable producers
(e.g., cooperating producers opposing the complaint). Assessing injury with respect to such a
domestic industry would, in Japan's view, be incons istent with the obligation of Article 3.1 of the
AD Agreement to conduct an "objective examination" of injury. 434 Thus, Japan disagrees with the
European Union's view that there is no obliga tion on investigating authorities in respect of the
definition of the domestic industry. 435 Japan notes that "the concept of 'domestic industry' is critical
to an injury determination, as it defines th e framework for data collection and analysis" 436, and
considers that there is a general obligation to conduct AD investigati ons in an unbiased and objective
manner, regardless of which aspect of the investigat ion is at issue. Moreover, Japan considers the
European Union's approach proble matic to the extent that it allows domestic producers themselves to
tailor the "domestic industry" by designating those companies for which injury is more likely to be
found as supporting the complaint, whereas those comp anies for which injury is less likely to be
found as not supporting the complaint, as inherently unfair and making it impossible for the
investigating authority to conduct an objective examination as required by Article 3.1 of the
AD Agreement.
7.199 As regards the second issue (the domestic i ndustry's share in total domestic production),
Japan notes that the term "major proportion" is not defined in Article 4.1 of the AD Agreement or in
any other provision of the AD Agreement. Therefore, without commenting on the specific facts of
this case, Japan agrees neithe r with China's argument that 27 per cent of domestic production a priori
does not constitute a "major proportion" nor with the European Union's argument that 25 per cent is a
priori sufficient to reach the "major proportion" threshold. 437 Japan recognizes the difficulty of

430 Colombia, written submission, para. 82.
431 Colombia, written submission, para. 82.
432 Japan, written submission, para. 18.
433 Japan, written submission, para. 20.
434 Japan, written submission, paras. 22-23.
435 Japan, written submission, para. 27.
436 Japan, written submission, para. 28, citing Panel Report, Mexico – Anti-Dumping Duties on Steel
Pipes and Tubes from Guatemala ("Mexico – Steel Pipes and Tubes "), WT/DS331/R, adopted 24 July 2007,
DSR 2007:IV, 1207, para. 7.321 (emphasis added by Japan).
437 Japan, written submission, para. 31.

quantifying what constitutes an "important, serious or significant" proportion of domestic production.
Thus, in Japan's view, it is sufficient that the investigating authority assess what constitutes a major
proportion on a case-by-case basis in an unbiased and objective manner438, and requests that the Panel
carefully consider the facts of this case.439
7.200 As regards the third issue (sampling), Japan r ecognizes that there are no clear provisions in
the AD Agreement applicable to the post-initiation phase of the investigation that permit investigating
authorities to engage in sampling of the domestic industry. 440 However, Japan notes that the panel in
EC – Salmon (Norway concluded that the AD Agreement allows authorities to conduct sampling of
the domestic industry where there are so many domestic industry members that individual
examination of all of them would be impracticable. 441 Japan disagrees with China's argument that
sampled domestic producers must account for a major proportion of total domestic production. 442 In
Japan's view, the Article 4.1 requirement concerni ng "major proportion" of total domestic production
must be clearly distinguished from the requirements for the selection of a sample. 443 Japan observes
that accepting China's argument that the collective output of the sample must constitute a major
proportion of total domestic production would vitiate the purpose of sampling in cases where there are
so many domestic industry members that an i ndividual examination of each of them would be
impracticable, which, by hypothesis, would be th e only instance in which investigating authorities
would resort to sampling.444 Japan considers that the second sentence of Article 6.10, which relates to
sampling of exporters, producers, importers or types of products, would be helpful also in the context
of sampling for the injury determination. The requirement explicitly imposed by the second sentence
of Article 6.10 for the selection of a sample is that the sample be either statistically valid or based on
the largest volume of sales i.e., exports, that can be reasonably investigated. However, in Japan's
view, the primary requirement for the selection of a sample for the injury determination is that, as
explained by the panel in EC – Salmon (Norway) , the sample must be sufficiently representative of
the domestic industry.445
(iii) Norway
7.201 Norway focuses on one of the issues raised by China, the alleged exclusion of certain
categories of domestic EU producers that produced the domestic "like product" during the relevant
period.446 Norway argues that the investigating aut hority in the determination of the domestic
industry cannot exclude groups of producers.447 In Norway's view, the European Union argues that an
investigating authority has the discretion to exclude whichever producers it wishes, provided that the
remaining producers represent a "major proportion" of the industry. 448 Norway disagrees that
Article 4.1 permits such a determination, which would prevent an objec tive examination of the
industry, as required by the AD Agreement. Norw ay observes that, under Article 4.1, the "domestic
industry" comprises producers "as a whole" of the lik e products. In the alternative, the industry may
be limited to a "major proportion" of the industry. However, the only category of producers that may

438 Japan, written submission, para. 33.
439 Japan, written submission, para. 34.
440 Japan, written submission, para. 35. Japan notes that footnote 13 of the AD Agreement appears to
provide for the possibility of sampling domestic producers before initiation of an anti-dumping investigation.
Id. at footnote 22.
441 Japan, written submission, para. 36.
442 Japan, written submission, para. 37.
443 Japan, written submission, para. 38.
444 Japan, written submission, para. 39.
445 Japan, written submission, paras. 40-41.
446 Norway, written submission, para. 4.
447 Norway, written submission, para. 5.
448 Norway, written submission, para. 9, referring to European Union, first written submission,
paras. 296-297.

be entirely excluded from the industry is "related" producers, thereby ensuring the inclusion of
domestic producers from all segments and sectors of the industry on an equal footing, and that any
determinations made with respect to the "domestic i ndustry" will be representative of that industry as
a whole. Norway asserts that Article 4.1 does not authorise an authority to limit an industry solely to
the producers that supported the investigation, or exclude "silent" producers. 449 Norway considers
that this reading of Article 4.1 is supported by st rong contextual evidence in Articles 3 and 5 of the
AD Agreement450, as well as by footnote 13 of the AD Agreement, attached to Article 5.4. 451
Accordingly, it is Norway's view that an inv estigating authority cannot exclude categories of
producers from the definition of the domestic industry, whether these categories are based on the
production of a particular type or model of the like product or their opposition or silence in respect of
the investigation.452
(iv) United States
7.202 The United States considers that China argues that the EU acted inconsistently with
Article 3.1 of the AD Agreement by (1) excludi ng domestic producers that did not support the
application from its examination of injury, and (2) evaluating injury factors on the basis of different
groupings of domestic producers. 453 While it takes no position on the merits of China's factual
allegations, the United States agrees with China that, under either of these conditions, an investigating
authority fails to undertake an "objective examination" of the impact of dumped imports on the
domestic industry as required by Article 3.1 of the AD Agreement.
454
7.203 The United States notes that, as the Appellate Body has recognized, "an 'objective
examination' requires that the domestic industry, and the effects of dumped imports, be investigated in
an unbiased manner, without favouring the interests of any interested party, or group of interested
parties, in the investigation ".455 The United States considers that, in light of this understanding of
Article 3.1, an investigating authority's inclusion of only supportive domestic firms, to the exclusion
of other domestic firms, in its ex amination of the domestic industry appears to show a selection bias
ab initio.456 When an investigating authority chooses to investigate data concerning only a portion of
the domestic industry, with no objective explanation therefor, it falls short of the requirement in
Article 3.1 to conduct an "objective examination" of the state of the domestic industry, particularly
where the selected partial data is that chosen by the supporters of the application.457
7.204 Furthermore, the United States asserts that, wh ere an investigating authority has failed to
conduct an "objective examination" as required by Ar ticle 3.1, that error permeates the investigating
authority's analyses of market share, price effe cts, impact, and causation under Articles 3.2, 3.4,
and 3.5, respectively, as a consequence of the fa ct that, instead of conducting these analyses in
relation to an objectively-determined "domestic indus try", the investigating authority analyzed these

449 Norway, written submission, para. 10.
450 Norway, written submission, para. 11.
451 Norway, written submission, para. 17.
452 Norway, written submission, para. 20.
453 United States, written submission, para. 29, referri ng to China, first written submission, paras. 241-
242 and 435-445.
455 United States, written submission, para. 30, citing, Appellate Body Report, US – Hot-Rolled Steel ,
para. 193 (emphasis added).
457 United States, written submi ssion, para. 31, referring to Appellate Body Report, Mexico – Anti-
Dumping Measures on Rice , paras. 180-181; Panel Report, Mexico – Anti-Dumping Measures on Rice ,
para. 7.86.

elements solely by reference to those member s of the domestic industry that supported the
antidumping application.458
(c) Evaluation by the Panel
7.205 In addition to substantively responding to Ch ina's arguments, the European Union asserts, as
a preliminary matter, that China's first allegation of error was not the subject of consultations, and is
therefore not within the Panel's jurisdicti on, and that China has failed to make a prima facie case with
respect to its claims concerning "major proportion" and representativeness of the sample chosen.
With respect to China's first allegation of error, that the failure to include in the domestic industry
producers coming forward after the 15-day dead line established in the Notice of Initiation was
inconsistent with Articles 3.1 and 4.1 of the AD Agr eement, the European Union alleges that the brief
summary of the legal basis in the request for c onsultations does not identify this allegation as the
matter in dispute.459 China responds by asserting that its requ est for consultations is broad enough to
cover the more specific issue, which it identifies in its panel request. 460 China also asserts that the
European Union errs as a matter of law in suggesting that the request for consultations must set forth
the identical "matter" as is identified in the panel request.
7.206 We recall the principles we addressed ear lier in this report in this respect 461, and that
Article 4.4 of the DSU requires that a request for consultations contain "an indication of the legal
basis for the complaint". We consider that this is a different, and in our view less stringent,
requirement than those of Article 6.2 of the DSU with respect to a panel request. Moreover, it is clear
to us that, to the extent it suggests that the request for consultations must set forth the identical matter
that is subsequently identifi ed in the panel request, the European Union is in error. 462 In this case,
China's request for consultations contains multiple references to Articles 3.1 and 4.1:
"2. China considers that the EC's imposition of anti-dumping duties on imports
of certain iron or steel fasteners originating in the People's Republic of China is
inconsistent with the EC's obligations under Articles VI and X:3(a) of the GATT
1994; Articles 1, 2.1, 2.2. 2.4, 2.6, 3.1, 3.2, 3.4, 3.5, 4.1, 5.4, 6.1, 6.2, 6.4, 6.5, 6.10,
9.2, 9.4 and 17.6(i) of the AD Agreement as well as Part I, paragraph 15 of China's
Protocol of Accession. ...
 (vi) The EC based its injury de termination on data from EC producers
accounting for only 27 per cent of the estim ated total EC production of the product
concerned in 2006, thereby acting inconsis tently with Articles 3 and 4.1 of the
AD Agreement;
 (vii) The EC failed to determine which proportion of the total domestic
production was represented by the EC producers in relation to which the injury

458 United States, written submission, para. 32. In this respect, the United States recalls that the
analyses set out in Articles 3.2, 3.4 and 3.5 all form part of the determination as to whether there is material
injury to the domestic industry. See Footnote 9 to the AD Agreement. The United States also notes that, in
Mexico – Olive Oil , the panel discussed the overarching importance of the domestic industry definition to
various aspects of the injury determination in Article 15 of the SCM Agreement, which provisions parallel those
of Article 3 of the AD Agreement. See Panel Report, Mexico – Definitive Countervailing Measures on Olive Oil
from the European Communities ("Mexico – Olive Oil "), WT/DS341/R, adopted 21 October 2008,
DSR 2008:IX, 3179, paras. 7.197-7.201.
459 European Union, first written submission, paras. 285-290.
460 China, second written submission, paras. 521, 527.
461 See paragraphs 7.16 to 7.24 above.
462 See, Panel Report, Brazil – Aircraft, para. 7.10; Appellate Body Report, Brazil – Aircraft, para. 132.

determination was made throughout th e investigation period, thereby acting
inconsistently with Articles 3 and 4.1 of the AD Agreement;
 (viii) The EC conducted the injury de termination on the basis of a sample
of EC producers accounting for only 17.5 per cent of the total EC production of the
product at issue in 2006, thereby acting inc onsistently with Articles 3 and 4.1 of the
AD Agreement; ...
 (ix) The EC failed to exclude from the scope of the domestic industry EC
producers that are related to the exporters or importers or are themselves importers of
the allegedly dumped product, thereby acting inconsistently with Articles 3 and 4.1 of
the AD Agreement."
7.207 Articles 3.1 and 4.1 are provisions setting fo rth multiple obligations for investigating
authorities. While the Appellate Body has indicated that a mere listing of legal provisions alleged to
be violated may not be sufficient to provide a brief summary of the legal basis of the complaint
sufficient to present the problem clearly in the context of a panel request
463, it is not clear to us that a
similar approach should be taken with respect to a request for consultations. Unlike Article 6.2 of the
DSU, which requires that a panel request provide a brief summary of the legal basis of the complaint
sufficient to present the problem clearly, Article 4.4 of the DSU requires only that a request for
consultations contain "an indication of the legal basis for the complaint". In our view, this is a lesser
requirement than that of Article 6.2, and may we ll be satisfied in a particular case by listing the
Articles allegedly violated. China's request for consultations clearly indicates that it seeks
consultations with the European Union concerning alleged violations of the provisions of the
AD Agreement set out in the chapeau of paragraph 2, including Articles 3.1 and 4.1. In the following
subparagraphs, China sets out additional information as to the circumstances of the alleged violations,
including with respect to the definition of the dom estic industry. While not specifically identifying
the failure to include in the domestic industry pr oducers coming forward after the 15-day deadline
established in the Notice of Initiation, China's requ est for consultations makes it clear that China
considered that there were several errors in the European Union's definition of the domestic industry.
In this case, we consider that the reference to Artic les 3.1 and 4.1 in the chapeau of paragraph 2 of the
request for consultations itself gives an "indication" th at the legal basis of the complaint is a violation
of some aspect of those provisions, with some furt her explanation in the following subparagraphs for
some of the Chinese concerns. Moreover, we note that there is no dispute that the panel request
clearly sets out a claim of violation with respect to the failure to include in the domestic industry
producers coming forward after the 15-day deadline estab lished in the Notice of Initiation. Thus, it is
clear to us that the panel request concerns the same dispute, and evolved from the matter set out in the
request for consultations. In these circumstances, we conclude that China's request for consultations
does contain a sufficient "indication of the legal basis" for the first allegation of error with respect to
its claim of violation of Articles 3.1 and 4.1 of the AD Agreement, which is therefore within our terms
of reference.
7.208 With respect to whether China made out a prima facie case regarding its claims concerning
"major proportion" and representativeness of the sample chosen, we recall that "[a] prima facie case is
one which, in the absence of effective refutation by the defending party, requires a Panel, as a matter
of law, to rule in favour of the complaining party presenting the prima facie case ".464 T h e
European Union's assertion of failure to present a prima facie case with respect to the "major
proportion" issue appears to rest, in significant part, on a disputed interpretation of the
AD Agreement. In this situation we consider it a ppropriate to resolve that question of interpretation

463 Appellate Body Report, Korea – Dairy, para. 124.
464 Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones) (EC –
Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, 135, para. 104.

first. We will then consider the parties' argume nts with respect to China's claims, including the
European Union's assertions regarding China's alleged failure to present a prima facie case.
7.209 Before turning to the parties' arguments, we set out below our conclusions with respect to the
facts surrounding the definition of domestic industry in this case. Some of these facts were disputed
by the parties, and we have resolved those disputes as necessary in order make our decision.
7.210 In this anti-dumping investigation, the Commission did not specifically set out a "definition"
of the domestic industry per se . However, its views on the subject are clear from the Definitive
Regulation. First, the Commission defined the "product concerned" in the investigation, as:
"certain iron or steel fasteners, other than of stainless steel, i.e. wood screws
(excluding coach screws), self-tapping screws, other screws and bolts with heads
(whether or not with their nuts or washer s, but excluding screws turned from bars,
rods, profiles or wire, of solid section, of a shank thickness not exceeding 6 mm and
excluding screws and bolts for fixing railway track construction material), and
washers, originating in the People's Repub lic of China (all together hereinafter
referred to as fasteners or product concerned).
The product concerned is normally declar ed within CN codes 7318 12 90, 7318 14
91, 7318 14 99, 7318 15 59, 7318 15 69, 7318 15 81, 7318 15 89, ex 7318 15 90, ex
7318 21 00 and ex 7318 22 00.
Fasteners are used to mechanically join two or more elements in construction,
engineering, etc., and are used in a wide variety of industrial sectors, as well as by
consumers. Based on their basic physical and technical characteristics and end uses,
all fasteners are considered to constitute a single product for the purpose of the
proceeding. Within the same national or international standards, fasteners should
comply with the same basic physical and technical characteristics including notably
strength, tolerance, finishing and coating."
465
7.211 At paragraphs 48-56 of the Definitive Regulation, the Commission addressed various
arguments of the parties to the investigation con cerning the issue of like product, and concluded at
paragraph 57 that:
"the fasteners produced and sold by th e Community industry in the Community,
fasteners produced and sold on the domestic market in the PRC and those produced
and sold on the domestic market in India, which served as an analogue country, and
fasteners produced in the PRC and sold to the Community are alike within the
meaning of Article 1(4) of the basic Regulation."
7.212 Referring to the indication at the outset of the investigation, in the Notice of Initiation, that
sampling might be used, the Definitive Regulation states that:
"in view of the large number of producers, sampling of the domestic industry was
proposed... In order to enable the Commission to decide whether sampling would be
necessary, and if so to select a sample, Community producers were requested to make
themselves known within 15 days from the da te of the initiation of the investigation
and to provide basic information on thei r production and sales, and the names and
activities of all their related companies i nvolved in the production and/or selling of
the product concerned....46 Community producers that produced the product

465 Definitive Regulation, Exhibit CHN-4, recitals 40-42.

concerned in the Community during the inv estigation period and expressed a wish to
be included in the sample within the afor esaid period were considered as cooperating
companies and were taken into account in the selection of the sample ....These
Community producers represented over 30% of the estimated production in the
Community in 2006. These producers are c onsidered to constitute the Community
industry as mentioned in recital 114."466
The Commission concluded, at recital 114 of the Definitive Regulation, that:

"The production of the Community producers that supported the complaint and fully
cooperated in the investigation represents 27,0% of the production of the product
concerned in the Community. It is ther efore considered that these companies
constitute the Community industry within the meaning of Articles 4(1) and 5(4) of the
basic Regulation."
7.213 In response to questions from the Panel, the European Union clarified that, at the time of
initiation, it sent sampling forms to 318 EU produ cers of fasteners, asking for certain basic
information concerning their operations, which coul d be used to determine the composition of the
intended sample, and setting a 15-day deadline.
467 Five national associations of producers were also
sent letters, and the Notice of Initiation invited any other domestic producers who so wished to come
forward and provide the requested in formation within the 15-day period. 468 Another 54 producers,
whose names had been provided by exporters, we re subsequently contacted by the Commission,
which sent sampling forms to 45 and received 10 co mpleted forms in return, but none of these
producers were ultimately included in the domestic industry. 469 The sampling forms do not contain
any questions concerning support for or opposition to the application. 470 China asserts that this does
not mean the EU investigating authority was not aw are of the positions of all companies with respect
to the investigation.471 In this respect, China notes that the Information Document, sent to the parties
at the time it was decided not to impose provisiona l measures, indicates that of 114 companies who
came forward with relevant information, tho se who produced the product under investigation and
expressed a wish to be included in the sample were considered as "cooperati ng" and were taken into
account in the selection of the sample. Of these cooperating companies, 86, representing 36 per cent
of estimated EU production, supported the compla int, while 25, accounting for 9 per cent of EU
production, opposed the complaint, and three did not express an opinion.
7.214 We note that the Definitive Regulation suggests, by using the term "producers that supported
the complaint", that, as alleged by China, only pr oducers expressing support for the complaint were
included in the domestic industry. While the In formation Document also seems to support this
conclusion, we accept that, as asserted by the Europ ean Union, this is a working document reflecting
progress in the investigation to that point, with no legal status in EU law, which was made available to
the parties despite there being no obligation to do so, and is not the measure before us.472 Thus, we do

466 Definitive Regulation, Exhibit CHN-4, recitals 22-25.
467 European Union, answer to Panel question 88, para. 17.
468 European Union, answer to Panel question 88, para. 17.
469 European Union, answer to Panel question 89, para. 20. One of these companies had in fact been
contacted at initiation, and was thus already included in the domestic industry. Id.
470 See Exhibits EU-30 and EU-31.
471 China, Comments on European Union answer to Panel question 89, para. 16.
472 European Union, answer to Panel question 30, pa ra. 88. China disagrees with the European Union
in this regard, referring to the title of the cover lette r transmitting the Information Document, which refers to
"Preliminary findings and continuation of the investigation without imposition of provisional measures".
China, second oral statement, para. 63 (emphasis added by China). However, we do not consider that the title of
the document binds the Euro pean Union, and accept th e European Union's repres entation of the document's
status under EU law.

not consider the representations in the Informa tion Document as constituting part of the measure
which we must evaluate. We note that the European Union indicates 473 that at least one producer
which was not a complainant, and had remained silent prior to initiation, was not only included in the
domestic industry, but was selected for the sample. 474 The European Union indicates that, based on
arguments made by Chinese exporters, it continued to consider the question of standing after the
initiation, that this continued examination confused the question of the definition of the domestic
industry, and that the "unfortunate standard formul ation" in the Definitive Regulation (referring to the
use of the term "producers that supported the co mplaint" with respect to the domestic industry) 475, did
not affect the definition of the domestic industry, with respect to which no distinction was made
between producers who supported the complaint and those that did not.476
7.215 We are sympathetic to China's position with respect to the question of whether producers who
do not support the complaint may be excluded from the domestic industry in the abstract. Issues
might arise should an investigating authority systematically exclude from the domestic industry
companies that produce the like product but do not support the complaint. On the other hand, we also
have sympathy for the European Union's view th at producers who do not support the complaint are
not likely to cooperate, and thus cannot effectivel y be considered as part of the domestic industry
unless they specifically come forward and agree to par ticipate in the investigation. We consider that,
on the facts before us, China has not demonstrated th at the EU investigating authority in this case did,
in fact, exclude producers that did not support the complaint from the domestic industry. In our view,
this is demonstrated by the fact that at least one producer who did not affirmatively state support for
the complaint was included in the domestic industry. In addition, while it seems clear that producers
who did not make themselves known within the 15- day period established at initiation were not
included in the domestic industry, we find that the i nvestigating authority did not act to exclude such
producers. There seems to have been a process of considering additional producers for inclusion in
the domestic industry, based on arguments made by the exporters. While none of the producers so
considered were in the end included in the domest ic industry, in our view, the fact that the
Commission considered including them the domestic industry supports our view that it did not simply
exclude producers who did not come forward within the 15-day period.
7.216 Finally, we note that the Definitive Regulation indicates that the Commission chose the
sample by selecting, from the 46 producers c onstituting the Community in dustry, those with the
largest production volumes, "so as to achieve the largest representative volume of production of the
like product produced in the Community which coul d reasonably be investigated within the time
available".
477 From the completed sampling forms received from domestic producers, the
investigating authority selected a sample compri sing seven producers, accounting for approximately
70 per cent of the production of the Community indu stry, as defined by the Commission, that is, the
46 producers. Subsequently, one sampled producer was considered as not cooperating, and dropped
from the sample, resulting in a sample comprising six producers accounting for approximately 65 per
cent of the production of the Community industry as defined by the Commission. Questionnaires

473 China asserted, in its request for interim review, that the European Union did not provide any
evidence in this regard, and that China could not independently verify this fact, as the identities of the
complainants was confidential. China, request for interi m review, para. 20. However, we have no reason to
doubt the European Union's assertion of fact in this regard.
474 European Union, answer to Panel question 89, para. 19; China, Comments on European Union
answer to Panel question 89, para. 15. China asserts that the fact that this company did not express a view prior
to initiation does not mean that it did not support the complaint when it came forward after initiation and
expressed a willingness to be included. Id. Whether this is true or not is not relevant to our evaluation, since it
is clear that the support or lack th ereof as a matter of fact was not enquired into by the Commission, and thus
was not an aspect of the inclusion of this company in the domestic industry.
475 European Union, answer to Panel question 89, para. 18.
476 European Union, answer to panel question 34, para. 105.
477 Definitive Regulation, Exhibit CHN-4, recital 27.

were sent to the sampled companies and replies from all of them were received within the deadlines
established by the Commission.478
7.217 Turning to the first aspect of China's claim, we recall that Article 4.1 of the AD Agreement
provides:
"4.1 For the purposes of this Agreement, the term "domestic industry" shall be
interpreted as referring to the domestic producers as a whole of the like products or to
those of them whose collective output of the products constitutes a major proportion
of the total domestic production of those products, except that:
 (i) when producers are related
11 to the exporters or importers or are
themselves importers of the allegedly dumpe d product, the term "domestic industry"
may be interpreted as referring to the rest of the producers;
 (ii) in exceptional circumstances the territory of a Member may, for the
production in question, be di vided into two or more competitive markets and the
producers within each market may be regarded as a separate industry if (a) the
producers within such market sell all or al most all of their production of the product
in question in that market, and (b) the demand in that market is not to any substantial
degree supplied by producers of the product in question located elsewhere in the
territory. In such circumstances, injury may be found to exist even where a major
portion of the total domestic industry is not injured, provided there is a concentration
of dumped imports into such an isolated market and provided further that the dumped
imports are causing injury to the producers of all or almost all of the production
within such market.
Norway ("EC – Salmon (Norway)"), WT/DS337/R, adopted 15 January 2008, and Corr.1, DSR 2008:I, 3,
para. 7.110.

as a separate industry if certain conditions are satis fied. However, we agree with the views of the
panel in EC – Salmon (Norway), that:
"nothing in the text of Article 4.1 gives any support to the notion that there is any
other circumstance in which the domestic industry can be interpreted, from the outset,
as not including certain categories of producers of the like product, other than those
set out in that provision. 283 Thus, we see no basis in the text of Article 4.1 which
would allow for the exclusion from the domestic industry, as a category or group, of
producers of any form of the like product...
China suggests that the 15-days a llowed by the Commission was insuffi cient, it does not substantiate
this position, and we see no basis for concluding that the 15-day period was necessarily insufficient.484
Moreover, it seems clear that the Commission did consider the possible inclusion of additional
producers in the domestic industry, although it ultimatel y did not include any. In our view, the mere
fact that the domestic industry as ultimately defi ned does not include any particular proportion of
producers expressing different views with respect to the complaint, or producers who did not come
forward within the 15-day period, does not demonstrat e that the European Union acted inconsistently
with Article 4.1 of the AD Agreement in defining the domestic industry. Thus, we find that China has
failed to demonstrate that the European Union excl uded producers that did not support the complaint,
and has failed to demonstrate that the definition of the domestic industry was inconsistent with
Article 4.1 of the AD Agreement in this regard.

480 Panel Report, EC – Salmon (Norway), para. 7.112.
481 Indeed, China does not dispute that such deadlines may be applied, so long as they are reasonable.
China, answer to Panel question 23, para. 101.
482 China contends that the fact that this company did not indicate support for the complaint prior to the
initiation does not mean that it did not support the complaint when it came forward after the initiation. China,
comments on European Union, answer to Panel question 89, para. 15. However, China proffers no evidence
which might suggest that the Commission inquired whether this company supported the complaint, that the
company did, in fact support the complaint, or that the Commission took this question into consideration at all.
483 China, answer to Panel question 23, para. 101.
484 We recall that in connection with its claim under Article 6.1.1 of the AD Agreement with respect to
the time given to fill out the MET/IT claim forms, China does not argue that the 15-day deadline given to fill out
those forms is unreasonable. See, footnote 1130 below.

7.220 Finally, although China asserts that the two lega l bases it posits for this aspect of its claim,
Articles 3.1 and 4.1 of the AD Agreement, are independent of one another, China has not, in our view,
made a prima facie case of violation of Article 3.1 of the AD Agreement. Article 3.1 of the
AD Agreement provides:
"A determination of injury for purposes of Article VI of GATT 1994 shall be based
on positive evidence and involve an objective examination of both (a) the volume of
the dumped imports and the effect of the dumped imports on prices in the domestic
market for like products, and (b) the consequent impact of these imports on domestic
producers of such products."
7.221 China asserts that it is only possible to un dertake an objective examination pursuant to
Article 3.1 if the result of the examination is not predetermined by the way the domestic industry is
defined.485 We do not disagree. However, we have re jected China's position with respect to this
aspect of its claim challenging the domestic industr y definition in this case. China makes no other
allegations in support of its claim of violation of Ar ticle 3.1, and we therefore dismiss that aspect of
China's claim.
7.222 China's second allegation of error has two aspects: (a) whether, in the circumstances of this
investigation, the Eurostat data considered by the Commission constituted a reliable basis for
estimating total EU production of fasteners in assessing whether the producers included in the
domestic industry accounted for a "major proportion" of total domestic production of the like product,
and (b) whether the 27 per cent of total EU production accounted for by the producers found to
constitute the domestic industry was sufficient to constitute a "major proportion" of total domestic
production of the like product, under Article 4.1 of the AD Agreement.
7.223 We note that China's arguments concerning the first aspect essentially reprise its arguments in
the context of its claim with respect to standing. As discussed in more detail above, and for the same
reasons, we do not consider that the European Un ion erred in relying on the Eurostat data in
estimating total EU production of fasteners. 486 China acknowledges that the specific data used,
PRODCOM statistics, are gathered according to objective rules, but asserts that these rules themselves
make the data unsuitable for calculating domestic production. However, similar to the standing
determination, the definition of the domestic industr y takes place at an early stage of the proceedings,
when the information available to the investigatin g authority is necessarily limited. In our view,
reliance on a set of data gathered and maintained on an objective basis for reasons not linked to the
anti-dumping investigation is a reasonable basis for an investigating authority to make decisions
concerning the definition of the domestic industry, including whether a group of producers accounts
for a sufficient proportion of total domestic production to be considered a "major proportion" of that
production. We do not preclude the possibility that su ch a decision might be revisited at a later stage
of the proceedings, when more information has beco me available to the investigating authority.
However, there is nothing in the facts before us that would support the view that the Commission
should have approached the Eurostat data with suspicion.
7.224 China contends that the alleged underestima tion of production volumes in the data was
confirmed by evidence provided by inter ested parties during the investigation.
487 Even assuming that
to be true, we fail to see how this could be taken into account at the beginning stages of the
investigation when the Commission was assessing wh ether producers considered for inclusion in the
domestic industry accounted for a major proportion of total EU production of fasteners. Although
China asserts that other information was available to the investigating author ity on EU production of

485 China, answer to Panel question 23, para. 107.
486 See, paragraphs 7.179 to 7.182 above.
487 China, answer to Panel question 87, para. 3.

fasteners, we note that this information at best relates to only some production, in Italy and for the
automotive industry 488, and we cannot see how such partial information would constitute a more
appropriate basis for estimating total domestic produ ction than the data actually relied upon. Thus,
we conclude that the European Union did not viol ate Article 4.1 by relying on Eurostat data in
estimating total EU production for purposes of defining the domestic industry.
7.225 The principal issue raised by China is whether the European Union violated Article 4.1 in
defining producers accounting for 27 per cent of esti mated total EU production of fasteners as the
domestic industry on the basis that these producer s accounted for a "major proportion" of total
domestic production within the meaning of Article 4.1. China argued that the Commission wrongly
relied on a presumption that producers accounting for 25 per cent of total domestic production
constitute a major proporti on of domestic production. 489 Whether or not the Commission relied on
such a presumption, it is for China to make a prima facie case that the Commission's definition of
domestic industry is inconsistent with Artic le 4.1 in the investigation in dispute. 490 Although China's
first written submission asserted that a "major propor tion" must be as close as possible to domestic
production "as a whole"491, at the first meeting of the Panel, China's representative acknowledged that
there is no proportion, in the abstract, that must be satisfied to constitute a "major proportion", and
that depending on the circumstances, even something less than 25 per cent might be sufficient. In our
view, the assertion that the Commission relied on a presumption is not alone sufficient to demonstrate,
prima facie, that the definition of domestic industry in this case is inconsistent with Article 4.1 of the
AD Agreement. We therefore do not consider it necessary to address China's argument that the
European Union erred by presuming that produ cers accounting for 25 per cent of total domestic
production will constitute a major propor tion, and thus satisfy the require ments of Article 4.1 in this
regard. We now turn to the question whether, in this case, the European Union erred in concluding
that producers of 27 per cent of estimated total EU production of fasteners accounted for a "major
proportion" of total domestic production within the meaning of Article 4.1
7.226 We recall the provisions of Article 4.1, quoted above, which do not define the term "major
proportion". As the parties have recognized, a "major" proportion is one that is "important, serious, or
significant".492 The parties also agree that the "major proportion" referred to in Article 4.1 of the
AD Agreement may be something less than 50 per cent, and that the lower limit is not determinable in
the abstract, but will depend on the facts of the case. This is consistent with the views of the panel in
Argentina – Poultry, which concluded:
"an interpretation that defines the domestic industry in terms of domestic producers of
an important, serious or significant pr oportion of total domestic production is
permissible. Indeed, this approach is entir ely consistent with the Spanish version of
Article 4.1, which refers to producers representing "una proporción importante" of
domestic production. Furthermore, Artic le 4.1 does not define the "domestic
industry" in terms of producers of the major proportion of total domestic production.
Instead, Article 4.1 refers to producers of a major proportion of total domestic
production. If Article 4.1 had referred to the major proportion, the requirement
would clearly have been to define the "domestic industry" as producers constituting
50+ per cent of total domestic production. 224 However, the reference to a major

488 See, China, answer to Panel question 87, para. 8.
490 We note in this regard that China did not bring a claim against Article 4(1) of the Basic AD
Regulation, which links "major proportion" for purposes of the domestic industry definition, by reference, to
Article 5(4) of the Basic AD Regulation, which in turn incorporates the numerical tests for standing set out in
Article 5.4 of the AD Agreement.
492 China, first written submission, para. 253; European Union, first written submission, para. 319.

proportion suggests that there may be more than one "major proportion" for the
purpose of defining "domestic industry". In the event of multiple "major
proportions", it is inconceivable that each individual "major proportion" could – or
must – exceed 50 per cent. This therefore supports our finding that it is permissible
to define the "domestic industry" in term s of domestic producers of an important,
serious or significant proportion of total domestic production. For these reasons, we
find that Article 4.1 of the AD Agreement does not require Members to define the
"domestic industry" in terms of domestic producers representing the majority, or 50+
per cent, of total domestic production.
Brazil's interpretation of Article 4.1."493
The panel in that case went on to observe that there w as "nothing on the record to suggest that, in the
circumstances of this case, 46 per cent of total dom estic production is not an important, serious or
significant proportion of total domestic production", and accordingly rejected Brazil's claim that
Argentina violated Article 4.1 of the AD Agreemen t by defining "domestic industry" as consisting of
domestic producers accounting for 46 per cent of total domestic production.

7.227 We agree with these views, and consider it approp riate to apply them in our analysis in this
dispute. Thus, the question for us is whether, in light of the facts on the record of the anti-dumping
investigation before us, there is anything that supports China's contention that 27 per cent of estimated
EU production of fasteners is not an important, serious, or significant pr oportion of total domestic
production of that product.
7.228 In its first written submission, China did not make any arguments with respect to the facts of
this case, but did raise such arguments at the first meeting of the Panel with the parties, and in
subsequent submissions. We note that the Eur opean Union asserts that China fails to make a prima
facie case with respect to this claim, as it failed to provide any relevant evidence of why 27 per cent of
total domestic production does not constitute a "major proportion" of total domestic production. In its
second written submission, China asserted the following specific circumstances in support of its
contention that 27 per cent of domestic production di d not satisfy the major proportion requirement:
(a) that the domestic producers included in the dom estic industry are not representative of the whole
of domestic production, (b) that it was feasible, as a practical matter, to include more domestic
producers, (c) that the producers included represen t only a small portion of the total number of
domestic producers, and (d) that the domestic industr y definition excluded producers other than those
referred to in Article 4.1(i) and (ii).
494 China also argues that invest igating authorities are required to
examine and determine, in light of the specifi c circumstances of each case whether the major
proportion test has been satisfied, including not onl y quantitative elements, but also aspects such as
those set out in (a) – (d) above.495 According to China, the EU investigating authority simply failed to
consider the circumstances of the case, and instead rested on the fact that 27 per cent is more than
25 per cent, and therefore was sufficient. China asse rts that this failure cannot be cured by the fact

493 Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry from Brazil ("Argentina –
Poultry Anti-Dumping Duties "), WT/DS241/R, adopted 19 May 2003, DSR 2003:V, 1727 Panel Report,
para. 7.341 (footnote 223 deleted, emphasis in original).
494 China, second written submission, paras. 632-639.

that the domestic industry as defined did, in fact , include large and smaller companies and producers
of different types of the like product.496
7.229 We recall that Article 4.1 is a definitional provision. Thus, while it does impose an obligation
on an investigating authority to ensure that it de fines a "domestic industry" in a manner consistent
with that provision, Article 4.1 does not set out any requirements with respect to how an investigating
authority is to do this. We see no basis in the te xt of Article 4.1 for the proposition put forward by
China that an investigating authority must, of its own accord, "examine and determine" whether the
major proportion test has been satisfied by consid ering the specific circumstances of the case with
reference to the criteria proposed by China. We do not mean to suggest that an investigating authority
may ignore relevant evidence, and in particular argum ents made by interested parties, suggesting that
a particular definition of domestic industry is inconsistent with Artic le 4.1. But the only requirement
clearly set out in that provision is that the domestic industry consist of "domestic producers of the like
product", either as a whole, or those of them accounting for a major proportion of total domestic
production. We see no basis in the text of the AD Agreement to impose on investigating authorities
an affirmative obligation to examine non-quantitativ e factors in defining a domestic industry on the
basis of producers accounting for a major proportion of domestic production of the like product. 497
Nor, in our view, does the report in Argentina – Poultry suggest otherwise. While the panel in that
dispute did note that "[t]here is nothing on the record to suggest that, in the circumstances of this case,
46 per cent of total domestic production is not an im portant, serious or significant proportion of total
domestic production" 498, we do not understand this to impo se an affirmative obligation on the
investigating authority to examine and determin e unspecified "circumstances" in defining the
domestic industry.
7.230 Even assuming non-quantitative factors are relevant to the definition of a domestic industry
under Article 4.1, we do not consider that the factors China raises in this rega rd are relevant in this
case, or in general. For instance, we see nothing in Article 4.1 that would require an investigating
authority, in defining the domestic industry, to examine and determine whether producers accounting
for a major proportion, are, in addition, some how "representative" of the whole of domestic
production.499 Nor do we see anything in the text of Ar ticle 4.1 that would require an investigating
authority to include as many producers as is "prac tically feasible", so long as the producers that are
included account for a sufficient quantity of dom estic production to be considered a "major
proportion". Similarly, we consider irrelevant whether the number of producers included in the
domestic industry is a small or a large portion of the total number of producers. Article 4.1 refers to
the volume of production accounted for by producers, a consideration which is, in our view, not
addressed by taking account of the number of producer s. Moreover, as the European Union observes,

497 We note that this does not mean that we agree that any domestic industry which includes producers
accounting for more than 25 per cent of total domestic production will necessarily be consistent with Article 4.1
of the AD Agreement, nor that an examination of injury to such an industr y will necessarily be consistent with
the provisions of Article 3 of the AD Agreement.
498 Panel Report, Argentina – Poultry Anti-Dumping Duties, para. 7.342.
499 We note in this regard China's contention that:
"[b]y failing to include in the domestic industry domestic producers that opposed the
complaint or remained silent, the EU investigating authorities defined a domestic industry that
is not "representative" of the whole industry a nd thus does not constitute a "proportion" of the
total domestic production and a fortiori not a "major proportion" of that production."
We consider this contention fundamentally flawed. As China recognizes, there are two alternative
bases for the definition of the domestic industry. Nothing in Article 4.1 suggests that an industry defined on the
basis of domestic producers of a major proportion must somehow "represent" the putative industry that would
be defined on the basis of domestic producers as a whole. Indeed, such a requirement would be illogical and
circular.

it is precisely in the situation of a "fragmented" indu stry with many producers that a definition of the
domestic industry based on the "major proportion" is most likely 500, and to require that an industry in
that situation must include a major proportion of the number of the producers would vitiate the
effectiveness of the major proportion option. Finally, as noted above, we have rejected as a matter of
fact China's contention that the Commission wrongly excluded certain categories of producers. We
therefore conclude that the European Union did not act inconsistently with Article 4.1 of the
AD Agreement in defining a domestic industry co mprising producers accounting for 27 per cent of
total estimated EU production of fasteners.
7.231 Turning to China's third allegation of error, we recall our conclusion above that there is
nothing in Article 4.1 that establishes any methodol ogical requirements with respect to the definition
of the domestic industry. In particular, there is nothing in that Article that establishes any period of
time for which total domestic production must be calcu lated in the context of determining whether the
major proportion requirement is satisfied. Similarly, we can see nothing in Article 3.1, even assuming
it is relevant to the definition of the domestic industry per se, which would establish that the definition
of the domestic industry must relate to any specific period, and in particular, the period for which data
is collected for purposes of the dumping margin calculations.
7.232 In this regard, we note that the period China considers relevant is what the European Union
refers to in its practice as the "Investigation Peri od", which we understand to be the period for which
data is collected for purposes of calculating dumpi ng margins. However, we note that there was
another relevant period defined in this investigation, from January 2003 to October 2007, referred to
in EU practice as "the period considered", which was the period for which information was collected
for purposes of examining the question of injury to the domestic industry.
501 The information on
which the calculation of major pr oportion was made covered calendar year 2006, and thus was within
the period considered. China argues that "the exis tence of material injury within the meaning of
Article 3.4 of the AD Agreement was assessed on the basis of the status of the domestic industry
during [the Investigation period 1 October 2006-30 Sept ember2007]. The previous periods were used
only in order to detect trends".502 On this basis, China considers that the EU authorities were required
to define the domestic industry in relation to the Investigation Period. We do not agree.
7.233 In our view, even assuming China is correct that the existence of injury was determined with
respect to the Investigation Period, a question which is not before us and which we do not address, we
do not see that this would necessarily establish that the definition of the domestic industry must be
based on data for the same period. China suggests that to do otherwise will necessarily result in a
failure to undertake an "objective examination", as requi red by Article 3.1, in the context of the injury
determination. We fail to see why a definition of domestic industry based on data for production of
the like product for the last full calendar year for wh ich data is available should necessarily result in
an injury determination based on a non-objective exam ination. We agree that a determination based
on a wrongly defined domestic industr y will be inconsistent with Ar ticle 3.1, as regardless of how
"objective" in the abstract the examination of positive evidence concerning that wrongly defined
industry may be, the conclusion would simply pertain to the wrong industry. 503 However, there is no
period defined in the AD Agreement with respect to which the injury determination must be made,
and indeed, China does not allege otherwise. Thus, a definition of industry based on a major
proportion calculated for the last full calendar year prior to initiation is not necessarily "wrongly
defined". We therefore do not agree that a de finition of domestic industry based on a major

500 European Union, second written submission, para. 122.
501 Definitive Regulation, Exhibit CHN-4, recital 39.
503 See, Panel Report, EC – Salmon (Norway), para. 7.124.

proportion calculated for data relating to a period othe r than the period for which data is collected for
the dumping determination necessarily is inconsistent with Article 3.1 of the AD Agreement.504
7.234 Turning to China's fourth allegation of error, we note that China does not dispute that an
investigating authority may use sampling in making its injury determination, but asserts that it must
be "consistent with the genera l obligations for investigating authorities, in accordance with
Article 3.1, to conduct an objective examination based on positive evidence".505 In this context, China
focuses on the assertion that the sample selected wa s not representative because the share of domestic
production accounted for by sampled producers was t oo small, and because it represented, at best, a
domestic industry defined inconsistently with Articles 3.1 and 4.1 of the AD Agreement.
7.235 We agree with China that, as stated by the panel in EU – Salmon (Norway),
"the AD Agreement establishes some general parameters for the use of sampling in
the injury context. Thus, in our view, the obligation in Article 3.1 that a
determination of injury be based on "pos itive evidence" and involve an "objective
examination" of the volume, price effects, and impact of dumped imports, limits an
investigating authority's discretion both in choosing a sample to be examined in the
context of injury, and in collecting and evaluating information obtained from the
sampled producers. The Appellate Body stated, in US – Hot-Rolled Steel , that "an
'objective examination' [under Article 3.1] requires that the domestic industry, and the
effects of dumped imports, be investigated in an unbiased manner, without favouring
the interests of any interested party, or group of interested parties, in the
investigation." A sample that is not sufficiently representative of the domestic
industry as a whole is not likely to allow for such an unbiased investigation, and
therefore may well result in a determinati on on the question of injury that is not
consistent with the requirements of Article 3.1 of the AD Agreement."
506
We have above rejected China's allegations that domestic industry was defined inconsistently with
Articles 3.1 and 4.1 of the AD Agreement, and we th erefore dismiss that aspect of China's allegation
that the sample selected by the EU investigati ng authority was not representative of the domestic
industry.507

7.236 China also argues that by using volume of produc tion as the sole criterion for selection of the
sample, and in doing so, failing to include in th e sample producers whose output represented the
largest volume of production of the like product whic h could reasonably be investigated within the

504 We note, in addition, that China has made no other arguments suggesting that the period actually
considered by the Commission, calendar year 2006, was inappropriate or unreasonable. In this regard, we
consider pertinent the Europ ean Union's argument that this represented the last full calendar year prior to
initiation for which data were available, which would at a minimum support a conclusion that the period was
reasonable, were we to address the question.
505 China, second written submission, para. 667, referring to Panel Report, EC – Salmon (Norway),
para. 7.130.
506 Panel Report, EC – Norway (Salmon), para. 7.130 (footnotes omitted).
507 In this respect, we note that we agree with the European Union that a sample for purposes of
assessing injury in an anti-dumping investigation must be sufficiently representative of the domestic industry as
defined by the investigating authority in the particul ar case, always assuming, however, that the domestic
industry was defined consistently with the requirements of Article 4.1. Thus, we reject China's argument that,
since the sample consisted of only six producers representing only 17.5 per cent of total domestic production, it
could not be considered as "representative" of tota l domestic production. China, first written submission,
paras. 279-282. The percentage of total domestic production represented by the sample is in our view
irrelevant to the question of the representativeness of a sample of domestic industry defined as producers
accounting for a major proportion of total domestic production of the like product.

time available, the EU investigating authorit y selected a sample that was not representative. 508 We
note that no provision of the AD Agreement addr esses the question of sampling in the context of
injury determinations, including the selection of a sa mple. This is in contrast to the context of
dumping determinations, where Article 6.10 explicitl y authorizes sampling, and sets out guidance for
the selection of an appropriate sample. One of th e methods set out in Article 6.10 for selection of a
sample for the dumping determination is to " limit [the] examination ... to the largest percentage of the
volume of the exports from the country in question which can reasonably be investigated".
7.237 As noted above, the Commission selected the sample based on the volume of production of
the producers who expressed willingness to be include d in the sample. China argues that selection on
the basis of volume of production is not appropriate to satisfy the requirement that the sample be
representative of the domestic industry.
509 In this respect, China argues that, unlike in the context of a
dumping determination based on sampling, where ther e is a possibility for subsequent refunds in the
future for exporters who do not actually dump, or du mp at lower margins, there is no similar system
which would take account of the absence of uninjur ed domestic producers, and thus it is particularly
important that the sample be sufficiently representative of the domestic industry. 510 China asserts that
the EU investigating authorities should have used a statistically valid sample, which is the only
guarantee of having a sufficiently representative sample of the domestic industry.511
7.238 We note the statement of the panel in EC – Salmon (Norway) , which China relies upon in
making its argument:
"In addition, we see no basis to impose the criteria of Article 6.10 on sampling in the
context of injury. It is not clear that the "largest volume that can reasonably be
investigated" criterion of Article 6.10 w ould [be] an appropriate basis for the
selection of a sample in the context of an injury investigation. On the dumping side,
ensuring that an adequate portion of total exports is investigated might be sufficient to
justify imposition of an anti-dumping duty, particularly given that there is a
possibility for subsequent refunds if an indi vidual producer is not actual dumping. In
the investigation of injury, factors other than the volume of production would seem at
least equally, if not more, relevant to ensuring that a sample adequately represents the
domestic industry as a whole, sufficient to justify a finding of injury to the domestic
industry. Thus, while the volume of producti on covered by a sample may be relevant
in assessing whether a determination based on information from sampled domestic
producers satisfies the requirements of Article 3.1, other considerations may also be
as relevant, or potentially more relevant."
512
In our view, this statement does not suggest, as Ch ina implies, that the volume of production is
irrelevant to the selection of a sample in the contex t of injury determinations, but merely suggests that
other considerations may be relevant. Other than to assert that the EU investigating authority did not
include in the sample it selected producers accounting for the largest percentage of volume that could
reasonably be selected, however, China makes no ar gument as to other potentially relevant factors

508 China, second written submission, paras. 681-684.
509 At the second meeting of the Panel with the parties, the European Union asserted that this
constituted a new claim that was not part of the request fo r consultations or the Panel request, and is outside the
Panel's terms of reference. European Union, second oral statement, para. 40. However, we do not consider this
argument to constitute an entirely new claim, as alleged by the European Union, but rather a newly developed
argument in support of China's claim that the European Union failed to make a determination of injury with
respect to the relevant domestic industry, in part because the sample included producers accounting for only
17.5 per cent of domestic production.
510 China, second written submission, paras. 674-675.
512 Panel Report, EC –Salmon (Norway), footnote 309.

that might have been relevant to the selection of the sample in this case. Nor does China even suggest
that any such factors were raised during the cour se of the investigation but not considered by the
investigating authority. The European Union asser ts that the sample selected in fact included
producers of all types of fasteners and small as well as large producers. 513 In our view, in the absence
of any arguments concerning relevant factors eith er ignored or dismissed by the investigating
authority, and given that the sample selected do es appear to include producers whose production is
representative of that of the industry defined in th e investigation, we conclude that China has not
demonstrated that the sample selected is not repr esentative of the domestic industry solely because it
was selected on the basis of volume of production.

7.239 China also asserts that the EU investigating au thority failed to select as the sample producers
whose output constitute the largest volume of produc tion that could reasonably be investigated, and
that it should have used a statistically valid method for selecting the sample, as provided for in
Article 6.10 of the AD Agreement. In this respect, we note that Article 6.10 is not, by its own terms,
applicable to the selection of a sample for purposes of the injury determination. 514 We recall that
there is no guidance in the AD Agreement on the s ources, collection or verification of information
concerning injury, and that the question of sampling in this context is not addressed in the
AD Agreement. Thus, there is absolutely no basis in the text from which we can derive any specific
methodological guidance in this respect. We certain ly would not disagree that a statistically valid
sample would most likely be sufficiently represen tative to serve as the basis of an injury
determination, but we can see significant difficulties in attempting to construct such a sample in any
particular anti-dumping investigation, given that in our understanding, a first requirement for a
statistically valid sample is a significant amount of information concerning the "universe" or
"population" that is to be sampled. In an anti- dumping investigation, on the other hand, and certainly
at the beginning stages when a sample for purposes of the injury investigation is likely to be selected,
there may be only very limited information c oncerning domestic producers available to the
investigating authority. Given the time cons traints for the conduct of an investigation
515, it seems
clear to us that to require a statistically valid sample would, in many cases, make it impossible for a
sample to be selected. Since we consider that sampling is permitted in the context of injury
determinations, a view China does not contest, we cannot accept the contention that only a statistically
valid sample will be sufficiently representative for purposes of an injury determination.
7.240 Similarly, in the absence of any methodological gu idance for the selection of a sample in the
context of an injury determination, we cannot conclude that a selection based on volume of
production is necessarily unsatisfactory. With resp ect to China's assertion that the EU investigating
authority did not, in fact, select as the sample producers whose output constitute the largest volume of
production that could reasonably be investigated, we note that the only support China asserts for this
contention is the fact that, for some of the injury factors, the European Union considered data for the

513 European Union, first written submission, para. 392.
514 Article 6.10 of the AD Agreement, which is not in dispute in this context, provides:
"The authorities shall, as a rule, determine an individual margin of dumping for each known
exporter or producer concerned of the product under investigation. In cases where the number
of exporters, producers, importers or types of products involved is so large as to make such a
determination impracticable, the authorities may limit their examination either to a reasonable
number of interested parties or products by using samples which are statistically valid on the
basis of information available to the authorities at the time of the selection, or to the largest
percentage of the volume of the exports from the country in question which can reasonably be
investigated."
Thus, it is clear to us that Article 6.10 sets out requirements with respect to the selection of samples in
the context of making dumping determinations, but does not refer to the selection of samples in the context of an
injury determination.
515 Article 5.10 of the AD Agreement provides that an anti-dumping investigation shall be completed
within 12 months, or, in exceptional circumstances, no more than 18 months, after initiation.

sampled producers, while for other factors, it consider ed data for the entire domestic industry. We do
not see how this demonstrates that the EU investig ating authority could have carried out the entire
injury examination for the domestic industry it had defined, or at least included more producers in the
sample, as China asserts.
516 China quotes the views of the panel in EC – Salmon (Norway), which
stated that:
"the volume of export sales that may be reas onable for an investigating authority to
investigate is a question that must be assessed on a case-by-case basis, taking into
account all relevant facts that are before the investigating authority, including the
nature and type of interested parties, the products involved and the investigating
authority's own investigating capacity and resources."517
7.241 However, China neglects to mention that this comment was not made in connection with the
issue of sampling in the injury context, but rather in the context of the dumping determination, as
Norway had challenged the selection of the sample of exporters for the dumping determination in that
dispute. Moreover, even assuming the matters referr ed to by the panel in that case, the nature and
type of interested parties, the products involved and the investigating authority's own investigating
capacity and resources, would be relevant factors in assessing whether the sample in an injury context
represents a sufficiently large volume of domestic production, a question we do not consider it
necessary to resolve, China has ma de no representations concerning these factors in this case. We
therefore reject China's arguments that the European Union acted inconsistently with Article 3.1 of
the AD Agreement in the selection of a sample of the domestic industry.
7.242 Finally, we turn to China's allegation that the European Union acted inconsistently with
Articles 4.1 and 3.1 of the AD Agreement by includ ing in the domestic industry and in the sample
producers that were related to the exporters or importers or were themselves importers of the allegedly
dumped product. We recall the language of Article 4.1(i), which provides that:
"when producers are related to the exporters or importers or are themselves importers
of the allegedly dumped product, the term "domestic industry" may be interpreted as
referring to the rest of the producers" (footnote deleted, emphasis added).
China recognizes that Article 4.1 does not require the exclusion of related producers or importing
producers.518 Nonetheless, China submits that inves tigating authorities do not have unlimited
discretion in determining whether or not to exclude such producers, that the "objective examination"
and "positive evidence" requirements of Article 3.1 a pply to the decision of investigating authority in
such cases, and asserts that the basis of the EU investigating authority's decision not to exclude related
producers or importing producers is not supported by the evidence in the record of the investigation.

7.243 It is clear to us, as China acknowledges, that the use of the term "may" in Article 4.1 makes it
clear that investigating authorities are not requ ired to exclude related producers or importing
producers. There is nothing in the text of Article 4.1(i) that would establish any criteria that might be
relevant to an investigating authority's decision in this regard.
519 In this case, th e European Union
explained its reasons for not excluding certain re lated producers in the definitive Regulation, at

517 Panel Report, EC – Salmon (Norway), para. 7.188.
519 We note that proposals were made in the Rules Negotiations under the Doha Development Agenda
that would establish criteria for determining whether or not to exclude related producers or importing
producers from the domestic industry, and the Chairman's first draft text in fact proposed amending the
AD Agreement in this respect. Do cument TN/RL/W/213, dated 30 November 2007, p. 10, Article 4.1(i),
proposed footnotes 17, 18. That negotiators proposed amending the AD Agreement in this regard supports the
view that the text as currently in force does not establish any criteria.

recitals 115-118. China does not suggest that the bases cited by the European Union are irrelevant,
but rather asserts that the evidence contradicts the conclusion reached.
7.244 We are not persuaded by China's view that Ar ticle 3.1 of the AD Agreement applies to the
decision whether to exclude related or importi ng domestic producers in the manner proposed by
China. The European Union suggests that the re ason Article 4.1 allows th e exclusion of related
producers is because such producers may be less re presentative of the interests of the domestic
industry, and may be benefiting from the dumped im ports themselves. Thus, the European Union
argues that, if anything, the exclusion of such rela ted producers is in the exporting country's interest,
which undermines the assertion that the failure to ex clude them in this case is an abuse of the
discretion provided for in Article 4.1. 520 In our view, there is nothing in Article 3.1, or in Article 4.1,
that limits the discretion of investigating authoriti es to exclude, or not, related or importing domestic
producers. Moreover, even assuming we considered it necessary to review the European Union's
decision not to exclude related producers in this case, we fail to see the relevance of the factual basis
for China's argument. The fact that two of the e xporters to which EU producers were related stated
that they produce principally for export, rather th an for sale in the domestic Chinese market is in our
view irrelevant to a decision whether to exclude the related EU producers from the domestic industry.
In the absence of any criteria in the AD Agreement against which the decision not to exclude related
producers might be assessed, we reject China's asserti on that the European Union acted inconsistently
with Articles 3.1 and 4.1 of the AD Agreement by failing to exclude related producers from the
domestic industry.
5. Whether the European Union violated Arti cles 2.1 and 2.6 of the AD Agreement in
defining the product under consideration and/or the like product
(a) Arguments of the Parties
(i) China
7.245 China asserts that, in the inv estigation which led to the definitive anti-dumping measure at
issue, there was great uncertainty concerning the precise scope of the "product under consideration"
and whether fasteners produced by the Community industry were comparable to fasteners produced
by the producer in the analogue country, India, and to those produced in China and exported to
the EC.
521 China asserts that the Definitive Regulation defined the "product concerned", and it is this
definition which is being ch allenged in this dispute. 522 Thus, in China's view, its claim is properly
before the Panel.
7.246 China claims that the European Union acted inconsistently with Articles 2.1 and 2.6 of the
AD Agreement by including in the scope of the pr oduct under consideration both standard and special
fasteners as "like" products, despite readily appare nt differences in characteristics and uses. In
particular, China contends that, by concluding th at fasteners produced and sold by the Community
industry, fasteners produced and sold on the domestic market in India and fasteners produced in the
PRC and sold to the Community were alike, the Eu ropean Union violated Articles 2.1 and 2.6 of the
AD Agreement.523 In China's view, Articles 2.1 of th e AD Agreement, in combination with
Article 2.6, sets forth an obligation concerning the de finition of the product concerned, such that the
product concerned can only include products that are "like, in order to ensure that the dumping

520 European Union, first written submission, para. 410. China did not respond to the European Union's
argument in this respect.

determination is based on a comparis on between products which are "like"". 524 In support of its
position, China refers to the text of the provisions, as well as to Articles 6.10, 2.4, and 2.4.2 of the
AD Agreement as relevant context, and to the object and purpose of the AD Agreement.
525 C h i n a
notes that the product under consideration in the investigation included both standard and special
fasteners, and that the "like product" for purpo ses of both the dumping and injury assessments also
included both standard and special fasteners.526
7.247 China argues that fasteners pr oduced in China for export to the European Union and those
produced by the Community industry are not "like" due to differences in physical and technical
characteristics, lack of interchangeab ility and different end-uses and prices.
527 China states that the
Commission recognized that the Chinese producer s exported to the European Union almost
exclusively standard fasteners whereas the EU pr oducers mainly produced special fasteners, and
therefore only compared standard fasteners for purposes of its dumping and injury determinations. 528
China argues that the differences in terms of ph ysical and technical characteristics, end-uses and
prices between fasteners produced by the Chinese exporting producers for export to the
European Union, fasteners produced by the Indian producer, and fasteners produced by EU producers,
establish that they are not like.
529 Given this situation, the Commission, in China's view, acted
inconsistently with Articles 2.1 and 2.6 of the AD Agreement by including special fasteners in the like
product.
(ii) European Union
7.248 The European Union contends that the pr oduct under consideration for purposes of the
investigation at issue was defined in the Notice of Initiation, which, since it was not identified in
China's request for establishment, is not a measure within the Panel's terms of reference, and therefore
requests that China's claim be rejected. 530 With respect to the substance of China's claim, the
European Union distinguishes the determination of the "product concerned" a nd the determination of
the "like product". With regard to the former, th e European Union argues that Articles 2.1 and 2.6 of
the AD Agreement are definitional provisions which cannot be the basis of a claim of inconsistency
with the AD Agreement. 531 Moreover, the European Union argu es that Article 2.1 does not contain
any obligation regarding the selection of the pr oduct concerned, and that Article 2.6 of the
AD Agreement is not relevant to China' s claim regarding the product concerned. 532 I n t h e
European Union' view, the product concerned can contain multiple models.533
7.249 With regard to the determination of the like product, the European Union asserts that this
claim is not within the Panel's terms of referenc e because China's panel request only refers to the
selection of the product concerned, on the assump tion that the like product standard applies. 534 In any
event, the European Union argues that, if the Panel concludes that this claim is within its terms of
reference, the like product definition in the investig ation at issue was that "fasteners (standard and
special) [were] like fasteners (standard and special)" 535, which definition the European Union asserts

525 China, second written submission, paras. 711-725.
526 China, first written submission, paras. 303, 326.
528 China, first written submission, para. 327. China se ts out what it considers the relevant facts in this
regard in paragraphs 341-354 of its first written submission.
530 European Union, first written submission, paras. 424-425.
531 European Union, first written submission, para. 423.
532 European Union, first written submission, paras. 427, 432-439.
533 European Union, first written submission, para. 431.
534 European Union, first written submission, para. 440.
535 European Union, first written submission, para. 441.

is consistent with Article 2.6 of the AD Agreemen t. The European Union adds that the Commission
never made a determination to the effect that standard and special fasteners were alike.536
(b) Arguments of Third Parties
(i) Chile
7.250 Chile notes that, with respect to the comparis on of the normal price with the export price,
Article 2.1 and 2.6 of the AD Agreement preclude co mparison of the prices of products that are not
identical without first separating them into categor ies. In Chile's view, the AD Agreement requires
the investigating authority to conduct a thorough analysis of the characteristics of the product in
question before making the comparison between normal value and export price.
537
(ii) Colombia
7.251 Colombia agrees with the European Union th at Article 2.6 of the AD Agreement is a
definitional provision, and in this sense, the determ ination of the product concerned is not the subject
of any specific obligation under Articles 2.1 and 2.6 of the AD Agreement. 538 However, when
considering likeness between the product concerne d, which may be freely determined by the
investigating authorities, and the like domestic pr oduct, the investigating authorities are bound by the
provisions of those Articles.539 Colombia considers that the sp ecific assessment of likeness should be
made on a case-by-case basis, in light of the facts of the investigation. 540 With respect to the present
dispute, Colombia considers that the challenged me asure is in conformity with the provisions of
Articles 2.1 and 2.6 of the AD Agreement.541
(iii) Japan
7.252 Japan asks the Panel to "carefully examine" whether the European Union correctly defined
the product under consideration 542, but notes that there is no requirement that the product under
consideration include only "like" products, or that each individual item within the "like product" be
like each individual item within the product under consideration. 543 Japan considers that the
AD Agreement does not provide any guidance on how the product under consideration should be
determined, and that Article 2.6 requires the identification of those products that are "like" the product
under consideration.544
(iv) Norway
7.253 Norway considers that, contrary to the arguments of the European Union, Articles 2.1 and 2.6
of the AD Agreement contain obligations with re spect to the determination of the product under
consideration that must be fulfilled. 545 In Norway's view, all models of the product included in the
scope of the "product under consideration" must be "like" each other, within the meaning of
Article 2.6 of the AD Agreement. 546 Norway contends that, to the extent that the Panel finds that

536 European Union, first written submission, para. 441.
537 Chile, oral statement, para. 8.
538 Colombia, written submission, para. 89.
539 Colombia, written submission, para. 90.
540 Colombia, written submission, para. 97.
541 Colombia, written submission, para. 102.
542 Japan, written submission, para. 44.
543 Japan, oral statement, para. 14.
544 Japan, oral statement, paras. 15-17.
545 Norway, written submission, paras. 22-25.
546 Norway, written submission, para. 32.

standard and special fasteners are not, in fact, "like" each other, this would entail a finding of violation
of Articles 2.1 and 2.6 of the AD Agreement.547
(v) Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
7.254 The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu ("Chinese Taipei"),
while not taking a position on the factual arguments of the parties, disagrees with the
European Union's view that Articles 2.1 and 2.6 are not relevant to the selection of the product
concerned.
548 In Chinese Taipei's view, whether the European Union correctly determined the
products under consideration and th e like products is an important issue in this dispute, as these
determinations set the parameters of the investigation. 549 Chinese Taipei considers that the
intertwined relationship between the determination of the scope of the product concerned and the like
product definition, as provided for in Articles 2. 1 and 2.6 of the AD Agreement, need further
clarification by the Panel, as do the questions of how an investigating authority determines the scope
of the product under consideration, and how much latitude the AD Agreement allows in this regard.550
(vi) United States
7.255 The United States disagrees with China's understa nding of the definition of "like product" in
anti-dumping investigations, but takes no position w ith respect to the mer its of China's factual
assertions.551 In the United States' view, as a purely definitional provision, Article 2.6 itself imposes
no obligation on WTO Members. 552 Moreover, the United States contends that the scope of any
"product" may contain any number of items that va ry in limited degree from one another, and that
there is no requirement under the AD Agreement that each individual item within the like product be
"like" individual items within the product under consideration. 553 W h a t i s r e q u i r e d , i n t h e
United States' view, is a comparison of the overall scope of the product under consideration with the
overall scope of the like product. 554 The United States asserts that this view is confirmed by the
context of Article 2.6, including Articles 6.10 and 2.4 of the AD Agreement.555
(c) Evaluation by the Panel
7.256 In addressing China's claims with r espect to product under consideration 556 and like product,
we consider first the European Union's preliminar y objections, before turning, if necessary, to the
substance of those claims.
(i) Product under consideration
7.257 The European Union asserts that the definiti on of the product under consideration in the
underlying investigation was set out in the Notice of Initiation, which is not a measure in dispute, and

547 Norway, written submission, para. 39.
550 Chinese Taipei, oral statement, paras. 11-12.
555 United States, written submission, paras. 27-28.
556 With respect to terminology, we note that the European Union uses the phrase "product concerned",
and China, and some third parties, do so as well in some instances, where the AD Agreement refers to the
"product under consideration". There is no dispute th at these two phrases refer to the same concept in the
context of anti-dumping investigations. Except when referri ng to the parties' and third parties' arguments, we
prefer to use the terminology of the AD Agreement itself.

therefore that this claim is not within the Panel's jurisdiction. 557 We note that the European Union
raised a similar argument with respect to the de termination of standing, which we have rejected. 558
Moreover, we note that the definition of the prod uct under consideration is clearly set forth in
recital 40 of the Definitive Regulation, a measur e which the European Union does not dispute is
before the Panel.559 As discussed in more detail above 560, we consider that in a dispute concerning a
final anti-dumping measure, a complaining Member may raise any alleged violations of the WTO
Agreements arising out of the initiation or conduct of, as well as the determinations made and actions
taken in the course of, the underlying anti-dumping inv estigation. We therefore conclude that China's
claim with respect to the product under considerat ion, which is undisputedly set out in the panel
request, is properly before us.
7.258 Turning to the substance of China's claim with respect to product under consideration, we
note that China does not argue that any provision of the AD Agreement sets out a definition of the
product under consideration for purposes of an an ti-dumping investigation. Rather, China has
constructed an argument by combining Article 2.1 of the AD Agreement, which defines dumping for
purposes of the AD Agreement, and Article 2.6, whic h defines the term "like product" for purposes of
the AD Agreement. We are not persuaded by Ch ina's arguments that these two provisions, taken
together, establish the obligations on an investigatin g authority with respect to the definition of the
product under consideration asserted by China. We note that China makes no argument under
Article 2.1 independent of its asser tion that Article 2.1, in combination with Article 2.6, imposes
obligations with respect to the definition of the product under consideration.
561
7.259 To recall briefly the relevant facts, in this case, the Commission defined the "product
concerned" in the investigation, as:
"certain iron or steel fasteners, other than of stainless steel, i.e. wood screws
(excluding coach screws), self-tapping screws, other screws and bolts with heads
(whether or not with their nuts or washer s, but excluding screws turned from bars,
rods, profiles or wire, of solid section, of a shank thickness not exceeding 6 mm and
excluding screws and bolts for fixing railway track construction material), and
washers, originating in the People's Repub lic of China (all together hereinafter
referred to as fasteners or product concerned).
The product concerned is normally declar ed within CN codes 7318 12 90, 7318 14
91, 7318 14 99, 7318 15 59, 7318 15 69, 7318 15 81, 7318 15 89, ex 7318 15 90, ex
7318 21 00 and ex 7318 22 00.
Fasteners are used to mechanically join two or more elements in construction,
engineering, etc., and are used in a wide variety of industrial sectors, as well as by
consumers. Based on their basic physical and technical characteristics and end uses,
all fasteners are considered to constitute a single product for the purpose of the
proceeding. Within the same national or international standards, fasteners should
comply with the same basic physical and technical characteristics including notably
strength, tolerance, finishing and coating."
562

557 The European Union makes no objection based on the request for consultations or the panel request
with respect to China's claim regarding product under consideration.
558 See paragraphs 7.162 to 7.166 above.
560 See paragraphs 7.162 to 7.166 above.
561 China, answer to Panel question 37.
562 Definitive Regulation, Exhibit CHN-4, recitals 40-42.

The Commission went on to consider, and reject, ar guments by the parties, concerning the scope of
the product under consideration.563

7.260 In considering China's claims concerning product under consideration, we note first that there
is no specific provision in the AD Agreement concerni ng the selection, description, or determination,
of a product under consideration, and China does not argue otherwise. China asserts that the product
under consideration can only include products that are "like" within the meaning of Article 2.6 of the
AD Agreement, in order to ensure that the determination of dumping is based on a comparison of
products which are "like" within the meaning of th at provision. China argues that the facts in the
investigation demonstrate that the product under c onsideration included both standard and special
fasteners, which China contends are not "like" within the meaning of Article 2.6.
7.261 Thus, the question for us is whether China's prem ise, that Articles 2.1 and 2.6 in combination
require that all individual items within the product under consideration be "like" each other, is correct.
If not, then China's legal argument is incorrect, and we need not consider its contentions regarding the
facts of this case.
7.262 Article 2.1 of the AD Agreement provides:
"For the purpose of this Agreement, a produc t is to be considered as being dumped,
i.e. introduced into the commerce of another country at less than its normal value, if
the export price of the product exported from one country to another is less than the
comparable price, in the ordinary course of trade, for the like product when destined
for consumption in the exporting country."
7.263 Beyond noting that Article 2.1 requires that th e comparison that must be made to determine
whether there is dumping must be carried out betw een the export price of a product and the price for
the "like product ... in the exporting country"
564, China does not address this provision in its
arguments. We agree that Article 2.1 refers to "a product" as being dumped, but cannot see that it
establishes any specific obligation concerning the scope of that product. Nothing in the text of
Article 2.1 provides any guidance as to what the para meters of "a product" with respect to which a
determination of dumping is made should be. The mere fact that a dumping determination is
ultimately made with respect to "a product" says nothing about the scope of that product. There is
certainly nothing in the text of Article 2.1 that can be understood to require any consideration of
"likeness" in the scope of the exported product investigated, contrary to China's argument.565
7.264 At the same time, other provisions of the AD Agreement, relevant as context to our
understanding of Article 2.1, suggest that whatever the parameters of "a product" in Article 2.1 may
be, the concept is not so limited as China argues. For instance, Article 6.10 provides for "limited
examination" (that is, sampling) in cases where the number of "types of products involved" in an
investigation is so large as to make it impracticable to determine an individual margin of dumping. If
the meaning of "a product" in Ar ticle 2.1 were limited as China argues, there would be no possibility
that more than one "type of product" would be at i ssue in any investigation, and thus no need for this
aspect of Article 6.10.

563 Definitive Regulation, Exhibit CHN-4, recitals 43-47.
564 In this case, the price for the like product in the exporting country was determined on the basis of
the prices in the analogue country, India.
565 We do not exclude the possibility that there may be a group of goods whose range is so broad as to
preclude their being considered "a product", for instance, a product denominated "transportation equipment" that
includes bicycles and jet aircraft. Bu t we do reject the view that the concept of likeness as set out in the
Article 2.6 definition of "like product" is the appropriate basis for evaluating whether any particular group of
goods comprises such a broad range of goods as to preclude being treated as a product under consideration.

7.265 China agrees that the product under investigation can include different types or models of the
product concerned, but argues that this does not mean that the investigating authorities may include in
the scope of the product under cons ideration products that are so substantially different that the
differences can not be compensated by making adjustments. We note that, as China correctly
observes, Article 2.4 requires that an investiga ting authority make due allowance for differences
which affect price comparability, including differences in physical characteristics. In our view, this
clearly demonstrates that there may be differenc es within the product under consideration and like
product. However, the fact that Article 2.4.2 of the AD Agreement requires a comparison of a
weighted average normal value with a weighted aver age of prices of all comparable transactions does
not, in our view, support the view that a product must necessarily include only "like" goods, such that
all of them are comparable to each other.
566 Rather, and as recognized by the Appellate Body, under
Article 2.4.2, an investigating authority may di vide a product being investigated into groups or
categories of comparable goods for purposes of co mparison of normal value and export price – the
practice of "multiple averaging".567 This would be unnecessary if China's position with respect to the
definition of product under consideration were correct. These considerations lead us to conclude that,
while Article 2.1 establishes that a dumping determin ation is to be made for a single "product under
consideration", there is no guidance for determining the parameters of that product, and certainly no
requirement of internal homogeneity of that product, in that Article.
7.266 In essence, China's claim is grounded in Article 2.6, which provides:
"Throughout this Agreement the term "like product" ("produit similaire") shall be
interpreted to mean a product which is identical, i.e. alike in all respects to the
product under consideration, or in the absence of such a product, another product
which, although not alike in all respects, has characteristics closely resembling those
of the product under consideration."
7.267 It is clear to us that the subject of Article 2.6 is not the scope of the product that is the subject
of an anti-dumping investigation at all. Rather, the purpose of Article 2.6, apparent from its plain
language, is to define the term "like product" fo r purposes of the AD Agreement. The plain language
of Article 2.6 calls for an assessment of "likeness" between some group of goods
568 and "the product
under consideration" in order to identify a "like pr oduct". Thus, logically, the scope of the "product
under consideration" referred to in Article 2.6 mu st already be known before the provisions of
Article 2.6 regarding "likeness" come into play. That is, it must be known what the comparator is,
before any comparison can be made to assess whet her another product is "identical" to or, in the
absence of an identical product, "has characteris tics closely resembling those of", the imported
"product under consideration". China's position w ould, in our view, require that any difference
between categories of goods, and potentially even between individual goods, within a product under
consideration would require that each such categor y or individual good be treated individually, as a
separate product under consideration. 569 This would be problematic , as, given that a "domestic
industry" for purposes of the AD Agreement is defined as producers of a like product, such a

566 See, China, second written submission, para. 716.
567 Appellate Body Report, United States – Final Dumping Determination on Softwood Lumber from
Canada (" US – Softwood Lumber V "), WT/DS264/AB/R, adopted 31 August 2004, DSR 2004:V, 1875,
para. 81.
568 In an anti-dumping investigation, the question of "like product" arises in two contexts – identifying
domestically produced goods that are "like" the product under consideration, and identifying goods sold in the
market of the investigated foreign producers/exporters that are "like" the product under consideration. The
identification of "like product" in these two contexts is for different purposes in the investigation.
569 Indeed, it appears that China considers that the European Union would have acted consistently with
the AD Agreement had it conducted separate investigati ons of standard fasteners and special fasteners.
However, even assuming such separate investigations woul d themselves be appropriate, this does not mean that
such separate investigations are required by the AD Agreement.

fragmented product under consideration, and corr espondingly fragmented like products, would result
in the definition of, and determination of injury to, multiple, narrowly defined "industries" which may
bear little if any resemblance to the economic re alities of the production of those goods in the
importing country.
7.268 We note that, on its face, Article 2.6 does not a pply to the question of "determining" anything
at all – it defines the term "like product" for pur poses of the AD Agreement, by reference to the
"product under consideration" in the anti-dumping investigation, whose scope, as we have noted, must
logically have been defined previously. 570 While it seems self-evident to us that an investigating
authority must, at the time it initiates an anti-dumpi ng investigation, make a decision as to the scope
of that investigation, and give notice of the "product involved" 571, we are not persuaded that either
Article 2.1 or Article 2.6 of the AD Agreement establishes a requirement for making an elaborated
determination in that regard.
7.269 Essentially, China's argument raises an issue of policy, suggesting that the absence of limits
on the scope of the product under consideration migh t result in erroneous dumping determinations by
investigating authorities. China argues that, if pr oducts that are not "like" are treated as the product
under consideration in a single investigation, a dumping determination would not reflect a comparison
between a product's export price and the domestic pr ice of its like product. China gives, as an
example, an investigation in which apples and tomatoes are treated as one product under
investigation.
572 China argues that the investigating author ity could compare the prices of the apples
and find they are dumped, and could compare the prices of the tomatoes and find they are not
dumped, but an anti-dumping duty would nonetheless be imposed on both apples and tomatoes, which
would be an unfair result.
7.270 We are not persuaded by this example. In the first place, it is not clear that, in this
hypothetical situation, a calculation of the dumping margin for the product under consideration
consistent with Article 2 of the AD Agreement would support the imposition of an anti-dumping duty
at all. Moreover, the scope of the product under consideration will have consequences throughout the
investigation, and the broader that scope, the more serious those consequences might be, complicating
the investigating authority's task of collecti ng and evaluating relevant information and making
determinations consistent with the AD Agreement. This would clearly be of concern with respect to
the determination of injury to the domestic indus try producing the like product. Thus, it seems to us
that the possibility of an erroneous determinati on of dumping, and the erroneous imposition of an
anti-dumping duty, based on an overly broad product under consideration, is remote. That remote
possibility is certainly not enough to persuade us to read obligations into the AD Agreement for which
we can find no basis in the text of the Agreement.
7.271 Moreover, we consider it noteworthy that, while the AD Agreement speci fically defines "like
product" by requiring a comparison between dom estically-produced or foreign goods and the
imported goods that are the product under considera tion, there is no specific definition of "product
under consideration". In our view, the very fact that there is a definition of like product in the
AD Agreement indicates that Members were well able to define terms carefully and precisely when
they considered it necessary. Th eir failure to provide any defin ition of product under consideration,
much less to require that the scope of that prod uct be determined on the basis of the concept of

570 In view of our conclusions, we do not consider it necessary to ad dress the question, raised by the
European Union in connection with China's like product claim, whether a definitional provision may give rise to
a finding of violation.
571 AD Agreement, Article 12.1.1(i).

likeness set out in Article 2.6, indicates that they did not intend to do so. 573 This implies to us that the
Members intended to allow investigating author ities wide discretion to determine a product under
consideration.574 In our view, this supports the conclusion that it would be absurd to impose the
definition of like product from Article 2.6 onto the undefined term product unde r consideration. We
simply see no basis in the text of Articles 2.1 a nd 2.6 of the AD Agreement for the obligation China
seeks to impose on investigating authorities with respect to product under consideration.
7.272 Thus, we conclude that, contrary to China's claim, Articles 2.1 and 2.6 of the AD Agreement
do not establish an obligation on investigating authorities to ensure that the product under
consideration include only "like" products. We therefore do not consider it necessary to address
China's arguments concerning the facts. Whether sta ndard and special fasteners are or are not "like"
each other within the meaning of Article 2.6 is not a relevant question with respect to the product
under consideration, in light of our decision on the interpretation of Articles 2.1 and 2.6.
7.273 Finally, we note that this very issue, a nd the arguments raised by China (as well as other
arguments not raised by China here), have been pr eviously addressed, and rejected, by other panels.
China has for the most part neither addressed nor a ttempted to distinguish the views of those panels
from the circumstances of this case. While we are not bound by the decisions of other panels, we
nonetheless consider their decisions relevant a nd potentially helpful in our assessment of the
arguments in this case.
7.274 The most elaborated discussion of the issue of product under consideration to date was in the
report of the panel in EC – Salmon (Norway) . Virtually every argument made by China in this case
was made by Norway in that case.
575 The panel in EC – Salmon (Norway) rejected each of Norway's
arguments. It found it "clear that the subject of Arti cle 2.6 is not the scope of the product that is the
subject of an anti-dumping investigation at all".576 The panel stated that:
"[t]he plain language of Article 2.6 calls for an assessment of "likeness" between
some group of goods 228 and "the product under consideration" in order to identify a
"like product". Thus, logically, the scope of the "product under consideration"
referred to in Article 2.6 must already be known before the provisions of Article 2.6
come into play. That is, it must be known what the comparator is, before any
assessment can be made as to whether anothe r product is "identical" to or, in the
absence of an identical product, "has charact eristics closely resembling those of" the
imported "product under consideration".
The panel concluded:

573 We note that proposals to establish a definition of "product under investigation" have been made in
the context of the negotiations on anti-dumping under the Doha Development Agenda. See, e.g., document
TN/RL/W/143 at page 11, paragraph 17.
574 As noted above, China has made no argument con cerning Article 2.1 apart from its arguments with
respect to Article 2.6.
575 Indeed, in its third party submission in this dispute, Norway repeats many of those same arguments.
576 Panel Report, EC – Salmon (Norway), para. 7.51.
577 Panel Report, EC – Salmon (Norway), para. 7.51.

"contrary to Norway's claim, Articles 2.1 and 2.6 of the AD Agreement do not
establish an obligation on investigating au thorities to ensure that where the product
under consideration is made up of categories of products, all such categories of
products must individually be "like" each other, thereby constituting a single
"product"."578
7.275 In US – Softwood Lumber V , which involved facts and arguments very similar to those of
EC – Salmon (Norway), the panel also rejected arguments much like those of China in this case. The
panel in US – Softwood Lumber V found that Article 2.6 addresses the definition of the product that is
to be considered "like" the product under considerati on. According to the panel, the starting point for
the application of Article 2.6 was the product under c onsideration. However, the panel could find no
guidance in the AD Agreement on the way in which the "product under consideration" itself should be
determined. The panel stated that:
"[w]hile there might be room for discussion as to whether [the approach advocated by
Canada] might be an appropria te one from a policy perspective, whether to require
such an approach is a matter for the Memb ers to address through negotiations. It is
not our role as a panel to create obligati ons which cannot clearly be found in the
AD Agreement itself."579
This aspect of the panel's report was not appeal ed, and was thus adopted by the DSB without
modification.

7.276 In another case, Korea – Certain Paper, the panel referred to the product under consideration
in the context of its consideration of a claim concerning the determina tion of like product under
Article 2.6. In that case, the Korean Trade Commission (KTC) had init iated an investigation
concerning dumped imports of "p lain paper copier" ("PPC") and "wood-free printing paper" ("WF")
from Indonesia. Indonesia made no claims conc erning the product under consideration, which
included both categories of paper, but did dispute the KTC's decision that there was one domestic
industry producing the two categories of paper, and the determination of injury to that industry,
despite having made separate dump ing determinations for the two categories of paper. Indonesia
argued that PPC and WF are not like products, a nd that under Article 2.6, the KTC should have
analyzed the effects of imports of PPC on produ cers of PPC, and the effects of imports of WF on
producers of WF. Korea argued that under Article 2. 6, like product is defined by reference to the
imported product, and that Indonesia's reference to the differences among the products produced by
the domestic industry had no legal basis under the Agreement.
7.277 In its analysis, the panel noted that the inv estigation initiated by the KTC concerned dumped
imports of PPC and WF, that the KTC determined that Korean PPC and WF were identical to
imported PPC and WF, and made a single injury determ ination. The panel considered that the issue
before it was whether Article 2.6 of the AD Agreement required the KTC to determine that PPC and
WF were like products before proceeding to carry out a single injury determination. The panel
concluded that it did not, stating:
"once the product under consideration is defi ned, the investigating authority has to
make sure that the product it is using in its injury determination is like the product
under consideration. As long as that determ ination is made consistently with the

578 Panel Report, EC – Salmon (Norway), para. 7.68.
579 Panel Report, US – Softwood Lumber V, para. 7.157.

parameters set out in Article 2.6, the inv estigating authority' s like product definition
will be WTO-consistent."580
The panel went on to state that it saw

"no basis in Article 2.6 for the proposition that the like product definition also applies
to the definition of "the product under consid eration". We are aware of no provision
in Article 2.6, or any other Article in the Ag reement, that contains a definition of "the
product under consideration" itself,"
citing in this regard US - Softwood Lumber V . We agree with the views expressed by these Panels,
and consider that they support our conclusions on China's claim under Articles 2.1 and 2.6.

7.278 Based on the foregoing, and in the light of st andard set out in Article 17.6(i) of the
AD Agreement, we do not accept China's view that Ar ticles 2.1 and 2.6 must be interpreted to require
the European Union to have defined the product unde r consideration to include only products that are
"like". As a consequence, we dismiss China's claim that the product under consideration identified by
the European Union was inconsistent with th e requirements of Articles 2.1 and 2.6 of the
AD Agreement.
(ii) Like product
7.279 Turning first to the European Union's preliminar y objection, we note that in its request for
establishment in this dispute, China sets out the following claim:
"China submits that [the Definitive Regula tion] is inconsistent, at least, with the
following provisions of the AD Agreement and of the GATT 1994
- Articles 2.1 and 2.6 of the AD Agreement by including in the scope of the product
under consideration both standard and special fasteners as "like" products despite
their readily apparent differences and uses."
581
7.280 The European Union contends that this passage "unequivocally related to the selection of the
product concerned (albeit on the erroneous assumpti on that the like product standard applies)" and
goes on to assert that the request for establishment "contains no clai m regarding the determination of
the like product".582 According to China, on the other hand, the quoted passage su ffices to set forth a
claim with respect to the definition of the like produc t in the underlying dispute. China considers that
the fact, which China acknowledges, that "the pa nel Request does not refer specifically to the
determination made by the EU concerning the " likeness" of fasteners produced by the Chinese
exporting producers, fasteners produced by the Indian producer and fasteners produced by the
Community producers" does not cause the claim to fall out side the panels' terms of reference. In the
regard, China asserts that the EU knows the essence of the issue from the request for establishment,
and has not demonstrated that the alleged procedur al deficiency has prejudiced the European Union's
ability to defend itself.
583
7.281 Keeping in mind the principles concerning suffici ency of a panel request outlined above, we
agree with the European Union. In our view, the passage on which China relies as providing "a brief

580 Panel Report, Korea – Certain Paper, para. 7.219.
581 Annex G-1, p. 3.
582 European Union, first written submission, para. 440.

summary of the legal basis of the complain t sufficient to present the problem clearly" 584 makes clear
that China is making a claim with respect to the selection of the product under consideration. While
we agree that China raised the c oncept of "likeness" as an element of its claim with respect to the
product under consideration, we consider that this alone is not sufficient to set out a claim with
respect to the definition of the like product per se . It is only under the most generous reading
imaginable that one can, focussing on the phrase ""lik e" products" as used in China's panel request
even have an inkling that China might intend to rai se a claim with respect to the definition of the like
product in this dispute. We recall that Article 2.6 of the AD Agreement, which defines the term "like
product", establishes how an investigating authority is to define like product when it refers to a
product which is "identical" to the product under consideration, or, if there is no such product, another
product which "has characteristics closely resembling those of the product under consideration".
There is nothing in the passage cited above which suggest that China intended to present arguments
with respect to alleged errors in the course of this comparison of products. In our view, if a claim
cannot reasonably be discerned as allegedly set out in the request for establishment, it is not necessary
to consider whether the defending party has been pr ejudiced in its ability to defend itself. Thus, we
consider that the panel request in this case does not set forth a claim with respect to the definition of
the like product in the underlying investigation.
7.282 In any event, even had we concluded that Ch ina did set out a claim with respect to the
definition of the like product in its panel request, we would have found that claim without merit in this
case. Our review of the Definitive Regulation leav es us in no doubt that the like product defined in
the underlying investigation is co-extensive with th e product under consideration. We agree with the
views of the panel in Korea – Certain Paper, which concluded that
"once the product under consideration is defi ned, the investigating authority has to
make sure that the product it is using in its injury determination is like the product
under consideration. As long as that determ ination is made consistently with the
parameters set out in Article 2.6, the inv estigating authority' s like product definition
will be WTO-consistent."
585
7.283 China contends that, in this investigation th e product under consideration and the like product
do not include the same products.586 We disagree. It is clear to us from the Definitive Regulation that
the product under consideration and the like product both include standard and special fasteners, albeit
not in the same proportion. Even China only argues that imports from China consist " almost"
exclusively of standard fasteners, thus acknowledging that there are imports of special fasteners from
China.587 Given that fact, it is clear to us that the like product defined by the European Union is
coextensive with the product under consideration. Thus , even if we considered that the question were
within our terms of reference, we would conclude that China has fa iled to establish a violation of
Article 2.6 of the AD Agreement with respect to the definition of like product in this case.

584 As required by Article 6.2 of the DSU.
585 Panel Report, Korea – Certain Paper, para. 7.219.
586 Answer to Panel question 36, para. 125. China seeks on this basis to distinguish this case from the
facts in US – Softwood Lumber V, where the panel reached the same conclusion.

6. Whether the European Union violated Article 2.4 of the AD Agreement in its Dumping
Determination
(a) Arguments of the Parties
(i) China
7.284 China argues that the Commission violated Artic le 2.4 of the AD Agreement in its dumping
determination for two reasons: first, because it did not make the comparison between the normal
value and the export price on the basis of produc t categories based on "Product Control Numbers"
("PCNs") which the Commission itself had defined in requesting information; and second, because it
failed to make adjustments for quality differe nces and for certain differences in physical
characteristics which were included in the PCNs, but not reflected in the factors on which product
categories for the comparison were ultimately based and which affected price comparability.588
7.285 China notes that in the exporter s' questionnaire, the Commission requested information to be
provided on the basis of product categories identif ied by unique PCNs. Chinese producers submitted
information on this basis. The questionnaire sent to the Indian exporter also requested information on
the basis of the same PCNs. In the General Di sclosure Document, however, the Commission stated
that normal value had been determined on the basis of product types, not PCNs. In comparing normal
value and export price, the Commission took into consideration two factors, strength class and the
distinction between special and standard fasteners, and compared the prices of the product types so
defined. China argues that all the product characte ristics reflected in the PCNs represent physical
differences that affect price comparability within th e meaning of Article 2.4, and which, therefore,
had to be taken into account when making the co mparison between normal value and export price in
order to carry out a "fair comparison".
589 By basing its product categorization on other factors,
however, the Commission disregarded these important physical differences and acted inconsistently
with Article 2.4.590
7.286 China also contends that the Commission viol ated Article 2.4 by failing to make certain
adjustments. In this regard, China maintains that the Commission should have considered whether the
PCN characteristics that were not reflected in the product types actually compared nonetheless
required adjustments.591 Second, China asserts that the Commission should have made an adjustment
for differences in the quality of Chinese fasteners and fasteners produced by the Indian producer.
China asserts that the Commission made only one ad justment, for differences in quality control costs
of the Chinese producers and the Indian producer . However, China maintains that there was a
significant quality difference between the fastener s produced by the Chinese producers and those of
the Indian producer and that the adjustment made for quality contro l did not fully address the quality
difference.592 According to China, by not making these adjustments, the Commission violated
Article 2.4 of the AD Agreement.
(ii) European Union
7.287 The European Union contends that the Defi nitive Regulation explains the Commission's
dumping determinations, and that China simply igno res these explanations in making its arguments.
According to the European Union, by not linking its arguments to the relevant parts of the Definitive

Regulation, China fails to make a prima facie case of violation.593 In the European Union's view, the
fact that information was requested on the basis of particular PCNs does not mean that each element
reflected in those PCNs affects price comparability.
594 The European Union disagrees with China's
assertion that the fair comparison obligation in Ar ticle 2.4 required in this investigation that
adjustments be made for each PCN element. Acco rding to the European Union, no such obligation
can be found in the AD Agreement. The European Union contends that PCNs provide a tool for the
collection of data for the investigating authoriti es' dumping determinations. Certain elements of
PCNs are standard in each investigation wh ile other elements are added depending on the
particularities of a given investigation. This is wh at the Commission did in this investigation. It
designed the PCNs to describe th e product manufactured in China, in the European Union and in
India, and asked that information be provide d for the PCN categories, which would allow a
mechanical comparison to take place.595 However, the Indian producer did not provide its information
on the basis of PCNs, and therefore the Commission decided to base its dumping determinations on
comparisons of product classified according to tw o factors, namely the strength class and the
distinction between special and standard fastener s. The European Union contends that some
interested parties also argued that the product cl assification should be made on the basis of these two
factors.596 The European Union also maintains that no interested party made a substantiated request
during the fasteners investigation for adjustments to be made with respect to other product
characteristics reflected in the PCNs.
7.288 With respect to the alleged quality differenc es between Chinese fasteners and fasteners
produced by the Indian producer, the European Un ion acknowledges that some interested parties
presented this argument during the investigation.
597 However, the European Union contends that, as
explained in recital 56 of the Definitive Regul ation, the Commission found that the Chinese and
Indian fasteners had the same basic physical and technical characteristics. The Commission made
adjustments for differences in quality control costs between Indian and Chinese fasteners, as well as
for other factors such as transport, insurance, packing handling costs etc.
598 The European Union
argues that in the absence of substantiation that di fferences demonstrated to affect price comparability
were ignored, this aspect of China's claim, therefore, should also be rejected.
(b) Arguments of Third Parties
(i) Chile
7.289 Chile considers that investigating authorities have to take into account all the characteristics
of the product under consideration before engaging in the comparis on between normal value and the
export price. According to Chile, the AD Agreemen t does not allow the comparison of the prices of
products that are not identical without breaking them into models.
(ii) Colombia
7.290 Colombia submits that Article 2.4 of the AD Agreement contains obligations for both the
investigating authorities and foreign producers subj ect to anti-dumping investigations. According to
Colombia, if the European Union demonstrates that the Commission duly evaluated all the differences

593 European Union, first written submission, paras. 455-456.
594 For example, the European Unio n argues that one element of the PCNs in this dispute, customs
classification (CN Codes), is not a difference affecting price comparability, but simply a way of identifying a
product. European Union, answer to Panel question 43(b).
595 European Union, answer to Panel question 43.
596 European Union, answer to Panel question 43(b).
597 European Union, first written submission, para. 452.
598 European Union, first written submission, paras. 452-453.

that the Chinese producers argued affected price comparability, the Panel should find that the
European Union acted consistently with its obligations under Article 2.4.
(c) Evaluation by the Panel
7.291 China puts forward two main arguments in s upport of its claim regarding the Commission's
dumping determinations. It argues that the Commis sion violated the fair comparison obligation set
forth in Article 2.4 of the AD Agreement by: a) not basing the comparison between the normal value
and the export price on full PCNs, and b) failing to make adjustments for quality differences and for
differences in physical characteristics that affect ed price comparability. Below, we address these
two arguments in turn.
Failure to Use Full PCNs
7.292 Turning first to the relevant facts, we note that the Commission, in the questionnaires sent to
the producer in India and to the Chinese producers, requested that information on the investigated
products be reported on the basis of categories de fined by PCNs. The relevant part of the
questionnaire sent to the Chinese producers reads:
"B-3 Comparison of export and domestic products
1- Product control number
In order to ensure a fair comparison betw een prices of the imports from China and
prices charged and costs incurred by th e Community producers, the Commission
intends to classify the product concerned in to different categories. The product has
been categorised according to a "Product Control Number" (PCN) (see table below).
The PCN consists of 10 characters/digits.

The product control number will be used to compare prices of imports from the
country concerned and prices charged by Community producers and to compare sales
data to the cost of production. In this respect, it is of great importance that you apply
the product control numbers throughout your questionnaire response (including the
computer files) in an absolutely correct and consistent manner ."599 (emphasis in
original)
7.293 The following elements make up the PCNs iden tified by the Commission: type of fasteners
(by CN code) 600; strength/hardness; coating; presence of chrome on coating, diameter; and
length/thickness. The questionnaire sent to the produ cer in India also requested that information be
provided on the basis of the same PCNs. However, the Indian producer did not provide information
categorized on the basis of the PCNs as requested. Thus, the Commission could not base its
comparison between the normal value and the export price on full PCNs.
601 Therefore, it resorted to
"product types" defined by two factors, strength class and the distinction between standard and special

599 Exhibit CHN-51, pp. 11-13.
600 This element identified fasteners by CN code but did not distinguish between standard and special
fasteners. The latter distinction was made later in the proceeding, after the adversar ial meeting, but was not a
part of the PCNs. Definitive Regulation, Exhibit CHN-4, recital 51.
601 European Union, answer to Panel question 43(b).

fasteners, in the price comparisons for the dumping determination. 602 In other words, in its price
comparison, it did not categorize the price informati on on the basis of all the factors reflected in the
PCNs.
7.294 China argues that the Commission violated its obligation under Article 2.4 of the
AD Agreement by not taking into consideration all the characteristics reflected in the PCNs in the
comparison between normal value and export price. China does not claim that the Commission
violated Article 2.4 merely by not making the price comparison on the basis of full PCNs. Rather, it
asserts that in the investigation at issue all the phys ical characteristics identified in the PCNs, namely
the type of fasteners (by CN code), strength/ha rdness, coating, presence of chrome on coating,
diameter and length and thickness, were differenc es that affected price comparability within the
meaning of Article 2.4, and therefore they should all have been taken in to consideration by the
Commission.
603 According to China, the fact that the in formation was requested on the basis of PCNs
means that the product characteristics reflected in the PCNs "were all relevant and all affected price
comparability".604 The European Union states that the Commission regularly requests interested
parties to provide information on the basis of PC Ns. According to the European Union, PCNs
provide a tool for information gathering in an inv estigation, but the inclusion of a factor in a PCN
does not establish that it affects price comparab ility, and therefore its relevance for the price
comparison to be carried out by the investigating authorities. 605 In addition, the European Union
argues that since not all factors in a PCN affect pr ice comparability, there is no obligation to explain
why certain PCN features did not lead to an adjustment at a later stage. 606 I n t h e v i e w o f t h e
European Union, therefore, the Commission was not required to base its price comparison on full
PCNs.
7.295 Article 2.4 of the AD Agreement provides, in pertinent part:
"2.4 A fair comparison shall be made between the export price and the normal
value. This comparison shall be made at the same level of trade, normally at the
ex-factory level, and in respect of sales ma de at as nearly as possible the same time.
Due allowance shall be made in each case, on its merits, for differences which affect
price comparability, including differences in conditions and terms of sale, taxation,
levels of trade, quantities, physical char acteristics, and any other differences which
are also demonstrated to affect price comparability. 7 In the cases referred to in
paragraph 3, allowances for costs, incl uding duties and taxes, incurred between
importation and resale, and for profits accruing, should also be made. If in these
cases price comparability has b een affected, the authorities shall establish the normal
value at a level of trade equivalent to th e level of trade of the constructed export
price, or shall make due allowance as warranted under this paragraph. The authorities
shall indicate to the parties in question what information is necessary to ensure a fair
comparison and shall not impose an unreasonable burden of proof on those parties.
According to the panel, "a Member is not required to compare a single weighted average normal value to a
single weighted average export price in cases where certain export transactions are not comparable to
transactions that represent the basis for the calculation of the normal value". Panel Report, United States – Anti-
Dumping Measures on Stainless Steel Plate in Coils and Stainless Steel Sheet and Strip from Korea ("US –
Stainless Steel (Korea)"), WT/DS179/R, adopted 1 February 2001, DSR 2001:IV, 1295, para. 6.111.
609 For instance, we can well imagine the complexities that may arise in quantifying such differences as
size, weight, raw materials, etc., once it is determined that a particular difference affects price comparability.
610 Appellate Body Report, US – Hot-Rolled Steel, para. 178.
611 Panel Report, European Communities – Anti-Dumping Duties on Malleable Cast Iron Tube or Pipe
Fittings from Brazil ("EC – Tube or Pipe Fittings "), WT/DS219/R, adopted 18 August 2003, as modified by
Appellate Body Report WT/DS219/AB/R, DSR 2003:VII, 2701, para. 7.158.
612 Panel Report, Korea – Certain Paper, para. 7.147.

adjustment claimed and then determine whether and to what extent that adjustment is merited ".613
If no adjustment is requested, or if an adjustment is requested with respect to a difference that is not
demonstrated to affect price comparability, or if the authority determines that an adjustment is not
merited, no adjustment need be made. It follows that, in order to make a prima facie case of violation
of Article 2.4 in this dispute, China has to demons trate to the Panel that an adjustment should have
been made with respect to (1) a difference (2) that was demonstrated to affect price comparability
between the normal value and the export price, and that the Commission failed to make the
adjustment.614 With this background in mind, we now turn to China's argument.
7.299 We recall that China's claim concerns allege d differences in physical characteristics of
Chinese fasteners and fasteners produced by the Indi an producer. China argues that the Commission
should have based its dumping determinations on full PCNs because, in China's view, all PCN factors
represented a difference in the physical characteri stics of the Chinese and Indian fasteners that
required due allowance within the meaning of Artic le 2.4. The European Union disagrees, asserting
that the fact that information was requested on th e basis of PCNs does not necessarily mean that each
element of those PCNs was relevant to the Commission's dumping determination.
7.300 China submits that all the factors reflected in the PCNs affected price comparability and
should have been taken into consideration by the Commission:
"[T]he main purpose of the PCNs is to id entify comparable products and thereby to
minimize the need for ad justments when making the comparison between export
price and normal value as well as between the export prices and the prices of the like
products in the importing country. To meet th is objective, the PCNs must necessarily
include those product characteristics which would justify an adjustment for
differences in physical characteristics. It can, therefore, be expected that if the EU
requires that domestic producers, impor ters and exporting producers submit all
information requested in the questionnaire organized by PCN, they do so because
they consider the distinction relevant fo r the comparisons which must be made. The
differences identified through the PCNs can th erefore be presumed to be relevant for
comparison purposes."615
China contends that if the Commission asked the in terested parties to submit information on the basis
of PCNs it must be because the Commission consider ed each and every element of PCNs to represent
a difference in physical characteristics which would necessarily affect price comparability.

7.301 We disagree. In our view, the fact that th e Commission sought information on the basis of
PCNs certainly suggests that the EU authorities c onsidered, at least in the early stages of the
investigative process, that these elements might af fect price comparability, and that they therefore
envisioned comparisons based on the PCNs in order to avoid possible problems of non-comparability.
That is, it suggests that the Commission intended, at the outset, to follow the first method that we
described above 616, whereby due allowance for differences affecting price comparability would be
taken into consideration through comparisons based on PCNs, and therefore there would be no need
to make individual adjustments for such differences . Since, however, the Indian producer did not
submit its information on the basis of PCNs, the Commission was unable to make the comparison
between the normal value and the export price on th e basis of PCNs, and decided on an alternative
basis for grouping the product into comparable categories.

613 Panel Report, EC – Tube or Pipe Fittings, para. 7.158 (emphasis added).
614 Panel Report, Korea – Certain Paper, para. 7.138.
615 China, answer to Panel question 41.
616 See paragraph 7.297 below.

7.302 China asserts that each PCN characteristic constituted a di fference in physical characteristics
that affected price comparability, and that therefore, if the products were not grouped by PCNs, an
adjustment had to be made for each characteristic re flected in the PCNs. In this regard, while it may
be plausible that the PCN char acteristics described in this case
617 indicate differences affecting price
comparability, China has pointed to no evidence that was before the investigating authority that would
support this conclusion. Moreover, it is clear that the Commission did not, in this case, reach such a
conclusion, and thus, even if there were evidence to support it, it would be inappropriate for us, under
the standard of review, to consider it for ourselves. We therefore consider that, as argued by the
European Union, PCNs are a tool for gathering information, but there is no inherent reason to
conclude, and no evidence in this dispute that w ould demonstrate, that every element of the PCN,
either in general, or in this case, necessarily re flects a difference which affects price comparability for
the product in question.
7.303 Moreover, when, as in this case, necessary in formation is not received in the format
requested, that is, categorized according to PCNs, the investigating authority must nonetheless make a
fair comparison of normal value and export pr ice, including due allowance for differences
demonstrated to affect price comparability. Whil e information organized on the basis of PCNs may
well facilitate the comparison process, by enabling what the European Union calls a "mechanical
comparison"
618, the obligation to make a fair comparis on under Article 2.4 does not vary depending
on the form in which information is requested or re ceived. Ultimately, the price comparison must be
judged against the requirements of Article 2.4, a nd not on the basis of the information-gathering
procedures of the investigating authority. We th erefore reject China's argument that the Commission
acted inconsistently with the obligation set forth under Article 2.4 of the Agreement by not taking into
consideration all the PCN characteristics in making price comparisons in its dumping determination.
7.304 We note, however, that the fact that PCNs were not used in the price comparisons in this
investigation does not absolve the Commission from its obligation under Article 2.4 to carry out a fair
comparison between the normal value and the export price. In the absence of a comparison based on
full PCNs, the Commission was required to make adjustments for differences demonstrated by the
Chinese producers to affect pri ce comparability. This takes us to the second argument raised by
China, namely that the Commission failed to make adjustments for factors that affected price
comparability.
Alleged Failure to Make Necessary Adjustments
7.305 China's second argument is that the Commissi on violated the obligation set forth in
Article 2.4 of the AD Agreement by failing to ma ke the necessary adjustments for differences that
affected price comparability. In th is regard, China raises two issues. First, China submits that the
Commission erred by not considering whether adjustme nts needed to be made for elements of the
PCNs which were not reflected in the "product types" on which it based its price comparisons.
Second, China maintains that the Commission violated Article 2.4 by not making an adjustment for
quality differences between Chinese fasteners and those of the Indian producer.
7.306 With respect to the first aspect of its argument, China contends:
"The EU investigating authorities never examined, once they decided to exclude from
the PCNs a number of physical characteri stics initially used to categorize products,
whether the excluded characteristics were to be considered as differences in physical
characteristics affecting price comparability and a fortiori never determined whether

617 These were, we recall, type of fasteners (by CN co de); strength/hardness; coating; presence of
chrome on coating, diameter; and length/thickness.
618 European Union, answer to Panel question 43.

or not an adjustment was required. Thus, by failing to evaluate the differences in
physical characteristics which the investig ating authorities had themselves identified
as being relevant for the purposes of making a fair comparison, these authorities
failed to act in compliance with Article 2.4, third sentence of the AD Agreement."
619
China thus maintains that once it decided to ex clude from its dumping margin calculation certain
elements of the PCNs and to make its price co mparison on the product categories defined by strength
class and the distinction between special and standard, the Commission was required under Article 2.4
to consider whether adjustments for those elements of the PCNs were nonetheless required. We note
that this aspect of China's argument effectively repeats its first argument, namely that the Commission
acted inconsistently with Article 2.4 by not b asing its comparison on full PCNs, which we have
rejected above. 620 Having concluded that the European Union was not required to carry out its
comparison on the basis of the PCNs, partly because the PCN elements do not necessarily reflect
differences affecting price comparability and there is no evidence to demonstrate that they do in this
case, we consider that the argument that the Commission should have considered whether the
elements excluded from the comparison nonetheless required adjustments does not amount to a prima
facie case of violation of Article 2.4. In th is regard, we note, as China acknowledges
621 that, in the
course of the investigation at issue, none of the Chinese producers argued that there were factors
which affected price comparability within the meani ng of Article 2.4 other than those used by the
Commission to categorize the product for comparison purposes, that is, strength class (which was an
element of the PCNs) and the distinction between st andard and special fasteners (which was not an
element of the PCNs). Given the absence of su ch a request from the Chinese exporters, and any
showing that there was a factor which affected pr ice comparability which should have been apparent
to the Commission such that ignoring it would lead to a biased determination, China's argument is
unfounded, and we therefore reject it.

7.307 The second aspect of China's argument relates to adjustments for quality differences. China
submits that the Commission violated Article 2.4 by not making an adjustment for quality differences
between the Chinese fasteners and tho se of the Indian producer. In this regard, China asserts that, at
recital 52 of the Definitive Regulation, the Commission acknowledged that there were quality
differences between these two groups of products. Recital 52 states:
"The submission from the PRC authorities mentioned in recital 48 enclosed an
analysis report detailing a lleged quality differences betw een fasteners of a given
standard (DIN 933 is used as an example) manufactured in the Community and the
PRC. This analysis took into account varia tions in geometry, hardness and chemical
composition. It was claimed that, although both products tested conformed to the DIN
standard, the Community-produced fasteners had a greater consistency, i.e. less
variation with respect to all parameters analysed, than the PRC-produced fasteners.
On this basis, the PRC authorities concl uded that the Community-produced product,
given its superior quality, could not be compared to the PRC product. In that respect,
it should be noted that the purpose of DIN and other widely accepted standards is to
ensure that products satisfy certain essential user requirements. Any residual variation
must be within limits which do not substa ntially affect the fastener's quality and
function. Therefore, a fastener which is marketed as a DIN 933 bolt must be
essentially comparable to another fastener marketed under the same standard. Any

620 See paragraphs 7.294 to 7.302 above.
621 China generally recognizes that the Chinese producers did not re quest an adjustment for factors
other than those included in the PCNs . China, answer to Panel question 38(b), para. 138. China, however,
argues that one Chinese producer requested an adjustme nt for differences in quality and we consider this
argument below in paragraph 7.310.

perceived differences in quality, which ma y subsist from a user's point of view, can
be dealt with through an adjustment for phys ical differences (see recital 103) but do
not mean that the two products are not comparable." (emphasis added)
7.308 We note that recital 52 relates to the issue of like product, not dum ping determinations.
Moreover, it refers to an analysis of differences between fasteners produced in China, and fasteners
produced in the European Union, provided in su pport of China's argument that Chinese and EU
fasteners are not comparable, and therefore should not be considered "like". In response to the
argument of the Chinese authorities that alleged quality differences between Chinese fasteners and
fasteners produced by the EU producers made th e products not "like", the Commission stated that
fasteners that met, for instance, a particular DIN standard were comparable, and that any perceived
quality differences can be dealt with through adjustments. In this regard, recital 52 refers to recital
103, which contains the Commission's explanations regarding the adjustment made with respect to the
differences between the quality control costs of the Chinese producers and those of the Indian
producer. It is clear, however, that this recita l does not even address the question of, much less
demonstrate that the Commission did in fact determ ine that there were differences in quality between
Indian and Chinese fasteners.
7.309 China's argument seems to rest on the premise th at the Commission stated in recital 52 that
any perceived quality differences would be dealt with through adjustme nts, and that therefore such
adjustments should have been made. 622 We note, however, that recital 52 says that any perceived
differences in quality can be dealt with through adjustments. Mo reover, as noted, it is clear that this
recital does not even address any differences between Indian and Chinese fasteners. Thus, despite the
reference to recital 103, where th e Commission explains the adjustment made for differences in the
cost of quality control between Indian and Chinese producers, we do not see what relevance recital 52
has to the issue raised by Chin a, that the Commission should have made an adjustment for quality
differences between Chinese and Indian fasteners. Indeed, the analysis referred to in recital 52, which
is the evidence China relies on to support the asser tion of quality differences, concerns fasteners
produced in China and the European Union, and does not even mention fasteners produced in India.
Nor does China argue that the Commission anywhere else concluded that there were differences in
quality between Indian and Chinese fasteners whic h affected price comparability and therefore
required adjustment.623 Thus, we do not consider the statemen t in recital 52 to demonstrate that the
Commission recognized any quality differences between Indian and Chinese fasteners, much less any
such differences that affected price comparability and therefore required an adjustment.
7.310 China argues that one Chinese producer referred to the issue of quality differences between
the Chinese fasteners and fasteners produced by the Indian producer and requested an adjustment,
citing in this respect a letter dated 24 Novemb er 2008, on behalf of Ningbo Yonghong Fasteners Co.
Ltd., setting out this company's comments on the Commission's final disclosure dated
3 November 2008. The letter reads, in relevant part:
"As explained above and as earlier explaine d in the comments of 4 September 2008,
Chinese producers, [LIMITED]*, mainly focus on low-end, low-quality fasteners
whereas producers in India, and particularly the cooperating producer in India, mostly
focus on high-end, high-quality fasteners for automotive and aero-space applications.
When making the comparison between the Chinese export prices and the normal
value as established on the basis of data from the cooperating Indian producer, the

622 China, answer to Panel question 94.
623 We recall that the Commission made an adjustment for differences in the costs of quality control
between the Chinese fasteners and fasteners produced by the Indian producer. Definitive Regulation,
Exhibit CHN-4, recital 103.

Commission Services apparently (due to the lack of disclosure with respect to the
normal value determination, it could not be checked whethe r such an adjustment has
indeed been made) made an adjustment for the cost of quality control incurred by the
cooperating Indian producer.
However, even though the Commission Se rvices hereby acknowledge that there are
quality differences between the products so ld by Chinese producers and the products
produced by the cooperating Indian producer, no adjustment seems to have been
made for differences in quality.
Clearly, such differences in quality affect price and price comparability and an
adjustment should therefore be made accord ing to Article 2(10)(a) basic Regulation.
In fact, it has been the Commission Services ' practice to make such adjustments if
there is a difference in the quality of the fi nal products or in the quality of the raw
materials...
Since the Commission Services acknowledged in recital (94) that there are quality
differences between the products exported by Chinese manufacturers and the
products produced by the cooperating Indi an producer, Yonghong hereby requests an
adjustment for the differences in quality of the products concerned and a difference in
quality of the raw materials, i.e. wire rod, pursuant to Article 2(10)(a) or 2(10)(k) of
the basic Regulation."624 (emphasis added)
7.311 We note that this letter shows that Yonghong re quested that an adjust ment be made with
respect to quality differences betw een the Chinese fasteners and fast eners produced by the Indian
producer. However, nothing in this letter indi cates that any evidence was proffered to the
Commission to demonstrate that this alleged diffe rence in quality affected price comparability, a
demonstration required under Article 2.4 of the AD Agreement.625 Moreover, it is not clear to us that
the Commission did, as recited in the letter, "ac knowledge that there are quality differences between
the products sold by Chinese producers and the products produced by the cooperating Indian
producer" within the categories that were actually compared. Recital 94 of the Disclosure document,
referred to in this regard, is the same as reci tal 103 of the Definitive Regulation, and as discussed
above, concerns difference in the costs of quality control procedures of the Indian producer and
Chinese cooperating exporting producers, for which an adjustment was made. Thus, this recital does
not support the assertion that the Commission recogni zed the existence of quality differences between
Chinese and Indian fasteners. China has made no other argument in this regard. Based on the
foregoing, we reject China's claim that the Commiss ion violated Article 2.4 of the AD Agreement by
not making the necessary adjustments in its dumping determinations in the investigation at issue.

624 Exhibit CHN-74, pp. 10-11 .
625 We note, in this regard, that the record does not show that Yonghong submitted information to
support its argument that there was a difference between the Chinese fasteners and fasteners produced by the
Indian producer. This might have been because of the fact that the Chinese producers were not informed in a
timely fashion of the basis on which the Commission made its price comparison. We recall that this is the main
basis of China's claim regarding the procedural aspects of the Commission's dumping determination, which we
address below, at paragraphs 7.470 to 7.508.

7. Whether the European Union violated Articl es 3.1 and 3.2 of the AD Agreement in its
price undercutting determination
(a) Arguments of the Parties
(i) China
7.312 China submits that the Commission violated the obligations set forth in Articles 3.1 and 3.2 of
the AD Agreement in its price undercutting determin ation. China acknowledges that Article 3.2 does
not prescribe a particular methodology with respect to price undercutting determinations. However,
argues China, the general obligation set forth under Article 3.1 to base an injury determination on
positive evidence and an objective examination a pplies to price undercutting determinations.
According to China, "[t]he requirement of "objectiv ity" implies that the comparison must be made in
an even-handed manner and that comp arable products must be compared". 626 China maintains that
the Commission failed to observe these principles fo r two reasons, and therefore requests the Panel to
find that the Commission's price undercutting dete rmination was inconsistent with Articles 3.1
and 3.2 of the Agreement.
7.313 First, China notes that the Commission request ed information on a PCN basis both from the
Chinese and the EU producers. However, the Commission did not base its price undercutting
determination on a comparison of product categories defined by full PCNs. Instead, the Commission
used simplified PCNs, eliminating the factor of diameter, and using only length in centimetres.
627
According to China, the use of such simplified PC Ns resulted in a situation in which product types
with 30 per cent price difference or more were grouped together. 628 This rendered the results of the
Commission's price undercutting determinations unreliable. 629 Therefore, China submits that "by
failing to take into account the full PCNs or to make adjustments, the European Union ignored certain
important differences in physical characteristi cs which affect price comparability and consumer
perception and made a finding of injury more likely, thereby violating Articles 3.1 and 3.2 of the AD
Agreement".630 According to China, the fact that the Commission requested information on the basis
of PCNs "create[d] a presumption that all the PCN characteristics were relevant in order to ensure a
comparison which is even-handed and objective". 631 In China's view, as a result of this presumption,
the Commission should have at least examined these factors which were finally not taken into account
for making the price undercutting analysis and concluded why they could not affect the price
undercutting analysis.
632
7.314 Second, China asserts that the error caused by use of simplified PCNs was "compounded by
the methodology applied by the EC to differentia te between special and standard fasteners".633 China
notes that the Commission in its price undercutting determination made a distinction between standard
and special fasteners. That is, the prices of sta ndard Chinese fasteners were compared with the prices
of standard fasteners produced by the EU industry, and the prices of special Chinese fasteners were
compared with the prices of special fasteners produ ced by the EU industry. However, China submits

627 China, first written submission, para. 391. We note that in paragraph 841 of its second written
submission, China argues that the Commission omitted not only length but also diameter. As we have noted in
paragraph 7.326 below, the facts on the record show that with respect to its price undercutting determinations
the Commission combined "length" and "diameter" into "size".
628 China argues that this price gap could go up to 80 per cent. China, first written submission,
para. 394.
630 China, answer to Panel question 42, para. 147; China, second written submission, para. 849.

that "the EU investigating authorities classified a ll fasteners as "standard" fasteners provided they met
the industry standards". Therefore, such "standa rd" fasteners also included fasteners which, in
addition to complying with industry standards, met the specific additional requirements of their
customers.634 Asserting that, unlike standard fasten ers exported by the Chinese producers, the
majority of standard fasteners produced by the EU producers also met specific customer requirements,
China submits that these fasteners were naturally mo re expensive than Chinese standard fasteners and
that comparing these two resulted in artificially high price undercutting margins. 635 Further, China
argues that the Commission failed to make an ad justment for quality differences between Chinese
standard fasteners and standard fasteners produced by the EU industry. In this regard, China notes
that recital 52 of the Definitive Regulation, which addresses the issue of "like product", states that any
perceived difference between the quality of Chinese and EU fasteners would be dealt with through
adjustments.636 China also notes that recital 125, whic h explains the Commission's price undercutting
determinations, states that a similar method was us ed as the one described in recitals 102 and 103
which explain the Commission's dumping determina tions. Given that recital 103 states that an
adjustment for differences in quality control costs was made in the context of dumping
determinations, China argues that it does not appear from the file that such an adjustment was actually
made.637 Even if an adjustment for differences in the costs of quality control was made, China
contends that this is different from that for qua lity differences mentioned in recital 52 of the
Definitive regulation, and that such an adjustment would, therefore, not be sufficient to address the
quality differences between Chinese and EU-made fasteners. 638 China concludes that not taking into
consideration the quality differences between Chinese and EU-made fasteners, which China contends
are obviously important from a consumer's point of view and which affect prices 639, rendered the
Commission's price undercutting determinations non-objective.640
(ii) European Union
7.315 The European Union asserts that this claim is outside the Panel's terms of reference because it
was not subject to consultations. 641 The European Union recognizes that China's Panel request
identifies a claim with respect to the Commission's price undercutting determination, but argues that
no such claim was raised in the request for consu ltations, and this matter was not discussed in the
consultations between the parties. The European Union also submits that China's claim on price
undercutting has different legal and factual bases compar ed with the other injury-related claims raised
in China's request for consultations . Therefore, argues the European Union, this claim is outside the
Panel's terms of reference.642
7.316 If the Panel finds this claim to be within its terms of reference, the European Union requests
the Panel to reject the substantive arguments pres ented by China. The European Union argues that
Article 3.2 of the AD Agreement does not impose a particular methodology with respect to price
undercutting determinations. In th is regard, the European Union fi nds support in previous panel
reports, including, among others, EC – Tube or Pipe Fittings , where the panel reasoned that
Article 3.2 does not require that a price undercutting analysis in the injury context include adjustments
in the same way that Article 2.4 does for pr ice comparisons in dumping margin calculations. 643
Therefore, submits the European Union, the Commis sion cannot be said to have violated Articles 3.2

641 European Union, first written submission, para. 485.
642 European Union, paras. 488-491.
643 European Union, first written submission, para. 496.

and 3.1 of the AD Agreement by not basing its price undercutting determination on full PCNs.644 The
European Union notes that China's reasoning is based on the text of Article 2.4 and contends that, as
the panel in EC –- Tube or Pipe Fittings found, the requirements of Article 2.4 cannot be transposed
into Article 3.2.645
7.317 The European Union also maintains that in the fasteners investigation, the Commission
compared like and essentially comparable products. According to the European Union,
"the comparison was actually made on the basis of 5 out of the 6 PCN features. In
addition, and at the express insistence of Ch inese interested parties, a distinction was
made between special and standard fasteners. In so doing the EU authorities ensured
a comparison which was undoubtedly fair and unbiased since the authorities went
well beyond what they were obliged to do under the [AD Agreement]."646
The European Union contends that merely becau se different product types included in the same
product group had different prices does not make the Commission's price undercutting analysis non-
objective.
647 Further, the European Union maintains that in response to interested parties' argument
regarding the alleged quality diffe rences between Chinese fasteners a nd the fasteners produced by the
EU producers, a distinction was made between stan dard and special fasteners which eliminated the
possibility of comparing inexpensive standard Ch inese fasteners with generally more expensive
special fasteners produced by the EU producers. 648 Thus China's arguments about quality differences
not having been taken into consideration are unfounded.

(b) Evaluation by the Panel
(i) Terms of Reference of the Panel
7.318 The European Union contends that China's clai m is outside the Panel's terms of reference
because it was not subject to consultations. Accord ing to the European Union, this claim is not
identified at all in China's request for consultations and was not discussed during consultations either.
China maintains that this claim was identified in China's request for consultations and discussed
during consultations. China argues that the list of the questions 649 that China sent to the
European Union prior to consultations confirms this.
7.319 China's request for consultations contains two re ferences to Article 3.2 of the AD Agreement.
One is found in the chapeau of paragraph 2. This paragraph reads:
"2. China considers that the EC's imposition of anti-dumping duties on imports
of certain iron or steel fasteners originating in the People's Republic of China is
inconsistent with the EC's obligations under Articles VI and X:3(a) of the GATT
1994; Articles 1, 2.1, 2.2. 2.4, 2.6, 3.1, 3.2 , 3.4, 3.5, 4.1, 5.4, 6.1, 6.2, 6.4, 6.5, 6.10,
9.2, 9.4 and 17.6(i) of the AD Agreement as well as Part I, paragraph 15 of China's
Protocol of Accession." (emphasis added)
China argues that this part of its request for c onsultations is where its price undercutting claim is
identified. The remainder of para graph 2 lists 14 aspects of China's complaint with respect to the
Definitive Regulation. The second reference to Article 3.2 is in item (x) of that list, which states:

644 European Union, first written submission, para. 498.
645 European Union, second written submission, para. 166.
646 European Union, second written submission, para. 167.
647 European Union, first written submission, para. 504.
648 European Union, first written submission, paras. 501-502.
649 Exhibit CHN-65.

"The EC failed to exclude from the volume of imports, for injury determination
purposes, non-dumped imports, thereby acting in consistently with Article 3.1 and 3.2
of the AD Agreement and Article VI:1 of the GATT 1994."
7.320 We note that, in the chapeau of paragraph 2, the request for consultations refers to the
imposition of the anti-dumping duties in the steel f asteners investigation, therefore the specific
measure at issue is properly identified. As to "t he legal basis for the complaint", the second element
that Article 4.4 of the DSU requires to be included in a request for consultations, the chapeau lists the
various Articles of the AD Agreement with which Ch ina asserts the specific measure is inconsistent.
The following fourteen sub-paragraphs list aspects of China's complaint with respect to the Definitive
Regulation, but do not refer in so many words to the question of price undercutting. Thus, the
threshold question for us is whether the reference to Article 3.2 of the AD Agreement in the chapeau
of paragraph 2 of the request for consultations satisfies the requirement of Article 4.4 of the DSU with
respect to China's complaint concerning the price unde rcutting analysis in the fasteners investigation.
In our view, the resolution of this question depends in part on the nature of the obligation(s) set forth
in the particular provision(s) cited as having been viol ated by the measure at issue, and in part on the
specific terms of the request for consultations.
7.321 Article 3.2 of the AD Agreement provides:
"3.2 With regard to the volume of the dum ped imports, the investigating authorities
shall consider whether there has been a significant increase in dumped imports, either
in absolute terms or relative to production or consumption in the importing Member.
With regard to the effect of the dumped imports on prices, the investigating
authorities shall consider whether there has been a significant price undercutting by
the dumped imports as compared with the price of a like product of the importing
Member, or whether the effect of such imports is otherwise to depress prices to a
significant degree or prevent price increases, which otherwise would have occurred,
to a significant degree. No one or several of these factors can necessarily give
decisive guidance."
Thus, Article 3.2 addresses the details of two of the th ree main elements of an injury determination,
namely the consideration of the volume of dumped imports and of the impact of the prices of such
imports on the prices of the domestic industry produc ing the like product in the country of imports.
With respect to volume, it provides that the author ities have to consider whether there has been an
increase in the volume of dumped imports, either in absolute terms of rela tive to production or
consumption in the importing country. With respect to the price analysis, Article 3.2 states that the
investigating authorities have to consider whethe r there has been significant price undercutting by
dumped imports, or whether the prices of the domestic industry have been significantly depressed or
suppressed by the prices of dumped imports.
650

7.322 Article 3.2 is a provision that contains multip le obligations for investigating authorities.
While the Appellate Body has indicated that a mere listing of legal provisions alleged to be violated
may not be sufficient to provide a brief summary of the legal basis of the complaint sufficient to
present the problem clearly in the context of a panel request 651, it is not clear to us that a similar
approach should be taken with respect to a request for consultations. Unlike Article 6.2 of the DSU,
which contains the requirement that a panel request provide a brief summary of the legal basis of the
complaint sufficient to present the problem clearly, Article 4.4 of the DSU requires only that a request

650 Price depression is the situation where prices in the importing country decline, while price
suppression is the situation where prices in the importin g country either do not incr ease, or increase less than
would otherwise be the case. Neither of these situations was at issue in the underlying investigation.
651 Appellate Body Report, Korea – Dairy, para. 124.

for consultations contain "an indica tion of the legal basis for the complaint". In our view, this is a
lesser requirement than that of Article 6.2, and may well be satisfied in a particular case by listing the
Articles allegedly violated. China's request for consultations clearly indicates that it seeks
consultations with the European Union concerning alleged violations of the provisions of the
AD Agreement set out in the chapeau of paragr aph 2. While it is true that the following
subparagraphs set out additional information as to th e circumstances of the alleged violations, but not
with respect to price undercutting, it is not clear to us that this is strictly necessary for purposes of
Article 4.4.
652 In this case, we consider that the referen ce to Article 3.2 in the chapeau of paragraph 2
of the request for consultations is sufficient to give an "indication" that the legal basis of the
complaint is a violation of some aspects of that pr ovision. Moreover, we note that there is no dispute
that the panel request clearly sets out a claim of violation with respect to the price undercutting
analysis, and thus may be considered to concern the same dispute, and to have evolved from the
matter set out in the request for consultations. On this basis, we conclude that China's request for
consultations does contain a sufficient "indicati on of the legal basis", Article 3.2 of the
AD Agreement, with respect to its complaint concerning the Commission's price undercutting
analysis and that this claim is therefore within our terms of reference.
7.323 Turning to China's claim under Article 3.1 of the Agreement, we note that China's panel
request, on page 4, cites Article 3.1, in addition to Article 3.2, with respect to the claim on price
undercutting. In its submissions to the Panel, China invokes both Articles 3.1 and 3.2 in connection
with this claim. Turning to whether the request for consultations indicates the legal basis for a
complaint under Article 3.1 in relation to price underc utting, we note that the chapeau of paragraph 2
of the request for consultations cites Article 3.1. We recall that Article 3.1 sets forth the general
obligations imposed on the investigating authorities w ith respect to injury determinations and sets out
the three main components of an injury determinati on. Had China's request for consultations referred
to Article 3.1 alone, it might have been difficult to conclude that the request contained a sufficient
indication of the legal basis for a claim on price undercutting, which is specifically addressed in
Article 3.2. However, the same chapeau sentence in the request for consultations refers to Article 3.2
of the AD Agreement. We consider that the allege d violation of Article 3.1 is dependent on a finding
of violation of the obligations in one or more of other Articles of the AD Agreement referred to in the
first sentence of paragraph 2, which contain more sp ecific elaboration of th e general requirement set
out in Article 3.1. Since we have concluded that the request for consultations covers China's price
undercutting claim, we also find that the alleged dependent violation of Article 3.1 is also within the
scope of the request.653
(ii) Substantive Analysis
7.324 China's claim is based on two main arguments: a) that the Commission acted inconsistently
with Articles 3.1 and 3.2 of the AD Agreement by not basing its price undercutting determination on
full PCNs; and b) that the method used to distingui sh between standard and special fasteners did not
result in an objective determination on price undercutting. Below, we address both arguments in turn.
7.325 With respect to China's first argument, we note that Article 3.2 of the AD Agreement
stipulates, inter alia , that, in an injury determination, the i nvestigating authorities have to consider
whether there has been significant price undercuttin g by the dumped imports as compared with the
prices of the like product in the importing countr y. Article 3.2 does not, however, prescribe a
particular methodology for the consideration of price undercutting, nor does it require that a

652 We do consider that a greater degree of particularity in a request for consultations might be
desirable and would likely provide better focus for the consultations.
653 Consequently, we need not go on to consider whether, had we not found the Article 3.2 complaint
with respect to price undercutting within the scope of the request for consultations, we would nonetheless have
found the Article 3.1 complaint, independently, within the scope of that request.

determination of price undercutting be made. 654 Thus the investigating authorities have a certain
degree of discretion with respect to the methodol ogy that they will follow in considering price
undercutting and making any de termination. This discretion is not, however, unlimited. Rather, the
general obligation set forth in Article 3.1 of the AD Agreement to carry out an objective examination
on the basis of positive evidence, sets the limits of the authorities' discretion in the context of
considering price undercutting. 655 Therefore, in order to establish a prima facie case of violation,
China has to establish that the Commission's pr ice undercutting analysis did not constitute an
objective examination based on positive evidence as required under Article 3.1 of the AD Agreement.
In this regard, we note the A ppellate Body's statement, in US – Hot-Rolled Steel , that "an 'objective
examination' [under Article 3.1] requires that the domestic industry, and the effects of dumped
imports, be investigated in an unbiased manner, w ithout favouring the interests of any interested
party, or group of interested parties, in the investigation". 656 We shall therefore consider whether
China has adduced evidence showi ng that the Commission acted in a biased manner or favoured the
interests of certain interested parties in its pri ce undercutting determination in the investigation at
issue.
7.326 The facts before us indicate that in the f asteners investigation the price information was
submitted on a PCN basis by the Chinese and the EU pr oducers. Originally, the PCNs defined by the
Commission included six elements. In its price undercutting analysis, however, the Commission
"simplified" the PCNs by replacing two separate el ements, "diameter" and "length", with a single
more general "size feature".
657 This resulted in a "modified" or "simplified" PCN with five
characteristics, instead of six, and the pricing in formation was categorized according to the modified
PCNs for purposes of the price undercutting comparisons.

654 Panel Report, EC – Tube or Pipe Fittings, para. 7.278, where the panel noted that while the calculation
of a dumping margin was determinative in a dumping determination, price undercutting was not determinative of
injury, but was part of the overall assessment of injury to the domestic industry. The panel went on to observe that
"[w]hile this certainly gives no basis or jus tification for an arbitr ary or non-even-handed
examination, particularly in light of the f act that the Agreement contains no specific
conditions or criteria or methodology, it permits an investigating authority a degree of
discretion in carrying out the price undercutting assessment."
Id. See also, Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel Rebar from Turkey
("Egypt – Steel Rebar"), WT/DS211/R, adopted 1 October 2002, DSR 2002:VII, 2667, para. 7.73.
655 Panel Report, EC – Tube or Pipe Fittings , para. 7.292, where the panel observed, referring to the
requirement in Article 3.1 to conduct an "objective examination" on the basis of "positive evidence", that the
investigating authorities' examination must:
"conform to the dictates of the basic principl es of good faith and fundamental fairness. The
investigating authority must therefore ensure an even-handed treatment of the information and
data on the record of the investigation. However, in view of the stark contrast in the text,
context, legal nature and rationale of the provisions in Article 2 of the Anti-Dumping
Agreement relating to the calculation of the dumping margin and Article 3 relating to the
injury analysis, we decline to transpose wholesale the more detailed methodological
obligations of Article 2 concerning dumping into the provisions of Article 3 concerning injury
analysis."
The panel also observed that relevant differences in prices might not be the same in the context of a
price undercutting analysis and a dumping margin analysis. Id., para. 7.293.
656 Appellate Body Report, US – Hot-Rolled Steel, para. 193.
657 These simplified PCNs are shown in Exhibit CHN-55. The table in this exhibit contains the
simplified PCNs in the first column and the correspo nding original full PCNs in the second column. The
European Union explained, in its answer to Panel question 43(b), that the last three digits in the original PCNs
refer to "length", the second last three to "diameter" a nd that these two were replaced by "size" as reflected in
the last two digits of the simplified PCNs. China has not contested the European Union's explanations in this
regard.

7.327 In response to a question from the Panel, China st ated that it "does not claim in the abstract
that the Commission is required to necessarily and always examine these issues on the basis of the
PCNs".
658 It contends, however, that the purpose of requesting information on a PCN basis was to
make sure that the same product types would be compared and therefor e the need to make
adjustments would be minimized. Therefore, s ubmits China, "the PCNs must necessarily include
those product characteristics which would justify an adjustment for differences in physical
characteristics".659 We note that this argument is essen tially the same argument made by China
regarding the non-use of full PCNs in the contex t of the Commission's dumping determinations.
Here, China contends that since the Commission asked the interested parties to submit information on
a PCN basis, the price undercutting determination sh ould have been based on full PCNs. That is, in
China's view, the Commission in its price undercutti ng determination either should have taken into
account the full PCNs or made adjustments for differences that affect ed price comparability. 660 The
European Union, however, argues that the fact th at information was requested on a PCN basis does
not mean that all the product characteristics reflec ted in the PCNs were relevant to the price
undercutting analysis. It also maintains that there is nothing inherently biased for or against foreign
producers in the use of PCNs in making the price comparisons. According to the European Union,
unlike Article 2.4, Article 3.2 does not even require that adjustments be made in the context of price
undercutting analysis.661
7.328 It is clear that the text of Article 3.2 provides no methodological guidance as to how an
investigating authority is to "consider" whether there has been significant price undercutting. In our
view, price undercutting may be demonstrated by comparing the prices of the like product of the
domestic industry with the prices of the dumped im ports, as the European Union did in this case.
However, there is no equivalent requirement unde r Article 3.2 to that of Article 2.4 of the
AD Agreement with respect to "due allowance" fo r differences affecting price comparability. In our
view, while it is clear that the general requireme nts of objective examination and positive evidence of
Article 3.1 limit an investigating authority's discre tion in the conduct of a price undercutting analysis,
this does not mean that the requirements of Article 2.4 with respect to due allowance for differences
affecting price comparability are applicable. 662 Thus, for instance, adjustments in the context of price
undercutting analysis may be a useful means of ensuring that the requirements of objective
examination of positive evidence in Article 3.1 are satisfied, as might the use of carefully defined
product categories for the collection of price informat ion. In this case, the Commission had requested
price information on the basis of PCNs consisting of six elements, and then when it undertook the
price undercutting comparisons, it "simplified" the PCN by referring to "size" rather than "length" and
"diameter". In the first place, it is not at all clear to us, and China has not made any argument in this
respect, that the feature of size is not an appropriate proxy for the two separate features of length and
diameter. Thus, we do not consider that, by simplifying the PCNs on the basis of which the price
undercutting analysis was conducted, the European Un ion acted inconsistently with the obligation to
undertake an objective examination on the basis of pos itive evidence, as required by Article 3.1 of the
AD Agreement. More importantly, however, given that there is no obligation to make due allowance
for the purposes of price undercutting analysis even with respect to differences for which due
allowance must be made under Article 2.4 when ma king dumping comparisons, the mere fact that the
Commission did not do so does not, in our view, establish a violation of Articles 3.1 and 3.2 of the
AD Agreement.
7.329 In any event, we recall that we rejected Chin a's claim that the failure to use full PCNs, or
make adjustments for those elemen ts of the PCNs which were not reflected in the product types

658 China, answer to Panel question 41.
659 China, answer to Panel question 41.
660 China, first written submission, para. 396; China, answer to Panel question 41.
661 European Union, second written submission, para. 166.
662 Panel Report, EC – Tube or Pipe Fittings, para. 7.292.

actually compared in the dumping determination, was inconsistent with Article 2.4 of the
AD Agreement. Given that conclusion, we see no b asis for any different conclusion with respect to
China's claim concerning price undercutting, where there is even less guidance on methodology.
7.330 China's second argument is that the method used by the Commission to distinguish standard
and special fasteners did not result in an objec tive determination on price undercutting. China
acknowledges that the Commission made a distincti on between standard and special fasteners, and
that in its price undercutting determination it comp ared the prices of standard Chinese fasteners with
those of the standard EU fasteners. 663 It argues, however, that, as defined in recital 54 of the
Definitive Regulation, "the "standard" fasteners produced by the Community producers included not
only standard fasteners which merely comply with industry standards but also fasteners which, in
addition to complying with industry standards, m eet the specific additional requirements of their
customers."664 China describes standard fasteners that only meet the industry requirements as "basic
standard fasteners" and those that also meet customer requirements as "standard-plus fasteners". 665
According to China, "the EU investigating au thorities should have made a comparison between
Chinese-made "basic standard fasteners" and EU-m ade "basic standard fasteners" and another
comparison between Chinese-made "standard-plu s fasteners" and EU-made "standard-plus
fasteners"".666
7.331 The European Union disagrees with China's descri ption and argues that "[a] standard fastener
simply meets a norm, which is specified by the produ cer, if produced for stock, or by the customer, if
produced for order".667 The European Union also maintains that fasteners that conform to the industry
requirements but additionally also meet specific cu stomer requirements would be treated as special
fasteners irrespective of country of origin. The Eu ropean Union adds that a customer can "order a
"standard" fastener by simply specifying the norm, the strength, the thickness and the diameter".668
7.332 In support of its argument that the Commission treated as "standard" fasteners what it calls
"standard-plus" fasteners, i.e., those which, in addition to meeti ng the relevant industry specifications,
also met certain customer requirements, China refe rs to the following part of recital 54 of the
Definitive Regulation:
"While it is recognised that not all types of fasteners can be used for all applications,
and that this is particularly the case for 'special' fasteners and high-end applications, it
was found that, within the same standard, all types of fasteners were found to be
interchangeable for most of the other applications."669 (emphasis added by China)
We note that this excerpt first underlines the fact th at not all types of fasteners can be used for all
applications, with specific reference to special fasten ers. The part highlighted by China implies that
fasteners that satisfy the same standards would gene rally all be suitable for the same needs. In our
view, this does not support China's allegation that in the investigation at issue the Commission
compared the prices of the so-called EU-made "stand ard-plus fasteners" produced with the prices of
Chinese "basic standard fasteners". Indeed, it is not even clear to us what the "standard-plus" and
"basic standard" categories posited by China consist of . Much less can we find any indication in the
Definitive Regulation suggesting that the Commissi on accepted that these categories existed. Thus,
we find that China has failed to make a prima facie showing that the Commission compared Chinese-

663 China, second written submission, para. 851; China, answer to Panel question 93(a).
665 China, answer to Panel question 93(a).
666 China, answer to Panel question 93(a).
667 European Union, comments of China's answer to Panel question 93(a).
668 European Union, comments of China's answer to Panel question 93(a).

made "basic standard fasteners" and EU-made "standa rd-plus fasteners" (or vice versa), and therefore
has failed to demonstrate in this respect that th e comparisons made by the Commission resulted in a
non-objective price undercutting determination.

7.333 Next, China submits that the Commission failed to take into consideration the quality
differences between Chinese fastener s and fasteners produced by the EU producers. In this regard,
China notes that in connection with the issue of like product, recital 52 of the Definitive Regulation
mentions that any perceived difference between the quality of Chinese and EU fasteners would be
dealt with through adjustments. China also notes that recital 125 mentions that in its price
undercutting determinations the Commission followed an approach similar to that followed in the
dumping determinations in undertaking comparisons by product type, which takes into consideration
the characteristics of the product being compared. China then refers to recital 103 which states that an
adjustment for differences in quality control costs was made in the context of the dumping margin
calculations, and contends that it does not appear from the file that a similar adjustment was made in
the context of price undercutting determinations. Even if such an adjustment was made, China
contends that this would not be sufficient to ad dress the quality differences between Chinese and EU-
made fasteners.
7.334 With respect to the adjustment for differences between costs of quality control, we note that
this adjustment was made in the context of the cal culation of the dumping margin, and with respect to
Indian produced and Chinese produced fasteners. Thus , it is in our view irrelevant to the question
before us here, whether the Commission's price comparison of Chinese fasteners exported to the
European Union and fasteners produced by the EU industry was consistent with Articles 3.1 and 3.2
of the AD Agreement. Similarly, China's argument with respect to whether or not an adjustment for
quality control eliminates a difference in quality
670 is also irrelevant, not only because, as discussed
above, "adjustments" in the sense of due allowance under Article 2.4 of the AD requirement are not
required in the price undercutting context, but also because the adjustment in question was not related
to the comparison of Chinese fasteners exported to the European Union and fasteners produced by the
EU industry.
7.335 In addition, China contends that there were quality differences between the raw materials
used to make Chinese and EU-made fasteners, and as serts that this difference should have been taken
into consideration.671 We note that, in recital 54 of the Definitive Regulation, the Commission made
the following findings regarding alleged quality diff erences between fasteners made in China and in
the European Union:
"Moreover, notwithstanding the lower pr ices observed in the PRC, the European
Association of the Iron and Steel Industry (Eurofer) confirmed that there is no major
quality difference between the steel produced in the PRC and the steel produced in
the Community when the steel corresponds to a standardised grade. As a result, it is
concluded that raw material quality diffe rences do not affect the comparability
between fasteners exported from the PRC and those produced and sold in the
Community." (emphasis added)
Thus, it is clear that the Commission concluded, in the context of its discussion of like product, that
alleged differences between the quality of the raw materials used in the production of Chinese and
EU-made fasteners did not affect the comparability of the two. China further maintains that the issue
of quality differences was broader than the differenc es in raw materials, and included other elements
such as coating etc. 672 China does not, however, substantiate th is assertion. Thus, we consider that

671 China, answer to Panel question 95.
672 China, answer to Panel question 95.

China has failed to make out a prima facie case that there were differences in quality between Chinese
and EU produced fasteners, and therefore has failed to demonstrate that the Commission did not
undertake an objective examination of price undercutting in this respect.

7.336 Based on the foregoing, we reject China's claim that the Commission's price undercutting
determination was inconsistent with Articles 3.1 and 3.2 of the AD Agreement.
673
8. Whether the European Union violated Articles 3.1, 3.2, 3.4 and 3.5 of the AD Agreement
in its consideration of the volume of dumped imports
(a) Arguments of the Parties
(i) China
7.337 China argues that the Commission violated Articles 3.1, 3.2, 3.4 and 3.5 of the
AD Agreement by treating all imports from China as being dumped. With respect to the first aspect
of its claim, China notes that two Chinese produ cers subject to individual examination in the
investigation at issue were found not to be dumping by the investigating authority. 674 China relies on
the text of Articles 3.1 and 3.2 of the AD Agreem ent, two panel reports and one Appellate Body
report to support its assertion that the European Union was obliged to exclude imports from these
two importers in examining the effects of "dumped imports" on the domestic industry. 675 China
acknowledges that while there is no specific methodolo gy to be followed in calculating the volume of
"dumped imports", the prerequisite for the examin ation of dumped imports is that it involves only
"dumped" imports as opposed to imports that are found not to be dumped. 676 Thus, China considers
that the inclusion of non-dumped imports in the volume of "dumped imports" examined necessarily
constitutes a violation of Articles 3.1 and 3.2 of the AD Agreement. 677 China considers the
European Union's reliance on the fact that the volume of non-dumped imports in this case was small
to be problematic, since it is not possible to know what percentage of non-dumped imports will be
sufficiently small to still satisfy the requirements of Articles 3.1 and 3.2.678
7.338 With respect to the second aspect of its claim, China argues that taking into consideration the
fact that these two individually-examined Ch inese producers were found not to be dumping, the
Commission could not legitimately treat all imports from Chinese producers for which an individual
dumping margin was not calculated as dumped. 679 China recalls that, in view of the large number of
exporting producers in China, the EU investigating authority used sampling, and a sample of nine
Chinese companies was select ed, of which five were granted indi vidual treatment. In addition, three
other companies not included in the sample recei ved individual treatment, for two of which, no
dumping was found. 680 China submits that the European Uni on violated Articles 3.1 and 3.2 of the
AD Agreement by treating the imports of all Chin ese producers who were not sampled or not subject
to individual examination as being dumped. 681 China considers that, following the reasoning of
previous panel and Appellate Body reports, the fact that individually examined exporters were found
not to be dumping must be taken into account, regardless of the fact that those exporters were not

673 We note that China has not made a claim w ith respect to the due process aspects of the
Commission's price undercutting determination. China, answer to Panel question 40; China, second oral
statement, para. 105.
675 China, first written submission, paras. 403-408.
676 China, second written submission, paras. 861, 865.

included in the sample.682 Thus, China asserts that the European Union was not entitled to extrapolate
from the sample, without taking into account the ev idence that two producers for which individual
dumping margins were calculated were found not to be dumping.683
7.339 China asserts that, by failing to properl y determine the "dumped imports", the
European Union also violated Articles 3.4 of the AD Agreement, which requires investigating
authorities to examine the impact of "dumped impo rts" on the domestic industry, and Article 3.5,
which requires investigating authorities to demonstr ate that the "dumped imports" are causing injury
to the domestic industry.
(ii) European Union
7.340 The European Union concedes that the Commissi on based the consideration of the volume of
dumped imports under Article 3.2 on Eurostat data , which statistics did not filter out the import
volumes from the two Chinese producers which were found not to be dumping. 684 However, the
European Union asserts that imports from these tw o producers were very small, that these two
producers were not included in the sample of Chinese producers, and that all of the sampled producers
were found to be dumping at a significant margin.
685 According to the Euro pean Union, these facts
distinguish this case from the previous panel reports relied on by China.686 The European Union notes
that Article 3 does not establish any particular methodology for the consideration of the volume of
dumped imports, and asserts that the Panel should ex amine whether China has demonstrated that the
analysis of whether there was a significant increase in imports was not satisfactory because it included
the small volume of non-dumped imports.
687 In this respect, the European Union argues that it is
obvious that, given the small volume of non-dumped imports in question, their inclusion in the
volume of dumped imports could not affect the outco me, and thus could not affect the objectivity of
the injury determination within the meaning of Article 3.1 of the AD Agreement. 688 Excluding
imports in such small quantities would not have cha nged the outcome of the injury determination.
The European Union underlines that its argument is not one of "harmless error". Rather it argues that
substantively there was no violation of the obliga tion to conduct an objective examination because of
the inclusion of non-dumped imports that accounted for a very small percentage of all imports from
China.689
7.341 With respect to the second aspect of China' s claim, the European Union disagrees with
China's contention that the Commission was wrong to treat imports from all non-sampled Chinese
producers as dumped in examining the volume of dump ed imports. The European Union recalls that
the investigating authority conducted its investigatio n of dumping on the basis of a sample of Chinese
producers, found that all producers in the sample we re dumping, and pursuant to Article 9.4 of the
AD Agreement, calculated a margin of dumpi ng for all non-sampled producers who were not
individually examined.690 The European Union maintains that it was entitled to consider all of these
imports for which more than de minimis margins were established as dumped imports for the purposes
of the volume and injury analysis. 691 The European Union contends that this conclusion is supported
by the panel reports relied on by China. 692 According to the European Union, in a situation of

683 China, second written submission, paras. 884, 887.
684 European Union, first written submission, paras. 510-511.
685 European Union, first written submission, paras. 513-515.
686 European Union, first written submission, para. 516.
687 European Union, first written submission, para. 517.
688 European Union, first written submission, para. 523.
689 European Union, first written submission, para. 532.
690 European Union, first written submission, paras. 535-536.
691 European Union, first written submission, para. 537.
692 European Union, first written submission, paras. 541-547.

sampling, when not all exports are examined, the only way to make an objective determination about
the volume of dumped imports from non-sampled producers is by extrapolation from the sample.693
7.342 Finally, the European Union notes that China's claims under Articles 3.4 and 3.5 of the
AD Agreement are dependent on a finding of viola tion of Articles 3.1 and/or 3.2, and should be
rejected, and that in any event, China has failed to set out a prima facie case of violation of those
provisions.694
(b) Arguments of Third Parties
(i) Japan
7.343 Japan believes that the European Union violated Articles 3.1 and 3.2 of the AD Agreement to
the extent it failed to exclude imports that were found not to have been dumped from the volume of
"dumped imports". Japan notes that previous pa nel and Appellate Body reports have found that
imports that were not found to have been dump ed must be excluded from the injury analysis. 695
Therefore, for Japan, it follows that, to the exte nt that the European Union considered non-dumped
imports as having been "dumped" for the injury and causation analyses, it violated Articles 3.1
and 3.2 of the AD Agreement in light of past WTO jurisprudence.
696
7.344 Japan believes that the European Union did not violate Articles 3.1 and 3.2 of the
AD Agreement by including in the volume of "dumped imports" all imports from non-sampled
exporting producers that were not individually exam ined, given that the European Union found that
all sampled exporting producers were engaged in dum ping, and accordingly, its determination that all
non-sampled exporting producers that were not indivi dually examined were also engaged in dumping
may be considered as based on "positive evidence" and an "objective examination" without additional
inquiry.697 Japan notes that there is no requirement in the AD Agreement for investigating authorities
to follow a specific methodology when applying sampli ng, other than to conduct the investigation on
the basis of "positive evidence" and to ensure that the injury determination results from an "objective
examination",698 and that investigating authorities have a right to apply sampling as long as they
"satisfy the requirements of 'positive evidence' an d an 'objective examination,' without having to
investigate each producer or exporter individually". 699 In Japan's view, these requirements are not
violated where the findings concerning the sample are extrapolated to all non-sampled producers that
were not individually examined.
700 Moreover, Japan stresses that nothing in the AD Agreement
requires investigating authorities to take into account information from outside the sample when
extrapolating the findings of the sample to non-ex amined producers outside of the sample, and asserts

693 European Union, second written submission, para. 181.
694 European Union, first written submission, paras. 551, 553.
695 Japan, written submission, para. 51, citing, Panel Report, Argentina – Poultry Anti-Dumping Duties,
para. 7.303; Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen
from India (" EC – Bed Linen "), WT/DS141/R, adopted 12 March 2001, as modified by Appellate Body
Report WT/DS141/AB/R, DSR 2001:VI, 2077, para. 6.138; Appellate Body Report, European Communities –
Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the DSU by
India ("EC – Bed Linen (Article 21.5 – India )"), WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III,
965, paras. 111-112 & 115.
696 Japan, written submission, para. 55.
697 Japan, written submission, para. 56.
698 Japan, written submission, para. 58. Appellate Body Report, EC – Bed Linen (Article 21.5 – India),
paras. 113, 116 and 117.
699 Japan, written submission, para. 58, citing, Appellate Body Report, EC – Bed Linen (Article 21.5 –
India), para. 117.
700 Japan, written submission, para. 59.

that such an obligation would vitiate the whole purpose of the sampling. 701 Indeed, Japan observes
that the purpose of sampling is to make an assess ment for non-examined companies based on findings
relating to a representative, albeit limited, group of companies.702
(ii) Norway
7.345 Norway notes that Article 3.1 requires the inv estigating authority to examine objectively "the
volume of the dumped imports", and Article 3.2 el aborates on this obligation, requiring examination
of whether there has been a "si gnificant increase in dumped imports", while Article 3.5 adds that the
authority must demonstrate that "the dumped imports are, through the effects of dumping, as set forth
in paragraphs 2 and 4, causing injury". In Norway 's view, these Articles show that it is only dumped
imports that are to be included in the determination of injury.
703 Norway considers that panels and the
Appellate Body have conf irmed this interpretation. 704 Accordingly, the imports of the two Chinese
producers that were found not to be dumping should have been treated as non-dumped, and should not
have been included in the volume of dumped imports.705
7.346 Norway recalls that Article 3.1 requires an " objective examination" of "the volume of the
dumped imports", based on "positive evidence". 706 Norway maintains that investigating authorities
are precluded from conducting an investigation "in su ch a way that it becomes more likely that, as a
result of the fact-finding or evaluation process, th ey will determine that the domestic industry is
injured".707 Norway considers that, by automatically considering that the volume of imported
products from all non-sampled and non-examined pr oducers are at dumped prices, it does become
more likely that an investigating authority w ill find that the domestic industry is injured. 708 I n
Norway's view, by extending conclusions reached regarding the sampled producers to non-sampled
producers, in this case, the EU assumed that impor ts from non-sampled producers were all dumped,
despite having found that two exporting producers that were subject to individual examination
(although not included in the original sample) were not in fact dumping. Norway asserts that whether
it is established through sampling or through individu al examination that there are producers that are
not dumping is irrelevant. Norway argues that the Pa nel should reject the European Union's view that
this case must be distinguished from the cases cited because all the producers selected for the original
sample were found to be dumping.
709 Norway does not generally disagree that there may be cases
were extrapolation from sampled producers is warrante d, but argues that in this case, the individual
examination of two additional companies not incl uded in the sample implies that an automatic
extrapolation from the original sample was not warranted. 710 Therefore, Norway considers that the
European Union failed to make an "objective examin ation", on the basis of "positive evidence", of the

701 Japan, written submission, para. 61. In th is regard, Japan refe rs to Panel Report, EC – Salmon
(Norway), para. 7.634 and footnote 780.
702 Japan, oral statement, para. 21.
703 Norway, written submission, para. 50.
704 Norway, written submission, para. 51, citing, Panel Report, EC – Bed Linen, para. 6.138; Appellate
Body Report, EC – Bed Linen (Article 21.5 - India), para. 115; Panel Report Argentina – Poultry Anti-Dumping
Duties, para. 7.303; Panel Report, EC – Salmon (Norway), paras. 7.627-7.628.
705 Norway, written submission, para. 53.
706 Norway, written submission, para. 55.
707 Norway, written submission, para. 56 , citing, Appellate Body Report, US – Hot-Rolled Steel ,
para. 196.
708 Norway, written submission, para. 57.
709 Norway, written submission, para. 59, referrin g to European Union, first written submission,
para. 545.
710 Norway notes that it is not aw are of any additional evidence in this respect put forward by the
European Union. Norway, written submission, para. 60.

volume of dumped imports from non-examined exporting producers, in violation of Article 3.1 of the
AD Agreement.711
(c) Evaluation by the Panel
7.347 Before examining China's claims concerning the volume of dumped imports, we recall certain
relevant facts, which we understand to be undisputed.
7.348 For purposes of the determination of dumping, the EU investigating authority selected a
sample of nine Chinese producers, representing 61 pe r cent of exports by cooperating companies of
the product under investigation, or 39 per cent of total exports from China. 712 All nine responded to
the dumping questionnaire in a timely fashion, but f our were subsequently de emed to have provided
false or misleading information and were thereafter treated as non-cooperating 713, leaving
five companies in the sample. Five other comp anies, not selected for the sample, voluntarily
submitted responses to the dumping questionnaire and requested individual examination under
Articles 9(6) and 17(3) of the Basic AD Regulation. 714 Four of these requests were granted, but the
Commission rejected arguments that the originally -selected sample should be enlarged to include
these companies, concluding that the sample comp rising the five remaining companies of those
originally selected remained suffi ciently representative, accounting for 54 per cent of total exports by
cooperating companies, and the granting of indivi dual treatment under Article 17(3) of the Basic AD
Regulation was distinct and separate from the sampling exercise. 715 One of these four companies was
found to have provided misleading information and was thereafter treated as non-cooperating.716
7.349 Thus, there remained five cooperating companie s in the sample, and three companies granted
individual examination under Article 17(3) of the Basic AD Regulation. Each of these requested and
was granted IT under Article 9(5) of the Basic AD Regulation. 717 All five of the sampled companies
were found to be dumping, with margins ranging from 63.1 per cent to 105.3 per cent. 718 Of the three
companies separately granted individual examination, one was found to be dumping, with a margin of
26.5 per cent, while for the other two companies, CELO Suzhou Precision Fasteners Co., Ltd and
Yantai Agrati Fasteners Co., Ltd, margins of zero, that is, no dumping, were calculated.719
7.350 The volume of imports from China was obtained fro m Eurostat data, and is reported in recital
121 of the Definitive Regulation. There is nothing in the Definitive Regulation that suggests that the
volumes of imports from individual exporters were either specifically requested, or otherwise
determined or examined. However, in respon se to the sampling forms and questionnaires sent to
exporters examined individually (whether included in the sample, or granted individual treatment

711 Norway, written submission, para. 60.
712 Definitive Regulation, Exhibit CHN-4, recital 16.
713 Definitive Regulation, Exhibit CHN-4, recital 62.
714 This request is distinct from a request for individual treatment under Article 9(5) of the Basic AD
Regulation. Under Articles 9(6) and 17(3) of the Basic AD Regulation, where the Commission uses sampling,
an individual dumping margin will nonetheless be calculated for companies not included in the sample who
submit the necessary information in a timely fashion, unless there are so many that to do so would be unduly
burdensome and would prevent the completion of the investigation in a timely fashion. These provisions of the
Basic AD Regulation reflect Article 6.10.2 of the AD Agre ement, and apply in all investigations, regardless of
whether the investigation involves a non-market economy.
715 Definitive Regulation, Exhibit CHN-4, recitals 20-21.
716 Definitive Regulation, Exhibit CHN-4, recital 78.
717 Definitive Regulation, Exhibit CHN-4, recitals 83 and 85.
718 Definitive Regulation, Exhibit CHN-4, recital 107.
719 Definitive Regulation, Exhibit CHN-4, recital 109. The European Union did not impose a duty on
imports from the two producers for which dumping margin s of zero were calculated. Definitive Regulation,
Exhibit CHN-4, Article 1, paragraph 2.

under Article 17(3) of the Basic AD Regulation) info rmation concerning the volume of imports to the
EU market attributable to them was provided by both CELO Suzhou Precision Fasteners Co., Ltd and
Yantai Agrati Fasteners Co., Ltd.
720
7.351 Turning to the issues before us, we note that China's claim with respect to the volume of
dumped imports has two aspects: (1) whether, by re lying on Eurostat data in considering the volume
of dumped imports, without distinguishing or co nsidering the volumes attributable to the two
exporters for which dumping margin s of zero were calculated in the investigation, the European
Union acted inconsistently with the requirement s of Articles 3.1, 3.2, 3.4 and 3.5 of the
AD Agreement; and (2), whether, by treating all imports from producers not individually examined,
whether by being included in the sample or othe rwise, as "dumped imports", the European Union
violated Articles 3.1, 3.2, 3.4 and 3.5 of the AD Agreement.
7.352 Articles 3.1, 3.2, 3.4 and 3.5 of the AD Agreement provide:
"3.1 A determination of injury for pur poses of Article VI of GATT 1994 shall be
based on positive evidence and involve an objective examination of both (a) the
volume of the dumped imports and the effect of the dumped imports on prices in the
domestic market for like products, and (b) the consequent impact of these imports on
domestic producers of such products."
"3.2 With regard to the volume of the dumped imports, the investigating
authorities shall consider whether there h as been a significant increase in dumped
imports, either in absolute terms or re lative to production or consumption in the
importing Member. With regard to the effect of the dumped imports on prices, the
investigating authorities shall consider wh ether there has been a significant price
undercutting by the dumped imports as compar ed with the price of a like product of
the importing Member, or whether the effect of such imports is otherwise to depress
prices to a significant degree or prevent price increases, which otherwise would have
occurred, to a significant degree. No one or several of these factors can necessarily
give decisive guidance."
"3.4 The examination of the impact of the dumped imports on the domestic
industry concerned shall include an evalua tion of all relevant economic factors and
indices having a bearing on the state of the industry, including actual and potential
decline in sales, profits, output, market shar e, productivity, return on investments, or
utilization of capacity; factors affecting domestic prices; the magnitude of the
margin of dumping; actual and potential negative effects on cash flow, inventories,
employment, wages, growth, ability to raise capital or investments. This list is not
exhaustive, nor can one or several of these factors necessarily give decisive
guidance."
"3.5 It must be demonstrated that the dumped imports are, through the effects of
dumping, as set forth in paragraphs 2 and 4, causing injury within the meaning of this
Agreement. The demonstration of a causal relationship between the dumped imports
and the injury to the domestic industry shall be based on an examination of all
relevant evidence before the authorities. The authorities shall also examine any
known factors other than the dumped imports which at the same time are injuring the
domestic industry, and the injuries caused by these other factors must not be
attributed to the dumped imports. Factors which may be relevant in this respect
include, inter alia , the volume and prices of imports not sold at dumping prices,

720 EU, answer to Panel question 97, para. 19, and Exhibit EU-27 (BCI).

contraction in demand or changes in the pa tterns of consumption, trade restrictive
practices of and competition between the foreign and domestic producers,
developments in technology and the export performance and productivity of the
domestic industry."
7.353 Turning to the first aspect of China's claim, we note that the question before us requires that
we determine whether the referen ces to "dumped imports" in Articles 3.1, 3.2, 3.4 and 3.5 of the
AD Agreement mean that the European Union's admitte d inclusion of imports attributable to the two
Chinese producers for which zero margins were calcula ted in the volume of imports considered under
those provisions constitutes a violation of one or more of those provisions.
7.354 We consider that the text of the AD Agreement is perfectly clear in this regard, and that the
consideration of "dumped imports" for purposes of ma king an injury determination consistent with
Articles 3.1, 3.2, 3.4 and 3.5 of the AD Agreement entails the consideration of only those imports for
which a margin of dumping greater than de minimis is established in the course of the investigation.
7.355 We note that this is not the first dispute to raise this question, and previous panel and
Appellate Body reports have been clear in concluding that the phrase "dumped imports" in
Articles 3.1, 3.2, 3.4, and 3.5 of the AD Agreement refers to imports from a producer or exporter for
which a proper calculation results in a dumping margin greater than de minimis.
721 For instance, the
panel in EC – Bed Linen (Article 21.5 – India) observed:
"the question of which imports are to be considered dumped is readily answered –
'dumped imports' are all imports attributable to producers or exporters for which a
margin of dumping greater than de minimis is calculated."722
The original panel in the same dispute observe d that, should a proper calculation lead to the
conclusion that a producer should be attributed a zero or de minimis margin, "the imports attributable
to such a producer/exporter may not be consider ed as "dumped" for purposes of injury analysis". 723
We also note the statement of the Appellate Body on review of this panel report that "if a producer or
exporter is found not to be dumping, all imports from that producer or exporter must be excluded from
the volume of dumped imports".724

7.356 Our view in this regard is also supported by logic concerning the imposition of anti-dumping
measures. It is undisputed that no anti-dumping duties can be imposed in the absence of a finding of
dumping. Similarly, Article 5.8 of the AD Ag reement provides that there shall be "immediate
termination in cases where the authorities de termine that the margin of dumping is de minimis", and

721 Panel Report, EC – Salmon (Norway); Panel Report, Argentina – Poultry Anti-Dumping Duties ;
Panel Report, EC – Bed Linen.
722 Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen
from India – Recourse to Article 21 .5 of the DSU by India (" EC – Bed Linen (Article 21.5 – India )"),
WT/DS141/RW, adopted 24 April 2003, as modified by Appellate Body Report WT/DS141/AB/RW,
DSR 2003:IV, 1269, para. 6.133. The European Union notes that this issue was not before the panel in EC –
Bed Linen (Article 21.5 – India), and that therefore the panel's statement in this regard is merely obiter dictum.
European Union, first written submission, para. 526. However, our understanding of the phrase "dumped
imports" as used in the relevant Articles of the AD Agreement is the same as was expressed by that panel,
whose views thus lend support to our own conclusion, even though it did not make a legal conclusion in this
regard.
723 Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen
from India ("EC – Bed Linen "), WT/DS141/R, adopted 12 March 2001, as modified by Appellate Body Report
WT/DS141/AB/R, DSR 2001:VI, 2077, para. 6.138. See also, Panel Report, Argentina – Poultry Anti-Dumping
Duties, para. 7.303.
724 Appellate Body Report, EC – Bed Linen (Article 21.5 – India), para. 115 (emphasis in original).

no anti-dumping duties can be imposed on such imports. It would seem illogical to allow these
imports to be treated as "dumped" for purposes of th e injury analysis, when th ey cannot be treated as
dumped for purposes of imposition of anti-dumping duties in the same case.
7.357 We note that in this case, the European Union does not suggest that it was entitled to consider
the imports of the two Chinese producers for wh ich dumping margins of zero were calculated as
"dumped imports", and acknowledges that it did not exclude those imports from the volume of
imports it considered in its examination of the volum e of dumped imports and analysis of injury and
causation. However, the European Union asserts that since the volume of imports attributable to these
two producers was very small 725, their consideration as "dumped" imports did not undermine the
objectivity of the injury determination within the meaning of Article 3.1 of the AD Agreement, as
excluding them would not have changed the outcome of the injury determination. In this regard, we
note that the European Union emphasises that its argument is not one of "harmless error". 726 Rather it
argues that substantively there was no violation of the obligation to conduct an objective examination
because of the inclusion of non-dumped imports that accounted for a very small percentage of all
imports from China in the examination of the volume of dumped imports. The European Union asks
the Panel to avoid approaching this matter in a "m echanistic" fashion, asserting that the inclusion of
non-dumped imports will only constitute a violation of Articles 3.1 and 3.2 if the failure to exclude
such imports "jeopardizes the objectivity of the examination".727
7.358 We do not agree. In our view, the question of whether the investigating authority undertook
an objective examination is secondary in this context – first comes the question whether the
investigating authority considered the relevant " positive evidence". In our view, data concerning
imports that includes imports that the investiga ting authority itself has determined are not dumped
cannot simply be substituted for evidence of the actua l volume of imports that are properly treated as
dumped. This is so regardless of the volume of non-dumped imports involved. Articles 3.1 and 3.2
are perfectly clear that the rele vant consideration is of the vol ume of "dumped imports" without
equivocation.728

725 Although the exact figure is co nfidential, we accept, and China does not dispute, that the volume of
imports attributable to these two companies is, both in terms of absolute volumes, and as a proportion of total
imports, justifiably considered "very small". The European Union notes that "99.9% of imports were dumped".
European Union, first written submission, para. 531. China noted in its second written submission that the
European Union's assertion concerning the volume of imports attributable to the two producers found not to be
dumping was "not substantiated" but did not dispute that the volume was small. China, second written
submission, para. 867.
726 European Union, first written submission, para. 532.
727 European Union, second written submission, para. 179.
728 We do not exclude the possibility that an investigating authority may in some circumstances rely, in
its analysis, on data that includes some imports that are not dumped as a proxy for the actual volume of dumped
imports. However, in our view to do so consistently with the requirements of th e AD Agreement would entail
an explanation by the investigating authority at the time it makes its determination as to why it has done so, and
why its consideration of that information is nonetheless reasonable. For instance, we can envision a situation
where the volume of imports would be entitled to confiden tial treatment if the volume attributable to a single
producer were excluded. In such a case, should the inve stigating authority wish to explain its analysis of the
volume of imports in a public document, it might rely on public information concerning all imports, but explain
that the volume of non-dumped imports included in that data is so small as to have no effect on its conclusions.
However, in the absence of such an explanation, the investigating authority will have failed to explain how its
consideration of "dumped imports" supports its injury determination. Moreover, ex post explanations, even
where we might have found them sufficient had they been given at the time of the determination, are not in our
view acceptable. A panel reviewing th e determination of an i nvestigating authority sh ould base its finding on
the authority's reasoning set out in the published determination. See, Appellate Body Report, Japan –
Countervailing Duties on Dynamic R andom Access Memories from Korea ("Japan – DRAMs (Korea)"),
WT/DS336/AB/R and Corr.1, adopted 17 December 2007, DSR 2007:VII, 2703, para. 159; Appellate Body

7.359 The European Union does not contend that the investigating authority itself considered and
determined, at the time it made the final determ ination, that the volume of non-dumped imports
included in the consideration of "dumped imports" w as so small that it could have no effect on the
outcome, but rather, asks the Panel to reach that c onclusion, relying in this respect on the Appellate
Body report in Japan – DRAMs (Korea) .729 In our view, the circumstances of this dispute do not
justify our consideration of this question. In Japan – DRAMs (Korea), the Appellate Body faulted the
Panel for not considering whether, in the absen ce of an intermediate finding the Panel found
unsupported, the determination ultimately reached by the investigating authority could nonetheless be
sustained based on the totality of the other evidence. In doing so, the Appellate Body noted that the
investigating authority could not have undertaken this consideration, because it could not "be
expected to proceed on the basis that certain aspects of its reas oning would later be found to be
faulty".730 In this case, the European Union did not make an erroneous intermediate finding which
may not have been determinative of the ultimate dete rmination, but rather based its consideration of
the volume of dumped imports and their effects on erroneous information concerning the volume of
dumped imports. The European Union certainly kn ew or should have known that the information it
was considering in examining the volume of dumped imports included imports that were not
dumped.731 The consideration of the volume of dumped imports is a necessary element of the
determination of injury under Article 3. Thus, we do not agree that this case presents the same issue
as Japan – DRAMs (Korea). In our view, it is not appropriate for us to conclude that the investigating
authority could have made an affirmative determinat ion of injury in the absence of consideration of
the volume of imports properly treated as dumped. 732 Such an analysis would effectively constitute a
de novo review of the evidence, which we are not to undertake under the applicable standard of
review.
7.360 We therefore conclude that the European Union erred in treating imports attributable to two
companies which it found not to be dumping as dumped in the context of its injury determination. As
a result, the European Union acted inconsistently with Articles 3.1 and 3.2 in considering the volume
of dumped imports. We do not consider it neces sary to address China's consequential claims of
violation of Articles 3.4 and 3.5, which are based on the same considerations as addressed above. A
finding of violation of Articles 3.4 and 3.5 would add nothing to the resolution of this dispute, nor
would it aid in any potential implementation, and ther efore we conclude that the exercise of judicial
economy in this respect is warranted.

Report, United States – Countervailing Duty Investigation on Dynamic Random Access Memory Semiconductors
(DRAMS) from Korea (" US – Countervailing Duty Investigation on DRAMS "), WT/DS296/AB/R, adopted
20 July 2005, DSR 2005:XVI, 8131, paras. 186-188.
729 European Union, first oral statement, para. 40; European Union, answer to Panel question 47,
referring to Appellate Body Report, Japan – DRAMs (Korea).
730 Appellate Body Report, Japan – DRAMs (Korea), para. 133.
731 Moreover, the European Union must be presumed to have been aware of previous WTO dispute
settlement concerning this issue, particularly as it was a party or third party in some of those disputes.
732 At most, we might consider whether, had the in vestigating authority cons idered the correct facts
regarding the volume of dumping, it could have reached the same conclusion. While the small volume of the
imports at issue may well suggest that their inclusion in the volume of dumped imports did not have a
significant impact on the ultimate determ ination, were we to take this into consideration, we would essentially
be concluding that the failure to consider only dumped im ports in the analysis of injury was harmless. If this
were not the conclusion, then we can see no basis on which a panel might decline to consider a similar error
involving a much larger and potentially significant volume of imports. The European Union's position would
imply that a reviewing panel should not find a violation in any case where the investigating authority based its
analysis on erroneous facts, but rather, should in such cases consider whether the same conclusion could have
been reached on the basis of the correct facts. In our view, such consideration by a reviewing panel would
constitute an inappropriate, de novo consideration of the facts that were before the investigating authority.

7.361 The second aspect of China's claim with respect to the volume of dumped imports concerns
the treatment of imports attributable to producers/e xporters who were not included in the sample used
for the dumping determination and not separ ately granted individual examination ("non-
sampled/unexamined exporters") as "dumped imports" for purposes of the injury determination under
Article 3. We recall that the EU investigating au thority determined that all sampled producers were
dumping, and calculated a dumping margin for non -sampled/unexamined producers on the basis of
the dumping margins determined for the sampled producer s. The question for us is whether, in these
circumstances, the European Union acted consisten tly with Articles 3.1 and 3.2 of the AD Agreement
in treating all imports from non-sampled/unexa mined producers as dumped, even though two
producers who were not included in the sample but were individually examined were found not to be
dumping.733, 734
7.362 China agrees that an investigating authority may treat imports from non-sampled/unexamined
exporters as dumped in its injury analysis if th ere is evidence to support extrapolating from the
selected sampled producers to all imports, but asserts that the facts preclude such treatment in this
investigation, because two exporte rs who were not part of the sample examined by the EU
investigating authority were individua lly examined and found not to be dumping. 735 T h e
European Union recalls that all sampled producers were found to be dumping, and asserts that this
constitutes positive evidence from which it was entitle d to extrapolate a conclusion regarding all
imports from non-sampled/unexamined producers.736
7.363 In our view, it is clear that the conclusion of the investigating authority with respect to the
sampled producers, that they were dumping, is not undermined by the fact that two producers not
included in the sample were found not to be dumping upon being individually examined. The purpose
of sampling foreign producers/exporters in an anti-du mping investigation is to allow an investigating
authority to extrapolate from the sample to draw conclusions about dumping for all non-
sampled/unexamined foreign producers/exporters on the basis of a detailed examination of fewer than
all of them. Article 9.4 of the AD Agreement makes clear that, if the sample for the dumping
determination is selected consistently with the AD Agreement, a matter China has not challenged in
this dispute, then the investigating authority may treat the findings of dumping made with respect to
that sample of companies as establishing the exis tence of dumping by all non-sampled/unexamined
companies for purposes of the imposition of anti-dumping duties.
7.364 In our view, a similar result should follow with respect to the treatment of imports as dumped
for purposes of the injury determination. That is , if the sample for the dumping determination is
selected consistently with the AD Agreement, a matter China has not challenged in this dispute, then
the investigating authority may treat the findings of dumping made with respect to that sample of
companies as evidence that imports from the non- sampled/unexamined companies are dumped. To

733 We emphasize that we do not mean to imply that the imports from the two producers not in the
sample who were individually examined could be treated as dumped imports – that question is resolved
separately in connection with the first aspect of China's claims above. This part of our evaluation refers to the
treatment of imports attributable to producers not incl uded in the sample who did not separately request and
receive individual examination – the group we refer to as "non-sampled/unexamined".
734 In this regard, we recall that, pursuant to Article 9.4 of the AD Agreement, the European Union was
entitled to apply an anti-dumping duty to imports from n on-sampled/unexamined producers, so long as the duty
rate did not exceed the weighted aver age margin of dumping calculated fo r the sampled producers, excluding
any zero or de minimis margins and margins based on facts availa ble. China does not challenge either the
calculation of a margin of dumping for non-sampled/unexamined producers on the basis of the margins
calculated for the sampled producers, or the impos ition of anti-dumping duties on imports from all non-
sampled/unexamined producers, but only their inclusion as "dumped imports" for purposes of the injury
analysis.
735 China, first written submission, paras.416-417.
736 European Union, first written submission, paras. 545-547.

do otherwise would limit the utility of Article 6. 10 of the AD Agreement, as it would require the
investigating authority to gather and consider in formation for non-sampled/unexamined producers in
order to be able to make individual j udgments as to whether the imports from non-
sampled/unexamined producers are dumped, despite the decision to proceed on the basis of a sample.
7.365 In our view, an investigating authority is not required to consider facts concerning the
individual operations of non- sampled/unexamined producers per se and decide the extent to which
findings for the sampled producers may be relied upon in drawing conclusions concerning whether
imports attributable to non-samp led/unexamined producers are dumped. To us, it seems inconsistent
and illogical to accept that conclusions about dumping for sampled producers can be the basis for the
imposition of anti-dumping duties on non-sampled/unexamined producers, but not to accept that those
same conclusions about dumping may serve as evidence that imports attributable to non-
sampled/unexamined producers are dumped in the same investigation.
7.366 The question of treatment of imports attributable to unexamined producers was addressed by
the Appellate Body in the EC – Bed-Linen (Article 21.5 – India) implementation dispute. In that case,
the European Communities, in implementing the or iginal panel and Appellate Body reports, re-
examined the dumping determinations for sampled producers, and found that three of the five
producers in the sample were dumping, and two were not . In its injury analysis in the implementation
context, the European Communities excluded th e imports attributable to the two non-dumping
producers from the volume of dumped imports, but in cluded all imports attributable to producers
which were not in the sample. The panel concluded that this was permissible.737
7.367 The Appellate Body reversed. The Appellate Body concluded that the fact that sampled
producers accounting for 47 per cent of examined imports were found to be dumping was not a
sufficient evidentiary basis to justify treating imports from unexamined producers as dumped for
purposes of the injury determination. The Appe llate Body noted that there was no specified
methodology for determining the volume of dumped imports, but stated that any such methodology
must be based on positive evidence and an objective examination of relevant evidence. The Appellate
Body went on to state that evidence of dumpi ng margins calculated for examined producers is
relevant "positive evidence" for determining whet her imports from non-examined producers may be
treated as dumped. 738 The Appellate Body acknowledged that the calculation of a dumping margin
under Article 2 was not required for unexamined pr oducers, given that sampling was authorized in
Article 6.10, but observed that there might be "other evidence" that could be relied upon in
determining whether imports from unexamined producers were dumped imports.739

737 Panel Report, EC-Bed-Linen (Article 21.5-India), para. 6.144.
738 Appellate Body Report, EC-Bed-Linen (Article 21.5-India), para. 130. Similarly, the panel in EC –
Salmon (Norway) referred to "the relevance of the findings of dumping for the examined producers as evidence
that imports from non-examined producers are dumped for purposes of the injury analysis". Panel Report, EC –
Salmon (Norway), para. 7.630.
739 In this context, the Appellate Body noted:
"evidence such as witness testimony and different types of documentary evidence about
critical aspects of the market, conditions of competition, production characteristics, and
statistical data relating to the volume, prices, and effects of imports. In the circumstances of a
specific investigation, such cate gories of evidence may qualify as affirmative, objective, and
verifiable, and thus form part of the "positive evidence" that an investigating authority may
properly take into account when determining, on the basis of an " objective examination",
whether or not imports from non-examined producers are being dumped."
Appellate Body Report, EC-Bed-Linen (Article 21.5-India), para. 129 and fn. 162.
It may be noted that in some cases, under the Ap pellate Body's interpretation, imports which are
subject to the imposition of anti-dumping duties pursuant to Article 9.4 may not be considered as "dumped
imports" for purposes of the injury determination under Article 3. We are troubled by this reasoning, as it seems

7.368 In EC-Bed-Linen (Article 21.5-India) , the Appellate Body concl uded that the determination
that all imports attributable to non-examined producers were dumped was not based on an objective
examination of the evidence of the sample, given that the evidence concerning the sample showed that
53 per cent of total imports from sampled producers we re attributable to sampled producers who were
not dumping. 740 The facts are different in this case – all sampled producers were found to be
dumping. Therefore, in our view, that evidence supports the European Union's treatment of all
imports from non-sampled/unexamined producers as dumped for purposes of the injury
determination.
7.369 We recognize that in this case, there were two exporters not included in the sample who were
individually examined separately, and found not to be dumping. However, this difference does not
affect our conclusion. That two producers not included in the sample but individually examined were
found not to be dumping does not in our view affect the relevance or probative value of the evidence
drawn from the sample when all sampled producers were found to be dumping.
741 Thus, in our view,
that two exporters not included in the sample were found not to be dumping does not preclude the
investigating authority from treating all impor ts from non-sampled/unexamined producers as dumped
in this case, based on the evidence of the sample itself.
7.370 We note that, like the panel in EC – Salmon (Norway) , we are troubled by the notion that an
investigating authority may consider "different a nd additional evidence" to evaluate whether imports
from non-sampled/unexamined producers are dumped for purposes of injury analysis, given that
Article 2.1 of the AD Agreement makes clear that "a product is to be cons idered as being dumped"
only if the export price is less than the normal value, and establishes detailed rules for that calculation.
We too consider it unclear "how such "other ev idence" can provide a legally sound basis for a
conclusion that imports attributable to unexamined producers are dumped" and consider that "the fact
that imports from unexamined producers are, under the AD Agreement, recognized as dumped for
purposes of the imposition of anti-dumping duties, an d that those duties may be collected in amounts
limited by calculations made pursuant to Article 2 of the AD Agreement, does establish a legally
sound basis for the treatment of those imports as dumped for purposes of the injury analysis".
742
However, we also agree with the panel in EC – Salmon (Norway) in seeing "no reason why, if all
[sampled] producers are found to be dumping, an investigating authority should be required to
consider "other evidence" that might indicate that imports from some unexamined producers are not
dumped".
743 In this case, as all producers in the sample were found to be dumping, we consider that
the Commission was entitled to, relying on that evidence, treat all imports from non-
sampled/unexamined producers as dumped for purposes of its injury determination.
7.371 We therefore conclude that the European Un ion did not err in treating all imports from non-
sampled/unexamined producers and exporters as dumped, in the context of its injury determination,
and thus did not act inconsistently with Articles 3.1 and 3.2 in considering the volume of dumped
imports. We also dismiss China's consequential clai m of violation of Articles 3.4 and 3.5, which are
based on the same considerations we have rejected above, for the same reasons.

to result in a logical inconsistency in anti-dumping prac tice, in that the same imports may be considered as
dumped for purposes of imposition of duty and not dumped for purposes of assessment of injury. However, this
inconsistency is mitigated if the finding of dumping ba sed on the sample is considered to constitute positive
evidence that imports from non-sampled/unexamined producers are dumped. We note that the panel in EC –
Salmon (Norway), reached the same conclusion. Panel Report, EC – Salmon (Norway), para. 7.630.
740 Appellate Body Report, EC – Bed-Linen (Article 21.5-India), para. 133.
741 We note that the European Union did not impose a duty on imports from the two producers for
which zero margins were calculated. Definitive Regulation, Exhibit CHN-4, Article 1, paragraph 2.
742 Panel Report, EC – Salmon (Norway), para. 7.633.
743 Panel Report, EC – Salmon (Norway), para. 7.634.

9. Whether the European Union violated Articl es 3.1 and 3.4 of the AD Agreement in its
consideration of the consequent impact of dumped imports
(a) Arguments of Parties
(i) China
7.372 China argues that the European Union violated Articles 3.1 and 3.4 of the AD Agreement,
because the Commission failed to objectively exam ine the impact of the dumped imports on the
domestic industry on the basis of positive evidence. China makes four allegations of error in this
regard. First, China argues that the Commission did not examine all injury factors in relation to a
domestic industry defined in a consistent manner. 744 In this regard, China notes that the Commission
examined the factors of production, production capac ity, capacity utilization, sales, market share,
employment and productivity for the industry as defined by the Commission, that is the 46 EU
producers of fasteners, while it examined the factor s of stocks, profitability, cash flow, investments,
return on investments, ability to raise capital, wages, magnitude of the dumping margins for the
sampled EU producers.
745 China maintains that the Commission should have consistently used the
same set of companies with respect to its consideration of all injury factors. 746 China points to
differences in the conclusions regarding sales a nd market share between the Information Document,
where the sample was considered , and the Definitive Regulation, where the EU industry was
considered, in support of its assertion that the an alysis was biased as a result of this lack of
consistency.747 China contends that information for th e industry, and information for the sample,
cannot be considered interchangeable bases of examining injury to the domestic industry. 748 China
argues that the fact that the analys is of data for certain injury fact ors with respect to the sampled EU
producers, or with respect to the EU industry, lead s to different results constitutes evidence that the
examination was not carried out objectively and wa s fundamentally biased. China asserts that the
Commission selectively used data relating to the EU industry or to the sampled EU producers, and
thereby favored the interests of the complainants and made a finding of injury more likely.749
7.373 Second, China alleges that the European Uni on did not objectively examine the profitability
of the domestic industry. In this regard, China asserts that the reported da ta show a substantial
improvement in the profitability of the industry, fro m 2.1 per cent in 2003 to 4.4 per cent during the
investigation period.750 China asserts that the statement that the level of profitability was "low", and
the conclusion that the dumped imports had a negati ve impact on profitability are inconsistent with
this evidence, thus demonstrating th at the conclusions were not objective. 751 Moreover, China
contends that since the increase in profitability "n early reached the "reasonable" target profit margin
of 5%" established by the Commission in consideri ng the injury margin, the conclusions regarding
profitability cannot be considered objective.752
7.374 Third, China asserts that the Commission's overall assessment of the impact of dumped
imports on the EU industry was not objective. In this respect, China asserts that the relevant factors
show that the industry was in a positive state. 753 According to China, the only injury factor that
possibly showed a negative trend during the inve stigation period was market share, and China

745 China, first written submission, paras. 436-437.
747 China, first written submission, paras. 439-443.
750 China, first written submission, paras. 446-447.

contends that a finding of material inju ry cannot be based on one negative factor. 754 China contends
that having found that all factors showed a positive trend, the Commission should have concluded that
the EU industry had not suffered material injury. 755 China asserts that the Commission did not
explain whether and how positive trends for most injury factors were outweighed by any negative
factor.756 China also considers the Commission's explanation as to why trends for certain factors were
"negative developments" to be unpersuasive. 757 China considers that an objective examination of the
Article 3.4 factors could only have led to a conclusion that the EU industry had suffered no injury.758
7.375 Finally, China contends that the Commission im properly considered the displacement of EU-
manufactured fasteners by Chinese imports from certain market segments in making its determination.
China relies on the panel report in EC – Pipe Fittings to argue that injury cannot be found to result
from a displacement of sales from one product segment to another product segment within the same
like product.759 Moreover, China asserts that the entire injury analysis is premised on the distinction
between two market segments, and that the Europ ean Union's conclusions are based on the industry
moving from production of standard fasteners to more production of special fasteners, allegedly
because of pressure from dumped imports. 760 According to China, this demonstrates that the injury
determination was not ba sed on the like product the Commission had defined, which includes both
standard and special fasteners.761
(ii) European Union
7.376 With regard to China's first argument, th e European Union acknowledges that in the
assessment of the consequent impact of dumped imports, the Commission used data pertaining to the
sampled domestic producers except for seven fa ctors (production, production capacity, capacity
utilisation, sales, market share, employment and productivity). 762 For these, it used data pertaining to
the entire domestic industry as defined in the investig ation at issue. But, the European Union argues,
China has failed to make a prima facie case that this led to a non-objective injury determination. 763 In
the view of the European Union, information c oncerning the domestic i ndustry as defined and the
sample may both be considered, and for different fact ors, in making an injury determination, because
the data for the sampled producers was reflective of the state of the entire domestic industry as
defined.764 Thus, all the information considered related to the same domestic industry. 765 T h e
European Union considers that nothing in the Comm ission's analysis reflects a limit on the scope of
the analysis to a part or segment of the domestic industry. 766 The European Union adds that, when
sampling is used, it is the general practice of the Commission to base its injury analysis regarding
"macroeconomic" factors on the entirety of the dom estic industry and of "m icroeconomic" factors on
the sampled producers, and maintains that nothing about this practice demonstrates a failure to
conduct an objective examination. 767 The European Union contends that the alleged difference in the

754 China, first written submission, paras. 453-454.
756 China, second written submission, paras. 927-929.
757 China, second written submission, paras. 930-934.
762 European Union, first written submission, paras. 561-562.
763 European Union, first written submission, para. 560.
764 European Union, first written submission, para. 573.
765 European Union, second written submission, para. 190.
766 European Union, first written submission, para. 574.
767 European Union, first written submission, para. 585. The European Union notes that this is
explained in the Information Document, id., footnote 483, referring to Exhibit CHN-17, p. 16.

Information Document and the Definitive Regulation relied upon by China to support its allegation of
bias is based on an inaccurate presentation of the facts, and that no such difference exists.768
7.377 With regard to China's second argument, the Eu ropean Union contends that the Commission
did take into consideration the slight increase in profitability registered during the period considered,
but reasonably found that profitability was low compar ed to the reasonable target profit margin of
5 per cent.769 The European Union considers that China' s argument asks the Panel to substitute its
judgment for that of the investigating authority, which the Panel may not do. 770 Moreover, the
European Union maintains that, viewed in context a nd in light of the explanations in the Definitive
Regulation, the conclusion that profitability remained low, particularly in light of the significant
increase in consumption, was reasonable.771
7.378 In response to China's third argument, the European Union asserts that the Definitive
Regulation shows that while only market share showed significant declines, evaluation of a number of
other factors, including production, productivity and capacity utilization and profitability also
revealed a negative assessment.
772 The European Union further notes that the Definitive Regulation
explains how even some positive developments, in context, do not reflect the significant increase in
demand, and thus do not underm ine the conclusions reached. 773 The European Union maintains that
the AD Agreement does not require that there be negativ e trends with regard to every injury factor in
order to determine that the domestic industry suffers injury.774
7.379 With respect to China's fourth argument, th e European Union submits that the Commission
did not find that injury was caused only to one segment of the market.775 The European Union asserts
that the Definitive Regulation examined trends in the different segments of the market, i.e., the
standard and special fastener segments, to explain how the EU industry tried to deal with the impact
of competition from dumped imports, which was con centrated in the standard fastener segment. 776
The European Union maintains that the Commission' s conclusion clearly related that assessment to
the finding of injury to the industry as a whole. 777 The European Union urges the Panel to refrain
from engaging in a de novo review of the Commission's determination.
(b) Third parties
(i) Chile
7.380 Chile considers the determination of inju ry to the domestic industry made by the
European Union to be inconsistent with Article 3.1 and 3.4 of the AD Agreement. In Chile's view, the
European Union considered that the displacement of domestic sales of one segment of the product
("special fasteners") w as a result of the increase of imports from another segment of the product

768 European Union, first written submission, paras. 582-588; European Union, second written
submission, para. 195.
769 European Union, first written submission, para. 594.
770 European Union, first written submission, para. 592.
771 European Union, first written submission, para. 598.
772 European Union, first written submission, paras. 607-613.
773 European Union, first written submission, paras. 617-618.
774 European Union, second written submission, para. 204, citing, Panel Report, EC – Bed Linen
(Article 21.5 – India), para. 6.213.
775 European Union, first written submission, para. 627.
776 European Union, second written submission, para. 207.
777 European Union, second written submission, para. 207.

("standard fasteners"). Chile considers this analys is at variance with the basic principles that should
guide any investigating authority when determining injury.778
(ii) India
7.381 India considers that the European Union's in jury determination, based on the sample of
domestic producers representing 17.5 per cent of domestic production, was not in accordance with
Articles 4.1 and 3.1 of the AD Agreement. India notes that the European Union conducted the injury
analysis on the basis of a sample of producers accoun ting for 17.5 per cent of total EU production of
the like product, and that the "Co mmunity industry" defined by the European Union consisted of
those domestic producers whose collective output cons tituted 27 per cent of domestic production, and
that the European Union considers that it is in respect of this Community industry's total production
that one should examine the repr esentativeness of the sample. In ot her words, India asserts that the
European Union argues that the sampled domestic producers need not necessarily represent a major
proportion of total domestic production, but ar e representative of the Community industry. 779 I n
India's view, this argument raises an important i ssue whether the European Union's determination on
injury was consistent with the requirement of " objective examination". India notes that Article 3.1
requires that a determination of injury be b ased on positive evidence and involve an objective
examination of the effect of the dumped imports on the domestic producers, while Article 3.4 requires
the examination of the impact of the dumped impor ts on the domestic industry concerned. According
to India, Article 3.4 does not envisage sampling, and Article 4.1 does not mention sampling. India
considers that, for an objective examination of inju ry under Article 3, the domestic industry has to be
interpreted as referring to the domestic producers as a whole of the like products or those whose
collective output of the product constitutes a major proportion of the total domestic production. Even
if an investigating authority resorts to sampling of domestic producers, the obligation of Article 4.1
regarding the definition of domestic industry must prevail for injury examination under Article 3.780
(iii) Norway
7.382 Norway contends that the strict discipline on i nvestigating authorities' injury determination,
especially Article 3.1, requires the investigating authority to determine the impact of the dumped
products on the domestic producers of the "like products". 781 Norway asserts that, once the European
Union determined the product scope to be standard and special fasteners, this product scope remains
constant throughout the investigation, and that Artic le 3.1 entails an obligation to look at the product
as a whole, not certain segments or models within the product. 782 For Norway, it follows logically
from this that injury cannot be found to result from a displacement of sales from one segment to
another, within the same "like product". 783 Therefore, Norway asserts that, to the degree that the
Panel finds that the European Union in its determination of material injury did find the displacement
of sales from one product segment to another to be a factor, this would be contrary to Article 3.1 of
the AD Agreement.784
(iv) United States
7.383 The United States maintains that, once an i nvestigating authority defines which entities
comprise the "domestic industry" that will form th e basis for its injury analysis, an "objective
examination" requires that the authority seek and, to the extent possible, use a consistent data set

778 Chile, oral statement, para. 9.
779 India, oral statement, para. 6.
780 India, oral statement, para. 7.
781 Norway, written submission, para. 41.
782 Norway, written submission, para. 42.
783 Norway, written submission, para. 43.
784 Norway, written submission, para. 44.

reflecting the performance of those entities. 785 The United States recognizes that an investigating
authority may be confronted with unreliable or in complete data furnished by one or more domestic
producers. In such situations, if the investiga ting authority does not receive complete and accurate
information through supplementary requests, or resort to a reasonable estimation methodology that
will yield results that are reflective of the state of the domestic industry, the investigating authority
should, at the very least, provide an explanation as to why it must examine injury factors on the basis
of different groupings of domestic producers. Without such an explanation, it could appear that the
investigating authority did not conduct an objective examinati on based on positive evidence as
required by Article 3.1, but instead selectively chose data to show injury where it may not exist.
786
(c) Evaluation by the Panel
7.384 Before addressing the issues raised by China's claim and the parties' arguments, we recall
briefly the facts regarding the determination of injury in the investigation in dispute.
7.385 The Commission, the EU investigating authority, addressed the impact of dumped imports in
the section of the Definitive Regulation entitled "situation of the Community industry", at
recitals 127-161, concluding in the latter recital th at "the Community industry suffered material
injury". There is no dispute that the Commission considered all the factors set out in Article 3.4 of the
AD Agreement. Nor is there any dispute that, in its consideration of some factors, specifically
production, production capacity, capacity utilization, sales, market share, average prices, employment,
and productivity, the Commission referred to data fo r the entire domestic industry, as defined in the
investigation, that is, the 46 EU fasteners producers. 787 In its consideration of the remaining factors,
specifically stocks, profitability and cash flow, inv estment, return on investments, ability to raise
capital, and wages, the Commission referred to data for the sampled EU fasteners producers, the
7 companies included in the sample. 788 The Definitive Regulation addresses the information
on profitability at recitals 141-143, and the Commissi on's overall conclusions are set out at recitals
153-160, in particular recitals 155-157 concer ning profitability, and recital 160, concerning
"displacement ... in some important market segments".
7.386 We recall that Article 3.1 of the AD Agreement provides:
"A determination of injury for purposes of Article VI of GATT 1994 shall be based
on positive evidence and involve an objective examination of both (a) the volume of
the dumped imports and the effect of the dumped imports on prices in the domestic
market for like products, and (b) the consequent impact of these imports on domestic
producers of such products."
In turn, Article 3.4 provides:

"The examination of the impact of th e dumped imports on the domestic industry
concerned shall include an evaluation of all relevant economic factors and indices
having a bearing on the state of the industry, including actual and potential decline in
sales, profits, output, market share, productivity, return on investments, or utilization
of capacity; factors affecting domestic prices; the magnitude of the margin of
dumping; actual and potential negativ e effects on cash flow, inventories,
employment, wages, growth, ability to raise capital or investments. This list is not

785 United States, written submission, pa ra. 33, referring to Panel Report, Mexico – Steel Pipes and
Tubes, paras. 7.326-7.328.
787 See Definitive Regulation, Exhibit CHN-4, recitals 127, and sections 5.1, 5.3, and 5.6.
788 See Definitive Regulation, Exhibit CHN-4, recitals 127, and sections 5.2, 5.4, 5.5 and 5.7.

exhaustive, nor can one or several of these factors necessarily give decisive
guidance."
7.387 China has made four separate allegations of e rror with respect to th e Commission's analysis
and determination regarding the im pact of dumped imports on the EU industry in support of its claim
that the Commission failed to make an objective examination based on positive evidence:
(a) that the Commission did not base its determination on the same group of producers
with respect to all injury factors that were analyzed;
(b) that the Commission did not conduct an obj ective assessment of the profitability of
the EU industry, since it disregarded the improvements in profitability observed
during the POI and treated the 4.4 per cent profitability rate as being low;
(c) that the Commission's overall assessment of the impact of dumped imports on the EU
domestic industry was not objective, since the only injury factor that showed a
negative trend was market share, and a r easonable investigating authority would not
have concluded under those circumstances th at the domestic injury was suffering
injury;
(d) that the Commission made a determination that dumped imports displaced the EU
products in certain market segments, and this differentiation between different market
segments resulted in a determination inconsis tent with Articles 3.1 and 3.4 of the AD
Agreement.
We will address each of these arguments below in turn.

7.388 In addition to substantively responding to the claims, the European Union asserts, as a
preliminary matter, that China has failed to make a prima facie case that the EU investigating
authority failed to conduct an "objective examination" with respect to the first aspect of its claim of
violation.
789 We note that "[a] prima facie case is one which, in the absence of effective refutation by
the defending party, requires a Panel, as a matter of law, to rule in favour of the complaining party
presenting the prima facie case".790 It seems to us that China's claim rests in part on its interpretation
of the AD Agreement and the definition of domestic i ndustry. Therefore, we consider it appropriate
to consider the substantive arguments regarding this claim, and address whether China has presented a
prima facie case as warranted in the course of that assessment.
7.389 The European Union acknowledges that the Commission based its assessment of certain
injury factors on information for the sample and its assessment of the others on information for the
entire EU industry. We understand China to argue that such an approach is per se inconsistent with
Articles 3.1 and 3.4 of the AD Agreement.791 In response to a question from the Panel, China asserted
that:
"According to China, it is necessary, once the set of producers is defined for the
purposes of the injury analysis – either the domestic industry as defined by the IA (as
the domestic producers as a whole or a number of them representing a major

789 European Union, first written submission, para. 560.
790 Appellate Body Report, EC – Hormones, para. 104.
791 China also asserts that it demonstrates that this approach resulted in a determination inconsistent
with the obligations of Articles 3.1 and 3.4 in this case, by showing that whether a specific injury factor is
examined with respect to the industry as defined by the Commission or the sample, the outcome is substantially
different, such as to influence the outcome of the injury analysis. China, answer to Panel question 50, para. 169.
We address this contention further below.

proportion of total domestic production) or a sample of producers of the domestic
industry, as defined – the IA must use consistently that set of producers throughout its
injury examination. … China submits that switching back and forth between the
domestic industry as defined and a sample of such industry, is not an objective
methodology since by selecting the set of producers being examined, one can
influence the outcome of the injury analysis."
792
The European Union has explained that its practice, where sampling is used, is to gather information
on "microeconomic" factors from the sampled producers, and take that information into account in its
analysis of injury, while information on "macr oeconomic" factors is obtained from all producers
comprising the domestic industry, and is taken into account in the analysis. We have elsewhere in this
report rejected China's arguments with respect to the definition of the domestic industry and the
selection of the sample in the underlying investigation.793 In these circumstances, logic would suggest
that the fact that some information is only co llected and analysed for the sample, while other
information is collected and analysed for all producers in the industry cannot per se render the
examination not objective. The purpose of a sample is to allow the investigating authority to
extrapolate from the sample to the whole. More over, the Commission's practice of collecting and
examining information on such factors as stocks, profitability and cash flow, investment, return on
investments, ability to raise capital, and wages onl y from the sampled producers is not unreasonable
on its face, and China has not argued otherwise.

7.390 China argues that the investigating authority did not consider the injury factors "in relation to
a Community industry defined in a consistent manner",
794 suggesting that it considers that the
investigating authority changed its definition of the industry in the course of its examination, or relied
on different definitions of the industry with respect to different factors. 795 In this regard, we consider
China's argument to rest on a false premise. The Commission defined the domestic industry in this
case as comprising 46 EU producers of fasteners, and subsequently selected a sample of those
producers for purposes of the investigation. It is clear that the sample is not the domestic industry. In
our view, if, as we have found in this case, the sa mple is properly constitute d, information for the
sample may be relied upon as representative of th e entire domestic industry. Thus, reliance on
information for the sample for some factors, and on information for the entire domestic industry for
others, does not mean that the investigating authority did not consider the injury factors in relation of
an industry defined in a consistent manner – there is only one industry defined in this case, the 46 EU
producers of fasteners. The sample is not a different "definition" of the domestic industry. We agree
with China to the extent that, once the domestic industry has been defined, it is clear that the
examination, analysis, and determination of injury mu st be with respect to th at industry. However,
this does not limit the right of the investigating authority to rely on information for a properly
constituted sample of the domestic industry in that ex amination, analysis and determination. As the
panel observed in Mexico – Steel Pipes and Tubes , "once an investigating au thority has identified the
framework for its analysis ... it must use this id entified framework consis tently and coherently
throughout an investigation".
796 In our view, that is what the Commission did in this case, making a

792 China, answer to Panel question 50, para. 169.
793 See Section VII.D.4(c) above.
795 China, second written submission, para. 896. See also, China, answer to Panel question 50,
para. 169, quoted in text at paragraph 7.389 above.
796 Panel Report, Mexico – Steel Pipes and Tubes, para. 7.322. We consider China's arguments relying
on the report of the panel in Mexico – Steel Pipes and Tubes to be based on an incorrect understanding of that
report. In that case, the question being addressed in th e section of the report cited by China was whether the
investigating authority's collection and reliance on certain categories of data pertaining to three firms, and other
categories of data pertaining to only one firm, was consistent with Mexico's obligations under Articles 3.1, 3.2,
3.4 and 3.5 concerning injury to the "domestic industry" as defined in Article 4.1. There was no allegation that
either the one firm, or the group of three firms, constituted a sample of the domestic industry. Indeed, the

determination with respect to the domestic industry as it was defined in this investigation. The use of
information relating to both the industry and the sample does not affect this view.
7.391 Finally, we note that this is not the first case in which the Commission's practice in this regard
has been considered by a panel. The panel in EC – Bed Linen addressed a similar claim in a case in
which the Commission considered information for al l the producers in the domestic industry for some
factors, and information for a sample of that industry for the other factors. 797 The panel, noting that
pursuant to Article 3.4, a determination of injury mu st be reached for the domestic industry that is the
subject of the investigation, stated:
"it would be anomalous to conclude th at, because the European Communities chose
to consider a sample of the domestic industr y, it was required to close its eyes to and
ignore other information available to it concerning the domestic industry it had
defined. Such a conclusion would be in consistent with the fundamental underlying
principle that anti-dumping investigations should be fair and that investigating
authorities should base their conclusions on an objective evaluation of the evidence.
It is not possible to have an objective evaluation of the evidence if some of the
evidence is required to be ignored, even t hough it relates precisely to the issues to be
resolved. Thus, we consider that the European Communities did not act
inconsistently with Articles 3.1, 3.4, an d 3.5 of the AD Agreement by taking into
account in its analysis information rega rding the Community industry as a whole,
including information pertaining to companies that were not included in the
sample."798
We agree with these views.

7.392 Based on the foregoing, we reject China's alle gation that the fact that the Commission
considered some injury factors on the basis of in formation for the domestic industry as defined, and
for the remaining factors on the basis of information fo r the sample of that industry, demonstrates that
the determination was not an objective examination based on positive evidence.
7.393 Having concluded that consideration of info rmation for both the industry as defined and a
sample of that industry is not per se inconsistent with Articles 3.1 and 3.4, we turn next to consider
whether China has demonstrated that, in this case, doing so resulted in an examination of the evidence
that was not objective. In this context, we note th at China does not dispute the facts relied on by the
investigating authority, but rather takes issue with the choice of facts for certain groups, asserting that
"the fact that the analysis of injury factors w ith respect to the domestic industry as constituted by
45 producers or with respect to the sampled producer s lead to different resu lts constitutes substantial
evidence that the examination was not carried out objectively and was fundamentally biased".
799 In
support of its position, China asserts that, in the Information Document, the Commission considered

definition of the domestic industry was not at issue in that dispute at all. In our view, there is no inconsistency
between our conclusion here, and that panel's view that "once an investigating authority defines which entities
comprise the domestic industry that will form the basis for its injury analysis, it should seek and use a consistent
data-set reflecting the performance of those entities". Panel Report, Mexico – Steel Pipes and Tubes ,
para. 7.326. Both information for the entire domestic industry and for a properly-constituted sample "reflect[s]
the performance" of the domestic industry with respect to which a determination of injury must be made, and
thus, in our view, constitutes a "consistent data-set" for purposes of an injury analysis.
797 In that case, the investigating authority also considered information concerning producers who were
not included in the domestic industry it had defined. The panel concluded that such information, since it did not
concern the domestic industry as defined, was not relevant to the determination. Panel Report, EC – Bed Linen,
paras. 6.182-6.183. However, that factual situation does not arise in this case.
798 Panel Report, EC – Bed Linen, para. 6.181.

data on sales and market share in relation to the sampled producers, while in the Definitive
Regulation, the Commission analysed sales a nd market share of the entire EU industry. 800 While we
have noted elsewhere in this report that the Inform ation Document is not a measure in this dispute,
and we accept the European Union's assertion that it is an intermediate working document, in the
context of this argument, we consider it appropriate to take the Information Document into account in
our consideration whether differences in appr oach between that document and the Definitive
Regulation supports China's allegation that the Commission undertook a selective examination of data
in a biased manner. We start by noting, however, that the mere fact of differences between the
preliminary views set out in the Information Docu ment and the final conclusions reached in the
Definitive Regulation is not sufficient, in our view , to demonstrate that the investigating authorities
conducted their investigation in such a way as to "orient the evaluation process an make a finding of
injury more likely".
801 As noted, the Information Document is at most a preliminary view of the facts.
Thus, the fact that certain conclusions in the De finitive Regulation are based on the information for
the entire domestic industry, while the Informa tion Document addresses information for the sample
does not alone demonstrate a "selective" review of the facts in the Definitive Regulation, which we
recall is the measure before us.802
7.394 Turning to the facts, we not e that the Information Document sets out the Commission's
practice with respect to consideration of information for both the industry and the sample, stating that:
"[i]n cases of sampling of the Community industry, it is the practice of the
Commission's services to examine "macroec onomic" elements (typically production,
capacity, sales volume, market share and em ployment on the basis of information
collected at the level of the entire Commun ity industry (not just for the sampled
companies). However, as stated above, many producers in the Community did not
cooperate in the investigation thereby not allowing for all these elements to be
examined for the entire Community industry. As a consequence, the analysis of the
situation of the Community industry was carried out for the sampled companies,
except for sales and market share, wher e the figures are for all the cooperating
Community producers. The other "macroec onomic" elements will continue to be
investigated to the extent possible."
803
Thus, it is clear that the parties receiving the In formation Document were made aware that the
analysis in that document was preliminary, that the investigation of certain elements to be analyzed
would continue, and that the analysis in the De finitive Regulation might well be undertaken on the
basis of different information, as indeed it was in this case, consistent with the Commission's usual
practice of examining "macroeconomic" factors on th e basis of information for the entire industry,
where possible. 804 In our view, this alone suffices as a b asis to reject China's argument that the
Commission's examination of information in the Definitive Regulation was "selective". Moreover,
we note as a matter of fact that, while the specific numbers and degree are different, both the

800 China, first written submission, paras. 439-442, citing Information Document, Exhibit CHN-17,
pp. 17, 21; Definitive Regulation, Exhibit CHN-4, recitals 136, 154.
802 This is in contrast with the situation in Mexico – Steel Pipes and Tubes , where the investigating
authority, in its final determination, considered facts for two different groups of producers neither of which was
a properly-constituted sample of the entire domestic industry in the investigation.
803 Information Document, Exhibit CHN-17, p. 16.
804 It is not clear why, having indicated, as quoted above, that the figures fo r sales and market share
were for all cooperating Community producers, the table on page 17 of the Information Document, and the
accompanying text at page 18, indicate that information for sales was for th e sampled producers. In our view,
however, this reinforces the preliminary nature of th e information and analysis in the Information Document,
and further supports our view that differences between it and the Definitive Regulation do not demonstrate that
the analysis in the Definitive Regulation was not objective.

Information Document and the Definitive regulation come to the same essential conclusion, reporting
a significant loss of market share by the EU industry.805

7.395 Thus, we conclude that China has not demonstr ated that the consideration of data for the
sample of the EU industry for some factors, and fo r the entire EU industry for others, resulted in this
case in bias in the analysis and outcome, and reject this aspect of China's claim.
7.396 Turning to the allegation that the Commission failed to objectively examine the profitability
of the domestic industry, we note that, to the extent China asserts error on the basis that the
Commission failed to take into consideration the im provement in profitability during the POI, we find
this to be unfounded as a matter of fact, as it is cl ear that the Definitive Regulation addresses the data
on profitability, and notes the increase relied upon by China in its arguments. Indeed, China
recognizes as much.
806
7.397 Thus, we turn to the principal allegation, Ch ina's assertion that characterising a 4.4 per cent
profit rate as "low", and concluding that dumped im ports had a "negative impact" on profitability, in
light of evidence that profitability improved from 2003 to the investigation period, is inconsistent with
Articles 3.1 and 3.4 of the AD Agreement. 807 In China's view, the Commission's explanation of its
conclusion, that the improvement in profitability wa s due to the domestic industry's concentration on
the supply of high quality products generating higher re venues, shows that the investigating authority
"ignored" the positive trend.808
7.398 We do not agree. We recall that the Comm ission addressed the profitability of the EU
industry at various points in the Definitive Regulati on. We note in particular the table preceding
recital 141, which shows that the profitability of th e industry's sales of the like product in the EU
market was 2.1 per cent in 2003, 4.7 per cent in 2004, 3.4 per cent in 2005, 2.9 per cent in 2006, and
4.4 per cent in the investigation period, 1 Oc tober 2006-30 September 2007, and the following
statements and conclusions:
"(141) The levels of profits from the sale of the like product by the Community
industry fluctuated throughout the period c onsidered while only reaching moderately
positive levels.
(142) Profitability was at its lowest level in 2003 (2,1 %) but it has since improved,
which is linked partly to the efforts of the Community industry to reduce
manufacturing costs and increase productivity and the fact that they concentrated
their efforts on the supply of high quality products generating higher revenues than
standard products, the former being less affected by dumped imports from the PRC
than the latter.
(143) It should be noted that the overall positive profitability during the period under
consideration coincided with an expanding market during an expansion phase of the
economic cycle which took place during 2004 a nd beginning of 2008, and it is likely
to deteriorate significantly when these trends are reversed. Indeed, as a widespread

805 Compare, Information Document, Exhibit CHN-17, p. 18 ("the market share of the Community
industry declined significantly, by 8.8% in less than three years") with Definitive Regulation, Exhibit CHN-4,
recital 139 ("the market share of the Community producers declined by 24% in less than three years).
806 China, answer to Panel question 51, para. 170, where China observes:
"China's analysis starts from the facts and evidence on the record, namely recital 140 of the
Definitive Regulation which shows that profitability has increased between 2003 to the IP
from 2.1% to 4.4%."
807 China, answer to Panel question 51, para. 170.
808 China, answer to Panel question 51, para. 171.

industrial product, fasteners are highly sensitive to the variations of the general
economic situation and the industrial production in particular. ...
(154) At the same time, while the Commun ity consumption increased by 29 %, the
sales volume of the Community industry only decreased by 1 %. Its market share fell
by 24 % and it could not fully pass on the gl obal increase in raw material prices to its
customers, resulting in continuing low levels of profitability. ...
(156) The impact of the dumped imports upon the profitability of the Community
industry was somewhat mitigated during the period under consideration by the
Community market expansion and the favour able economic cycle. However, this
situation could be reversed when this cycle comes to an end. ...
(223) The level of any anti-dumping measures should be sufficient to eliminate the
injury to the Community industry caused by the dumped imports, without exceeding
the dumping margins found. When calculating the amount of duty necessary to
remove the effects of the injurious dumping, it was considered that any measures
should allow the Community industry to obtain a profit before tax that could be
reasonably achieved under normal conditions of competition, i.e. in the absence of
dumped imports. For this purpose, it was cons idered that a profit margin of 5 % is an
appropriate level that the Community industr y could be expected to obtain also with
regard to the like product in the absence of injurious dumping."
809
7.399 We note that China does not dispute the facts referred to in these passages, but merely the
characterization of the overall profitability of th e industry as "low", and the conclusion that the
dumped imports had a negative impact on profitability. With respect to the first point, we note that
there is nothing in the AD Agreement that prescribes a threshold level of profitability that might be
considered sufficiently "low" to s upport a conclusion of injury. Ind eed, it is clear to us that this
question is one which must be considered in each c ase, in light of the nature of the industry and the
facts and circumstances of the investigation. In this case, the Commission found, and China does not
dispute, that a profit margin of 5 per cent was a leve l the industry could be expected to achieve in the
absence of injurious dumping. 810 In these circumstances, we see absolutely no basis on which we
might conclude that the Commission's conclusion th at the level of profitability was "low" in the
circumstances of this industry demonstrates a failure to examine the facts objectively.
7.400 With respect to the second point, we recall that China does not dispute the facts on which the
Commission's conclusion that dumped imports had a negative impact on the profitability of the
industry rests. Rather, China asserts that, since the 4.4 per cent profit margin achieved during the
investigation period is "close" to the 5 per cent level the Commission considered appropriate, and
profitability doubled between 2003 and the inves tigation period, the Commission "could not
objectively conclude" that dumped imports had a negative impact on profitability. 811 This is no more
than an alternative interpretation of the facts, and as such, is in our view insufficient to demonstrate
that the Commission failed to examine the (uncontested ) evidence in an objective manner. Moreover,
we note that the industry's profitability did not increase steadily throughout the period 2003-
30 September 2007, but rather fluctuated 812, and that even at the end of that period at the top of the
business cycle, had not reached the level the industry could be expected to achieve in the absence of
injurious dumping. The standard of review we are to apply under Article 17.6(i) makes it clear to us

809 Definitive Regulation, Exhibit CHN-4, recitals 141-143, 154-156, 223.
810 We note that this does not necessarily mean that such a level of profit would be "high", or even that
there would be no injury to the industry if it operated at this level of profit.
812 See paragraph 7.398 above, quoting Definitive Regulation, Exhibit CHN-4, recital 141.

that the mere fact that a different conclusion can be reached, even if that different conclusion were
one we might have reached ourselves (which we do not suggest is the case here) is insufficient to
warrant overturning the evaluation of the investig ating authority. We therefore reject China's
allegation that the European Union failed to objectively examine the profitability of the EU industry.
7.401 China's third allegation is that the Commission' s overall analysis of the impact of dumped
imports on the domestic industry was not objective. In support of this allegation, China asserts that
the Commission improperly found that the industry suffered injury, since "examination of the relevant
factors pursuant to Article 3.4 shows a positive state of the domestic industry". 813 With regard to this
aspect of China's claim, we recall that we are not to engage in a de novo review of the Commission's
determination. Moreover, we recall also that Article 3.4 contains no methodological guidelines for
the required consideration of relevant economic factors, but does provide that the list of factors in that
provision is not exhaustive, and that no one or several of the listed factors can give decisive guidance.
In particular, we consider that there is nothing in the text of Article 3.4 which requires that any
particular factor or group of factors demonstrat e "negative trends", which we understand to mean
declines, in order for a determination of injury to be made.
814 China focuses on its assertion that
market share was the only "negative factor", and ar gues that, having found that "all factors showed a
positive trend over the period concerned" the Co mmission should have concluded that the EU
industry had not suffered material injury.815
7.402 In our view, a "negative factor" in the assessmen t of the condition of the domestic industry is
not limited to a factor for which the information de monstrates an actual decline in performance. Our
view is supported by the text of Article 3.4, wh ich requires investigating authorities to evaluate all
relevant factors, "including actual and potential dec line" in certain factors, and "actual or potential
negative effects" on certain other factors. The New Shorter Oxford English Dictionary defines
"potential" as "Possible as opp[osed] to actual; capable of coming into being or action; latent". 816
The use of the word "potential" in the context of the Article 3.4 non-exhaustive list of relevant
economic factors indicates to us that a declin e need not have occurred during the period under
consideration in order for an investigating authority to find injury.
7.403 Turning to the facts of this case, we recall th at the fasteners market in the European Union
expanded significantly during the period concerned in the injury analysis, with a reported increase in
demand of 29 per cent between 2004 and the investigation period 817, a fact China does not dispute. In
this market context, it seems reasonable to us that relevant economic factors wh ich China refers to as
"positive trends"818, because they show increases, may be inte rpreted as "negative factors" when those
increases are significantly less than the expansion in demand. 819 Thus, to us, China's argument

814 Thus, it seems to us that it may be possible that even if the evidence before the investigating
authority showed a decline only with respect to one factor considered, for instance, market share, this would not
necessarily preclude a finding of injury, consistent with Ar ticle 3.4. Clearly, in such a case, the other evidence,
including the nature of the product, industry, and market, as well as the reasoning of the investigating authority,
would be critical considerations for a reviewing panel.
816 New Shorter Oxford English Dictionary, Clarendon Press, 1993.
817 Definitive Regulation, Exhibit CHN-4, recital 129.
819 We do not mean to suggest that a domestic industry is somehow entitled to benefit from the entirety
of an expansion in its domestic market, or that a fa ilure of its performance to in crease commensurate with an
increase in demand necessarily demonstrates injury, but mere ly that in such a situation, the fact that certain
indicators of the industry's perfor mance increased less than demand may be a negative consideration in an
investigating authority's analysis of injury to that industry.

confuses "negative trends", that is, declines in th e reported data for injury factors, and "negative
factors", which in our view may be found even where the reported data shows increases.820
7.404 In this case, the Commission concluded, inter alia, that profitability remained low821, and that
the increase in profitability was disproportionately low when compared to the increase in demand 822;
that production capacity grew "only slightly" resulti ng in low levels of capacity utilization throughout
the period 823; that sales decreased by 1 per cent, while consumption increased by 29 per cent,
resulting in a decline in market share of 24 per cent in less than three years824; that cash flow declined
by almost 20 per cent from 2005 to the investigation period, almost to the level recorded in 2003 825;
and that the margins of dumping were above de minimis, and given the volumes and prices of dumped
imports, the impact of the margin of dum ping could not be considered negligible. 826 Moreover, the
Commission recognized certain positive developments, in cluding a decline in the level of stocks, and
the fact that return on investments and prices increased. 827 The Commission explained, however, that
these improvements did not reflect the significant increase in demand, which might have been
expected to result in more rapid positive movement.
828 Based on our review of the Definitive
Regulation, and our view of when a factor may be viewed as "negative" for purposes of evaluating
injury factors, we reject China's assertion that it is "incorrect, as a matter of fact, to allege that a
"significant number of injury factors" were negative". 829 Considering the Commission's evaluation of
the data before it with an eye to th e specific facts and circumstances of this dispute, and in light of the
explanations given by the Commission in the Definitive Regulation, we conclude that the
Commission's overall evaluation of the relevant injury factors reflects an objective examination of
positive evidence, and its conclusions were such as could reasonably be reached by an objective
decision-maker, on the basis of the facts and arguments before it, and we therefore reject China's
allegation in this regard.
830
7.405 China's final allegation of error with respect to the injury determination is that, to the extent
the Commission's finding is based on the fact that there was a significant displacement of EU product
from some market segments, this conclusion is inconsistent with Articles 3.1 and 3.4 of the
AD Agreement.831 The European Union contends that China's argument goes to the question of
causation, not the existence of injury, and is in any event contradicted by the facts, asserting that the
Commission made its injury determ ination with reference to the entire industry, not any segment

820 We use the terms "increases" and "declines" in this discussion as indicating positive and negative
developments. Of course, for some factors, an increasing trend may actually be a negative development, for
instance, with respect to inventories.
821 A characterization which, we recall, we have not found unjustified in this case.
822 Definitive Regulation, Exhibit CHN-4, recital 141.
823 Definitive Regulation, Exhibit CHN-4, recital 130.
824 Definitive Regulation, Exhibit CHN-4, recital 139.
825 Definitive Regulation, Exhibit CHN-4, recital 144.
826 Definitive Regulation, Exhibit CHN-4, recital 151. We note that China acknowledges that the
margins of dumping were a negative factor, but considers it unclear how they can be an injury factor on their
own. China, second written submission, para. 922, 10 th tiret. While this is an interesting question, the fact
remains that Article 3.4 lists the margin of dumping as a relevant economic factor to be considered, and thus we
must treat it as relevant to the investigating authority's evaluation of those factors.
827 Definitive Regulation, Exhibit CHN-4, recitals 146, 138.
828 Definitive Regulation, Exhibit CHN-4, recitals 157, 138.
830 We do not dispute that an alternative evaluation of the facts, such as proposed by China, might be
possible. We note, however, that in this case, China do es not even argue that this alternative explanation was
raised before the Commission. We consider, moreover, that the explanations provided by the Commission in
the Definitive Regulation, and by the European Union in support of that determination, are "reasoned and
adequate" even in light of the proffered alternatives. See, Appellate Body Report, US – Softwood Lumber VI
(Article 21.5 – Canada), para. 117, footnote 176.

thereof, and explained that the negative impact of the dumped imports was mitigated by the move of
the industry into the higher-end, special fastener segment of the market.832
7.406 China refers, in support of its position, to r ecital 160 of the Definitive Regulation, which
states:
"The investigation has since confirmed that material injury resulted from the
significant displacement of Community products by Chinese imports in some
important market segments , with a negative impact on capacity utilisation and
profitability, although this impact has been somewhat attenuated by the fact hat [sic]
the industry managed to compensate lower production volumes by focusing on
market segments and products generating higher revenues." (emphasis added by
China)
The European Union refers to the same stat ement in support of its position, emphasising the
conclusion at the end of the recital that "this impact has been somewhat attenuated by the fact [t]hat
the industry managed to compensate lower produc tion volumes by focusing on market segments and
products generating higher revenues". According to the European Union, China's argument suggests
that the loss of market share is due to the indus try's decision to move into the higher end market
segment, but that in fact, the opposite is true, a nd the industry was forced out of the lower end,
standard fasteners segment, but was able to incr ease its sales in the higher end, thus avoiding the
worst.833 Moreover, the European Union asserts, the Commission did not make a finding of market
displacement, but related its injury finding to fasteners as a whole.834

7.407 China asserts for all the inju ry factors which showed a positive trend, the Commission
systematically considered that these should not be treated as "positive", since the positive trend was
only due to the fact that the domestic industry prod uced more special fasteners and fewer standard
fasteners.835 China considers that, by doing so, the Commi ssion examined the injury factors only in
terms of standard fasteners, since the positive tr ends induced by increased production of special
fasteners were systematically set aside in the injury analysis. Therefore, China asserts that the entire
injury analysis of the Commission is premised on the distinction between the two market segments,
and contends that, whether the state of the domes tic industry is better because the domestic producers
have moved from standard fasteners to the more lucr ative segment of the market is irrelevant since
both are within the like product. 836 China considers that the Co mmission's injury analysis is
effectively based on the standard fastener market segment, as the conclusion appears to be based on
the fact that the EU industry could not continue to produce standard fasteners because of the pressure
exerted by dumped imports. 837 China relies on the Appellate Body's report in US – Hot-Rolled Steel
in support of its view that, by focussing on one segment of the market, the Commission's injury
determination is inconsistent with Articles 3.1 and 3.4.838
7.408 China's arguments in this regard raise two qu estions; first, whether the Commission did, in
fact, focus its injury determination on one segment of the market, and second, if it did, whether this
demonstrates that its determinati on was inconsistent with Articles 3.1 and 3.4. In our view, China's
argument fails because, taking into consideration the entirety of it analysis and conclusions with

832 European Union, first written submission, paras. 623-624.
833 European Union, first written submission, para. 624.
834 European Union, second written submission, para. 207.
835 China, second written submission, paras. 944-947.
836 China, second written submission, paras. 942-9 43, 948; China, answer to Panel question 52,
para. 172.
838 China, second written submission, para. 949; China, answer to Panel question 52, para. 172.

respect to injury, it is clear that the Commission did not find injury to only the standard fasteners
segment of the market, and thus did not conclude that injury resulted from a displacement of sales
from one segment of the market to another. All the data considered by the Commission with respect
to the condition of the EU industry refers to th e industry as a whole – there is no separate data
reported for different market segments. Thus, it is cl ear to us that, in its evaluation of the relevant
factors, the Commission did not focus on one segment, and discount the other, but rather, made a
determination with respect to the entire industry, and explained certain aspects of its analysis by
referring to developments in different segments of the market. We note in this regard the views of the
Appellate Body in US – Hot-Rolled Steel:
"it seems to us perfectly compatible with Article 3.4 for investigating authorities to
undertake ... an evaluation of particular part s, sectors or segment s within a domestic
industry. Such a sectoral analysis ma y be highly pertinent, from an economic
perspective, in assessing the state of an industry as a whole."
839
In our view, the Commission's evaluation of information and conclusions in the Definitive Regulation
are entirely consistent with this statement.

7.409 The factual circumstances of this case, moreover, are entirely different from those in US –
Hot-Rolled Steel. In that case, the US investigating aut hority, the United States International Trade
Commission ("USITC"), was considering an industr y which produced steel for captive consumption,
and for sale in the "merchant market". The USITC' s final determination cont ained frequent reference
to data for the merchant market, but did not contai n, describe, or otherwise refer to, data for the
captive market. In these circumstances, the Appell ate Body concluded that while the statute which
directed the USITC to "focus primarily" on the me rchant market in its analysis of injury for an
industry with both captive consumption and mercha nt market sales was not inconsistent with
Articles 3.1 and 3.4 as such, the application of the statute in that investigation constituted a selective
examination of one part of a domestic industry, an d thus was not an objective examination of positive
evidence regarding the industry. The Appellate Body observed that:
"where one part of an industry is the subj ect of separate examination, the other parts
should also be examined in like manner. Here, we find that the USITC examined the
merchant market, without also examining th e captive market in like or comparable
manner, and that the USITC provided no ade quate explanation for its failure to do
so."
840
7.410 In this case, by contrast, it is clear that the Commission did not "examine the [higher end
specialty fastener] market, without also examining th e [lower end standard fastener] market". Indeed,
the Commission did not examine separate markets per se at all in this case. Rather, it examined the
performance of the industry as a whole, and expl ained how some of the developments observed
reflected the shift of the industry to production of more specialty fasteners. Therefore, we conclude
that, as a matter of fact, the Commission did not "s egment" its analysis of injury, and did not focus
only on the standard fastener segment of the mark et. Thus, China has failed to demonstrate the
premise of its final allegation of error, and we therefore reject China's allegation.
7.411 Based on the foregoing, we conclude that China has failed to demonstrate that the
European Union's examination of the impact of dumped imports on the domestic industry is
inconsistent with Articles 3.1 and 3.4 of the AD Agreement.

839 Appellate Body Report, US – Hot-Rolled Steel, para. 195 (footnote omitted).
840 Appellate Body Report, US – Hot-Rolled Steel, para. 214.

10. Whether the European Union violated Articl es 3.1 and 3.5 of the AD Agreement in its
consideration of causation
(a) Arguments of the Parties
(i) China
7.412 China contends that the European Union viol ated Articles 3.1 and 3.5 of the AD Agreement
in concluding that dumped imports from China caused material injury to the EU Industry. China
bases its claim on two assertions of error: first, that the Commission failed to demonstrate that the
dumped imports, through the effects of dumping, are causing injury; and second, that the Commission
failed to ensure that injury caused by factors othe r than dumped imports was not attributed to dumped
imports.
 841
7.413 In support of its first allegation, China subm its that the Commission failed to establish a
causal relationship between the dumped imports and the injury, as required by Article 3.5. China
argues first that the Commission's reasoning, which China asserts is based on a coincidence between
the significant increases in the volume of dumped im ports and the continuously declining loss of
market share by EU producers, does not support the conclusion that dumped imports are causing
injury to the EU industry through the effects of the dumping, as China argues is required. 842 China
maintains that a mere "coincidence", that is, si multaneity of an increase in the volume of dumped
imports and the existence of injury, is insufficien t to establish the causal relationship required by the
AD Agreement.843 Second, China submits that the conclu sion that there is a causal relationship
between dumped imports and injury must be b ased on positive evidence, and argues that the
Commission failed to adduce such evidence in its examination of the reasons why the EU industry
produced more special and fewer standard fasteners.844 According to China, the Commission failed to
consider this latter fact, and that the loss in mark et share was due to this "strategic decision", which
may be motivated by factors other than the presence of dumped imports. 845 China considers that it
was manifestly necessary, as part of the analysis of causation, to determine why EU producers shifted
from producing standard fasteners to producing special fasteners, and contends that the Commission's
conclusion that the shift was a reaction to increasi ng quantities of dumped imports is not based on
positive evidence and thus is not substantiated.846
7.414 With respect to the second assertion, China cont ends that the Commission failed to properly
assess the injurious effects of increased raw material prices, and the effects of exports to third
countries, and failed to ensure that injury caused by these factors was not attributed to dumped
imports. Concerning increased raw material prices, China notes that the EC considered it a factor
causing injury, but concluded it was not "the decisive factor" and would not per se break the causal
link between dumped imports from China and the injury to the EU industry. 847 China maintains that
the European Union failed to separate and distingu ish the injurious effects of the increase in raw

841 China, first written submission, para. 462. We note that the European Union, in its second oral
statement, objected to the second aspect of China's argument, asserting that no claim in this regard was set out in
China's panel request. European Unio n, second oral statement, para. 70. However, as noted, China clearly
argued this aspect of its claim in its first written submission. We consider the European Union's objection
untimely, particularly in this case, where the European Union had previously made numerous similar objections,
and decline to address it.
842 China, first written submission, paras. 475-476.
846 China, second written submission, paras. 968-972.
847 China, first written submission, para. 478, citing Definitive Regulation, Exhibit CHN-4,
recitals 176, 179.

material prices from the injurious effects of dumped imports.848 China argues that the increase in raw
material prices made it more attractive to produce high quality fasteners, in which raw material costs
are a smaller portion of total costs, and thus led the EU industry to focus on production of high quality
fasteners, which explains the decrease in the EU industry's market share. 849 According to China, the
Definitive Regulation does not contain a satisfactory explanation of the nature and extent of the
injurious effects of this factor, as distinguished from the injurious effects of the dumped imports, as
China considers is required by Article 3.5 of the AD Agreement. 850 With respect to exports to third
countries, China asserts that that the European Union violated Articles 3.1 and 3.5 of the
AD Agreement. China asserts first that the conclusion that export performance was not causing injury
was not based on positive evidence and did not invo lve an objective examination of the evidence
submitted.
851 Second, China maintains that the Co mmission based its assessment of export
performance on data which do not relate to the domestic industry as defined in the investigation. 852
China notes that the information in the Definitive Regulation concer ning exports, which showed an
increase in exports to third countries, is for all EU producers of fasteners, and not for either the
industry as defined in the investigation, or the sample examined. 853 China considers that the
Commission's conclusions, that exports were only 11 per cent of the EU industry's production in
2006, and were at prices higher than those in the EU market, do not relate to the EU industry, as they
are not based on data for that industry. 854 China submits an alternate calculation of changes in
exports, which it asserts shows a completely different trend, a decrease of almost 50 per cent. 855
China maintains that the Commission failed to examine to what extent this alleged loss in export sales
caused injury to the EU industry.856 Moreover, China maintains that it is not possible to determine the
possible influence of export performance on the inju ry suffered by the EU industry without assessing
the export performance of that industry, which must be based on data for that industry, and not some
other, larger group of producers.857
(ii) European Union
7.415 The European Union contends th at China fails to establish a prima facie case with respect to
both aspects of its causation claim. 858 The European Union contends that China's argument unduly
limits the injury to loss of market share, contrary to the facts of record. It also argues that, concerning
causation, China's argument is limited to speculati on that if the domestic industry had not decided to
move into the specialty fastener segment of the market, it would not have lost market share.859 For the
European Union, this is insufficient to make out a prima facie case.860 The European Union asserts
that the actual findings of the Commission are set out in the Definitive Regulation, referring
particularly to recitals 163 th rough 171. The European Union contends that these findings
demonstrate that the Commission's analysis w as reasonable and well-reasoned. Moreover, the
European Union considers that China has not made any argument otherwise with respect to this
analysis.861

849 China, first written submission, paras. 486-488.
850 China, second written submission, paras. 983-993.
851 China, second written submission, paras. 994-1004.
852 China, second written submission, paras. 1006-1017.
854 China, first written submission, paras. 490-492.
857 China, second written submission, paras. 1007-1008.
858 European Union, first written submission, para. 632.
859 European Union, first written submission, para. 634.
860 European Union, first written submission, para. 635.
861 European Union, first written submission, paras. 637-638.

7.416 With respect to the second aspect of China's claim, the European Union contends that,
contrary to China's arguments, the Commission did not consider the loss of market share by the EU
industry as a cause of injury, but as an indicator of injury caused by the effects of dumped imports,
finding a clear and direct link between the increase in dumped imports, their increase in market share,
and the consequent loss of mark et share of the EU industry.
862 The European Union contends that
China does not point to any flaws in the Commission 's reasoning, or any evidence that would suggest
that the Commission failed to separate and distinguish the effects of other factors from the injurious
effects of dumped imports. Rather, the European Union asserts, China merely disagrees with the
Commission's evaluation of those effects. 863 In any event, the European Union notes that there is no
specified methodology for conducting a non-attribution an alysis, and that what is important is that
injuries caused by other factors are not lumped t ogether with injury caused by the dumped imports. 864
The European Union notes that the Commission addressed the effect of raw material price increases at
length, finding that these prices increased worldwide, but that the increases could not be passed on to
consumers by EU producers, as would normally be the case, due to pressure on prices in the EU
market from dumped imports.
865 For the European Union, this supports the reasonable conclusion
that increased raw material prices were not the decisive factor in the injury, as normally they would be
passed on to consumers, but in this case could not be. 866 The European Union asserts that the analysis
in the Definitive Regulation did not lead to the conclusion that a direct link between increased raw
material prices and the injury existed, as the time pattern did not match, the price increases were not
specific to the European Union, an d these increases could not be passed on to consumers. According
to the European Union, this analysis sufficiently addressed the nature and extent of the injury caused
by increased raw material prices.
867 With respect to exports to third countries, the European Union
asserts that the Commission found that export perfo rmance was not a cause of injury to the EU
industry, and thus no further analysis of the natu re and extent of the effect of this factor was
required.868 With respect to the information cons idered in the Definitive Regulation, the
European Union contends that consideration of da ta for all EU producers is one way of examining
export performance of the EU industry, especially wh ere, as here, no interested party raised export
performance as an important "other factor" causing injury. 869 The European Union considers that the
alternative information relied on by China in its arguments is not part of the record, and was not raised
during the investigation. Thus, the European Union argues that it would be an unwarranted de novo
review for the Panel to consider this information, which the European Union contends is incorrect.870
(b) Arguments of Third Parties
(i) Japan
7.417 Japan requests that the Panel carefully revi ew whether the European Union violated
Articles 3.1 and 3.5 of the AD Agreement by attributing to dumped imports injury caused to the EU
industry by other known factors, in particular the effects of increased raw material prices.
871 Japan
notes the requirements of Articles 3.1 and 3.5, and recalls that investigating authorities must separate
and distinguish the injurious effects of the dumpe d imports from the injurious effects of other known

862 European Union, first written submission, paras. 642-644.
863 European Union, first written submission, para. 647.
864 European Union, first written submission, paras. 650-652.
865 European Union, first written submission, paras. 653-655.
866 European Union, first written submission, para. 656.
867 European Union, second written submission, para. 216.
868 European Union, first written submission, paras. 661-662.
869 European Union, first written submission, para. 664.
870 European Union, first written submission, paras. 665-666.
871 Japan, written submission, paras. 64, 67.

factors.872 Japan considers the principle of "separating and distinguishing" the effects of other known
factors to be of paramount importance in every anti-dumping investigation.873
(ii) Norway
7.418 Norway does not take a position on whether th e European Union fulfilled its obligations
according to Articles 3.1 and 3.5 in this case, but highlights certain arguments it considers may be
important to the Panel's interpretation and application of those provisions. 874 Norway recalls the text
of those provisions, and the requirement that the investigating authorities "separate and distinguish"
the injurious effect of the dumped imports from the injurious effects of other known factors. 875
Norway notes that this requires "a satisfactory explan ation of the nature and extent of the injurious
effects of the other factors, as distinguished from the injurious effects of the dumped imports". 876
Norway attaches great importance to these principles , as an important mechanism to ensure that the
injury from dumped imports is isolated from the injurious effects of other factors, fulfilling the
objective of Article 3.5. Norway therefore asks the Panel to carefully review whether the EU in this
case fulfilled its obligation to "separate and distin guish" the effects of the dumped imports from the
injurious effects of the increase in raw material prices and exports to third countries by the EU
industry, and whether the EU ensured that any in jurious consequences from such other factors were
not attributed to the dumped imports.
877
(c) Evaluation by the Panel
7.419 Article 3.5 provides:
"It must be demonstrated that the dumped imports are, through the effects of
dumping, as set forth in paragraphs 2 and 4, causing injury within the meaning of this
Agreement. The demonstration of a causal relationship between the dumped imports
and the injury to the domestic industry shall be based on an examination of all
relevant evidence before the authorities. The authorities shall also examine any
known factors other than the dumped imports which at the same time are injuring the
domestic industry, and the injuries caused by these other factors must not be
attributed to the dumped imports. Factors which may be relevant in this respect
include, inter alia , the volume and prices of imports not sold at dumping prices,
contraction in demand or changes in the pa tterns of consumption, trade restrictive
practices of and competition between the foreign and domestic producers,
developments in technology and the export performance and productivity of the
domestic industry.
"
China's claim alleges error with both the Commiss ion's conclusion that dumped imports from China
caused injury to the EU industry producing fastener s, and with the Commission's examination of any
"known factors other than dumped imports" which were injuring the EU industry at the same time as
dumped imports. We address each of these in turn below.

7.420 First, however, we recall that the Commission addressed causation in the Definitive
Regulation at recitals 162-184, concluding in the latte r recital that "the dumped imports originating in
the PRC have caused material injury to the Community industry". The Definitive Regulation

872 Japan, written submission, paras. 65-66.
873 Japan, written submission, para. 67.
874 Norway, oral statement, para. 18.
875 Norway, oral statement, para. 19 citing, Appellate Body Report, US – Hot Rolled Steel, para. 226.
876 Norway, oral statement, para. 20, citing, Appellate Body Report, US – Hot Rolled Steel, para. 226.
877 Norway, oral statement, para. 21.

addresses the effect of dumped imports at recitals 163-171, addresses the effect of other factors,
specifically, imports from third countries, export perfo rmance of the EU industry, and increase in raw
material prices, at recitals 172-179, and draws conclusions at recitals 180-184. China does not dispute
any of the factual information considered by the in vestigating authority, except, as discussed below,
the use of export data for all EU producers.
7.421 We recall that Article 3.1 of the AD Agreement, also cited by China with respect to this
claim, provides that:
"A determination of injury for purposes of Article VI of GATT 1994 shall be based
on positive evidence and involve an objective examination of both (a) the volume of
the dumped imports and the effect of the dumped imports on prices in the domestic
market for like products, and (b) the consequent impact of these imports on domestic
producers of such products."
7.422 In this case, there is no dispute concerning the evidence considered by the Commission in
finding causation.878 Thus, the question before us is whether, in examining the consequent impact of
dumped imports on domestic producers of the like products , that is, the EU industry as defined by the
Commission in this investigation, the Commissi on engaged in an objective examination of the
evidence. We recall in this regard that "an 'objective examination' [under Article 3.1] requires that the
domestic industry, and the effects of dumped imports , be investigated in an unbiased manner, without
favouring the interests of any interested party, or gr oup of interested parties, in the investigation". 879
It is, we consider, the task of the investigating authority to weigh the evidence and make a reasoned
judgement – this implies that there may well be evidence, and arguments, that detract from the
conclusions reached.880 We recall that Article 17.6(i) of th e AD Agreement requires us, on review, to
determine whether the authorities' establishment of the facts was proper and whether their evaluation
of those facts was unbiased and objective. If we find this to be so, we may not overturn the
authorities' determination even if we would have r eached a different conclusion. In our view, this
means that, unless a complaining party in disput e settlement demonstrates that the evidence and
arguments before the investigating authority were such that an unbiased and objective investigating
authority could not reach a particular conclusion, we are obliged to sustain the investigating
authority's judgment, even if we would not have r eached that conclusion ourselves. Moreover, we do
not consider that a determination can be sustaine d on review only if every argument and conflict in
the evidence was resolved by the investigating author ity in favour of the determination made – that is,
it may reach conclusions on some issues that do not support its determination, but so long as its
explanations are reasonable and supported by th e evidence cited, merely that another overall
conclusion might have been reached does not de monstrate that the investigating authorities'
determination is inconsistent with either Article 3.1 or 3.5 of the AD Agreement.881

878 There is disagreement between the parties concerning the evidence with respect to the Commission's
examination of "other factors", which we address below.
879 Appellate Body Report, US – Hot-Rolled Steel, para. 193.
880 We note in this regard the statement of the Appellate Body in US – Countervailing Duty
Investigation on DRAMS , concerning the role of a panel as a review er of agency action, rather than as initial
trier of fact: "[A] panel examining the evidentiary basi s for a subsidy determination should, on the basis of the
record evidence before the panel, inquire whether the evidence and explanation relied on by the investigating
authority reasonably supports its conclusions". Appellate Body Report, United States – Countervailing Duty
Investigation on Dynamic Random Access Memory Semiconductors (DRAMS) from Korea (" US –
Countervailing Duty Investigation on DRAMS "), WT/DS296/AB/R, adopted 20 July 2005, DSR 2005:XVI,
8131, para. 188. While the agency dete rmination at issue in that case concer ned the existence of a subsidy, we
consider that this view is equally applicable in the co ntext of review of a determination of causation in an anti-
dumping investigation.
881 See, Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 117.

7.423 With respect to the first asp ect of China's claims, we not e that China asserts that the
Commission's reasoning for its finding of causati on is based on a "mere coincidence" between
significant increases in the volume of dumped imports and the decline in the EU industry's market
share. China acknowledges that there is no require d methodology for the analysis and determination
of causation in the AD Agreement. However, referring to the Appellate Body report in US – Wheat
Gluten, China asserts that the fact that two elements occur simultaneously does not establish that the
one element "brings about", "produces" or "induc es" the other element, which China considers
necessary to demonstrate causation.
882 China considers that, in order to make a determination of
causation consistent with Article 3.5, the EU author ities were required to demonstrate with supporting
evidence that the loss of production volumes and the loss in market share were caused, i.e., produced,
by the dumped imports. China asserts that, by b asing the conclusion on a mere coincidence, they
failed to do so, and ignored that the factors consider ed to show injury, and in particular the loss of
market share, may well be explained by the domestic industry's increased production of special
fasteners.
883
7.424 However, a review of the Definitive Regulation makes clear to us that while the coincidence
in time of the increase in dumped imports and the decline in the EU industry's market share is
certainly an element in the Commission's reasoning, it is not the entire basis for the conclusion that
dumped imports caused injury to the domestic industr y. China does not explain why, in its view, the
fact that the increase in the volume of dumped impo rts coincided with the declining trends in the
situation of the domestic industry is insufficient as a basis for finding causation, but merely speculates
that the loss of market share might be explained by the EU industry's move to increased production of
specialty fasteners. We note that, as the panel in Argentina – Footwear observed,
"While such a coincidence by itself cannot prove causation (because, inter alia ,
Article 3 requires an explanation – i.e., "findings and reasoned conclusions"), its
absence would create serious doubts as to th e existence of a causal link, and would
require a very compelling analysis of why causation still is present."884
Argentina – Footwear was a dispute under the Safeguards Agreem ent, but we note that the Appellate
Body has treated the causation standard under that agreement and under the AD Agreement as similar,
and therefore we consider it re levant to our determination. 885 In that dispute, the Appellate Body
stated that it saw "no error in the Panel's in terpretation of the causation requirements ... of the
Agreement on Safeguards".886

7.425 In this case, as is clear from the Definitive Re gulation, the Commission did not find that the
EU industry was injured solely because market share declined 887, and did not consider the declining

882 China, answer to Panel question 56, para. 191, quoting, Appellate Body Report, United States –
Definitive Safeguard Measures on Imports of Wheat Gluten from the European Communities ("US – Wheat
Gluten"), WT/DS166/AB/R, adopted 19 January 2001, DSR 2001:II, 717, para. 67.
883 China, answer to Panel question 56, para. 192.
884 Panel Report, Argentina – Safeguard Measures on Imports of Footwear ("Argentina – Footwear
(EC)"), WT/DS121/R, adopted 12 January 2000, as modified by Appellate Body Report WT/DS121/AB/R,
DSR 2000:II, 575, para. 8.238.
885 See Appellate Body Report, US – Hot-Rolled Steel , para. 229, where the Appellate Body observed
that its interpretation of Article 3.5 of the AD Agreem ent, in particular the non-a ttribution requirement, is
"fortified" by its interpretation of Article 4.2(b) of the Agreement on Safeguards, the causation requirement in
that Agreement, citing in this regard the Appellate Body Reports in US – Wheat Gluten and United States –
Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia ("US –
Lamb"), WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX, 4051.
886 Appellate Body Report, Argentina – Safeguard Measures on Imports of Footwear ("Argentina –
Footwear (EC)"), WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, 515, para. 145.
887 See Section VII.D.9(c) above.

market share to be a cause of injury, but rath er a factor demonstrating that injury existed. 888 T h e
Commission also found that a number of other injury factors supported the finding of injury, in the
context of an industry facing increased demand. Moreover, the Commission explained its conclusion
that the decline in market share supported its finding that dumped imports caused injury.
889 We note
in particular the statement that:
"In reaction to the increasing quantities of im ports of standard products originating in
the PRC, the Community industry has developed its production activities of special
parts (based on drawings from customers), t hus managing to maintain its production
volumes and avoid a further deterioration of profitability. Howe ver, these products,
belonging to the higher end of the market cannot fully compensate for the loss of high
volumes of production of standards [sic] products."
890
7.426 In our view, this is a reasonable interpretation of the facts, and one which could be reached by
an unbiased and objective investigating authority on th e basis of the information before it. Moreover,
contrary to China's argument, it specifically addresses the question of why EU producers chose to
move into production of special fasteners. Chin a acknowledges that the European Union explained
this shift as a reaction to increased quantities of Chinese imports of standard fasteners
891, but contends
that this explanation is unsubsta ntiated by evidence, and that ther e are other reasonable explanations
for this shift. However, China has itself proffered no evidence to support its alternative
explanations.892 Moreover, a lack of direct evidence for such reasoning is in our view not fatal,
particularly where, as in this case, the reasoning itsel f is a rational explanation of the observed facts,
and is not undermined by evidence before the investigating authority. We consider that China has not
demonstrated a failure of reasoning or expl anation in the Commission's determination 893, but has
rather put forward an unsubstantiated different interpretation of the relevant facts.
7.427 We recall that it is not our role to review the evidence de novo , or to choose which of
alternative interpretations of the facts is most convincing to us, or would be ours were we to make our
own conclusion. It is our task to undertake a ca reful scrutiny of the Commission's determination to
assess whether the conclusions therein could be reached by an unbiased and objective decision maker,
taking into account the facts that were before the investigating authority, and in light of the
explanations given. We recall, in this regard, the statement of the Appellate Body that
"a panel is not compelled under Article 11 to "automatically reject" the explanation
given by an investigating authority merely because a plausible alternative explanation
has been proffered. At the same time, a panel may find the investigating authority's
explanation inadequate when, even though that explanation seemed "reasoned and
adequate" at the outset, or in the abstract, it no longer seems so when viewed in the
light of the plausible alternatives. In ot her words, it is not the mere existence of
plausible alternatives that renders the investigating authority's explanation
"implausible". Rather, in undertaking its review of a determination, including the
authority's evaluation (or lack thereof) of a lternative interpretations of the evidence, a

888 Definitive Regulation, Exhibit CHN-4, recitals 154, 160.
889 Definitive Regulation, Exhibit CHN-4, recitals 165-167.
890 Definitive Regulation, Exhibit CHN-4, recital 167.
892 China does not assert that these alternatives were argued before the investigating authority and
rejected, and there is no indication in the Definitive Regulation that any party proposed these alternatives during
the investigation. Thus, it is difficult for us to see on what basis the investigating authority could now be
required to have considered them.
893 We recall that China does not di spute the facts in question in connection with this aspect of its
claim.

panel may conclude that conclusions that initially, or in the abstract, seemed
"reasoned and adequate" can no longer be characterized as such.176
In our view, the Commission's determination that dumped imports caused the injury it had found the
EU industry to be experiencing was a reasonable conclusion, based on the evidence and arguments
before it, and we therefore reject this aspect of China's claim.

7.428 Turning to the second aspect of China's claim, China argues that the European Union did not
separate and distinguish the effects of other factor s, specifically, the increase in raw material prices
and the export performance of the EU industry, whic h might be contributing to the injury suffered by
the domestic industry, from the effects of dum ped imports, as required by Article 3.5 of the
AD Agreement. We recall that Article 3.5 provides in pertinent part:
"The authorities shall also examine any known factors other than the dumped imports
which at the same time are injuring the domestic industry, and the injuries caused by
these other factors must not be attributed to the dumped imports."
Previous panel and Appellate Body reports make it clear that while an investigating authority is
required to consider the effects of other factors known to the investigating authority which may be
causing injury to the domestic industry, there is no required method of analysis in undertaking that
examination.
895 As previously discussed, we consider that it is our task to undertake a careful scrutiny
of the Commission's determination to assess whether the conclusions therein could be reached by an
unbiased and objective decision maker, taking into account the facts that were before the investigating
authority, and in light of the explanations given.896

7.429 We note, and China does not dispute, that the Definitive Regulation does discuss the effect of
"other" factors causing injury, including specifically increased raw material prices
897, and does
address the export performance of the EU industry. T hus, the issue for us is whether that discussion
and the explanations given in light of the facts fa ll short of the requirements of Article 3.5 of the
AD Agreement. In this context, we recall that Article 3.5 contains no guidance on the assessment of
other factors, and the reports of the Appellate Body concerning the need to "separate and distinguish"

894 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 117.
895 Appellate Body Report, US – Hot-Rolled Steel , para. 178; Appellate Body Report, EC – Tube or
Pipe Fittings, para. 189; Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 154.
896 Panel Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 7.19; Appellate Body
Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 112; Appellate Body Report, United States –
Countervailing Duty Investigation on Dynamic Random Access Memory Semiconductors (DRAMS) from Korea
("US – Countervailing Duty Investigation on DRAMS "), WT/DS296/AB/R, adopted 20 July 2005, para. 151 &
footnote 278.
897 The Commission also considered the effect of imports from third countries in this regard, Definitive
Regulation, Exhibit CHN-4, recitals 172-174, and concluded that they "could not have contributed to the injury
suffered by the Community industry". Id., recital 174. China has not challenged this aspect of the Definitive
Regulation.

the effects of dumped imports from those of other factors causing injury similarly do not provide any
direction to investigating authorities as to how this is to be done. We consider it appropriate to
evaluate whether the explanations given by the Commission as to why the increase in the price of raw
materials did not per se break the causal link between dumped im ports and material injury, and why
the export performance of the domestic industry w as not a source of injury, are such reasonable
conclusions as could be reached by an unbiased and objective investigating authority in light of the
facts and arguments before it and the explanations given.
7.430 Turning first to the Commission's consideration of increased raw material prices, we note that,
in the Definitive Regulation, the Commission found that, while there was evidence of some increase
in steel prices during the period, increased raw material prices were not a decisive factor in the injury
to the EU industry, which was mainly reflected in lost market share. The Commission also found that
average selling prices in the European Union increased mainly due to the shift to production of special
fasteners, which are more costly to manufacture, by the EU industry. The Commission went on to
observe that sales prices could not be increased to make up for these cost increases, due to
inflexibility in prices caused by the simultaneous su rge in dumped imports at prices significantly
below those of the EU producers.
898 Finally, the Commission noted that increased raw material prices
should have affected all manufacturers, and therefor e could not be considered a particular factor
affecting the EU industry, since the unit prices of Chinese product remained stable despite increased
raw material prices.
7.431 In light of this, it is clear that the Commission did consider the effect of increased raw
material costs. Indeed, China does not dispute this, but rather once more proposes an alternative
interpretation of the facts. China posits that the increase in raw material prices made it attractive for
the EU industry to focus on special fasteners, where th e share of raw material costs in the total cost of
production is smaller, a nd revenues are higher, and thus expl ains the industry's increasing production
of special fasteners. This, China asserts, explains th e loss of market share, and thus the injury to the
EU industry.899
7.432 While China characterizes its explanation as demonstrating errors in the Commission's
reasoning900, in our view, its alternative explanation does not address the Commission's reasoning at
all, but rather proposes an alternative analysis. Mo reover, it is an alternative that focuses on different
considerations, and does not take account of certain salient factors which the Commission considered
relevant, such as the increased volume of dumped imports sold at prices significantly below those of
the EU producers and thereby exerting pressure on EU prices. Thus, in our view, China has not
demonstrated that the Commission's determination, that increased raw material costs did not break the
causal link between dumped imports and injury, w as not a reasonable conclusion, reached by an
unbiased and objective investigating authority in light of the facts and arguments before it.
7.433 With respect to the export performance of the domestic industry, we note that the
Commission also addressed this question. The Commission observed that exports were only 11 per
cent of the EU industry's production in 2006, in creased by 81 per cent between 2003 and the
investigation period, and were consistently at prices significantly above sales prices on the EU

898 The Commission found price undercutting averaging more than 40 per cent. Definitive Regulation,
Exhibit CHN-4, recital 126. We recall that we have rejected China's claim with respect to the Commission's
price undercutting analysis. See paragraph 7.336 above.
899 China, first written submission, paras. 483-488. We note that China has not asserted that this
alternative was argued to the investigating authority during the course of the investigation.

market. Thus, the Commission concluded that the export performance of the EU industry "was not a
source of material injury to the Community industry".901
7.434 China does not dispute that the Commission conc luded that the export performance of the EU
industry "was not a source of material injury to the Community industry". China considers that this
conclusion is not one which coul d have been reached by an unbiased and objective investigating
authority on the basis of the facts before it. Ch ina raises a different issue in respect of export
performance, asserting that the information with resp ect to exports considered by the Commission in
its analysis was for all EU producers of fasteners, and was not specific to the domestic industry as
defined, i.e., the 46 producers, or the sample considered. According to China, this information cannot
be extrapolated to the EU industry. 902 China argues that the increase in exports cited by the
Commission was equivalent to nearly 4 per cent of the EU market, and was t hus substantial, and had
it been sold in the EU market, EU producers would ha ve retained most, if not all, of the EU market
share.903 Moreover, China has submitted to the Panel an alternative calculation of the EU industry's
export trends, which it asserts is completely different from that relied upon by the Commission. 904
China asserts that the investigating authority coul d not carry out a proper analysis of whether other
factors could have caused injury to the domestic industry by assessing such other factors on the basis
of information relating to a broader group of produc ers than the industry with respect to which the
injury determination was made.905
7.435 The European Union responds by asserting that China speculates about what might have
happened if all export sales had been made on th e EU market, which was not the case, and notes
moreover that since the export sales were at higher prices, they would not have been competitive in
the EU market, where prices were under pressure from dumped imports. 906 The European Union
acknowledges that the data concerning exports on which the Commission relied was for all EU
producers, but argues that, in a case where, as here, no interested party raised the issue of export
performance as an important "other factor", it was reas onable to rely on publicly available data rather
than seeking company specific data through questionnaires. 907 In addition, in response to a question
from the Panel, the European Union noted its usual practice is to consider macroeconomic factors at
the industry level, rather than at the company sp ecific level, and that export performance is also
normally examined at the industry level ra ther than at the company specific level. 908 T h e
European Union further stated that:

901 Definitive Regulation, Exhibit CHN-4, recital 175.
902 China, first written submission, paras. 489-492.
904 Specifically, China compares the volume of sales by the EU industry on the EU market with data for
EU industry production and stocks of sampled producers, and calculates that exports declined by almost 50 per
cent from 2003 to the investigation period. China, first written submission, para. 492.
906 European Union, first written submission, para. 663.
907 In this regard, we note that, in response to questions from the Panel, the European Union stated that,
consistent with its usual practice, in this case, th e Commission requested "information relating to sales (both
domestic and export sales) in the injury questionnaires sent to the sampled producers". European Union, answer
to Panel question 100, para. 37. Thus, it is clear that the Commission had information on exports for the
sampled producers, and indeed, it provided an extract from an internal document prepar ed in the course of the
investigation summarising the verified data of the injury indicators for the sampled producers, including data on
exports. The European Union asserts that this data confirms both the lack of importance of export sales, and the
healthy state of export performance, thus demonstrating that export performance could not have been a cause of
injury. However, there is no indication in the De finitive Regulation that this information was actually
considered by the Commission in its analysis, and indeed, the European Union does not assert otherwise.
908 European Union, answer to Panel question 100, para. 37.

"[s]ince global data for the whole EU industry was available in COMEXT
(EUROSTAT) it could be compared with the total Community Industry figure ( i.e.
PRODCOM 1.431 K MT) to assess its relative importance. This approach was
consistent with the use of the remaining data quoted under Chapter E. of Council
Regulation No 91/2009 on causation which was related to total imports from the rest
of the world and imports from a selected number of countries (Taiwan, Japan, USA).
COMEXT statistics are an objective and reliable source of information. Such use of
general statistical information is all the mo re permissible given that this factor does
not really concern the state of the domestic industry (Article 3.4) but is examined in
order to evaluate its possible relevance fo r determining the impact of factors other
than dumped imports (Article 3.5)."
909
Finally, the European Union disputes China's alte rnative calculation, contending that it compares
information for the EU industry of 45 producers for sales and production with stocks figures for the
sampled producers, which the European Union asserts is clearly incorrect, and that this information
should therefore not be used.
910

7.436 We note that, while the discussion of export pe rformance is in the section of the Definitive
Regulation entitled "Effect of other factors", it appears that the Commission did not, in fact, find that
export performance was an "other factor which was in juring the domestic industry at the same time as
dumped imports" within the meaning of Article 3.5 of the AD Agreement. However, it is also clear
that this conclusion was based on information fo r all EU producers of fasteners, and not on
information related to either the domestic indus try as defined by the Commission, or the sampled
producers examined in the investigation. Th e European Union asserts that the Commission's
consideration of this data on exports was nonetheless permissible, particularly since it was compared
to data for EU industry production.
7.437 We do not agree. It seems clear that a compar ison of data on exports by a larger group of
producers, including producers not included in the EU industry, with production data for the EU
industry, will not necessarily give an accurate indication of the export performance of the EU
industry. We recall that, with respect to the evaluation of the Article 3.4 factors concerning injury, the
panel in EC – Bed Linen concluded that:
"information concerning companies that are not within the domestic industry is
irrelevant to the evaluation of the "rel evant economic factors and indices having a
bearing on the state of the industry" required under Article 3.4. This is true even
though those companies may presently produce, or may have in the past produced,
the like product, bed linen."
The European Union argues that:

"one cannot simply transpose the EC – Bed Linen finding in respect of industry
indicators under Article 3.4 to causation indicators under Article 3.5. ... Clearly, since
the purpose of Article 3.5 is not to evaluate the state of the domestic industry but
rather to examine whether the injury allege d to exist is not caused by other factors,
these other factors may be of a general statistical nature."
911
However, in our view, this ignores the fundamental pr inciple reflected in the statement of the panel in
EC – Bed Linen , which in our view is that the analysis of injury to the domestic industry should rest

909 European Union, answer to Panel question 100, para. 37.
910 European Union, first written submission, para. 666.
911 European Union, answer to Panel question 99, paras. 34-35.

on information related to that industry, and not some other group of producers. We see no reason why
the same fundamental principle should not be adhere d to in the context of analysis of causation,
including the examination of other factors which may be causing injury to the domestic industry at the
same time as imports. 912 It is undisputed that the Commission's conclusions with respect to export
performance rest on consideration of information fo r a broader group of producers than the domestic
industry as defined by the Commission in this investigation.

7.438 We therefore conclude that, by relying on in formation concerning producers not part of the
domestic industry in considering whether exports of the EU industry may have contributed to the
injury suffered by the industry, the European Union failed to undertake an objective examination of
the relevant facts in concluding that the export perfo rmance of the domestic industry was not a source
of material injury to the EU industry. Thus, we consider that its conclusion concerning the effect of
other factors is, in this respect, inconsistent with Articles 3.1 and 3.5 of the AD Agreement.
913
11. Claims regarding alleged procedural violations
(a) Introduction
7.439 China raises a series of claims of violation with respect to the conduct of the fasteners
investigation. While it argues these claims separate ly, there is a significant degree of overlap in its
assertions, and in the factual situations it asserts dem onstrate the violations alleged. The relevant
provisions under which violations are asserted are Articl es 6.1.1, 6.2, 6.4, 6.5, 6.9, 12.2 and 12.2.2 of
the AD Agreement. We examine each of China's claims below.
(b) Whether the European Union violated Articles 6.5, 6.2 and 6.4 of the AD Agreement by
failing to disclose the identity of domestic producers
(i) Arguments of the Parties
China
7.440 China contends that the Commission did not discl ose the identity of the complainants and the
supporters of the complaint 914, treating this information as confidential on the grounds that its

912 We do not preclude the possibility that information for all producers might, in some circumstances,
be an appropriate proxy for information specific to the domestic industry at issue, for instance where
information for the industry is not available or not provided. However, in such a situation, we would consider it
imperative that the investigating authority explain why, in the particular case, it considers reliance on
information to be appropriate, and how any weaknesses in the information have been taken into account.
913 We note that we do not consider it appropriate to consider the information on export volumes and
trends submitted by China, as China calculated export information for the EU industry by subtracting data for
sales by the entire EU industry from data for productio n by the entire EU industry, and comparing the result
with data for inventories reported by the seven sampled producers, to derive the proffered data on exports. We
consider this comparison improper, and that the resu lting information on exports constitutes an inappropriate
basis for analysis in this case. Moreover, it is clear, an d China does not argue otherwise, that no arguments in
respect of such information were made before the investigating authority. Similarly, we decline to consider the
information submitted by the European Union in response to questioning by the Panel on this issue. While it
appears this information was in the record of the inves tigating authority, there is no indication in the Definitive
Regulation that it was considered by the Commission, and the Definitive Regulation itself, as explained by the
European Union, indicates that it did not. We do not co nsider it appropriate to evaluate whether other data, not
referred to by the Commission, could have been the basis of the determination actually made. In our view, to do
otherwise would require us to engage in de novo consideration of the eviden ce, which we are precluded from
undertaking, pursuant to the standard of review in Article 17.6(i).
914 Although initially China also seemed to take issue with the non-disclosure of the volume of
production of the subject product by the complainants and the supporters of the complaint, it subsequently

disclosure could lead to retaliation from complain ants' and supporters' customers who import the
subject product from China. The identity of comp lainants is, in China's view, essential information
that an application must contain. China first clai ms that the European Uni on's failure to disclose the
identity of the complainants and supporters of the complaint constitutes a violation of Article 6.5 of
the AD Agreement. China maintains that a clai m of "potential commercial retaliation" does not
amount to "good cause" being shown for confidential treatment within the meaning of Article 6.5 of
the AD Agreement. In China's view, the argument presented by the complainants and the supporters
of the complaint that disclosure of their identity may trigger commercial retaliation by their customers
referred to a hypothetical detrimental effect and did not establish "good cause". Further, China asserts
that the companies that were included in the sample for the Commission's injury determination did not
request that the Commission keep their identity confidential. Sin ce the sampled companies were all
also complainants or supporters of the complaint, China contends that the fact that confidential
treatment of their identities was not required during the investigation shows that the ground on which
they sought confidential treatment for their identit y at the time of the complaint, namely "potential
commercial retaliation", was not "good cause" w ithin the meaning of Article 6.5 of the
AD Agreement. China also argues that the complain ants and the supporters of the complaint did not
submit evidence to support their claim of potential commercial retaliation. As China sees it, good
cause cannot be established on the basis of allegations or conjecture but must be based on evidence.915
7.441 China argues that the identity of the complainants constitutes relevant information used by the
authorities in an investigation. Failure to disclose that information therefore also violated Article 6.4
of the AD Agreement, which requires that interest ed parties be given timely opportunities to see all
non-confidential information which is used by the au thorities and which is relevant to the preparation
of their cases. China is of the view that a violation of the obligation set forth in Article 6.4 necessarily
leads to a violation of Article 6.2, and that therefore, by not disclosing the identity of the complainants
and the supporters, the European Union also act ed inconsistently with Article 6.2 of the
AD Agreement. Independently from this, China ma intains that the Commission violated Article 6.2
since the non-disclosure of the identity of the comp lainants and supporters deprived the Chinese
exporters of an opportunity to review the information on standing and to make comments.916
European Union
7.442 The European Union notes that although in the h eading and the introductory part of this claim
China refers to Article 6.5.1 of the AD Agreement, along with the chapeau of Article 6.5, it develops
the claim essentially on the basis of the latter. Th e European Union therefore considers China to have
dropped the Article 6.5.1 aspect of this claim. 917 With respect to the claim under Article 6.5, the
European Union notes that China seems to accept that in principle the identity of complainants can be
treated as confidential information within the meani ng of Article 6.5, but asserts that in this case no
good cause was shown for such treatment . According to the European Union, any detrimental effect
that may result from the disclosure of busine ss confidential information is by definition
hypothetical.918 It is, in the European Union's view, impo ssible to predict with any degree of certainty
the consequences of disclosing confidential informati on. The European Union, therefore, disagrees
with China's contention that there had to be compelling evidence to show the existence of commercial
retaliation from the customers of the complainants and the supporters of the complaint in the fasteners
investigation.919 The European Union posits that potentia l commercial retaliation constitutes "good

clarified that this claim was limited to the non-disclosure of the identity of the complainants and the supporters
of the complaint. China, second written submission, para. 1049.
917 European Union, first written submission, para. 711.
918 European Union, first written submission, para. 715.
919 European Union, first written submission, para. 715.

cause" within the meaning of Article 6.5. There was, in the European Union's view, a serious risk that
customers importing fasteners from China whose cost s would have gone up with the imposition of an
anti-dumping measure on fasteners from China w ould retaliate against the complainants and
supporters.920 The European Union also disputes Chin a's assertion that the sampled EU producers
whose identity was disclosed were themselves complainants or supporters of the complaint,
maintaining that this assertion has no factual basis.921
7.443 As regards China's claims under Articles 6.4 and 6.2, the European Union submits that these
claims fall outside the Panel's terms of reference because China's panel request makes no reference to
the identity of the complainants in connection with these two provisions.
922 The European Union
notes that the panel request refers to "the composition of the domestic industry", but argues that this is
not the same as "the identity of the complainants". 923 Assuming China's claims under Articles 6.4 and
6.2 are within the Panel's terms of reference, the European Union argues that , with the exception of
the independent claim under Article 6.2, these two cl aims are purely consequential to China's claim
under Article 6.5. According to the European Union, since there is no violation of Article 6.5, there
should be no violation of Articles 6.4 or 6.2 eith er. Assuming that the Panel finds a violation of
Article 6.5, the European Union disagrees that this would necessarily lead to a violation of
Articles 6.4 and 6.2 of the Agreement without further examination.
924 While recognizing the inter-
linkages between the different paragraphs of Article 6, the European Union contends that each such
paragraph contains distinct rights and obligations.925 With respect to China's independent claim under
Article 6.2, the European Union contends that Ch ina ignores the third sentence of Article 6.2, which
excludes confidential information from the scope of th e right conferred upon interested parties in that
provision. Therefore, argues the European Union, this claim is also dependent on China's claim under
Article 6.5, and even if the Panel finds this claim to be within its terms of reference, it should be
rejected on substance.926
(ii) Arguments of Third Parties
Chile
7.444 Chile submits that a correct application of Article 6.5 of the AD Agreement requires that the
reason for the disclosure of confidential information must be known by the interested party that has
submitted the information. According to Chile, wher e the investigating authorities determine that the
request for confidentiality is not warranted, they mu st expressly so state. Chile considers that the
disclosure of information considered by the auth ority to be non-confidential must be properly
substantiated and expressly authorized by the part y submitting the information. Not so doing would
violate that party's due process rights.
(iii) Evaluation by the Panel
7.445 China's claim consists of several distinct allegations. China argues that confidential treatment
of the identities of the complainan ts and the supporters of the complaint violated Article 6.5 of the

920 European Union, first written submission, para. 716.
921 European Union, first written submission, paras. 717-718.
922 The European Union's terms of reference objection in this regard applies both to the claims under
Articles 6.2 and 6.4 that the European Union characterizes as being dependent on a finding of inconsistency
with Article 6.5 and to the independent claim under Arti cle 6.2. European Union, first written submission,
para. 724.
923 European Union, first written submission, para. 720.
924 European Union, first written submission, paras. 721-723.
925 European Union, answer to Panel question 62.
926 European Union, first written submission, para. 724.

AD Agreement.927 Since, according to China, the identity of the complainants and the supporters was
not confidential information within the meaning of Article 6.5, withholding that information from
access by the Chinese producers also vi olated Article 6.4 of the AD Agreement. In China's view, any
violation of Article 6.4 necessarily leads to a violation of Article 6.2. 928 Thus, submits China, by not
disclosing the identity of the complainants and suppor ters, the Commission also violated Article 6.2.
This allegation of a violation of Ar ticle 6.2 is dependent on a finding of violation of Article 6.4. In
addition, China maintains that the Commission violat ed Article 6.2 because by treating the identity of
the complainants and supporters as confidential in formation, the Commission deprived the Chinese
producers of the opportunity to examine whether the standing requirements were met.929
7.446 The European Union argues that China's clai ms under Articles 6.4 and 6.2 are outside our
terms of reference because China's panel request does not refer to these two provisions in connection
with the non-disclosure of the identity of the comp lainants and supporters. China objects to this
assertion and submits that its panel request does rais e a claim under Articles 6.4 and 6.2 with respect
to the non-disclosure of the identity of the compla inants and supporters. In this regard, China
contends that its panel request not only raises this claim but also goes further and identifies some of
the arguments supporting the claim. According to China, however, such arguments do not limit the
scope of the claim raised in the panel request. Fu rther, China contends that the European Union has
not shown that the alleged procedural deficiency in China's panel request prejudiced its ability to
defend itself in these proceedings.930
7.447 We note that the central element of China's clai m is an alleged violation of the chapeau of
Article 6.5 of the AD Agreement. China conte nds that the Commission erred in treating as
confidential information the identity of the complain ants and the supporters of the complaint. With
respect to its claims under Articles 6.4 and 6.2, Ch ina disagrees with the European Union's contention
that these claims are dependent on China's claim under Article 6.5. 931 We agree with China that these
claims do not seem to be dependent on the claim under Article 6.5 in the sense that China does not
argue that since Article 6.5 was violated Articles 6. 4 and 6.2 were also violated. However, we note
that both Articles 6.4 and 6.2 exempt confidential information from the scope of the rights that they
confer upon interested parties in an investigation. Article 6.4 gives interested parties the right "to see
all information that is relevant to the presentation of their cases, that is
 not confidential as defined in
paragraph 5". (emphasis added) Article 6.2 which concerns the interested parties' right to defend their
interests, and to that end meet other interested parties, provides, in its third sentence, that the
"[p]rovision of such opportunities must take account of the need to preserve
confidentiality[.]"(emphasis added) Thus, the rights of interested parties set forth in these two
provisions do not apply to confidential information. It follows that to find a violation of Articles 6.4
and 6.2, we necessarily have to find a violation of Article 6.5, which would mean that the identity of
the complainants and the supporters should not have been treated as confidential information. It is
only if that information was wrongly treated as conf idential that we can engage in a substantive
analysis of China's claims under Articles 6.4 and 6.2. In this regard, we recall that China raises two
allegations of violation of Article 6.2, one as a dependent claim on a violation of Article 6.4 and one
independently, on the basis that by treating the id entity of the complainants and the supporters as
confidential information the Commission precluded the Chinese producers from examining properly
whether the standing requirements were met in the fasteners investigation. We note that finding a
violation of Article 6.2 in the context of China's claim under Article 6.2 which it characterizes as
being independent from a violation of Article 6.4, would also require a prior finding, in connection
with the claim under Article 6.5, that the identity of the complainants and the supporters was wrongly

930 China, second written submission, paras. 1057-1064.

treated as confidential information. In this re gard, we see no difference between China's dependent
and independent claims under Article 6.2. Consequently, we will st art our evaluation with the claim
under Article 6.5. If we find that the Commission did not err in treating the information at issue as
confidential and that therefore there was no violation of Article 6.5, we will also find that Articles 6.4
and 6.2 were not violated either. We recall, howev er, the European Union's argument that the claims
under Articles 6.4 and 6.2 are not within our terms of reference. Therefore, we will only reject
China's claims under these two provisions if we find them to be properly before us. Conversely, if we
find that the Commission's treatment of this informat ion violated Article 6.5, we will go on to address
the European Union's preliminary objection, and assuming we conclude that the claims under
Articles 6.4 and 6.2 are within our terms of refe rence, will assess China's cl aims in light of the
specific rights and obligations set out in these two provisions.
7.448 With these considerations in mind, we now turn to China's claim under Article 6.5. 932 W e
note that the facts pertaining to this claim are unc ontested. The complaint requesting the initiation of
the investigation at issue requested not to disclose the identity of the complainants in order to avoid
potential retaliation which could be caused by some of their customers who also buy fasteners
imported from China. The complaint reads, in relevant parts:
"The Complainants and the Supporters have expressed the willing [sic] not to have
their names published, to avoid a potential retaliation which could be carried out by
some of their Customers who also buy products directly from P.R. China.
A non-confidential summary cannot be sub sequently given without disclosing the
name of the complainants and the Supporters."933 (emphasis added)
7.449 The Commission accepted this request for confid entiality and conveyed its decision to the
Chinese producers who had questioned the Commission on the complainants' identity. 934 T h e
disagreement between the parties relates to whet her or not potential commercial retaliation from
customers constitutes good cause within the meaning of Article 6.5 of the AD Agreement, justifying
the treatment of the information as confidential.
7.450 The chapeau of Article 6.5 of the AD Agreement reads:
"6.5 Any information which is by nature confidential (for example, because its
disclosure would be of significant competitiv e advantage to a competitor or because
its disclosure would have a significantly adverse effect upon a person supplying the
information or upon a person from whom that person acquired the information), or
which is provided on a confidential basis by parties to an investigation shall, upon
good cause shown, be treated as such by the au thorities. Such information shall not
be disclosed without specific permissi on of the party submitting it." (footnote
omitted)
7.451 We note that Article 6.5 addresses the treatment of information submitted to the investigating
authorities in an anti-dumping investigation by inte rested parties for which confidential treatment is
sought. It states that information which is by nature confidential or which is submitted on a
confidential basis must be treated as confidential by the investigating authorities provided good cause

932 China's claim only relates to the chapeau of Article 6.5 and does not extend to Article 6.5.1. China,
first written submission, para. 1050.
933 Exhibit CHN-15, p. 5.
934 The relevant communication from the Commission states that "[t]he Commission services have
accepted this request from these interested parties in order to avoid eventual adverse commercial consequences".
Exhibit CHN-44, p. 1.

is shown. It also provides that such informati on cannot be disclosed without specific permission from
the party submitting the information. We note th at it is now well establis hed that the good cause
requirement for confidential treatment applies both to information that is by nature confidential and to
information submitted on a confidential basis. 935 Thus, whether the identity of the complainants and
the supporters was by nature confidential or was submitted on a confidential basis is not relevant to
our analysis. Article 6.5 does not, however, explain what "good cause" means. In our view, this is
something that has to be assessed by the investigati ng authorities in light of the circumstances of each
investigation and each request for confidential treat ment. We also consider that what constitutes
"good cause" will depend on the nature of the inform ation at issue for which confidential treatment is
sought.936 The "good cause" alleged to exist, in tu rn, will determine the kind of supporting evidence
that may be needed in order to demonstrate the existence of such "good cause".
7.452 We recall that in this dispute the core of the disagreement between the parties is whether
"potential commercial retaliation" constitutes good cause to justify confidential treatment of the
identity of the complainants and the supporters of the complaint. On its face, we see nothing in
Article 6.5 that would exclude potential commercia l retaliation from constitutin g good cause for the
confidential treatment of any information, including the identity of the complainants. China does not
contest the factual assertion that some of the custom ers of the complainants and the supporters of the
application also bought the subject product from Chinese producers. The complaining EU producers
asserted that they feared commercial retaliation. We understand this assertion to imply that if such
customers found out that these producers had requested the initiation of an anti-dumping investigation
on fasteners from China, this might have the effect of raising prices on such fasteners, and thus raising
the costs of these customers. China has not proffere d any evidence, or even argued, that this assertion
was unfounded, unreasonable, or untrue. China me rely argues that the potential retaliation was
"hypothetical", something that "could" happen, but that there was no evidence that it "would" happen.
We recall that in elucidating what may constitute information that is by nature confidential,
Article 6.5 refers to, inter alia , situations where the disclosure of the information "would have a
significantly adverse effect upon a person supplying the information or upon a person from whom that
person acquired the information". We can certainly see that "potential commercial retaliation" from
the complainants' customers who, in addition to buying the subject product from the complainants,
also purchase imports from the country subject to the complaint, might have a "significantly adverse
effect" upon the complainants.
7.453 China argues that the Commission erred by ma king its decision without any evidence that
showed the existence of the alle ged potential commercial retaliation.
937 It is clear that the only
"evidence" before the Commission was the complaint, which alleged that the disclosure of the identity
of the complainants could trigger commercial reta liation from their customers who also bought the
subject product from China. The Commission relied on this statement, although there is no indication
that the complainants submitted evidence to support th eir concern in this regard. However, in the
circumstances of this investigation, we do not consider this to be a fatal lack of evidence. First, in our
view, "potential commercial retaliation" is not a sufficiently concrete phenomenon that evidence of its
existence is likely to be obtainable. 938 Thus, unless there is some reason to believe that the fear of

935 Panel Report, Korea – Certain Paper , para. 7.335; Panel Report, Guatemala – Definitive Anti-
Dumping Measures on Grey Portland Cement from Mexico ("Guatemala – Cement II"), WT/DS156/R, adopted
17 November 2000, DSR 2000:XI, 5295, para. 8.219.
936 Panel Report, Korea – Certain Paper , para. 7.335; Panel Report, Mexico – Steel Pipes and Tubes ,
para. 7.378.
937 China, second written submission, paras. 1052-1053.
938 We do not exclude the possibility of there being some situation in which such an allegation can be
substantiated by some more concrete evidence than the testimony of the party seeking confidential treatment for
the information that it submits. However, it is difficult to conceive of what such evidence might be – the
likelihood of complainants being able to produce a written document, or an audio recording, of a customer
threatening commercial retaliation seems far-fetched, and yet in the absence of such evidence, we do not see

retaliation is unreasonable, unfounded, or untrue – a nd China has proffered none – we consider that
the allegation of the complainants in this case is a sufficient basis for the Commission's conclusion.
We note in this regard that, in our view, the pur pose of granting confidential treatment as provided for
in Article 6.5 is precisely to make sure that a f eared adverse effect, in this case "potential commercial
retaliation", remains hypothetical, and does not actually materialize. Second, we note that in this
investigation the basis for treating the identity of the complainants as confidential was not a mere
assertion by the complainants that disclosing their identity would cause retaliation. The record shows
that, by stating that their customers were also themselves importers of the subject product from China,
the complainants substantiated their assertion to a certain degree by explaining the circumstances
which they thought showed that commercial retali ation could happen. We therefore disagree with
China's contention that the "potential commercia l retaliation" alleged by complainants did not
constitute good cause within the meaning of Article 6.5.
7.454 China argues that the seven EU producers that made up the sample for purposes of the
Commission's injury determination were also compla inants and supporters and that they did not ask
the Commission to treat their identity as conf idential information during the course of the
investigation after initiation. This, in China's view, shows that there was no logical reason to keep the
identity of these companies confid ential at the complaint stage. 939 In our view, however, the fact that
the names of the companies that made up the sa mple for purposes of the injury analysis were
disclosed does not affect the analysis with respect to the confidential treatment of the names of the
complainants and supporters. The sampled comp anies can clearly be identified as cooperating,
otherwise they would not have been included in th e sample, but this is not necessarily the same as
being identified as complainants themselves, and t hus might not cause the same concerns for those
companies.940 We are therefore not convinced by this argument.
7.455 Based on the foregoing, we conclude that the Commission did not err in granting the request
of the complainants and the supporters of the comp laint to treat their identities as confidential, and
therefore reject China's claim under Article 6.5.941
7.456 We now turn to China's claims under Articles 6.4 and 6.2 of the AD Agreement. We recall
that the European Union argues that these claims are outside our terms of reference because they were
not identified in China's panel request consistently w ith the requirements of Article 6.2 of the DSU.
The European Union argues that the panel request does not refer to the non-disclosure of the identity
of the complainants in the list of the claims unde r Articles 6.2 and 6.4. The European Union notes
that in this particular section the panel request refers to "the composition of the domestic industry" but
maintains that this issue is addressed in a diffe rent section of China's first written submission. 942
China disagrees, arguing that the European Union mixes claims with arguments. China maintains that
it raised a claim under Articles 6.4 and 6.2 of th e AD Agreement arguing, as indicated in its panel
request, that the Commission failed to give the Chinese exporters timely opportunities to see all
relevant information that was relevant to the pr esentation of their cases and the opportunity to defend

what could be proffered as evidence to support a fear of such retaliation, and China has made no suggestions or
argument in this regard.
939 China, first written submission, paras. 537-538.
940 We recall, moreover, that at least one company included in the sample was not, in fact, either a
complainant or supporter of the complaint. See paragraph 7.214 above.
941 That said, however, we would like to underline that our finding only reflects our view on this issue
in light of the particular circumstances of the fasteners investigation. Our reasoning should not be interpreted as
giving investigating authorities carte blanche to treat the identities of all complainants in all anti-dumping
investigations as confidential. Nor should our conclusion here be interpreted to mean that an asserted fear of
potential commercial retaliation would always be sufficient, of itself, to justify confidential treatment, or could
not be challenged as unfounded, unreasonable, or untrue.
942 European Union, first written submission, para. 720.

themselves.943 China contends that it then went on and gave examples as to how these obligations
were violated. According to Chin a, the fact that China added argu ments as to how the specific rights
and obligations found in Articles 6.4 and 6.2 were violated by the Commission does not narrow the
scope of these claims so as to justify the conclusion that they do not extend to the non-disclosure of
the identity of the complainants and supporters. 944 Furthermore, China submits that the phrase
"including, but not limited to" used in the panel re quest in connection with these claims shows that
China intentionally submitted a non-exhaustive list of arguments in support of these claims. 945
Finally, China posits that the Panel should reject the European Union's terms of reference objection
since the European Union failed to show that its due process rights were prejudiced by this alleged
deficiency in China's panel request.946
7.457 We recall that in line with the legal framework outlined above 947, in assessing the
European Union's terms of reference objection, we must consider China's panel request, in its entirety,
to see whether a claim has been raised under Articles 6.4 and 6.2 of the AD Agreement with respect to
the non-disclosure of the identity of the complainants and the supporters of the complaint. We note
that the European Union's objec tion only concerns whether the panel request provides a brief
summary of the legal basis for a claim under Articles 6.4 and 6.2 with respect to the non-disclosure of
the identity of the complainants and supporters. The panel request provides, in relevant part:
"China submits that this measure is in consistent, at least, with the following
provisions of the AD Agreement and of the GATT 1994:

Articles 6.2 and 6.4 of the AD Agreement and paragraph 151 (c)(e) of the Working
Party Report on the Accession of China because the EC failed to ensure throughout
the investigation to Chinese producers/exporte rs the full opportunity for the defence
of their interests and failed to provide timely opportunities for them to see all
information that is relevant to the presentation of their cases, including, but not
limited to the composition of the domestic industry , data concerning normal value
determination, information on the adjustments for differences affecting price
comparability, Eurostat data on the basis of which are based the total EC production
and EC consumption figures[]" (underline emphasis added)
7.458 We note that the request clearly refers to Articles 6.4 and 6.2 of the AD Agreement and
argues that the Commission failed to give the Ch inese exporters full opportunity for the defence of
their interests and timely opportunities to see all the information that was relevant to the presentation
of their cases, throughout the fasteners investigation. We also note that this explanation repeats the
text of Articles 6.4 and 6.2, which provide, resp ectively, that "[t]he authorities shall whenever
practicable provide timely opportunities for all interested parties to see all information that is relevant
to the presentation of their cases[]" and that "[t]hroughout the anti-dumping investigation all
interested parties shall have a full opportunity for th e defence of their interests". In our view, this
made it clear that China sought to bring a claim rega rding an alleged violation of the obligations set
forth in Articles 6.4 and 6.2 in the fasteners inve stigation. China's panel request goes further,
however, and contains more specific explanations as to the factual circumstances in which
Articles 6.4 and 6.2 were allegedly violated in the fasteners investigation. Thus, the panel request
asserts that Articles 6.4 and 6.2 were violated, inter alia, in connection with the composition of the

944 China, second written submission, paras. 1059-1061.
947 See paragraph 7.15 above.

domestic industry, data concerning normal value determination, information on the adjustments for
differences affecting price comparability, and Euro stat data on the basis of which the total EC
production and EC consumption figures were calculated. These specific explanations are preceded by
the phrase "including, but not limited to". Having reviewed China's panel request, we agree with
China that the more specific explanations provide d cannot be interpreted as limiting the scope of the
claims under Articles 6.4 and 6.2 of the AD Agreemen t. In our view, the nature of the rights and
obligations set forth in Articles 6.4 and 6.2 is such that a reference to these provisions, without further
explanation, could suffice to put the responding Member on notice of the nature of the claim that the
complainant might bring. We therefore find China's claims under Articles 6.4 and 6.2 of the
AD Agreement with respect to the non-disclosure of the identity of the complainants and the
supporters of the complaint are properly before us.
7.459 Turning to the substance of China's claims, we recall our observation above
948, that the
obligations in Articles 6.4 and 6.2 of the AD Ag reement do not apply to information which is
confidential within the meaning of Article 6.5 of the AD Agreement. Having concluded that the
Commission did not err in treating the information as confidential, it is clear that there can be no
violation under Articles 6.4 and 6.2 in the non-disclos ure of that information. We therefore reject
China's claim of violation of Articles 6.4 and 6.2 in connection with the non-disclosure of the identity
of the complainants and the supporters of the complaint.
(c) Whether the European Union violated Articles 6.2, 6.4, 6.5 and 6.9 of the AD Agreement by
failing to disclose aspects of the normal value determination
(i) Arguments of the Parties
China
7.460 China argues that the Commission violated its procedural obligations under Articles 6.2, 6.4
and 6.9 of the AD Agreement in connection with its dumping determination. First, China argues that
the Commission acted inconsistently with the requirements of Articles 6.4 and 6.2 of the
AD Agreement by failing to disclose information concerning the product types used in the
determination of normal value. China contends that it was in the General Di sclosure Document that
the Commission informed the Chinese producers for the first time that normal value for the Indian
producer was calculated on the basis of product t ypes. However, China maintains that despite
repeated requests from the Chinese producers, th e Commission did not explain what those product
types were. According to China, it was only one working day before the d eadline for comments on
the General Disclosure Document that the Commi ssion informed the Chinese producers that the
normal value had not been calculated on the basis of PCNs. China asserts that by remaining silent
despite Chinese producers' repeated requests for information on the product types, the Commission
violated the obligations set forth in Article 6. 4 of the AD Agreement. China argues that the
information on product types was used by the Commi ssion, was relevant to the preparation of the
Chinese producers' cases and was not confidential. Therefore, argues China, the Chinese producers
should have been allowed to see this information. Ch ina also submits that by refusing to provide this
information the Commission also violated the more general due process obligation set out in
Article 6.2 of the AD Agreement.
949
7.461 Second, China submits that the Commission violated Article 6.4, and therefore also
Article 6.2, of the AD Agreement by failing to di sclose information on normal value calculations.
China argues that the Chinese producers sought to obta in information on normal value determinations

948 See paragraph 7.455 above.

during the investigation at issue. 950 China asserts that the Commissi on failed to disclose information
on normal values calculated for each product type, a nd the calculations as to whether each product
type was sold in representative qua ntities in the Indian market. 951 China argues that through these
violations, the Commission made it impossible fo r the Chinese producers to properly defend their
interests in the investigation at issue.
7.462 Third, China argues that the Commission violat ed Articles 6.4 and 6.2 of the AD Agreement
by failing to disclose information regarding th e comparison between the normal value and export
price. China maintains that despite repeated requests from th e Chinese producers, the Commission
refused to provide information on the adjustments that were made. Specifically, China argues that the
Commission did not provide any information on how the distinction between standard and special
fasteners was made and how the adjustment for quality control costs was made. 952 In the absence of
this information, argues China, it was impossi ble for the Chinese producers to challenge the
Commission's normal value determinations and dumping calculations.953
7.463 Fourth, China maintains that as a result of these th ree violations, that is by failing to provide
information on product types, normal value determ inations and the comparison between the normal
value and the export price, the Commission also viol ated Article 6.9 of the AD Agreement. In this
regard, China argues that these thr ee pieces of information constitute "facts" that established the basis
of the European Union's decision as to whether or not definitive anti-dumping measures should be
applied, and should therefore have been disclosed to the Chinese producers pursuant to Article 6.9.954
European Union
7.464 In response to China's claims under Article s 6.4 and 6.2 of the AD Agreement, the
European Union generally notes that China bases th ese claims on the disclosure documents issued by
the Commission. The European Union contends, however, that these disclosure documents are
susceptible to scrutiny under Article 6.9 of the AD Agreement, not Articles 6.4 or 6.2. 955 With regard
to China's first claim, the European Union argues that this claim is not within the Panel's terms of
reference because China's panel request refers to "data concerning normal value determination", not to
"product types for the normal value calculation".956 Assuming this claim is within the Panel's terms of
reference, the European Union argues that China' s claim should be rejected. The European Union
notes that in connection with this claim, China refers to the relevant parts of the Definitive
Regulation, certain disclosure documents and correspondence between the Commission and a law
firm representing Chinese producers. According to the European Union, the Definitive Regulation
cannot be challenged under Articles 6.4 and 6.2 in th is context, although it could have been (but was
not) challenged under Article 12 of the AD Agreement. Therefore, that part of China's evidence is
irrelevant.957 As to the disclosure documents and th e correspondence between the Chinese producers
and the Commission, the European Union argues that those could in theory only be evidence of an
alleged violation of Article 6.9 of the AD Agreement, but not of alleged violations of Articles 6.4
or 6.2. In any case, argues the European Union, the evidence submitted by China shows that the
Chinese producers had the opportunity to see all the relevant information which was not confidential

950 China, answer to Panel question 64, para. 279; China, answer to Panel question 101, paras. 41-42.
955 European Union, first written submission, paras. 707 and 726.
956 European Union, first written submission, para. 725.
957 European Union, first written submission, para. 726.

and which was relevant to the presentation of their cases. 958 There can therefore be no violation of
Articles 6.4 or 6.2 of the AD Agreement in this regard.
7.465 With regard to China's second claim, the Eur opean Union posits that given the amount of
information provided in the Definitive Regulation, China's claims under Articles 6.4 and 6.2 of the
AD Agreement should be rejected. The European Union argues that the pieces of evidence on which
China bases its claims, namely the General and I ndividual Disclosure Documents, fall within the
scope of the obligation set forth in Article 6.9 of the AD Agreement, not Articles 6.4 or 6.2, because
these two provisions do not impose an active notification obligation on the investigating authorities.959
The European Union contends that the General Di sclosure Document contained enough information
on the Commission's normal value determination. According to the Europ ean Union, since the
information on the normal values of the Indian producer was treated as confidential under Article 6.5
of the AD Agreement, a decision China has not ch allenged, China's claim under Article 6.2 fails,
because the obligation under this provision does not apply to confidential information.
960
7.466 Regarding China's third claim, the European Union notes that China bases this claim on the
disclosure documents which, according to the Europ ean Union, are susceptible to a challenge under
Article 6.9 of the AD Agreement, not Articles 6.4 or 6.2. 961 Further, the European Union submits that
the information on the comparison between the nor mal value and the export price was treated as
confidential information by the Commission, a decision China has not challenged, and is therefore not
within the scope of the obligation under Articles 6.4 and 6.2. 962 The European Union also argues that
China's factual description with regard to this claim is incomplete and inaccurate.
7.467 In response to China's fourth claim, con cerning Article 6.9 of the AD Agreement, the
European Union asserts that this claim is not within the Panel's terms of reference, because China has
failed to consult on this claim, and it is not proper ly identified in China's panel request. According to
the European Union, as far as alleged procedural violations were concerned, the essence of the
consultations was an alleged failu re to provide access to the file a nd an alleged violation of the
confidentiality rules. The European Union main tains that the disclosure obligations were not
discussed in the consultations.963 If the Panel is of the view that this claim does fall within its terms of
reference, the European Union contends that Chin a's argument is limited to providing a summary of
the obligation set forth in Article 6.9, and that China has thus failed to demonstrate a prima facie
violation of this provision.964
(ii) Arguments of Third Parties
Norway
7.468 Norway contends that the requirements of Ar ticles 6.4 and 6.9 of the AD Agreement also
serve to achieve the purpose of Article 6.2, namely to enable interested parties to defend their
interests. Norway therefore subm its that whenever an investigating authority violates Articles 6.4 or
6.9 of the AD Agreement, it also violates Article 6.2. With respect to Article 6.4, Norway argues that
whether a particular document is relevant to an in terested party's defence should be assessed from the
point of view of that party, not that of the investigating authorities. Norway asserts that the only
exception to this is confidential information whic h, if submitted, has to be accompanied by a non-
confidential summary. With respect to Article 6.9, Norway maintains that the obligation set forth in

958 European Union, first written submission, para. 726.
959 European Union, first written submission, paras. 735-736.
960 European Union, first written submission, para. 738.
961 European Union, first written submission, para. 739.
962 European Union, first written submission, para. 741.
963 European Union, first written submission, para. 744.
964 European Union, first written submission, paras. 746-747.

this provision is not to disclose all facts, but tho se facts which establish the basis of the authorities'
decision whether definitive measures will be applie d. This obligation, argues Norway, cannot be
fulfilled by giving access to all the files in the inves tigation file. Rather, the investigating authorities
should identify the facts that establish the basis of the decision whether definitive measures should be
imposed.
United States
7.469 The Unites States agrees with China's conten tion that Article 6.4 of the AD Agreement
requires the investigating authorities to provide access to all non-confidential information submitted
during an investigation. The United States also agrees that not doing so would violate not only
Article 6.4 but also Article 6.2 of the AD Agreement, since without access to information described in
Article 6.4 interested parties cannot have a fu ll opportunity to defend their interests. The
United States maintains that an interested party's ri ght to defend its interests is particularly important
with respect to information pertaining to normal values and the comparison between the normal value
and the export price. The Unites States asserts that without access to such information an interested
party cannot be said to have benefited from th e right to defend its interests as required under
Article 6.2.
(iii) Evaluation by the Panel
7.470 China maintains that the Commission violated the obligations set forth under Articles 6.2, 6.4,
6.5965 and 6.9 in its dumping determination in the fasten ers investigation. In support of this claim,
China puts forward four arguments. The first th ree arguments concern alleged violations of
Articles 6.4 and 6.2 of the AD Agreement, and asser t that the Commission failed to allow the Chinese
producers access to information pertaining to di fferent aspects of the Commission's dumping
determinations, namely information on: 1) product types; 2) the nor mal value determination; and 3)
the comparison between the normal value and the expor t price. With respect to each of these, China
argues that despite the Chinese producers' requests, the Commission failed to provide the requested
information. Given the commonality of their premi se, we consider it appropriate to evaluate these
three arguments together. After we have considered these three arguments, we will proceed to China's
argument under Article 6.9 of the AD Agreement.
Alleged Violations of Articles 6.4 and 6.2 of the AD Agreement in connection with the
Commission's dumping determinations
7.471 China submits that the Commission violated the obligations set forth in Articles 6.4 and 6.2 of
the AD Agreement by failing to provide the Chinese producers with access to information pertaining
to certain aspects of its dumping determinations in the fasteners investigation. As noted above,
China's claim under Articles 6.4 and 6.2 take issue with three specific elements of the Commission's
dumping determinations, namely access to in formation on the product types, normal value
determinations, and the comparison between the nor mal value and the export price. As far as the
claim with respect to information on product types is concerned, the European Union argues that this
claim is not properly before us. We therefore have to resolve this objection before proceeding to a
substantive assessment of China's claim.
7.472 The European Union asserts that this claim is not within our terms of reference because it was
not identified in China's panel request. The Euro pean Union notes that the claims identified in
China's panel request in connecti on with Articles 6.4 and 6.2 of the AD Agreement refer to "data
concerning normal value determinati on", and maintains that this cannot be the basis of China's claim

965 See, footnote 989.

regarding the alleged failure to disclose "infor mation on product types". The European Union
therefore argues that the Panel should refrain from making findings with respect to this claim.
7.473 China argues that the reference in its panel request to "data concerning the normal value
determination" also covers "information on prod uct types" used by the Commission in its normal
value determinations. Specifically, China maintains th at the word "data" is broad enough to cover all
information used in connection with the normal va lue determination, including that concerning the
product types used for that determination. 966 China also argues that in making this terms of reference
objection the European Union mixes claims with arguments. Finally, China posits that the
European Union's objection should be rejected since it has not shown that the alleged deficiency in
China's panel request prejudiced the European Union's due process rights in these proceedings.967
7.474 China's panel request provides in relevant part:
"Articles 6.2 and 6.4 of the AD Agreement and paragraph 151 (c)(e) of the Working
Party Report on the Accession of China because the EC failed to ensure throughout
the investigation to Chinese producers/exporte rs the full opportunity for the defence
of their interests and failed to provide timely opportunities for them to see all
information that is relevant to the presentation of their cases, including, but not
limited to the composition of the domestic industry, data concerning normal value
determination, information on the adjustments for differences affecting price
comparability, Eurostat data on the basis of which are based the total EC production
and EC consumption figures;" (emphasis added)
7.475 Central to the Parties' disagreement is the meaning of the phrase "data concerning normal
value determination" as used in China's panel reque st. Specifically, the issue is whether this phrase
may be interpreted as referring to information on product types used by the Commission in making
normal value determinations. We recall that dumping determinations are based on a comparison
between the export price of a product, that is, th e price of a product when sold to the importing
country, and the normal value of a like product, that is, the price of a like product when sold in the
market of the exporting country. In some investiga tions, as in the fasteners investigation, the product
at issue in the investigation may comprise different t ypes of the product. In such investigations, data
concerning normal value determinations may be co llected and subsequently compared to the export
price on the basis of such product types. In our vi ew, a reference to the data concerning normal value
determination may reasonably be understood as also referring to the relevant product types on the
basis of which data may be collected and analysed. We therefore consider that China's claim that the
Commission acted inconsistently with Articles 6.4 and 6.2 of the AD Agreement by failing to disclose
information concerning the product types used in th e determination of the normal value is properly
before us, and we proceed to a substantive assessment of this claim.
7.476 As discussed above968, we have rejected China's claim under Article 2.4 of the AD Agreement
with respect to the substantive aspects of the Co mmission's dumping determinations. In rejecting
China's claim, we relied, inter alia , on the fact that China had not demonstrated that the Chinese
producers made a substantiated request for adjustme nts with respect to differences affecting price
comparability between Chinese fasteners and those of the producer in India. China argues that the
reason why the Chinese producers did not make such a request in the fasteners investigation is
because they were not provided timely opportuniti es to see information necessary to make such a
request, in violation of Article 6.4 of the AD Agreem ent, and were thus deprived of the opportunity to
defend their interests, in violation of Article 6.2 of the AD Agreement.

968 See paragraphs 7.294 to 7.302 above.

7.477 China contends that the Commission violated Articles 6.4 and 6.2 of the AD Agreement by
failing to provide information to the Chinese producer s with respect to three issues related to its
dumping determination. China's arguments seek to show that, as far as the dumping determination
was concerned, the fasteners investigation was conducted in a manner that disregarded the basic rights
of interested parties under Articles 6.4 and 6.2. We understand China to argue that, by not respecting
these rights, the Commission left the Chinese produ cers in the dark for a long time during the
investigation, making it impossible for them to defe nd their interests, and more specifically, to make
requests for adjustments to ensure a fair comparis on between the normal value and the export price.
We recall that China acknowledges that the Chinese producers did not make a request for adjustments
in the investigation at issue.969 China contends, however, that this was due to their understanding that
the comparison between the normal value and the e xport price would be made on the basis of full
PCNs. According to China, by informing the two Chinese producers who had repeatedly requested
clarification in this regard of the fact that th e comparison would not be based on full PCNs only one
working day before the deadline for comments on the Disclosure Documents, the Commission made it
impossible for them to request adjustments. 970 The issue for us, therefor e is whether the Commission
disregarded the rights of the Chinese producers under Articles 6.4 and 6.2 of the AD Agreement, and
thereby prevented them from taking necessary steps to ensure that the Commission's determination of
dumping was based on a fair comparison.
7.478 Article 6.4 of the AD Agreement provides:
"6.4 The authorities shall whenever prac ticable provide timely opportunities for
all interested parties to see all information that is relevant to the presentation of their
cases, that is not confidential as defined in paragraph 5, and that is used by the
authorities in an anti-dumping investigation, and to prepare presentations on the basis
of this information."
7.479 We note that Article 6.4 generally stipulates that the authorities shall give interested parties
"opportunities" to see all information used by the investigating authorities in an anti-dumping
investigation. This right, however, is not unlimited. First, it applies to information which is used by
the authorities. Second, the information must be relevant to the presentation of the interested parties'
cases. Third, this right do es not apply to confidential information. Fourth, the investigating
authorities have to provide these opportunities "whenever practicable ", and on a "timely" basis. 971
The panel in EC – Salmon (Norway) explained these obligations as follows:
"It seems clear to us that the timeliness of the opportunities must be assessed by
reference to the right of the interested parties to prepare presentations on the basis of
the information seen. It is similarly clear to us that whether particular information is
relevant is not determined from the investigating authorities' perspective, but with
reference to the issues to be considered by the investigating authority under the
AD Agreement.
880 Thus, information which relates to issues which the investigating
authority is required to consider under the AD Agreement, or which it does, in fact,
consider, in the exercise of its discreti on, during the course of an anti-dumping
investigation, presumptively falls within the scope of Article 6.4.
881 Clearly, an
investigating authority may not allow inter ested parties to see information which is
properly treated as confidential under the AD Agreement.882 Finally, the question of

969 See footnote 621 above.
970 China, answer to Panel question 38(b).
971 Appellate Body Report, EC – Tube or Pipe Fittings, para. 142; Panel Report, Korea – Anti-Dumping
Duties on Imports of Certain Paper from Indonesia – Recourse to Article 21.5 of the DSU by Indonesia ("Korea
– Certain Paper (Article 21.5 – Indonesia)"), WT/DS312/RW, adopted 22 October 2007, DSR 2007:VIII, 3369,
para. 6.82.

whether information is " used" by the investigating authority cannot, in our view, be
assessed from the perspective of whether the in formation is specifically referred to or
relied upon by the investigating authority in its determination. If the investigating
authority evaluates a question of fact or an issue of law in the course of an anti-
dumping investigation, then, in our view, all information relevant to that question or
issue that is before the investigating aut hority must necessarily be considered by the
investigating authority, in order to make an objective and unbiased decision.
Consequently, it seems clear to us that whether information is "used" by the
investigating authority must be assessed by reference to whether it forms part of the
information relevant to a particular issue th at is before the investigating authority at
the time it makes its determination.
883"
Pipe Fittings, paras. 145-146.
881 We thus reject the view of the EC that, in th e context of whether information is relevant to
the presentation of an interested party's case, "the investigating authority may decide on which
information access should be granted". EC, FWS, para. 531.
882 Except to the extent that disclosure is made pursuant to protective orders, as provided for in
footnote 17 of the AD Agreement.
883 We find support for this conclusion in the views of the Appellate Body in EC – Tube and
Pipe Fittings, para. 147."972
7.480 In addition, we agree with the European Union that Article 6.4 does not obligate the
investigating authorities to actively discl ose information to interested parties. 973 China generally
recognizes that Article 6.4 requires the authorities to allow interested partie s to see all information
which is relevant to the presentation of their c ases, and bases its claims under Article 6.4 on the
assertion that the Commission refused to "provide " certain information to the Chinese producers
despite numerous requests.974 We note, however, that, in its response to question 101 from the Panel,
China argues that "the investigating authorities were under the obligation to provide such normal
value information even in the absence of a request for disclosure". To the extent this may suggest that
China considers the Commission to have been re quired to actively disclose information under
Article 6.4, we reject that view. In our view, a violation of Article 6.4 would normally require a
showing that the investigating authorities denied an interested party's request to see information used
by the authorities, which was relevant to the presenta tion of that interested party's case and which was
not confidential.
7.481 Article 6.2 provides:
"6.2 Throughout the anti-dumping investigati on all interested parties shall have a
full opportunity for the defence of their interests. To this end, the authorities shall, on
request, provide opportunities for all interest ed parties to meet those parties with

972 Panel Report, EC – Salmon (Norway), para. 7.769 (emphasis added).
973 European Union, answer to Panel question 62, para. 143. In this regard, we find support in the
finding of the panel in Korea – Certain Paper (Article 21.5 – Indonesia) that Article 6.4 of the AD Agreement
"does not ... impose an independent disclosure obligation on the authorities". Panel Report, Korea – Certain
Paper (Article 21.5 – Indonesia), para. 6.87. We note that Article 6.9, in contrast, does contain an obligation to
actively disclose "essential facts". China's claims under that provision are addressed elsewhere in this report.
974 See, for instance, China, first written submission, para. 563; China, answer to Panel question 61.

adverse interests, so that opposing views may be presented and rebuttal arguments
offered. Provision of such opportunities must take account of the need to preserve
confidentiality and of the convenience to the parties. There shall be no obligation on
any party to attend a meeting, and failure to do so shall not be prejudicial to that
party's case. Interested parties shall also have the right, on justification, to present
other information orally."
The Appellate Body has interpreted Article 6.2 to re quire that interested parties in an anti-dumping
investigation be given "liberal opportunities ... to defend their interests".
975 To ensure this, Article 6.2
requires that the authorities provide opportunities for interested parties to meet other parties with
opposing views so that an exchange of views ca n take place, subject to the need to preserve
confidentiality. Thus it is clear to us that the rights of interested parties under Article 6.2 do not
include any right to see information treated as conf idential consistently with the provisions of
Article 6.5 of the AD Agreement. We also note th at, like Article 6.4, Article 6.2 does not require the
investigating authorities to actively disclose information to interested parties.

7.482 Having outlined the requirements of the two pr ovisions that China has cited in connection
with its claim, we now turn to the facts of the fasteners investigation to consider whether these
provisions were, as argued by China, violated by the Commission. We recall that China's claim under
Articles 6.4 and 6.2 alleges that the Commission faile d to "provide" three categories of information,
that is, information on: 1) product types used in the determination of the normal value; 2) normal
value determinations; and 3) the comparison between the normal value and the export price.
7.483 We note that with respect to all three of these alleged violations the European Union submits
that China's claim does not pertain to the obligati ons set forth in Articles 6.4 and 6.2 since these
provisions do not require the investigating authorities to actively disclose any information. 976 Thus,
the European Union appears to focus on China's use of the word "provide" in its claim and arguments,
suggesting that this entails disclosures, and thus China's allegations under Articles 6.4 and 6.2 do not
correspond to the obligations in these two provisions. In our view, however, it is clear that China
bases its claims under Articles 6.4 and 6.2 on the allegation that two Chinese producers requested
information from the Commission which the Commissi on failed to then make available to them.
Thus, it is clear to us that China's allegations fall within the scope of a claim under, at least,
Article 6.4, as we have described above.
 Product Types

7.484 With respect to information on product types, China maintains that the first time the Chinese
producers were informed of the fact that the Comm ission had based its normal value determination on
product types, as opposed to PCNs, was in the Genera l Disclosure Document. China asserts that even
then, however, the Commission did not explain what those product types were until very late in the
period allowed for comments on the General Discl osure. China contends that the Commission
refused to provide information concerning the product types, despite repeated requests made by two
Chinese producers, until one working day before the period for comments ended.
977

975 Appellate Body Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country
Tubular Goods from Argentina ("US – Oil Country Tubular Goods Sunset Reviews "), WT/DS268/AB/R,
adopted 17 December 2004, DSR 2004:VII, 3257, para. 241; Panel Report, Korea – Certain Paper
(Article 21.5 – Indonesia), para. 6.76.
976 European Union, first written submission, paras. 726, 736 and 739.
977 China, first written submission, paras. 555-556.

7.485 The General Disclosure Document contains the following information, in relevant parts:
"3.3.3 Normal value ...
(84) It was examined whether each type of the product concerned sold in
representative quantities on the Indian domestic market could be considered as being
sold in the ordinary course of trade pursuant to Article 2(4) of the basis Regulation.
This was done by establishing for each product type the proportion of profitable sales
to independent customers on the domestic market during the investigation period.
(85) Where the sales volume of a product type , sold at a net sales price equal to or
above the calculated cost of production, re presented more than 80% of the total sales
volume of that type, and where the weighted average price of that type was equal to
or above the cost of production, normal value was based on the actual domestic price.
This price was calculated as a weighted average of the prices of all domestic sales of
that type
 made during the IP, irrespective of whether these sales were profitable or
not.
(86) Where the volume of profitable sales of a product type represented 80% or
less of the total sales volume of that type, or where the weighted average price of that
type was below the cost of production, normal value was based on the actual
domestic price, calculated as a weighted average of profitable sales of that type only.
(87) Depending on the product type , normal value was established based on
weighted average sales prices of all sal es or weighted average sales prices of
profitable sales only, on the domestic market of the analogue country based on the
verified data of one producer in that country."978 (emphasis added)
Thus, the General Disclosure Document makes it clear that the Commission based its normal value
determination on "product types", as opposed to PCNs , but does not provide any information as to the
relevant characteristics of those groups, or how they were determined. We note in this regard that the
European Union does not contest the fact that th e Chinese producers were informed of this for the
first time when they received the General Disclos ure Document, which, as noted, was issued on
3 November 2008.

7.486 Having received the General Disclosure Document, two Chinese producers wrote to the
Commission on 8 November 2008 seeking clarification regarding the product types used to determine
normal value:
"On several occasions, the disclosure document mentions that the comparison for
dumping purposes is based on "product type
". It would appear that there are no PCN
types with the degree of detail as produced by Kunshan and/or Jinding. Kunshan and
Jinding would therefore be eager to
 see a listing of such "product types" and a linkage
with the PCNs of Kunshan and Jinding . It should be possible to disclose such
information, i.e. which Indian fastener type (normal value) was compared to which
PCNs (export sales) in the calculation table, without disclosing confidential business
information of the Indian company."
979 (emphasis added)
In our view, this letter clearly conveys these tw o Chinese producers' request to see information
regarding the product types that established the basis of the Commission's normal value determination

978 Exhibit CHN-18, pp. 18-19.
979 Exhibit CHN-28, p.2.

and the relationship between these product types an d the PCNs pertaining to the Chinese producers'
products.

7.487 In an email dated 13 November 2008, the Commission replied to this request:
"Q2: The exact normal values used cannot be disclosed since they would reveal the
prices of the analogue country producer. As explained under point 4 below, beside
product characteristics as specified in the PC N, a distinction was introduced between
standard and special products since this was found to have a significant impact on
prices.
Q4: As mentioned in our document, the relevant distinction made was between
standard and special products.
For the investigated Community producers, standard products represented about 40%
of the produced volume.
For the Indian producer, a very substantial part (the % is confidential) of their
domestic sales were also standard products.
For your two clients, their entire export volume was considered as being standard
products.
As for the fasteners sold to the automotive sector, they can buy either standard or
special fasteners."
980
We agree with China that this reply does not e xplain how the product types were established in the
determination of normal value, or the relevant characteristics of those product types.

7.488 These two Chinese producers sent another letter to the Commission, dated
17 November 2008:
"From Pooja Forge's non-confidential files, we cannot find any indication that Pooja
Forge did report transaction-by-transaction sales listings on a PCN basis. We likewise
cannot see whether Pooja Forge reported any cost tables on a PCN basis. In abstract
terms, was normal value established on a PCN basis, or were more general types
of Pooja's fasteners matched with groups of PCNs from our clients? In that
context, it would still be very useful for us if we could have a listing simply of
which type of fastener or which PCNs of Pooja were matched with the PCNs of
our clients . […] we trust that the (abstract) disclosure of which types/PCNs were
used on the normal value side for comparison purposes does in no way constitute
confidential information, but it would simply give use an idea of what was compared
with what, for the purposes of providing our comments."
981 (emphasis in original)
This letter clearly repeats these Ch inese producers' request to see in formation on the basis of which
the product types for the Indian producer were established.

980 Exhibit CHN-29.
981 Exhibit CHN-30, p. 2.

7.489 The Commission replied to this request in a letter dated 21 November 2008:
"The comparison was not made on the basis of the full PCN , but on part [sic] of the
characteristics of the product, namely the strength class as well as the
abovementioned distinction between special and standard products."
982 (emphasis
added)
This letter is the first time the Commission clear ly informs these two Chinese producers that the
Commission did not make its normal value determinati ons on the basis of full PCNs, but rather on the
"characteristics" of strength class and the distinctio n between standard and special fasteners. China
asserts, and the European Union does not dispute, th at this letter came one working day before the
deadline to make comments on the General Disclosure Document.

7.490 Thus, it is clear, and largely undisputed, that the two Chinese producers who requested
clarification in this regard learned only shortly before the deadline to make comments on the General
Disclosure, which we understand to have been the last opportunity for interested parties to present
arguments to the Commission with respect to the investigation, that the normal value data were
established on the basis of product types, as opposed to PCNs, and of the characteristics on which
those product types were determined. In our vi ew, the correspondence betw een the Commission and
two Chinese producers quoted above shows that until the receipt of the General Disclosure Document,
the Chinese producers were under the impression that the Commission would make its dumping
determinations on the basis of PCNs, as requested in the questionnaires sent to the Chinese and the
Indian producers. Shortly before the deadline for their last opportunity to make comments on the
Commission's dumping determinations, however, they learned that this was not the case, and two who
requested clarification in this regard received so me information as to the actual basis on which the
price comparisons would be made.
7.491 Ensuring that the comparison of normal value and export price is based on comparable goods
is, as provided for in Article 2.4, an obligation on investigating authorities. Foreign producers have a
role in that process, by requesting due allowanc e for differences demonstrated to affect price
comparability. In order to fulfil their role, and thus ensure that their interest in a fair comparison is
protected, however, it is necessary that they know the basis on which the investigating authority
undertakes to make the comparison of normal value a nd export price, and in sufficient time to allow
the exporters to make and substantiate requests for due allowance. In a case such as this one, where it
appears from the structure of the questionnaires th at such requests will not be necessary because of
the categorization of the product according to PCN gr oups, we consider that it is not unreasonable for
exporters to not request specific adjustments whic h are already reflected in those PCN groups.
However, once the investigating authority informs th e exporters that the comparison will not be based
on those PCN groups, it seems to us that the investig ating authority is also obliged to provide an
opportunity to see, in a timely fashion, information concerning the basis on which the comparison will
actually be made. Without that information, it would be difficult if not impossible, for foreign
producers to request adjustments that they consider necessary in order to ensure a fair comparison.
7.492 The facts of this case are clear. Chinese producers were informed very late in the proceedings
of the product types that formed the basis of the comparisons underlying the Commission's dumping
determinations. Two of them re quested information pertaining to those product types, but were not
given a timely opportunity to see the relevant information by the Commission.
983 T h e
European Union does not argue that the information at issue was not relevant to the presentation of

982 Exhibit CHN-31, p. 2.
983 We note, in this context, that an opportunity to "see" information may obviously be satisfied by an
active provision of that information, in a letter or othe r communication. This is different, however, from an
affirmative obligation to actively disclose information.

the Chinese exporters' case. Thus, the facts above suggest that the European Union failed to provide a
timely opportunity for the Chinese exporters to see in formation relevant to the presentation of their
cases, in violation of Article 6.4 of the AD Agreement.
7.493 However, the European Union disputes the assertion by China that the information on product
types at issue was not confidential, arguing that China has not made a claim under Article 6.5 of the
AD Agreement regarding the confidentiality of some of the information pertaining to the Indian
producer.984 We do not consider that the fact that China did not make a claim under Article 6.5 in this
context undermines its claim under Article 6.4 in this case. There is no indication in the
correspondence discussed above that the Commission refused to provide the information on product
types, as opposed to the actual normal values, becau se it was confidential – in fact, in the last
communication, the Commission did explain the b asis for the product type groups. In these
circumstances, we consider that the European Union has failed to de monstrate that the information in
question was confidential, or was withheld from access on the basis of confidentiality, and therefore
do not consider that China's arguments have been rebutted.
7.494 The European Union also submits that Chin a's allegation that the Commission repeatedly
refused to provide information on the product types is contradicted by Exhibit CHN-31.
985 T h a t
Exhibit is the 21 November 2008 letter from the Commission which, as discussed above, informed the
two Chinese producers who requested clarification in th is regard for the first time in the investigation
that the Commission had based its normal value determ inations on product types, not PCNs, and that
those product types were based on strength class a nd the distinction between special and standard
fasteners. Given our view that this information wa s not provided in a timely fashion, as required by
Article 6.4, we consider that the European Uni on's argument is unavailing, and does not rebut China's
arguments. We therefore conclude that the European Union violated Article 6.4 of the AD Agreement
by not providing a timely opportunity for Chinese producers to see information regarding the product
types on the basis of which normal value was establi shed, information relevant to the presentation of
their case.
7.495 Moreover, while in general we might not consider it necessary to go on to address China's
claim under Article 6.2, in this case, we consider th at the discussion above is also relevant to a proper
application of the obligation to ensure all interested parties a "full opportunity for the defence of their
interests". In our view, the Chinese exporters could not defend their interests in this investigation
because the Commission only provided information concerning the product types used in the
determination of the normal value at a very late stage of the proceedings, when it was no longer
feasible for them to request that adjustments be made in order to ensure a fair comparison, which until
that time they reasonably considered were not necessar y. We therefore conclude that the European
Union acted inconsistently with Article 6.2.
 Normal Value Determinations

7.496 We turn now to China's allegation that th e Commission failed to provide information on
normal value determinations . China contends that the Europ ean Union violated its obligations
under Articles 6.4, 6.2 and 6.5 of the AD Agreemen t by failing to disclose, in the individual and
General Disclosure Documents, information pertaini ng to the determination of the normal value.
China puts forward two arguments in support of its cl aims under Articles 6.4 and 6.2: first, that the
Commission failed to disclose the nor mal values, either on a general basis or on a product type basis;
and second that the Commission failed to disclo se for each product type the outcome of its
determination of whether the product had been sold in representative quantities in the Indian

984 European Union, first written submission, para. 730.
985 European Union, first written submission, para. 732.

market.986 The European Union submits that Articles 6.4 and 6.2 do not require the investigating
authorities to actively provide any information. According to the European Union, the disclosure
documents that China cites in connection with this claim fall within the scope of the obligation set
forth under Article 6.9, not Articles 6.4 or 6.2. With respect to the substantive arguments presented
by China, the European Union maintains that the General Disclosure Document contains considerably
more information than China suggests.987
7.497 We note that this aspect of China's claim is speci fically directed at alleged deficiencies in the
disclosure by the Commission to the Chinese producer s, as reflected in the General and Individual
Disclosure Documents. This is clear from the fi rst written submission of China, which clearly links
this claim to the General and Individual Disclosur e Documents issued by the Commission: "In both
the Individual and General Disclosure Documents, th e EC failed to provide any relevant information
regarding the determination of the normal value". 988 We recall that Articles 6.4 and 6.2 of the
AD Agreement do not impose any affirmative disclosur e obligations on the investigating authorities.
We therefore consider that China has failed to make a prima facie case of violation under these two
provisions with respect to the alleged non-di sclosure of information on the normal value
determinations in the General and Individual Discl osure Documents, and therefore reject China's
claim.989
 Comparison between the Normal Value and the Export Price

7.498 With regard to the Commission's alleged failure to provide information on the comparison
between the normal value and the export price , China submits that since the Individual and
General Disclosure Documents sent by the Commissi on did not contain sufficient information on fair
comparison, two Chinese companies requested informati on on this issue. Chin a contends that despite
these Chinese producers' requests, the Commission did not provide the required information and
therefore violated Articles 6.4 and 6.2 of the AD Agreement. The European Union repeats its
argument that Articles 6.4 and 6.2 do not impose a disclosure obligation on the investigating
authorities. The European Union also mainta ins that China's descrip tion of the Commission's
disclosure documents and the subsequent excha nge of letters between the Commission and the
Chinese producers is incomplete and inaccurate.990
7.499 The evidence before us indicates that Ch inese producers did make a request to see
information concerning fair comparison:
"The individual disclosure documents, in Annex B on dumping, No. 2 "Comparison",
only state in general terms that "due allowa nce in the form of adjustments was made
for differences affecting price comparability". Kunshan and Jinding would like to
know at least what kind of adjustments of normal value were made for comparison
purposes, in particular for physical differences, if any."991 (emphasis added)

986 China, first written submission, paras. 567-568.
987 European Union, first written submission, para. 737.
988 China, first written submission, para. 566 (introducing China's argument regarding this claim).
989 We note that although China cites Article 6.5 in its submissions to the Panel in connection with this
claim, it does not articulate this aspect of its claim. In response to questioning in this regard, China states that
its argument is that treating normal value information as confidential is inconsistent with Article 6.5 of the
AD Agreement, China, answer to Panel question 69, but makes no specific arguments with respect to the
information at issue in this case. We do not consider this general statement to be sufficient to make out a prima
facie case of violation and consider this aspect of China' s claim to have been insufficiently elaborated, and
therefore do not make findings in this regard.
990 European Union, first written submission, para. 742.
991 Exhibit CHN-28, Question 3 on p.2.

In response, the Commission stated:

"The adjustment was calculated based on th e costs of quality control incurred by the
Indian producer. The amount of these costs cannot be disclosed, but they were clearly
higher than that of the Chinese producers." 992
In a subsequent letter which mainly addressed the issue of product types used for the dumping
determinations, Chinese producers asked whether the Commission had made any adjustment for
physical differences between the products of the Indian producer and those of the Chinese
producers.993 In response, the Commission stated:

"Physical differences are addressed by the divi sion into special and standard types, as
described above, and by the adjustment for the cost of quality control which reflects
the general difference in quality level."994
7.500 This exchange of letters shows that the Chinese producers sought information on the fair
comparison made by the Commission and the la tter responded to these requests with relevant
information. We understand China to recognize that information was provided, but to argue that the
explanations provided by the Commission were not suffi cient. For instance, Ch ina maintains that, in
its last communication in this regard, the Commissi on "failed ... to precisely explain which products
were 'standard' fasteners and which products were 'special' fasteners[]" 995 and that "regarding the
adjustment for 'costs of quality control', the EU investigating authorities merely noted that an
adjustment had been made but failed to provide any detail regarding this adjustment[.]"996
7.501 We do not consider that China's allegations in this regard are sufficient to constitute a prima
facie case of violation of Article 6.4 of the Agreemen t. China has not shown that a request to see
information used by the Commission which was re levant to the presentation of Chinese producers'
cases was rejected by the Commission. Indeed, the focus of China's argument is the alleged
insufficiency of the explanation given by the Commi ssion, not a lack of information. However, we
see nothing in the text of either Article 6.4 or Artic le 6.2 that requires an investigating authority to
give any explanation at all with respect to th e information it makes available to the parties. 997 Thus,
we consider that China has not made a prima facie case of violation of Article 6.4 in this regard, and
therefore reject China's claim. Having rejected Ch ina's claim under Article 6.4, and in the absence of
any additional arguments with respect to the alleged violation of Article 6.2 of the AD Agreement, we
also reject China's claim under the latter provision.
Alleged Violation of Article 6.9 of the AD Ag reement in connection with the Commission's
dumping determinations
7.502 China submits that by failing to disclose info rmation on product types, the normal value
determinations and the comparison between the nor mal value and the export price, the Commission
failed to disclose "essential facts" as required by Ar ticle 6.9 of the AD Agreement. China contends
that these three elements constituted "facts" within the meaning of Article 6.9 and therefore should

992 Exhibit CHN-29, Response to Question 3.
993 Exhibit CHN-30.
994 Exhibit CHN-31, p.2.
995 China, answer to Panel question 102(b).
996 China, answer to Panel question 102(b).
997 Other provisions do require the investigating aut hority to explain its analysis and conclusions with
respect to that information, including Article 12.2 of the AD Agreement, which requires that an investigating
authority set forth, "in sufficient detail the findings and conclusion reached on all issues of fact and law
considered material".

have been disclosed by the Commission. 998 The European Union subm its that China's claim under
Article 6.9 of the AD Agreement falls outside the Pa nel's terms of reference, because this claim was
not subject to consultations, and because in China's panel request no reference is made to information
on "product types".
7.503 China acknowledges that its request for cons ultations does not contain any reference to
Article 6.9, but argues that this does not necessarily mean that its claim under Article 6.9 in its panel
request cannot reasonably be said to have evolved from its request for consultations. China states that
the issues of "the data concerning the normal valu e" and "the adjustments for differences affecting
price comparability" were subject to consultations. A ccording to China, the fact that Articles 6.2, 6.4
and 6.5 were cited in this connection in China' s request for consultations shows that the Chinese
producers raised the concern that they were not pr ovided with adequate opportunities to have access
to information which was not confidential. China goes on to contend that:
"The additional reference to Article 6.9 means that this very same issue raised
concerns also in terms of the EU's failure to properly disclose the facts. In other
words, the additional reference to Article 6. 9 in the panel request does, therefore, not
change the essence of the dispute which conti nues to relate to the same issue, namely
access to facts and information used by the i nvestigating authority. In that respect the
legal basis in the panel request has merely evolved from the legal basis mentioned in
the request for consultations."999 (emphasis in original)
7.504 We begin by observing that it is undisputed that China's request for consultations contains no
reference to Article 6.9 of the AD Agreement. Ch ina's panel request, on the other hand, states, in
pertinent part:
"China submits that [the Definitive Regula tion] is inconsistent, at least, with the
following provisions of the AD Agreement and of the GATT 1994: ...
- Articles 6.2 and 6.9 of the AD Agreement because the EC failed to inform the
interested parties of the essential facts under consideration which form the basis for
the decision whether to apply definitive measures, including, but not limited to the
following elements: data concerning the nor mal value determination and information
on how the price comparison was carried out, including data on the adjustments for
differences affecting price comparability."
7.505 We recall that, as discussed above
1000, while there does not have to be precise identity
between China's request for consultations and its pa nel request, the request for consultations and the
panel request must concern "the same matter" or, put differently, we must be able to conclude that the
legal basis of the panel request "may reasonabl y be said to have evolved from the legal basis
identified in the request for consultations", in orde r for a claim not specifically identified in China's
request for consultations, but properly identified in the panel request, to fall within our terms of
reference. We do not consider that this standard is satisfied with resp ect to China's claim under
Article 6.9.
7.506 Based on the jurisprudence, China submits that its claim under Article 6.9 "does not change
the essence of the issue" and that the legal basis for this claim merely evolved from the legal basis
identified in its request for consultations. It follo ws, in China's view, that its claim under Article 6.9

998 China, first written submission, paras. 585-586.
1000 See paragraph 7.24 above.

is within the Panel's terms of reference. In this regard, China refers to the Appellate Body's reasoning
in Mexico – Anti-Dumping Measures on Rice:
"In our view, the same logic applies with respect to the legal basis of the complaint.
A complaining party may learn of additi onal information during consultations—for
example, a better understanding of the opera tion of a challenged measure—that could
warrant revising the list of treaty provisions with which the measure is alleged to be
inconsistent. Such a revision may lead to a narrowing of the complaint, or to a
reformulation of the complaint that tak es into account new information such that
additional provisions of the covered agreemen ts become relevant. The claims set out
in a panel request may thus be expected to be shaped by, and thereby constitute a
natural evolution of, the consultation process. Reading the DSU, as Mexico does, to
limit the legal basis set out in the panel requ est to what was indicated in the request
for consultations, would ignore an important rationale behind the requirement to hold
consultations—namely, the exchange of in formation necessary to refine the contours
of the dispute, which are subsequently set out in the panel request. In this light, we
consider that it is not necessary that the provisions referred to in the request for
consultations be identical to those set out in the panel request, provided that the "legal
basis" in the panel request may reasonably be said to have evolved from the "legal
basis" that formed the subject of consultations. In other words, the addition of
provisions must not have the effect of changing the essence of the complaint ."1001
(underline emphasis added)
In our view, the facts of this dispute are diffe rent from the hypothetical situation posited by the
Appellate Body. In this case, there is no reference to Article 6.9 in China's request for consultations
nor any narrative description indicating that China mi ght intend to raise a claim under Article 6.9 in
the context of the Commission's dumping determinations . Thus there is no indication at all of a legal
basis in the request for consultations from which the claim in this regard set forth in the panel request
could have evolved.

7.507 In our view, it is clear that the obligation set forth in Article 6.9 of the AD Agreement is
different in nature from the obligations set forth in Articles 6.4 and 6.2. We recall the text of
Article 6.9, which provides:
"The authorities shall, before a final dete rmination is made, inform all interested
parties of the essential facts under consideration which form the basis for the decision
whether to apply definitive measures. Such disclosure should take place in sufficient
time for the parties to defend their interests."
The obligations of this provision are quite straight forward – the investigating authority shall inform
interested parties of "essential f acts under consideration" prior to ma king a final determination, but in
sufficient time for the interested parties to defend th eir interests. Thus, as we have noted earlier, and
as is clear from the second sentence, Article 6.9 clear ly requires an affirmative act of disclosure of
information by the investigating authorities, and sp ecifies what information must be disclosed – the
"essential facts under consideration which form the b asis for the decision whether to apply definitive
measures". Moreover, in our view, the disclosure required under Article 6.9 is a one-time act
1002, and,
as is clear from the text, takes place near the end of the process ("before a final determination is

1001 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, para. 138.
1002 See, Panel Report, EC – Salmon (Norway), paras. 7.797-7.802, where the panel concluded that
Article 6.9 did not require an additional disclosure in a case where, subsequent to the Article 6.9 disclosure and
comments thereon by interested parties, the investigatin g authority changed its views, and reached a different
conclusion than that foreshadowed in the disclosure.

made ... in sufficient time for parties to defend thei r interests"). On the other hand, as we have
discussed above, Articles 6.4 and 6.2 do not require any affirmative disclosure by the investigating
authority, but rather concern the provision of tim ely opportunities to see in formation, and a full
opportunity to defend interests. Moreover, both of these obligations apply throughout the course of an
anti-dumping investigation – Article 6.2 specifically so states, and Article 6.4 requires the authorities
"whenever" practicable to provide "opportunities", in the plural, for parties to see information.

7.508 Thus, in our view, even though China's clai m under Article 6.9 is premised on the same
factual basis, given that there was no reference whatsoever to Article 6.9 in the request for
consultations, nor any explanation that might sugg est that this information was not disclosed as
required by Article 6.9, we are of the view that this claim cannot be said to concern the "same matter",
or to have "evolved from the legal basis", set fort h in the request for consultations. We therefore
conclude that consultations were not held with r espect to China's claim under Article 6.9, and that
therefore, pursuant to Article 6.2 of the DSU, this claim is not within our terms of reference, as
defined in Article 7.1 of the DSU.
1003
(d) Whether the European Union violated Article s 6.5, 6.2 and 6.4 of the AD Agreement in
connection with the non-confidential version of certain questionnaire responses
(i) Arguments of the Parties
China
7.509 China argues that the non-confidential vers ions of the questionnaire responses by EU
producers, and that of the producer in India, were deficient compared with the requirements of
Article 6.5 of the AD Agreement. China submits that this issue was brought to the Commission's
attention by the Chinese producers several times during the investigation. 1004 China posits that after
the Commission relayed these concerns to the EU producers, some of them submitted additional
information in the non-confidential ve rsion of their questionnaire responses. 1005 With respect to the
alleged deficiencies in the non-confidential versi on of the EU producers' questionnaire responses,
China gives two specific examples, namely the quest ionnaire responses of A. Agrati S.p.A. ("Agrati")
and Fontana Luigi S.p.A ("Fontana Luigi"). With respect to Agrati, China contends that the non-
confidential version of this producer's questionna ire response did not contain any non-confidential
summary of certain important injury information, and did not contain an adequate statement of the
reasons why such a summary was not possible. 1006 As regards Fontana Luigi, China maintains that
the non-confidential version of this producer's questionnaire response did not contain any data
concerning certain injury factors, and did not contain an adequate statement of the reasons why such a
summary was not possible, but stated that the in formation was by nature confidential because its
disclosure would be of significant competitive advantage for a competitor. 1007 China argues that the
Commission violated Article 6.5.1 of the AD Agreement by not requiring non-confidential summaries
of the confidential information submitted by these tw o producers which were sufficiently detailed to
permit a reasonable understanding of the confidential information.1008

1003 Having found that this claim was not the subject of consultations, we do not consider it necessary
to consider whether it was identified in China's panel request consistently with the requirements of Article 6.2 of
the DSU.
1008 China, answer to Panel question 103.

7.510 With respect to the non-confidential version of the Indian producer's questionnaire response,
China alleges a violation of both Articles 6.5 and 6.5.1. 1009 China contends that the non-confidential
version of the questionnaire response does not contain an y information at all, particularly with respect
to the product types on the basis of which the information was provided by this producer. China
argues that the Commission erred by treating the information in this questionnaire response as
confidential without good cause and thus acted inconsistently with Article 6.5 of the
AD Agreement.1010 If the Panel finds that the information was properly treated as confidential, China
claims a violation of Article 6.5.1 of the AD Agreement on the basis that the non-confidential
summaries in the questionnaire response are not sufficiently detailed to permit a reasonable
understanding of the information in the confidentia l version of the questionnaire response and did not
contain an adequate statement of the reasons why such a summary was not possible.1011
7.511 China also asserts that by failing to make sure that these three questionnaire responses
included all relevant information, whether in conf idential or non-confidential format, the Commission
also violated the Chinese producers' procedural rights under Articles 6.4 and 6.2 of the
AD Agreement.
1012
European Union
7.512 The European Union argues that China has not developed its claim under Articles 6.4 and 6.2
of the AD Agreement.1013 With respect to the claim under Article 6.5, the European Union argues that
China has not developed this claim in connectio n with the questionnaire response of the Indian
producer.1014 The European Union contends that the domestic producers submitted non-confidential
summaries of their questionnaire responses as re quired under Article 6.5.1. Further, the
European Union notes that, on 16 May 2008, the Commission requested all sampled EU producers to
make sure that adequate non-conf idential versions of their ques tionnaire responses were provided,
specifically, summaries in sufficient detail so as to provide a reasonable understanding of the
substance of the confidential information. The produ cers were also requested to provide copies of all
publicly available documents contained in their questionnaires.
1015 Almost all producers replied
within the 15-day deadline, submitting additional n on-confidential information. The European Union
also maintains that China's own evidence regarding one EU producer demonstrates that the allegations
are factually unfounded. 1016 Further, most of the information th at China refers to is "manifestly and
by nature confidential" and not susceptible of summarization. 1017 In any event, the European Union
asserts that the non-confidential versions of the que stionnaires demonstrate that "it has clearly been
possible for the interested parties to defend themselves in respect of injury factors". 1018 T h e
European Union concludes that China has failed to make a prima facie case under Article 6.5.1019

1009 China, answer to Panel question 103.
1010 China, answer to Panel question 71.
1011 China, second written submission, para. 1114; China, answer to Panel question 103.
1013 European Union, first written submission, para. 749.
1014 European Union, first written submission, para. 748.
1015 European Union, first written submission, para. 751.
1016 European Union, answer to Panel question 72, para. 178.
1017 European Union, first written submission, para. 753.
1018 European Union, answer to Panel question 72, para. 174.
1019 European Union, first written submission, para. 755.

(ii) Evaluation by the Panel
7.513 China's claim takes issue with the non-confidential versions of the questionnaire responses of
two EU producers1020 and that of the Indian producer whose da ta was used in the determination of the
normal value in the fasteners investigation. China' s claim consists of two elements: first, China
alleges a violation of Articles 6.5 and/or 6.5.1 with respect to the manner in which confidential
information in the questionnaire responses was trea ted by the Commission; and second, it alleges a
violation of Articles 6.4 and 6.2, on the grounds that because of the alleged violations of Articles 6.5
and/or 6.5.1, the Commission also violated th e Chinese producers' procedural rights under these
two provisions. The claims under Articles 6.4 and 6. 2 are, in our view, dependent on a finding of
inconsistency with respect to the claims under Artic les 6.5 and 6.5.1. We shall therefore start our
evaluation with the claims under Articles 6.5 and 6. 5.1 and, if necessary, proceed to consider the
dependent claims under Articles 6.4 and 6.2.
7.514 With respect to the non-confidential summaries of confidential information in the two EU
producers' questionnaire responses, China asserts that the Commission violated Article 6.5.1 of the
AD Agreement by failing to make sure that the non-confidential summaries of confidential
information in the responses of these two EU produ cers, Agrati and Fontana Luigi, were sufficiently
detailed so as to allow a reasonable understanding of the substance of the confidential information.
Article 6.5.1 reads:
"6.5.1 The authorities shall require interested parties providing confidential
information to furnish non-confidential summaries thereof. These summaries shall be
in sufficient detail to permit a reasonable understanding of the substance of the
information submitted in confidence. In exceptional circumstances, such parties may
indicate that such information is not su sceptible of summary. In such exceptional
circumstances, a statement of the reasons why summarization is not possible must be
provided."
We recall that, as discussed above
1021, the chapeau of Article 6.5 sets forth the general principle that,
provided good cause is shown, information that is by nature confidential and information submitted
on a confidential basis must be treated as confid ential, and the investigating authorities may not
disclose such information without specific permissi on from the party submitting it. Article 6.5.1, in
turn, stipulates that investigating authorities sha ll require interested parties submitting confidential
information to submit a non-confidential summary thereo f, which must be prepared in such a way as
to allow other interested parties to have a reasonable understanding of the substance of the
confidential information. In exceptional circumst ances, where such summarization is not possible,
Article 6.5.1 requires that the interested party in stead indicate that summarization is not possible and
state the reasons for that conclusion.

7.515 In our view, Article 6.5.1 serves to balance the goal of ensuring that the availability of
confidential treatment does not unde rmine the transparency of the investigative process, with
recognition of the importance of maintaining the c onfidentiality of information where appropriate.
We consider that it is the investigating authorities' obligation to ensure that all the requirements of

1020 While China suggests that this claim concerns the non-confidential version of the questionnaire
responses of all EU producers, particularly those in th e sample, China, first written submission, para. 587, our
analysis and conclusions are limited to the two EU pr oducers with respect to which China submitted evidence
and arguments. Claims under Article 6.5 (and Articles 6.2 and 6.4) require, as a general rule, a close
consideration of the facts, and thus in the absence of sp ecific evidence, we consider it inappropriate to make a
more general ruling.
1021 See paragraph 7.450.

Article 6.5.1 are respected by interested parties. 1022 That is, we consider that the investigating
authority must ensure that an appropriate non-c onfidential summary is provided, or in exceptional
circumstances, if that is not possible, that an a ppropriate statement of reas ons why summarization is
not possible is given. 1023 Clearly, in the absence of scrutiny of the non-confidential summaries or
stated reason why summarization is not possible by th e investigating authority, the potential for abuse
of confidential treatment by interesting parties would be unchecked unless and until the matter were
reviewed by a panel. This would obviously defeat the goal of maintaining transparency during the
course of the investigation itself that is one of th e purposes of Article 6.5. Thus, in our view, the
investigating authorities must ensure that where an interested party asserts that a particular piece of
confidential information is not susceptible of summary, the reasons for that assertion are appropriately
explained.
7.516 With these considerations in mind, we now turn to the facts underlying China's claim. With
respect to the EU producer Agrati 1024, we note that the non-confidential questionnaire response of this
company contains non-confidential summarized info rmation on some injury factors, including
employment, sales and re-sales of the subject product (both in volume and value terms), inventories,
production, capacity and capacity utilization. Howe ver, the questionnaire response does not contain
any non-confidential summary of the confidential information on other injury factors, including return
on investment, investments, profitability (with respect to the product concerned and the overall
company), cash flows, cost of production, suppliers of direct (raw) materials during the investigation
period, volume of raw materials used to produce th e subject product, extraordinary items with respect
to costs, list of all sales to unrelated customers in the European Union, and allocation of different cost
elements among different types of products. In each instance, the r eason given for the lack of a non-
confidential summary is the following:
"The information cannot be summarized without disclosing confidential information
which can cause a damage to our company. The information has been provided as
limited."

1022 We find support for this conclusion in the statement of the panel in Mexico – Steel Pipes and Tubes:
"Although Article 6.5.1 does not explicitly provide that "the authorities shall require"
interested parties to provide a statement of th e reasons why summarization is not possible, we
consider that Article 6.5.1 will be meaningfully construed if the interested party on its own
initiative gives the reasons why summarization is not possible, in which case it will be for the
investigating authority to ensure compliance with the mandate in Article 6.5.1. Accordingly,
we consider that Article 6.5.1 imposes an ob ligation on investigating authorities to require
parties that indicate that information is not su sceptible of summary to provide a statement of
the reasons why summarization is not possible."
Panel Report, Mexico – Steel Pipes and Tubes , para. 7.379. See also, Panel Report, Guatemala –
Cement II , para. 8.213, where the panel made a similar finding.
We also find support for this conclusion in the report of the panel in Mexico – Olive Oil , a dispute
concerning Article 12.4.1 of the SCM Agreement, the parallel provision to Article 6.5.1. In that case, the panel
concluded that while Article 12.4.1 "imposes an obliga tion on the interested party claiming confidentiality, in
our view it also imposes an obligation on the investigating authority to require that such a statement be
provided". Panel Report, Mexico –Olive Oil"), para. 7.89.
1023 Reading Article 6.5.1 to impose an obligation on the investigating authority in this regard is, in our
view, consistent with the principle of effective treaty in terpretation which, the Appellate Body has observed, is
"[o]ne of the corollaries of the "general rule of interpretation" in the Vienna Convention[.]" See, Appellate Body
Report, United States – Standards for Reformulated and Conventional Gasoline (" US – Gasoline "),
WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3, p. 23. See also, Appellate Body Report, Japan –
Alcoholic Beverages II , p. 12; Appellate Body Report, United States – Restrictions on Imports of Cotton and
Man-made Fibre Underwear (" US – Underwear "), WT/DS24/AB/R, adopted 25 February 1997,
DSR 1997:I, 11, p. 16.
1024 Exhibit CHN-52.

We recall that Article 6.5.1 requires a party subm itting confidential information to also submit a non-
confidential summary in sufficient detail to perm it a reasonable understanding of the substance of the
confidential information or, if that is not possible, to provide a statement of reasons explaining why
such a summary is not possible. Moreover, as di scussed above, we consider that the investigating
authorities must ensure that the reasons given in th is regard are appropriate. There is nothing in the
Definitive Regulation, or any other evidence that has been proffered, that would even suggest that the
Commission ever considered whether Agrati's st ated reason for the lack of a non-confidential
summary of such information as profitab ility, or cash flows was more than pro forma . Agrati's
statement simply reflects one of the bases on which information may be considered "by nature
confidential" - that its disclosure would have a si gnificantly adverse effect on the person supplying it
– and asserts that the confidential information cannot be summarized without disclosure. The
statement does not, however, relate to any of th e specific information for which no non-confidential
summary is provided, or to anything having to do with Agrati itself, the party supplying it. 1025 We
also note the fact that Fontana Luigi was able to provide non-confidential summaries with respect to
some of the information for which Agrati did not provide such a summary 1026, which to us suggests
that these categories of information are in fact suscep tible of summary. There is certainly nothing in
Agrati's stated reason which would demonstrate ot herwise. We therefore consider that the
Commission failed to ensure Agrati's compliance with the requirements of Article 6.5.1, and thus
acted inconsistently with that provision with respect to Agrati.

7.517 Turning to the questionnaire response of the ot her EU producer, Fontana Luigi, we note that
the non-confidential version this producer's questionnaire response contains almost no non-
confidential summarized information regarding injury factors, except for total EU consumption and
currency exchange rates. In response to a question from the Panel, the European Union explained that
the non-confidential version of Fontana Luigi' s questionnaire response submitted by China
1027 does
not reflect additional non-confidential summaries that were submitted by Fontana Luigi following the
Commission's request for additional information. The European Union submitted these additional
relevant annexes to Fontana Luigi's questionnaire response as Exhibit EU-28. 1028 Those annexes
contain non-confidential summaries of confidentia l information concerning volume of production,
production capacity, capacity utilisation, total purchases in value and volume, stocks in volume of
finished goods, sales and re-sales in value and volume both to related and unrelated companies,
captive use, cost of production, consumption of ra w materials, profitability for the product in question
and total company profitability, cash flows, investments, return on net assets, and employment and
labour costs both for the product concerned and for th e company. China does not dispute that this
additional information was made available to the in terested parties in the fasteners investigation. 1029
However, there remained other in formation, such as distribution system and price setting, for which
no non-confidential summaries were provided, either originally, or after the Commission's request. In
each instance where a non-confidential summary is not provided, the reason given for the lack of a
non-confidential summary is the following:
"This information is by nature confiden tial because its disclosure would be of
significant competitive advantage to a Competitor."

1025 We note in this regard the conclusion of the panel in Mexico – Olive Oil, considering similar facts:
"We consider that general statements of this sort are not sufficient as they constitute an
unsupported assertion rather than a statement of reasons as required by Article 12.4.1."
Panel Report, Mexico – Olive Oil, para. 7.101.
1026 See paragraph 7.517 below.
1027 Exhibit CHN-60.
1028 European Union, answer to Panel question 105.
1029 The European Union submitted documents showing th at representatives of the interested parties
had access to all of these documents and had taken copi es thereof. European Union, answer to Panel
question 105, Exhibit EU-29.

There is nothing in the Definitive Regulation, or an y other evidence that has been proffered, that
would even suggest that the Commission ever cons idered whether Fontana Lu igi's stated reason for
the lack of a non-confidential summary of such in formation as distribution system and price setting
was more than pro forma . Fontana Luigi's statement does not even assert that the confidential
information cannot be summarized, but simply asserts th at the information is "by nature confidential".
Fontana Luigi's statement is not related to the specific information for which no non-confidential
summary is provided, or to anything having to do with Fontana Luigi itself, the party supplying it.
We therefore consider that the Commission failed to ensure Fontana Luigi's compliance with the
requirements of Article 6.5.1, and thus acted inconsistently with that provision with respect to Fontana
Luigi.

7.518 Turning to the questionnaire response of th e Indian producer, Pooja Forge Ltd. ("Pooja
Forge") we note that the non-confidential version of this company's questionnaire response contains
information only on company turnover, production, capacity and capacity utilization, all of which
appears to be in indexed form.
1030 No information on sales to independent customers, costs and
profits is provided, on the grounds of confidenti ality. No non-confidential summary of this
information is provided, and no reason for the lack of such a summary is given. In response to a
question from the Panel, the European Union conf irmed that exhibit CHN-53 contains the latest
version of this document, and that the Commissi on did not ask Pooja Forge to provide more non-
confidential information, as it had with respect to the sampled EU producers.1031 We also note that the
questionnaire sent to Pooja Forge contains explana tions and guidance concerning the preparation of a
non-confidential version of the questionnaire res ponse, including examples of how a respondent may
summarize confidential information, for instance, by indexing, which, as noted, Pooja Forge appears
to have done with respect to some information.1032
7.519 Before considering the parties' arguments on this claim, we note that the development of this
claim over the course of these panel proceedings raises concerns for us with regard to due process in
dispute settlement proceedings in the WTO. China, in its first written submission, contends that the
non-confidential versions of the questionnaire res ponses of the EU producers and Pooja Forge were
"largely deficient", and that this constituted vi olations of Articles 6.2, 6.4 and 6.5 of the
AD Agreement.1033 Although China provided evidence and ma de arguments in support of its claim
under Article 6.5 with respect to the questionnair e responses of the two EU producers, Agrati and
Fontana Luigi, it did not make arguments with respect to the questionnaire response of the Indian
producer, Pooja Forge, although it did submit th e non-confidential versi on of its questionnaire
response. Further, China's first written submis sion does not develop its claims under Articles 6.2
and 6.4 of the AD Agreement at all – there is no ar gument or discussion of Articles 6.2 and 6.4 in this
regard. The European Union, in its first written submission, pointed this out, and argued that China
appeared to have dropped the part of its claim under Article 6.5 pertaining to the non-confidential
version of Pooja Forge's questionnaire response. 1034 The European Union also pointed out that China
did not develop its claims under Articles 6.2 and 6.4, and asserted that this indicated that China was
not pursuing these claims.1035
7.520 In its second written submission, China asser ted that it had not dropped its claim under
Article 6.5 with respect to the non-confidential ve rsion of Pooja Forge's questionnaire response, and

1030 Exhibit CHN-53.
1031 European Union, answer to Panel question 109.
1032 European Union, answer to Panel question 108. Exhibit EU-32 contains the cover letter sent to the
Indian producer along with the questionnaire in which it is mentioned that non-confidential summaries have to
be provided for confidential information and that such summaries could be prepared in the form of indices.
1033 China, first written submission, paras. 587-593.
1034 European Union, first written submission, para. 748.
1035 European Union, first written submission, para. 749.

clarified its claim, arguing that the non-confiden tial version of this questionnaire response did not
provide any information, in particular with respect to product types on the basis of which information
had been submitted and that this viol ated Article 6.5 of the AD Agreement. 1036 China also elaborated
its claims under Articles 6.2 and 6.4, arguing that "[b]y failing to make sure that the questionnaire
responses of the Community producers and of the producer in the analogue country included all
relevant information (if necessary in the form of non-confidential summary), the EU investigating
authorities manifestly violated Article s 6.4 and 6.2 of the AD Agreement". 1037 In response to
question 71 from the Panel, China further elaborat ed its claims, arguing chiefly that the Commission
violated Article 6.5 because no good cause was show n for the confidential treatment of certain
information in Pooja Forge's questionnaire response. It also argued that the Commission violated
Article 6.5.1 because no non-confidential summary w as provided for certain confidential information.
In its response, China also referred, in one sentence, to its claims under Articles 6.2 and 6.4. In its
oral statement at the second meeting, the European Union noted China's explanations and argued that,
taking into consideration paragraph 16 of its working procedures, "the Panel should not go any further
because China had its opportunity to try to make its case but it failed to even try". 1038 In its second
written submission, the European Union made no reference to China's arguments with respect to these
claims.
7.521 In response to question 103 from the Panel, following the second meeting, China reiterated
that it makes a claim under both Articles 6.5 and 6. 5.1 with respect to Pooja Forge's questionnaire
response. In comments on China's response to que stion 103, the European Union contended that
China's clarification of the legal basis of its claim in this response was inconsistent with the Panel's
working procedures and the basic principles of due process. With respect to China's substantive
arguments, the European Union submits that China' s argument that the non-confidential version of
Pooja Forge's questionnaire response contains no info rmation is counterfactual and, with respect to
product types, it argues that the non-confidential questionnaire response mentions that the product
concerned is "fasteners" generally.
7.522 We note that the way in which China has pursued this claim in this dispute is far from ideal.
We are particularly troubled by the fact that the claim was not developed at all in China's first written
submission. In that sense, we share the European Union's due process concerns. It seems to us that,
by failing to put forward a fuller explanation of a nd argument in support of its claim with respect to
the Indian producer's questionnaire response at the first opportunity, that is, in the first written
submission, China left the European Union in a di fficult position in attempting to respond to a claim
that was unclear. Indeed, this lack of clarity led us to pose questions to China in this regard, and
China subsequently provided, in its second written submission and its answer to our question 71, a
sufficiently clear argument in support of its cl aim to allow the European Union an adequate
opportunity to respond, as it did, up to its final submission, with comments on China's answers to
questions from the Panel concerning this claim. Mo reover, we recall that one of the purposes of the
DSU is to provide for the "prompt settlement of situ ations in which a Member considers that benefits
accruing to it" under a covered Agreement are being impaired by another Member's measure, as
provided for in Article 3.3 of the DSU. In this re gard, we recall the statement of the Appellate Body
in US – FSC that
"Article 3.10 of the DSU commits Member s of the WTO ... to engage in dispute
settlement procedures "in good faith in an e ffort to resolve the dispute". ...The
procedural rules of WTO dispute settlement are designed to promote, not the

1038 European Union, second oral statement, para. 116.

development of litigation techniques, but simply the fair, prompt and effective
resolution of trade disputes."1039
Ultimately, in this case, we do not consider that the European Union was deprived of due process by
the manner in which China pursued this claim, an d we therefore consider it appropriate to make
findings on it and proceed to our s ubstantive analysis. We would, however, urge complaining parties
to make every effort to pursue their claims with the fullest possible exposition of their arguments in
their first written submissions. In our view, this would help ensure that responding parties have a
sufficient opportunity to respond to those claims, and demonstrate that Members are engaging in
dispute settlement "in good faith in an effort to r esolve the dispute", as provided for in Article 3.10 of
the DSU.

7.523 Turning to the substance, we note that Ch ina's claim with respect to Pooja Forge's
questionnaire response is two-fold. China argues, in the first place, that the Commission violated
Article 6.5 by treating as confidential certain inform ation in this questionnaire response, particularly
product types, which, according to China, do not c onstitute confidential information. If the Panel
finds that this information was properly treated as confidential, China submits that the Commission
violated Article 6.5.1 by failing to require Pooja Forge to submit a non-confidential summary which
would permit other interested parties to have a reasonable understanding of the confidential
information.
1040
7.524 The European Union argues that China's claim with respect to Pooja Forge's questionnaire
response is limited to information on product types. As noted above, we consider that evaluation of a
claim under Article 6.5 requires a careful review of th e facts with respect to the claim, and note that
China has not put forward any evidence or arguments with respect to the confidential treatment of any
other category of information than that concerning product types. Therefore, although China's claim
takes issue with the treatment of all the information in Pooja Forge's questionnaire response
1041, we
limit our analysis to whether the Commission erred in treating information on product types as
confidential.
7.525 The European Union asserts that Pooja Forg e's questionnaire response mentions that the
product concerned is "fasteners" generally, suggesting that in its view, this is sufficient information on
product types. 1042 However, China's claim is that the in formation on product types was treated as
confidential inconsistently with Article 6.5 of the AD Agreement because good cause was not shown
for such treatment. There is nothing in the evidence before us, and the European Union does not even
assert, that a showing of good cause was made for trea ting this information as confidential. We recall
that Article 6.5 clearly requires that "good cause" be shown for confidential tr eatment of information,
whether such treatment is requested for information which is by nature conf idential, or information
submitted on a confidential basis. 1043 The non-confidential version of Pooja Forge's questionnaire
response gives no information concerning the product types for which information was provided, with
no assertion or explanation of "good cause" for conf idential treatment. We therefore find that the
Commission acted inconsistently with its obliga tions under Article 6.5 of the AD Agreement with
respect to the treatment of the confidential info rmation in Pooja Forge's questionnaire response.

1039 Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations" ("US –
FSC"), WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III, 1619, para. 166.
1040 China, answer to Panel questions 71 and 103; China, second written submission, paras. 1110-1115.
1041 See, for instance, China, second written submissi on, para. 1110 (non-confidential version of Pooja
Forge's questionnaire response "does not contain any information, and in particular information on the "product
types" on the basis of which the information has been provided by this producer which is obviously not
confidential".)
1042 European Union, comments on China, answer to Panel question 103, para. 24.
1043 See paragraph 7.451 above.

Having found a violation of Article 6.5, we need not, and do not, make findings with respect to
China's claim under Article 6.5.1.1044
7.526 With respect to China's claim that the allege d deficiencies in the questionnaire responses of
Agrati, Fontana Luigi and Pooja Forge also violated the obligations set forth in Articles 6.4 and 6.2 of
the AD Agreement, we recall that, in our view , China's claims under Articles 6.4 and 6.2 are
dependent on the claims under Ar ticles 6.5 and 6.5.1. Having found violations of Article 6.5.1 in
connection with the non-confiden tial versions of the questionnaire responses of Agrati and Fontana
Luigi, and of Article 6.5 in connection with the questionnaire response of Pooja Forge, we consider
that additional findings on China's claims under Ar ticles 6.4 and 6.2 would not contribute to the
resolution of this dispute or be potentially useful in implementation. We therefore exercise judicial
economy with respect to these claims.1045
(e) Whether the European Union violated Articles 6.5, 6.2 and 6.4 of the AD Agreement by
failing to disclose the Eurostat data on total EU production of fasteners
(i) Arguments of the Parties
China
7.527 China asserts that, in the complaint underlying th is investigation, the complainants calculated
total EU consumption of fasteners by adding total imports to total production, and then subtracting
total exports from that sum. China contends that although the complaint provided the source data for
total exports and imports, data for total production were not provided on the grounds that this was
confidential information. According to China, by treating this information as confidential, which
China contends was from public sources, the Commission violated Article 6.5 of the
AD Agreement.1046 China goes on to argue that, in the De finitive Regulation, the Commission stated
that the figure for total EU production had been estimated on the basis of Eurostat industrial
production data, but failed to explain how this estim ation had been made. According to China, the
Commission violated Article 6.5 of the AD Agreemen t by treating as confidential the Eurostat data
and information as to how the estimation of tota l EU production was made, and particularly as to
whether adjustments had been made to the Eurostat data.
1047 China argues that the Eurostat data and
the information as to how the estimation of total EU production had been made, including any
adjustments to the Eurostat data, was informati on used by the Commission and was relevant to the
presentation of the Chinese producers' cases. Accord ingly, argues China, failing to provide access to
such information also violated Articles 6.2 and 6.4 of the AD Agreement.
1048
European Union
7.528 The European Union contends that Article 6. 5 refers to information, not documents or
original sources, and asserts that what matters under this provision is the content of the information,
not the original document. The European Un ion maintains that the information on domestic
consumption and the methodology for its calculation were disclosed to the Chinese producers in the
investigation at issue. Specifically, the Eur opean Union asserts that the Chinese producers were

1044 Thus, we need not address the European Union's c ontention that a reference to fasteners in general
suffices to give a "reasonable understanding" of the product types used in the determination of normal value.
1045 We would note, however, that the basis for China's claims under Articles 6.2 and 6.4 with respect
to the questionnaire responses remains unclear to us, as China has not, in our view, elucidated how, in its view, a
failure to require a showing of good cause for the treat ment of information as c onfidential, even if true,
constitutes a violation of these provisions.

"given access to the relevant Eurostat information, including the fact that source of the information
was Eurostat". 1049 Therefore, the European Union contends , there was no violation of Article 6.5.
The European Union asserts that this information was contained in unlimited Annex C 1-2 to the
complaint, and that subsequently it was include d in other documents, such as the Information
Document and the General Disclosure Document.
1050 The European Union asserts that China's claims
under Articles 6.2 and 6.4 are consequential, and requests the Panel to reject them.1051
(ii) Evaluation by the Panel
7.529 China argues that the Commission violated Artic les 6.5, 6.2 and 6.4 of the AD Agreement 1052
by treating as confidential the original source on whic h the estimate of total EU production of the like
product was based, and by not explaining how the est imation of total EU production was made and
whether adjustments to the Eurostat data were made . We note that, in our view, China's claims under
Articles 6.2 and 6.4 are dependent on the claim under Article 6.5, since China's allegation of a
violation of Articles 6.2 and 6.4 assumes that th e Commission erred in treating the information at
issue as confidential. We will therefore start our evaluation with China's claim under Article 6.5.
7.530 China maintains that the Commis sion violated Article 6.5 by treating Eurostat data on total
EU production, and how the estimation of total EU production was made, including whether any
adjustments were made to Eurostat data, as confidential. 1053 With respect to the second aspect of
China's claim, we note that the obligation set forth in Article 6.5 applies to the confidential treatment
of information, not the methodology used and determ inations made by the investigating authorities.
Whether the Commission made adjustments to the Euro stat data in calculating total EU production is
not, in our view, information, but rather an aspect of the Commission's analysis and determination in
the investigation. In our view, whether or not these matters can be kept confidential or must be
disclosed does not fall within the scope of Article 6.5.
1054 We therefore reject this part of China's
claim.
7.531 As regards the Eurostat data, we recall that the complainants submitted information on total
EU production of fasteners in two annexes: Unlimited Annex C 1-1 1055 and Limited Annex C 1-21056.
The table in Unlimited Annex C 1-1 is titled "EU 27 Total Production of the CN Codes Involved in
the Complaint in Tons Source: Eurostat" and contains production data, for the period 2004-first
quarter 2007, on the basis of CN codes. The ta ble in Limited Annex C 1-2 is titled "EU 27 Total
Production of the CN Codes Involved in the Complain t in Tons Original Source". The titles indicate,
and a comparison of the two tables shows, that the table in Limited Annex C 1-2 is the source from
which the data in the Unlimited Annex C 1-1 ha ve been derived. Complainants asked the
Commission to treat Limited Annex C 1-2 as conf idential on the grounds that "[t]his information

1049 European Union, first written submission, para. 761 (emphasis in original).
1050 European Union, first written submission, para. 761.
1051 European Union, first written submission, para. 765.
1052 China's claim does not extend to Articles 6.5.1 and 6.5.2 of the AD Agreement. China, answer to
Panel question 104.
1053 Specifically, China alleges th at this information was not placed in the non-confidential
investigation file. However, the manner in which the asserted violation took place is not relevant to our analysis
of China's claim under Article 6.5, which does not contain any guidelines as to how non-confidential
information is to be handled by the investigating authorities in terms of its filing.
1054 We do not mean to suggest that we take the view that an investigating authority can keep secret its
methodology and determinations, merely that any obligations in this regard flow from provisions of the
AD Agreement other than Article 6.5. We note in this regard, for instance, Article 12.2 of the AD Agreement,
which requires the investigating authority to set forth, in a public notice, and in suff icient detail, its "findings
and conclusions on all issues of fact and law considered material by the investigating authorities".
1055 Exhibit CHN-15, p.45.
1056 Exhibit EU-11.

[was] by nature confidential becau se its disclosure would be of significant competitive advantage to a
Competitor".1057 The Commission accepted this request and did not place this annex in the non-
confidential file.
7.532 China contends that the Commission violated Article 6.5 by treating Limited Annex C 1-2 as
confidential, because "good cause" was not shown to justify such treatment. 1058 China argues that the
data in the Limited Annex C 1-2 differs from the data in the Unlimited Annex C 1-1 in that, unlike the
latter, the former contains information on the b asis of specific PRODCOM codes, not CN codes, and
it indicates for each figure whether any of the national figures in the EU 27 were estimated.1059
7.533 In response to question 76 from the Panel, the European Union argues:
"Only the original downloaded screen shot from the EUROSTAT database ([Exhibit]
EU-11) was not in the non-confidential file. The Commission did not insist that the
complaint be modified in this respect b ecause the same information was available in
the non-confidential file and, in fact, also publicly through EUROSTAT's website. In
this respect it should be noted that the codes in Exhibit EU-11 correspond exactly to
the CN codes on p. 45 in Exhibit CHN-15. The table on p. 45 of Exhibit CHN-15
gives product data by CN code at 8 dig it level. Exhibit EU-11 gives production data
by PRODCOM code using the NACE 1.1 classification. EUROSTAT publishes a
"look-up list" to match CN codes (export codes) to PRODCOM codes (production
codes) and this is available on the EUROSTAT website.
69
Limited Annex C 1-2 was available from a public s ource, namely the Eurostat website. It seems
apparent to us that information that is publicly available is not confidential within the meaning of
Article 6.5 of the AD Agreement. However, the Co mmission treated this information as confidential
information, despite that good cause had not been shown. This, in our view, was inconsistent with the
letter of Article 6.5 of the AD Agreement, which requires that "good cause" be shown to justify
confidential treatment of information. The fact that this information was available in the public
domain is not, in our view, an excuse for disregarding the requirements of Article 6.5. This
undoubtedly constitutes a fault on the part of the Commiss ion with respect to Article 6.5, even if this
violation did not materially affect the ability of Chinese producers to defend themselves in the
investigation at issue.
7.535 Turning to China's claim under Article 6.4, we recall that this provision does not require the
investigating authorities to actively discl ose information to interested parties.
1061 Rather, Article 6.4
requires the authorities "provide timely opportunities for all interested parti es to see all information
that is relevant to the presentati on of their cases, that is not confidential ... and that is used by the
authorities". We note that in the fasteners invest igation, the information in question, total EU

1057 Exhibit CHN-15, p.178.
1059 China, answer to Panel question 74; China, second written submission, para. 1121.
1060 European Union, answer to Panel question 76.
1061 See paragraph 7.480 above.

production of fasteners, was, available to inter ested parties, both from public sources, and more
importantly, in Unlimited Annex C 1-1. It is therefore clear that the Chinese producers had adequate
opportunities to see that information. We therefore reject China's claim that the Commission violated
the obligation set out under Article 6.4 of the AD Agreement with respect to this information. Having
rejected the claim under Article 6.4, we also rej ect China's claim under Artic le 6.2, which concerns
the more general right of interested parties with to have a "full opportunity for the defence of their
interests". Since the information in question was av ailable to interested parties, we see no basis on
which we might conclude that interested parties did not have a full opportunity for the defence of their
interests in this regard.
(f) Whether the European Union violated Article s 6.9, 6.2 and 6.4 of the AD Agreement in
procedural aspects of the domestic industry definition
(i) Arguments of the Parties
China

7.536 China submits that the Commission's determ ination regarding the number of producers
included in the domestic industry definition was unclear, and specifically, that the Commission
indicated in the Information Document that the num ber of producers in the industry was 114, and in
the General Disclosure Document (and in the Defi nitive Regulation) indicated that the number of
producers in the domestic industry was 46. 1062 China contends that by failing to give access to
relevant information concerning the definition of th e domestic industry, and in particular, how many
producers were actually included in the domestic i ndustry definition and their identity as well as the
identity of the producers that were excluded from th e scope of the domestic industry, the Commission
violated Articles 6.2 and 6.4 of the AD Agreement. 1063 China adds that by not disclosing in the
Disclosure Document (i) the number of companies c onstituting the domestic industry, (ii) whether or
not such companies supported the complaint, (iii) their identity and (iv) the reason for the reduction
from 86 to 46 companies, the Commission also violated Article 6.9 of the AD Agreement.1064
European Union
7.537 The European Union asserts that the "evidence" China relies on to support its claims under
Articles 6.2 and 6.4 is certain recitals in the Defi nitive Regulation, and contends that these recitals
cannot constitute evidence of a vi olation of these two provisions. 1065 Moreover, the European Union
notes that China's arguments also refer to alleged inconsistencies in the number of domestic producers
referred to in two recitals of the Definitive Regulati on, and explains that this discrepancy is explained
in the Definitive Regulation itself, at recital 112. 1066 The European Union considers that China has
failed to make a prima facie case in connection with its claims under Articles 6.2 and 6.4. 1067 The
European Union contends that China's claim unde r Article 6.9 is outside the Panel's terms of
reference, because the parties did not consult on this claim. If the Panel disagrees, the
European Union considers that China has failed to present any evidence or argument in support of this
claim, and therefore has failed to make a prima facie case with regard to this claim.
1068

1062 China, first written submission, paras. 599-604.
1063 China, first written submission, paras. 605-607.
1065 European Union, first written submission, paras. 766-767.
1066 European Union, first written submission, para. 768.
1067 European Union, first written submission, para. 769.
1068 European Union, first written submission, paras. 770-771.

(ii) Evaluation by the Panel
7.538 China's claim alleges violations of Articles 6.2, 6.4 and 6.9 of the AD Agreement, on the
grounds that the Commission failed to provide information on the number and identity of the
producers making up the domestic industry.
7.539 The factual basis for China's claim is the Co mmission's alleged failure to give access to
information on the number and identity of the domestic producers making up the domestic industry as
well as on the identity of the producers that were excluded from the scope of the domestic industry
defined by the Commission in the fasteners i nvestigation. We recall that, as discussed above
1069, in
our view, Articles 6.2 and 6.4 do not impose any affirmative obligation on investigating authorities to
actively disclose information to interested parti es. We also observe that Article 6.4 requires
investigating authorities to provide timely opportunities for interested parties to see information.
However, China's claim does not refer to a failure to provide opportunities to see information. China's
claim focuses on the definition of the domestic industry, specifically the number and identity of
producers in that industry. In our view, the defin ition of the domestic industry is an aspect of the
Commission's analysis and determination, and does not constitute information per se . China
acknowledges that the Commission informed parties, at various stages, of its views in this regard, in
the Information Document, and in the General Disc losure Document, and ultimately explained its
definition of the domestic industry in the Defin itive Regulation. The differences between the
statements in these documents do not, in our view, have any relevance to a claim under Ar ticles 6.4,
as they are not, as we have noted, information per se, but conclusions reached by the Commission.
Merely because the conclusion at an early stage of the investigation may be different from that
ultimately reached does not change this fact. In our view, China has failed to establish a prima facie
case of violation of Article 6.4 of the AD Agreem ent because the facts and argument it presents are
not relevant to the obligation set out in Article 6.4. Similarly, we fail to see how the fact that the
Commission made, and notified parties concerning, conc lusions with respect to the definition of the
domestic industry at various stages of the proceeding establishes, even prima facie, a violation of the
Article 6.2 requirement to provide interested pa rties a full opportunity for the defence of their
interests. Indeed, quite the contrary, the fact that the interested parties were notified of these
conclusions if anything enabled them to defend their interests by giving insight as to the development
of the Commission's analysis, and enabling them to present their own arguments. We therefore reject
China's claims under Articles 6.2 and 6.4, as China has failed to substantiate them sufficiently to
present a prima facie case.
7.540 With respect to China's claim under Article 6.9, we recall that we have concluded that China's
claims under Article 6.9 with respect to the nor mal value calculations were not the subject of
consultations, given that the request for consulta tions contains no reference to Article 6.9, and
therefore found these claims not to be within our terms of reference.
1070 In light of the basis for that
conclusion, we consider that this claim under Article 6.9 is also not within our terms of reference, and
we therefore do not address it further.

1069 See paragraphs 7.478 to 7.481 above.
1070 See paragraphs 7.503 to 7.508 above.

(g) Whether the European Union violated Article 12.2.2 of the AD Agreement in procedural
aspects of individual treatment determinations
(i) Arguments of the Parties
China
7.541 China argues that determinations concerning indi vidual treatment constitute "matters of fact
and law" within the meaning of Article 12.2.2, and that therefore, the Commission was required to
explain the reasons for its determination with respect to each request. 1071 However, in the Definitive
Regulation, the Commission merely stated that, on th e basis of the information available, the requests
met the requirements to be granted IT, without explaining the reasons. China asserts that the
requirement to explain is not limited to situations where requests for IT are rejected. Therefore, China
asserts, by not explaining the basis for its deci sions granting the requests for IT, the Commission
acted inconsistently with the obligation set forth under Article 12.2.2 of the AD Agreement.1072
European Union
7.542 The European Union first asserts that this claim is not within the Panel's terms of reference
because China failed to consult with the Eur opean Union with regard to Article 12.2.2. 1073 If the
Panel disagrees, the European Union submits that the Definitive Regulation states that all Chinese
producers that requested individual treatment were granted such treatment because each of them
satisfied the criteria set out in Article 9(5) of the Basic AD Regulation. According to the
European Union, this is a positive decision for the relevant interested parties, which provides the
relevant information on the matters of fact and law and reasons for such determination. Therefore, the
European Union maintains that there can be no ne ed to explain such a decision in the Definitive
Regulation in any more detail beyond explaining that the relevant conditions have been fulfilled.
1074
(ii) Evaluation by the Panel
7.543 With respect to the European Union's prelimin ary objection, we note that China's request for
consultations specifically states:
"2. China considers that the EC's imposition of anti-dumping duties on imports
of certain iron or steel fasteners originating in the People's Republic of China is
inconsistent with the EC's obligations under Articles VI and X:3(a) of the GATT
1994; Articles 1, 2.1, 2.2. 2.4, 2.6, 3.1, 3.2, 3.4, 3.5, 4.1, 5.4, 6.1, 6.2, 6.4, 6.5, 6.10,
9.2, 9.4 and 17.6(i) of the AD Agreement as well as Part I, paragraph 15 of China's
Protocol of Accession.
(i) The EC imposed a countrywide duty on the sole basis that China is a non-
market economy country and exempted from this duty only those few Chinese
exporters that were able to meet the so-c alled "Individual Treatment" criteria, thereby
acting inconsistently with Articles 2, 6.10, 9.2, 9.3, 9.4 and 12.2.2 of the
AD Agreement..." (emphasis added)

1071 China, first written submission, paras. 613-614.
1073 European Union, first written submission, para. 772.
1074 European Union, first written submission, para. 774.

Thus, it is clear to us as a matter of fact that China's request for consultations encompassed its
complaint under Article 12.2.2 with respect to the Definitive Regulation. We therefore reject the
European Union's preliminary objection.

7.544 Turning to the substance of China's claim, we re call that we have concl uded that Article 9(5)
of the Basic AD Regulation is inconsistent w ith Articles 6.10 and 9.2 of the AD Agreement.
1075 We
also found that the application of that provision in the fasteners investigation was inconsistent with the
same two provisions. 1076 We consider as a general matter that, where there is a substantive
inconsistency with the provisions of the AD Agreem ent, it is not necessary to consider whether there
is a violation of Article 12, as the question of wh ether the notice is "sufficient" under Articles 12.2
and 12.2.2 is immaterial.1077
7.545 In this case, however, we consider that the br oader issue raised by China's assertion that the
Commission's explanation of its decision granting individual treatment was inconsistent with
Article 12.2.2 merits consideration, as this is an issue which may well arise, even if in another
context, in implementation. We recall that the Commission explained its decision by stating that each
of the producers requesting individual treatment had met all the requirements to be granted such
treatment in accordance with the relevant provision of EU law. In our view, China is correct to the
extent that it argues that whether a decision in the course of an anti-dumping investigation is
favourable to relevant interested parties or not, does not determine whether the notice provided of the
decision is sufficient under Article 12.2.2.
7.546 We recall that Article 12.2.2 of the AD Agreement provides:
"A public notice of conclusion … of an inv estigation in the case of an affirmative
determination providing for the imposition of a definitive duty … shall contain, or
otherwise make available through a separat e report, all relevant information on the
matters of fact and law and reasons wh ich have led to the imposition of final
measures or the acceptance of a price undert aking, due regard being paid to the
requirement for the protection of confidential information. In particular, the notice
or report shall contain the information descr ibed in subparagraph 2.1, as well as the
reasons for the acceptance or rejection of re levant arguments or claims made by the
exporters and importers, and the basis for any decision made under subparagraph 10.2
of Article 6".
Article 12.2 provides, in pertinent part, that "Public notice ... of any preliminary or final determination
… shall set forth, or otherwise make available through a separate report, in sufficient detail the
findings and conclusions reached on all issues of fact and law considered material by the
investigating authorities". (emphasis added)

7.547 It is clear to us that the obligations with r espect to explanation of determinations are not
limited only to determinations that are unfavourable to a particular interested party or group of
interested parties. On the other hand, however, it is also clear to us that the nature and content of the
explanation given may well differ depending on the nature of the determination or decision in
question. We do not exclude that, in a situati on where a relevant provision establishes detailed
requirements for factual criteria that must be satisfi ed in order to justify a particular decision, an
explanation that the party in question satisfied the relevant criteria may be sufficient under
Article 12.2.2.

1075 See paragraphs 7.98 and 7.112 above.
1076 See paragraph 7.149 above.
1077 Panel Report, EC– Bed Linen, para. 6.259.

7.548 In this case, however, since we have found the pr ovisions of Article 9(5) of the Basic AD
Regulation at issue in connection with this clai m are inconsistent with the European Union's
obligations, both as such and as applied, we do not consider it appropriate to rule on whether the
Definitive Regulation in this case was consistent with the requirements of Article 12.2.2.
(h) Whether the European Union violated Article 6.5 of the AD Agreement by disclosing
confidential information
(i) Arguments of the Parties
China
7.549 China notes that each of the nine Chinese expor ting producers included in the sample for the
dumping determination requested market economy tr eatment, and provided information in support of
those requests as called for in the MET/IT Claim Fo rm. The information supplied in those forms was
verified by the Commission at the premises of the companies. The assessment of the claims for MET
was disclosed by the Commission in a single document for all nine producers, which was provided to
the nine Chinese producers, to the Chinese authorities, and to the interested parties, including the
complainant in the investigation.1078 China states that the document contains confidential information
for each of the nine Chinese producers, concerning ow nership of the company, sales, costs, profits,
subsidies, accounting systems, assets, etc, whic h is sensitive and was submitted on a confidential
basis, as indicated by the label "LIMITED" on the MET/IT Claim Forms. 1079 China asserts that by
failing to treat the information as confidential and di sclosing it to interested parties other than the
producers whose information it was, the European Union violated Article 6.5 of the
AD Agreement.1080
European Union
7.550 The European Union contends that China's claim is based on general assertions and that
China has failed to make a prima facie case of violation.1081 The European Union also asserts that the
information in the document is very general and does not disclose any specific information submitted
on a confidential basis. Moreover, the European Union contends that none of the companies
concerned have complained about confidential information having been disclosed.1082
(ii) Arguments of Third Parties
Chile
7.551 Chile notes that Article 6.5 of the AD Agreemen t distinguishes between information which is
by nature confidential, and information which is provided on a confidential basis by parties to an
anti-dumping investigation. Nevertheless, for Chile, the treatment of information as confidential will
be contingent upon there being good cause for tr eating the information in question as such. 1083 Chile
considers that for this provision to be correctly ap plied, the reasons justifying the disclosure of the
information provided must be known to those who provided the information, and if the authority
concludes, in the course of the investigation, that good cause for maintaining the confidentiality of the
information does not exist, it must expressly so state. For Chile, this cannot happen subsequently, still
less once dispute settlement proceedings have begun. The disclosure of information considered by the

1078 China, first written submission, paras. 617-619.
1079 China, second written submission, para. 1142, citing Exhibit CHN-71.
1080 China, first written submission, paras. 620-621.
1081 European Union, first written submission, paras. 777-778.
1082 European Union, first written submission, para. 779.
1083 Chile, oral statement, para. 10.

authority to be non-confidential must be properly s ubstantiated and must be expressly authorized by
the party that supplied the information, otherwise, the position of the investigated party would be
undermined and the rules of due process violated.1084
United States
7.552 While it takes no position on the merits of China' s factual allegation, the United States agrees
with China that, where an investigating authorit y accepts information being submitted as confidential,
the authority's failure to so treat that information, in particular by disclosing it to interested parties
other than each of the exporting producers that fu rnished the information, is inconsistent with
Article 6.5 of the AD Agreement.1085
(iii) Evaluation by the Panel
7.553 Before turning to the substance of China's claim we recall the salient facts, which we
understand to be undisputed. Nine Chinese exporting producers were selected as the sample for the
investigation of dumping. All nine requested market economy treatment (MET), and provided
information supporting those claims to the Commission, which information was subsequently verified
at their premises. The cover pages of the MET/ IT forms submitted by th ree Chinese producers are
clearly labelled "limited". 1086 The information submitted in those forms served as the basis for the
Commission's analysis and determination with respect to the requests, which were ultimately denied.
The assessment of the MET claims by the Comm ission was set out in a single document entitled
"MET Disclosure Document – Assessment of market Economy Treatment Claims by nine producers
in the PRC".
1087 That document was made available to all nine Chinese exporting producers in the
sample, to the Chinese authorities, and to other interested parties, including the complainants.
7.554 We understand, and the European Union has not ass erted otherwise, that in EU practice, the
label "limited" on a document indicates that the docum ent so labelled is submitted on a confidential
basis as containing confidential information within th e meaning of Article 6.5 of the AD Agreement.
In response to question 80 from the Panel, the European Union stated that "it is true that the original
MET Disclosure Document is labelled "L imited" and contains a footnote stating inter alia that it "is
for internal use only" and that it "is a confid ential document pursuant to Article 19 of Council
Regulation EC No 384/96".1088 The footnote in question reads, in full:
"This document is for internal use only. It is protected pursuant to Article 4 of
Regulation (EC) No 1049/2001 of the European Parliament and of the Council (OJ L
145, 31.5.2001, p. 43). It is a confidential document pursuant to Article 19 of
Council Regulation EC No 384/96 (OJ L 56 6.3. 1996, p.1) and Article 6 of the WTO
Agreement on Implementation of Article VI of the GATT 1994 (Anti-dumping
Agreement)."
7.555 The principal question for us in resolving Ch ina's claim is whether, by providing the MET
Disclosure Document to each of the nine Chinese e xporting producers in the sample, to the Chinese
authorities, and to other interested parties, incl uding the complainants, the European Union disclosed
confidential information. We recall that Article 6.5 provides, in pertinent part:

1084 Chile, oral statement, para. 11.
1086 Exhibit CHN-71.
1087 Exhibit CHN-19.
1088 European Union, answer to Panel question 80, para. 187. The first three paragraphs of Article 19
of Council Regulation EC No 384/96 largely replicate the provisions of Article 6.5 of the AD Agreement.

"6.5 Any information which is by nature confidential (for example, because its
disclosure would be of significant competitiv e advantage to a competitor or because
its disclosure would have a significantly adverse effect upon a person supplying the
information or upon a person from whom that person acquired the information), or
which is provided on a confidential basis by parties to an investigation shall, upon
good cause shown, be treated as such by the au thorities. Such information shall not
be disclosed without specific permission of the party submitting it.17
Regulation (EC) No. 384/96 (OJ L 56, 6.3.1996 p.1) and Article 6 of the WTO
Agreement on Implementation of Article VI of the GATT 1994 (Anti-Dumping
Agreement). Documents which do not contai n this label are considered to be non-
confidential documents pursuant to these provisions. Therefore, any replies which
contain confidential information must be labelled 'Limited'."
We note that the MET/IT Claim Forms were prepared by the Commission, and were provided by it to
Chinese exporters to enable them to claim market economy and/or individual treatment in the anti-
dumping investigation in question. In addition, we note that the option "Limited Version" is one of
two options which can be chosen by the company su bmitting the form – the other is labelled "Version
for Inspection by Interested parties". In light of these facts, it is eviden t to us that the Chinese
exporting producers provided the information in these forms to the Commission on a confidential
basis. Moreover, we consider it clear, in view of the footnote, that they were entitled to expect that
the information would be treated as confidential by the Commission in the course of the investigation,
as required by EU law and the relevant provision of Article 6 of the AD Agreement, that is
Article 6.5. While China did not provide copies of the forms submitted by the other six producers, the
European Union does not contend that they were not submitted on the same "limited" basis as those in
Exhibit CHN-71, and we have no reason to consider th at they were any different in this regard. The
European Union has made no argument that the Commi ssion denied confidential treatment to any of
the information submitted in the MET/IT claim forms by the nine Chinese producers.

7.557 The European Union also does not de ny that the MET Disclosure Document
1089 bears the
label "Limited", with a footnote, which states:
"This document is for internal use only. It is protected pursuant to Article 4 of
Regulation (EC) No 1049/2001 of the European Parliament and of the Council (OJ L
145, 31.5.2001, p. 43). It is a confidential document pursuant to Article 19 of
Council Regulation EC No 384/96 (OJ L 56 6.3. 1996, p.1) and Article 6 of the WTO
Agreement on Implementation of Article VI of the GATT 1994 (Anti-dumping
Agreement)."

1089 Exhibit CHN-19.

In our view, it is thus clear that the European Union treated the MET Disclosure Document as one
containing confidential information, to be treated as such as required by EU law and the relevant
provision of Article 6 of the AD Agreement, that is , Article 6.5. Moreover, we note that the MET
Disclosure Document reports information concerni ng, and the Commission's conclusion with respect
to each of the nine Chinese producers, individually and by name 1090, and the European Union has not
demonstrated that the information reported in that form was not submitted on a confidential basis.

7.558 The European Union asserts that the "Limited" label can be explained on the basis that the
document was originally an internal working document, but ceased to be "Limited" once it was sent to
interested parties as an MET Disclosure Document, and the "Limited" label, and the footnote, should
have been omitted when the document was sent to the parties.
1091 The European Union considers that
the labelling of the document cannot itself amount to a violation of Article 6.5, and asserts that the
information in the document is "very general a nd does not disclose any information submitted on a
confidential basis", and that none of the companies involved complained about disclosure of
confidential information.
1092 We consider the fact that the docum ent was considered to be for internal
use only, as indicated by the footnote, to be irrelevant for purposes of our consideration of China's
claim. Clearly, it is within the power of the Comm ission to disclose internal documents to whomever
it may choose, provided that it does not, by so doing, violate some other relevant obligation, as China
claims it has done in this case.
7.559 We consider the following facts to be indisputable:
(a) nine Chinese producers submitted information in MET/IT claim forms on a
confidential basis;
(b) the Commission made no decision concluding that the information so submitted was
not properly treated as confidential;
(c) the Commission neither sought nor received the permission of each of the Chinese
producers to disclose the information so submitted, either as such, or in generalized or
summary form; and
(d) the Commission provided a document, which reports information so submitted for
each Chinese producer individually and by name, to all nine Chinese producers, to the
Chinese authorities, and to other interested parties, including the complainants, in the
fasteners investigation.
In light of these facts, we consider the conclusi on that the European Union disclosed confidential
information in the anti-dumping investigation underlying this dispute to be inescapable.

7.560 Finally, we note that, in the circumstances of this case, we do not consider it necessary for us
to determine whether or not the information in th e MET/IT Claim Forms, or in the MET Disclosure
Document, was properly treated as confidential unde r Article 6.5 of the AD Agreement. We agree

1090 Exhibit CHN-19.
1091 European Union, answer to Panel question 80, para. 188.
1092 European Union, answer to Panel question 80, para. 189. With respect to the latter point, we note
that, contrary to the European Union's contention that none of the companies mentioned in the MET Disclosure
Document voiced such concerns, the MET Disclosure Do cument specifically refers to one Chinese producer
who expressed concerns to the Commission with respect to disclosure of confidential information in the MET
disclosure document. China, first written submission, para. 622, Exhibit CHN-61. While it is not clear whether
any confidential information of that company was actually disclosed in the document, it is clear that at least one
Chinese producer raised concerns ab out the disclosure of confidential information in the MET Disclosure
Document.

with the European Union that merely because a document is labelled as such does not demonstrate
that the information it contains is confidential within the meaning of Article 6.5. It is clear that an
investigating authority may conclude that inform ation submitted as confidential does not merit such
treatment. However, in such a case, Article 6.5.2 of the AD Agreement establishes certain
requirements, not least of which is to give the s upplier of the information an opportunity to make the
information public or to authorize its disc losure in generalized or summary form. 1093 Moreover, even
if the investigating authority concludes that a request for confidentiality is not warranted, Article 6.5.2
provides that if the supplier is unwilling to make th e information public or to authorize its disclosure
in generalized or summary form, the au thorities may disregard the information. 1094 Article 6.5.2 does
not, however, authorize the authorities to provide th e information to other interested parties in the
investigation. In any event, even assuming, as the European Union asserts, that the MET Disclosure
Document does not contain any data on the volume, value, or unit price of sales, actual costs of the
companies concerned, percentage or value of profits , value of any subsidy received, or the value of
the assets of the companies examined 1095, this does not, in our view, demonstrate that the document
contains only non-confidential information. In formation which may properly be treated as
confidential under Article 6.5 is not necessarily lim ited to data of the types referred to by the
European Union, but may include any type of information submitted on a confidential basis.
7.561 Based on the foregoing, we conclude that the European Union violated Article 6.5 of the
AD Agreement by disclosing confidential information.
(i) Whether the European Union violated Article 6.1.1 of the AD Agreement by failing to
provide sufficient time to respond to requests for information
(i) Arguments of the Parties
China
7.562 China notes that Article 6.1.1 of the AD Agreement provides that "foreign producers
receiving questionnaires used in an anti-dumping inv estigation shall be given at least 30 days for
reply", and footnote 15 provides that the time period shall be counted from the date of receipt, as a
general rule, deemed to be one week fr om the date the questionnaire was sent. 1096 China asserts that,
in this case, the Commission gave Chinese producers only 15 days from the date of the Notice of
Initiation to submit "questionnaires" for companies claiming market economy status and/or individual
treatment.
1097 In China's view, the Commission should have given Chinese producers 30 days to
submit their claims for market economy treatment and/or for individual treatment, and should have
started to count that period from the date of receipt.1098

1093 We recall that Article 6.5.2 of the AD Agreement provides:
"If the authorities find that a request for confiden tiality is not warranted and if the supplier of
the information is either unwilling to make the information public or to authorize its
disclosure in generalized or summary form, the authorities may disregard such information
unless it can be demonstrated to their satis faction from appropri ate sources that the
information is correct." (footnote omitted).
1094 There is no indication, and the European Union does not contend, that the Chinese producers who
supplied the information agreed to make it public or authorized its disclosure in generalized or summary form.
We note that the European Union does not contend that the information in the MET Disclosure Document is in
"generalized or summar y form". We recall in this regard that the information is reported for each submitting
Chinese producer individually, identified by name.
1095 European Union, first written submission, para. 779.
1096 China, first written submission, para. 625, quoting Article 6.1.1 (footnote omitted).
1097 China, first written submission, paras. 623-624.

European Union
7.563 The European Union notes that the premise of China's claim is that the document in question
is a "questionnaire" within the meaning of Article 6.1.1 of the AD Agreement. 1099 T h e
European Union asserts that this premise is fundame ntally flawed, asserting that the provision applies
to the initial overall questionnaire, citing in this regard the panel report in Egypt – Steel Rebar .1100
According to the European Uni on, the claim form for MET and IT cannot be a questionnaire for
purposes of Article 6.1.1 because it is for a different purpose than the questionnaire foreseen in that
provision.1101 The European Union notes that, according to China's Protocol of Accession, it is for
Chinese producers in an anti-dumping investigation to show that market economy conditions prevail,
and the claim form is a means to allow that showing.1102 Moreover, the European Union contends that
the decision whether to grant MET and/or IT must be made early in the investigation, as it has
important consequences for the investigation, and thus consideration of claims in this regard must not
become an obstacle to the conduct of the investigation. 1103 Finally, the European Union asserts that
the 15-day period was reasonable, noting that the same period was given to other parties for
submission of basic information.
(ii) Arguments of Third Parties
Japan

7.564 Japan shares the European Union' s view that Article 6.1.1 of the AD Agreement applies only
to the initial questionnaire, and does not require that investigating authorities provide respondents
with a minimum 30-day period to reply to all possible information requests. 1104 Japan considers it
sufficient that respondents are afforded a reasonable period of time to supply other information, given
the time restraints on AD investigations. 1105 Japan notes that an MET/IT claim form is an additional
element used only in AD investigations concerning non-market economy countries, and that the
deadlines for investigations regarding market economy and non-market economy countries are
identical. As the resolution of these claims can ha ve an important impact on the remainder of the
investigation, Japan considers that they should be dealt with as swiftly as possible, and that a period of
less than 30 days to submit an MET/IT claim form is entirely reasonable.
1106
United States
7.565 The United States agrees with the European Union that China's claim is premised on a
fundamental misunderstanding of the scope of Article 6.1.1. 1107 The United States refers to the report
of the panel in Egypt – Rebar to argue that the original antidumpi ng questionnaire in an investigation
is the single document considered "the ques tionnaire" for purposes of the AD Agreement. 1108 T h e
United States considers that the opportunity provided by an investigating authority to permit Chinese
companies to claim market economy treatment or individual treatment is a precursor to the issuance of
the actual antidumping questionnaire, and therefore is not subject to the obligations in Article 6.1.1 –
indeed, the United States notes that the informati on submitted enables the investigating authority to

1099 European Union, first written submission, para. 782.
1100 European Union, first written submission, para. 783.
1101 European Union, first written submission, para. 783.
1102 European Union, first written submission, para. 785.
1103 European Union, first written submission, para. 786.
1104 Japan, written submission, para. 71.
1105 Japan, written submission, para. 75.
1106 Japan, written submission, paras. 76-77.
1108 United States, written submission, paras. 41-42.

identify those companies that will receive the antidumping questionnaire for which the minimum 30-
day response period applies.1109
(iii) Evaluation by the Panel
7.566 In order to resolve China's claim under Article 6. 1.1, we must answer two questions. First,
we must interpret Article 6.1.1 to ascertain the sc ope of the obligation set forth therein, and second,
we must determine, as a matter of fact, whether the documents concerned in China's claim fall within
that scope. We address these questions in turn below.
7.567 First, however, we recall the salient facts, wh ich we understand to be undisputed. In the
Notice of Initiation, the European Union indicated that "Duly substantiated claims for market
economy treatment ... and/or for individual treatment pursuant to Article 9(5) of the basic Regulation,
must reach the Commission within 15 days" of the publication of the notice. Chinese exporting
producers were sent a letter, attaching a copy of the form for requesting market economy treatment
and/or individual treatment, stating that compan ies wishing to "submit a claim for individual
treatment in this proceeding ... must submit the attached claim form ... within 15 days, i.e. by
26 November 2007".
7.568 The European Union asserts that, having fa iled to present the document in question as
evidence to support its claim, China has failed to make a prima facie case. We consider, however,
that the failure to submit a copy of the document with its first written subm ission is not fatal to
China's claim. China may well have proceeded on the understanding that the Panel could address this
claim without reference to the speci fic form itself. China did submit a copy of the form, which is
entitled "Market Economy Treatment and/or Indivi dual Treatment claim form", with its second
written submission.
1110 The European Union also offered to provide us with a copy, but argues that
this would undercut the Panel's working procedures, which require the submission of evidence by the
first meeting, as a general matter.1111 We recall that we posed question 81 to China with respect to the
basis for the assertion that this document is a "ques tionnaire" within the meaning of Article 6.1.1.
Thus, even were we to take a strict view of our working procedures, which we do not consider is
required1112, China's submission falls within the express provision of our working procedures allowing
for the submission of factual evidence necessary for purposes of answers to questions.1113
7.569 Turning to the substantive issues, we recall th at Article 6.1.1 of the AD Agreement provides,
in pertinent part:
"6.1.1 Exporters or foreign producers receiving questionnaires used in an
anti-dumping investigation shall be given at least 30 days for reply. 15 Due
consideration should be given to any requ est for an extension of the 30-day period
and, upon cause shown, such an extension should be granted whenever practicable.

1110 Exhibit CHN-72.
1111 See Working Procedures for the Panel, para. 16.
1112 Our working procedures provide for exceptions, upon a showing of good cause, to the general rule
requiring factual evidence to be submitted no later than the first substantive meeting. Working Procedures for
the Panel, para. 16.
1113 Working Procedures for the Panel, para. 16.

diplomatic representative of the exporting Me mber or, in the case of a separate customs
territory Member of the WTO, an official representative of the exporting territory."
The fundamental questions for us are what is the m eaning of "questionnaire" in this provision, and
whether the "Market Economy Treatment and/or I ndividual Treatment claim form" which is the
subject of China's claim is such a "questionnaire".

7.570 We note that the first sentence of Article 6.1. 1 clearly requires investigating authorities to
allow at least 30 days for replies to "questionnaires" . However, neither this sentence, nor any other
provision in the AD Agreement, defines the term " questionnaires". The only qualification of the term
"questionnaire" in Article 6.1.1 is the fact that th e 30-day period is accorded to "exporters or foreign
producers receiving questionnaires". Therefore, we ex amine the ordinary meaning of this term in its
context, and in light of the object and purpose of the provision to inform our understanding.
7.571 Neither party has relied on the dictionary definiti on of the word questionnaire in this dispute.
Nonetheless, we note that the New Shorter Ox ford English Dictionary defines the word
"questionnaire" as "a formulated series of questi ons by which information is sought from a selected
group, usu[ally] for statistical analysis".
1114 While this is an appropriate definition in our view, it does
not suffice to answer the question before us. In the course of an anti-dumping investigation, it is not
unusual for there to be multiple instances in which the investigating authorities seek information from
a selected group through a "formulated series of ques tions". However, it seems clear to us that
Article 6.1.1 cannot apply to each such instance, as this could make it impossible for the authorities to
obtain necessary information while still respecting th e time limits on investigation set forth in
Article 5.10 of the AD Agreement.
1115
7.572 This was the question considered by the panel in Egypt – Rebar . In its report, the panel
considered whether "questionnaires" as referred to in Article 6.1.1 are only the original questionnaires
in an investigation, or whether this term also in cludes all other requests for information, or certain
types of requests, including requests in additi on and subsequent to original questionnaires. 1116 T h e
panel considered that context, referring to the only other use of the term "questionnaire", in
paragraphs 6 and 7 of Annex I to the AD Agr eement, supported the conclusion that the term
"questionnaire" in Article 6.1.1 refers only to the original questionnaires sent to interested parties at
the outset of an investigation. 1117 Considerations regardi ng the conduct of anti-dumping
investigations1118, and the particular requests for information at issue in that case, which were in the
nature of follow-up questions to those in the original questionnaire 1119, led the panel to conclude that
those requests did not constitute questionnaires in the sense of Article 6.1.1, and that therefore the

1114 The New Shorter Oxford English Dictionary, Clarendon Press, 1993.
1115 We recall that Article 5.10 provides that "[i]nves tigations shall, except in special circumstances, be
concluded within one year, and in no case more than 18 months, after their initiation". In considering similar
questions, the Appellate Body has consistently balanced the due process rights of interested parties against the
need of investigating authorities to control the conduct of the investigation and to carry out the multiple steps
required to reach a timely completion of the investigation.
"[T]he due process rights in Article 6 of the AD Agreement—which include the right to
30 days for reply to a questionnaire—'cannot ex tend indefinitely' but, instead, are limited by
the investigating authority's need 'to 'control the conduct' of its inquiry and to 'carry out the
multiple steps' required to reach a timely completion' of the proceeding."
Appellate Body Report on Mexico – Antidumping Measures on Rice , para. 282 (quoting Appellate
Body Report, US – Oil Country Tubula r Goods Sunset Reviews , para. 242, quoting in turn, Appellate Body
Report, US – Hot Rolled Steel, para. 73, in turn quoting Panel Report on US – Hot Rolled Steel, para. 7.54).
1116 Panel Report, Egypt – Steel Rebar, para. 7.275.
1117 Panel Report, Egypt – Steel Rebar, para. 7.276.
1118 Panel Report, Egypt – Steel Rebar, para. 7.277.
1119 Panel Report, Egypt – Steel Rebar, para. 7.278.

less-than-30-day deadline imposed for responses to those requests was not inconsistent with that
Article.1120
7.573 We note in addition that footnote 15 to Article 6.1.1 of the AD Agreement provides further
support for the conclusion that the questionnaires referred to in the provision are the original
questionnaires sent at the outset of the investigation. This footnote lengthens the 30-day rule by one
week for questionnaires sent to exporters, provi ding generally that "the time-limit for exporters shall
be counted from the date of receipt of the questionnaire, which for this purpose shall be deemed to
have been received one week from the date on which it was sent to the respondent". This reference to
"the questionnaire" in the singular suggests that one questionnaire, sent to all exporters, is the subject
of this obligation. However, as noted by the European Union 1121, the information to support requests
for market economy and/or individual treatment is sought only from exporters in non-market
economies, and thus is not sent to all exporters. Had the drafters intended the term "questionnaires" in
Article 6.1.1 to refer to any and a ll information requests in the form of a series of questions, a plural
formulation, or an indefinite formulation such as "any" or "a" "questionnaire", in footnote 15, might
be expected.
7.574 To us, these considerations indicate that the term "questionnaires" in Article 6.1.1 refers to
one kind of document in an investigation. Turning to the question of what that document might be,
we note that the considerations of context referred to above
1122 suggest that it refers to the initial
comprehensive questionnaire issued in an anti-dumping investigation to each of the interested parties
by an investigating authority at or following the initiation of an investigation, which questionnaire
seeks information as to all relevant issues pertaining to the main questions that will need to be decided
(dumping, injury and causation).1123
7.575 China appears to accept the view that Article 6.1.1 refers to an "original" questionnaire sent at
the outset of an investigation. 1124 Indeed, China notes that the docum ents in question in this dispute
"were sent to the interested parties at the outset of the investigation" and therefore argues that they fall
within the scope of Article 6.1.1 of the AD Agreement. 1125 China points out that, unlike the requests
for information at issue in Egypt – Rebar , the documents at issue here were not requests for
information in addition and subseque nt to the "original" questionnaire. 1126 China asserts that the
questions posed in the MET questionnaire are obviousl y not in the nature of follow-up questions to
any "original questionnaire response" - on the cont rary, China asserts that the MET questionnaire is

1120 Panel Report, Egypt – Steel Rebar, para. 7.279.
1121 Third party Japan also made this point.
1122 For instance, paragraph 6 of Annex I refers to "[v]isits to explain the questionnaire," which
suggests that such a questionnaire is a substantial in formation request, otherwise there would be no need to
provide for a possible visit to explain it. Similarly, paragraph 7 of Annex I provides that, as the main purpose of
an on-the-spot investigation is to "verify information pr ovided or obtain further details", normally that visit
should take place "after the response to the questionnaire has been received". This also suggests that "the
questionnaire" is a substantial enough information request to warrant a visit to verify the information, and that it
is sent early in the investigation. The procedures re quired for such a visit, in cluding advance notice and the
agreement of the exporting Member, si milarly suggest that the visit itself is a significant event, and not
something likely to occur repeatedly, with respect to repeated "questionnaires".
1123 We recognize that there may be differences in the initial comprehensive questionnaires sent to the
different interested parties, reflectin g their different activities and interest s in the investigation. Moreover,
depending on how a Member organizes the conduct of anti-dumping investigations, there may be separate and
distinct initial questionnaires concerning the issues of dumping and injury and causation. These circumstances
do not affect our fundamental conclusion, that the initial comprehensive document, or set of documents,
covering all of these issues are encompassed by the term "questionnaires" in Article 6.1.1.
1126 China, answer to Panel question 81, para. 356.

the original questionnaire.1127 China considers that satisfying the MET and IT tests is of fundamental
importance to Chinese exporting producers, as the outcome of those tests determines whether a
country-wide duty is applied to them, and asserts th at therefore, it is critical that an exporting
producer has sufficient time to gather and pr esent the voluminous data requested by the EU
investigating authorities.1128
7.576 We do not agree that the "Market Economy Treatment and/or Individual Treatment claim
form" in question can be considered a "questionnair e" within the meaning of Article 6.1.1, as we
understand that term. We certainly do not agree w ith China's contention that it is the "original
questionnaire" as we understand that term, and as the panel in Egypt – Rebar understood it. In our
view, merely that it is the first request fo r information sent to Chinese exporters does not, ipso facto,
demonstrate that it is a questionnaire within the m eaning of Article 6.1.1. We consider that the
substance of the document is critical to determining whether it is such a questionnaire.
7.577 We have reviewed the form in question, and it clearly is not a comprehensive questionnaire
seeking all the information on the issues of dumpi ng, injury and causation that the investigating
authority considers will be required, at least at the outset of the investigation, in order to make its
determinations on those issues consistently with th e requirements of the AD Agreement. Rather, it
elicits information relevant to th e market economy test and individual treatment test applied by the
European Union in anti-dumping investigations involving certain non-market economies. We
consider that these questions, which are not relevant in all investigations, and are not directly related
to the determinations of dumping, injury and causation required by the AD Agreement 1129, are
properly treated as preliminary requests for informat ion, necessary for the investigating authority to
determine, inter alia, which interested parties will receive the comprehensive questionnaires that are
within the scope of Article 6.1.1. 1130 We recognize that the resolution of the MET and IT tests is
important for the Chinese exporting producers, but we do not consider that this changes the nature of
the questionnaire, or brings it within the scope of Article 6.1.1.
7.578 We recall that there is no basis in the text of the AD Agreement to differentiate between
different types of requests for information, and that to require at least 30 days response time for every
request for information would either make it impossi ble for investigating authorities to complete their
investigation within the allowed overall timeframe, or require them to stop seeking information, and
thus base their decision on less complete or less accu rate information. Furthe r, we have interpreted
the term "questionnaires" in Article 6.1.1 as refe rring only to the comprehensive questionnaire(s)
issued at the outset of the investigation, in part because this strikes an appropriate balance between the
due process rights of interested parties and the ri ght of investigating authorities to obtain the
information they need to conduct their investiga tions in the manner and within the time limits
prescribed in the AD Agreement. To treat th e "Market Economy Treatment and/or Individual
Treatment claim form" as a "questionnaire" within the meaning of Article 6.1.1 would mean that a

1127 China, answer to Panel question 81, para. 363. We note that China also referred to the fact that the
information provided in the MET/IT claim forms was verified in support of its contention that they should be
considered a "questionnaire" within the meaning of Artic le 6.1.1 of the AD Agreement, citing the Panel Report
in Egypt – Rebar in this regard. China, first written submission , para. 137, China, answer to Panel question 81,
paras. 364-365.
1128 China, answer to Panel question 81, para. 371.
1129 We recall that there is no requirement under the AD Agreement to treat ex porters in non-market
economies differently with re spect to any aspect of an investigation, although such different treatment with
respect to the determination of normal value is allowed for by Article 2.7.
1130 China has not made any claim, independent of Article 6.1.1, that the time for response to the
"Market Economy Treatment and/or Individual Treatment claim form" was unreasonable or inadequate, and we
therefore need not address that question. We would note , however, that the same 15-day period for response is
used by the European Union with respect to other requests for information it considers to be preliminary to the
issuance of comprehensive questionnaires, which would suggest that the period is not per se unreasonable.

subsequently issued comprehensive questionnaire see king all the relevant information needed for the
determinations of dumping, injury and causation would be something other than a "questionnaire"
within the meaning of Article 6.1.1. This would, in our view, deny exporters precisely the right that is
afforded them by that provision, a result we find untenable.
7.579 We therefore conclude that the "Market Ec onomy Treatment and/or Individual Treatment
claim form" in question is not a "questionnaire" within the meaning of Article 6.1.1 1131, and that
therefore, the European Union did not violate Article 6.1.1 of the AD Agreement by not providing
Chinese exporters with 30 days to submit their responses. In light of our conclusion, we consider it
unnecessary to address China's claim that, by starting to count those 15 days as from the publication
of the Notice of Initiation, the European Union acted inconsistently with the requirements of
footnote 15 to Article 6.1.1 of the AD Agreement.
VIII. CONCLUSIONS AND RECOMMENDATION
A. C
ONCLUSIONS
8.1 Having considered the European Union's prel iminary objections, we have made no findings
with respect to the following claims, which we have concluded are not within our terms of reference
for the reasons set out in the foregoing sections of our Report:
(a) Claim under Article 2.6 of the AD Agreement with respect to the definition of like
product;
(b) Claim under Article 6.9 of the AD Agreem ent with respect to the alleged non-
disclosure of aspects of the normal value determination; and
(c) Claim under Article 6.9 of the AD Agreement with respect to the procedural aspects
of the domestic industry definition.
8.2 In light of the findings we have set out in th e foregoing sections of our Report, we conclude
that the European Union acted inconsistently with:
(a) Articles 6.10, 9.2 and 18.4 of the AD Agre ement, Article I:1 of the GATT 1994 and
Article XVI:4 of the WTO Agreement with respect to Article 9(5) of the Basic AD
Regulation;
(b) Articles 6.10 and 9.2 of the AD Agreement w ith respect to the individual treatment
determinations in the fasteners investigation;
(c) Articles 3.1 and 3.2 of the AD Agreement w ith respect to the consideration of the
volume of dumped imports in the fasteners investigation;
(d) Articles 3.1 and 3.5 of the AD Agreement with respect to the causation analysis in the
fasteners investigation;
(e) Articles 6.4 and 6.2 of the AD Agreement with respect to aspects of the normal value
determination;

1131 We emphasize that our conclusion is not based on the name of the document, but on our
consideration of its substance and its purpose in anti-dumping investigations conducted by the European Union.

(f) Article 6.5.1 of the AD Agreement with r espect to non-confidential versions of
questionnaire responses of two European producers and Article 6.5 of the
AD Agreement with respect to confiden tial treatment of information in the
questionnaire response of the Indian producer;
(g) Article 6.5 of the AD Agreement with resp ect to the confidential treatment of the
Eurostat data on total EU production of fasteners; and
(h) Article 6.5 of the AD Agreement by disclosing confidential information.
8.3 In light of the findings we have set out in th e foregoing sections of our Report, we conclude
that China has not established that the European Union acted inconsistently with:
(a) Article 5.4 of the AD Agreement with resp ect to the standing determination in the
fasteners investigation;
(b) Articles 4.1 and 3.1 of the AD Agreement with respect to the definition of domestic
industry in the fasteners investigation;
(c) Articles 2.1 and 2.6 of the AD Agreement with respect to the product under
consideration in the fasteners investigation;
(d) Article 2.4 of the AD Agreement with resp ect to the dumping determination in the
fasteners investigation;
(e) Articles 3.1 and 3.2 of the AD Agreement with respect to the price undercutting
determination in the fasteners investigation;
(f) Articles 3.1, 3.2, 3.4 and 3.5 of the AD Ag reement with respect to the consideration
of imports from non-sampled/unexamined producers and exporters as dumped in the
fasteners investigation;
(g) Articles 3.1 and 3.4 of the AD Agreement w ith respect to the consideration of the
consequent impact of dumped imports on the domestic industry;
(h) Articles 6.5, 6.4 and 6.2 of the AD Agreement in connection with the non-disclosure
of the identity of the complainants and the supporters of the complaint;
(i) Articles 6.2 and 6.4 of the AD Agreement w ith respect to the confidential treatment
of the Eurostat data on total EU production of fasteners;
(j) Articles 6.2 and 6.4 of the AD Agreement with respect to the procedural aspects of
the domestic industry definition; and
(k) Article 6.1.1 of the AD Agreement with respect to the amount of time provided for
responses to requests for information.
8.4 In light of the findings we have set out in paragraph 8.2, we make no findings, based on
judicial economy, with respect to China's claims under:
(a) Articles 9.3 and 9.4 of the AD Agreement and Article X:3(a) of the GATT 1994 with
respect to Article 9(5) of the Basic AD Regulation,

(b) Article 9.4 of the AD Agreement with respect to the individual treatment
determinations in the fasteners investigation;
(c) Articles 3.4 and 3.5 of the AD Agreement with respect to the volume of dumped
imports;
(d) Article 6.5.1 of the AD Agreement with r espect to the questionnaire response of the
Indian producer;
(e) Articles 6.2 and 6.4 of the AD Agreement with respect to the non-confidential
versions of questionnaire responses of tw o European producers and the confidential
treatment of information in the questionnaire response of the Indian producer; and
(f) Article 12.2.2 of the AD Agreement with r espect to the procedural aspects of the
individual treatment determinations.
B. RECOMMENDATION
8.5 Pursuant to Article 3.8 of the DSU, in cases wh ere there is infringement of the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment of bene fits under that agreement. Accord ingly, we conclude that to the
extent the European Union has acted inconsistent ly with the provisions of the AD Agreement and
GATT 1994, it has nullified or impaired benefits accruing to China under those Agreements. We
therefore recommend that the Dispute Settlement Bo dy request the European Union to bring its
measure into conformity with its obligations under the AD Agreement and GATT 1994.
8.6 China requests that the Panel use its discreti on under the second sentence of Article 19.1 of
the DSU by suggesting ways in which the Euro pean Union could implement the recommendations
and rulings of the DSB. China asserts that, given the "as such" nature of the violation, the first
measure should be withdrawn. China further asserts th at the nature and scope of the violations of the
AD Agreement and of GATT 1994 with respect to th e second measure are such that the measure is
devoid of any legal basis, and shoul d be withdrawn. Therefore, China requests that the Panel suggest
that the European Union implement the recommenda tions and rulings of the DSB by withdrawing
both contested measures.1132 The European Union does not address China's request in this respect.
8.7 Article 19.1 of the DSU provides:
"Where a panel or the Appellate Body concl udes that a measure is inconsistent with a
covered agreement, it shall recommend that the Member concerned bring the measure
into conformity with that agreement. In addition to its recommendations, the panel or
Appellate Body may suggest ways in which the Member concerned could implement
the recommendations". (Footnote omitted.)
Thus, a panel must ("shall") reco mmend that a Member found to have acted inconsistently with a
provision of a covered agreement "bring the measure into conformity", but has discretion to ("may")
suggest ways in which a Member could implement that recommendation. Clearly, however, a panel is
not required to make a suggestion shoul d it not deem it appropriate to do so. 1133 We also note

1133 The Appellate Body has explained that the second sentence of Article 19.1 "does not oblige panels
to make ... a suggestion". Appellate Body Report, United States – Anti-Dumping Measures on Oil Country
Tubular Goods (OCTG) from Mexico , (" US – Anti-Dumping Measures on Oil Country Tubular Goods "),
WT/DS282/AB/R, adopted 28 November 2005, DSR 2005:XX, 10127, para. 189.

Article 21.3 of the DSU, which requires Members to inform the DSB regarding implementation of
panel and Appellate Body recommendations, providing:
"At a DSB meeting held within 30 days afte r the date of adoption of the panel or
Appellate Body report, the Member concerne d shall inform the DSB of its intentions
in respect of implementation of the r ecommendations and rulings of the DSB".
(footnote omitted).
8.8 Most panels reviewing anti-dumping (and c ountervailing duty) measures have declined
requests for suggestions. Where the panel has explai ned its reasoning, it has generally noted that, in
view of the different violations found, while re vocation of the measure is a possible means of
implementation, other means might also be available. 1134 Several panels, in declining to make a
suggestion, have noted that Article 21.3 of the DSU gives the authority to decide the means of
implementation, in the first instance, to the Member found to be in violation. 1135 Many other panels
have declined requests for suggestions as well. 1136 In the few cases in which panels have made a
suggestion in an anti-dumping disput e, the panels have focussed on the conclusion that one of the
violations found concerned initiation, and thus vitiated the entire proceeding, which should never have
been initiated, or on the "fundamental and pervasive nature" of the violations, leading the panel to
conclude that revocation was the only means of implementation.1137

1134 Panel Report, US – Hot Rolled Steel , para. 8.11 (panel declined to make specific suggestions,
observing that the variety of different violations found might necessitate differing responses in order to bring the
measure concerned into conformity with obliga tions under the AD Agreement); Panel Report, US – DRAMS ,
para. 7.4 (panel declined to make any suggestions on the grounds that there was a range of possible ways
through which the United States could appropriately implement the panel's recommendation); Panel Report,
US – Steel Plate , para. 8.8 (panel saw "no particular need to suggest a means of implementation"); Panel
Report, US – Stainless Steel (Korea) , para. 7.10 (panel found the determination regarding the margin of
dumping inconsistent with the AD Agreement in a number of respects, but observed that it could not say that
had the investigating authority acted consistently with the AD Agreement, it would not have found dumping.
Noting that while revocation would be one way in which the United States could implement the
recommendation to bring its measure into conformity, the panel was not prepared to conclude that it was the
only way to do so, and declined to make a suggestion); Panel Report, US – Line Pipe, para. 8.6 (panel declined
Korea's request for a specific suggestion on ways in which the United States might implement the
recommendations, stating that there may be other ways in which the United States could implement its
recommendation); Panel Report, US – Steel Plate, para. 8.8 (panel indicated that it was "free to suggest ways in
which [it believed] the [defendant] could appropriatel y implement [the panel's] recommendation" but decided
not to do so).
1135 E.g., Panel Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products
from Japan ("US – Hot-Rolled Steel"), WT/DS184/R, adopted 23 August 2001, as modified by Appellate Body
Report WT/DS184/AB/R, DSR 2001:X, 4769, para. 8.13. The panel in this dispute observed that the means of
implementation is, pursuant to Article 21.3 of the DSU, for the Member concerned, in the first instance.
1136 Panel Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant
Carbon Steel Flat Products from Japan (" US – Corrosion-Resistant Steel Sunset Review "), WT/DS244/R,
adopted 9 January 2004, as modified by Appellate Body Report WT/DS244/AB/R, DSR 2004:I, 85, para. 8.2;
Panel Report, US – Softwood Lumber V, para. 8.6; Panel Report, US – Softwood Lumber VI , para. 8.8; Panel
Report, Korea – Certain Paper, para. 9.4; Panel Report, European Communities – Countervailing Measures on
Dynamic Random Access Memory Chips from Korea ("EC – Countervailing Measures on DRAM Chips "),
WT/DS299/R, adopted 3 August 2005, DSR 2005:XVIII, 8671, paras. 8.6-8.7; and Panel Report, United States
– Anti-Dumping Measures on Oil Countr y Tubular Goods (OCTG) from Mexico (" US – Anti-Dumping
Measures on Oil Country Tubular Goods "), WT/DS282/R, adopted 28 November 2005, as modified by
Appellate Body Report WT/DS282/AB/R, DSR 2005:XXI, 10225, para. 8.18.
1137 In Guatemala – Cement I , the panel concluded that Guatemala had violated the provisions of the
AD Agreement by initiating an investigation when there was not sufficient evidence to justify such an initiation
under Article 5.3 of the Agreement. With respect to the request for a suggestion on implementation, the panel
stated:

8.9 In this case, although we have found the co ntested measures inconsistent with the
AD Agreement, the GATT 1994 and the WTO Agreement in a number of respects, we do not find it
appropriate to make a suggestion with respect to implementation, and therefore deny China's request.

"[T]he entire investigation rested on an insufficient basis, and therefore should never have
been conducted. This is, in our view, a violati on which cannot be corrected effectively by any
actions during the course of the ensuing inves tigation. Therefore, we suggest that Guatemala
revoke the existing anti-dumping measure on impor ts of Mexican cement, because, in our
view, this is the only appropriate means of implementing our recommendation."
Panel Report, Guatemala – Cement I , para. 8.6. The second panel to hear the same dispute also
suggested revocation of the measure, for similar reasons. Panel Report, Guatemala – Cement II, para. 9.7.
In Argentina – Poultry Anti-Dumping Duties, the panel concluded that the violations it had found were
of a "fundamental nature and pervasive", stated "[i]n light of the nature and extent of the violations in this case,
[the panel does] not perceive how Argentina could properly implement [the panel's] recommendation without
revoking the anti-dumping measure at issue in this disput e" and suggested that Argent ina repeal the measure.
Panel Report, Argentina – Poultry Anti-Dumping Duties, paras. 8.6-8.7.