CHINA — MEASURES IMPOSING ANTI-DUMPING DUTIES ON HIGH- PERFORMANCE STAINLESS STEEL SEAMLESS TUBES ("HP-SSST") FROM JAPAN
Document: Panel Report
Date: 13 February 2015
Document codes: WT/DS454/R; WT/DS460/R; WT/DS454/R; WT/DS460/R.
Complainant: Japan
Respondent: China
Third parties: EU, India, South Korea, Russia, U.S., Turkey, Saudi Arabia
Dispute stage: Appellate Body
Agreements cited: Art. 3.1, 3.2, 3.4, 3.5, 6.5, 6.8, 6.9, 6.5.1, 7.4, 12.2, 12.2.2  Anti-dumpingArt. VI  GATT 1994

CHINA — MEASURES IMPOSING ANTI-DUMPING DUTIES ON HIGH-
PERFORMANCE STAINLESS STEEL SEAMLESS TUBES ("HP-SSST")
FROM JAPAN

CHINA — MEASURES IMPOSING ANTI-DUMPING DUTIES ON HIGH-
PERFORMANCE STAINLESS STEEL SEAMLESS TUBES ("HP-SSST")
FROM THE EUROPEAN UNION
REPORTS OF THE PANELS

Note by the Secretariat:

The Panels issue these Reports in the form of a single document constituting two separate Panel
Reports: ; and Each Panel Report relates to one of the two complaints
in these disputes. The cover page; preliminary pages; descriptive part; Sections 1-6, 7.1-7.2,
and 7.5-7.11; and the Annexes are common to both Panel Reports. The page header throughout
the document bears two document symbols, and , with the following
exceptions: Section 8.1 on pages 105-106, which bears the document symbol for and relates to
the Panel Report ; and Sections 7.3-7.4, and 8.2 on pages 24-44 and 107-109, which
bear the document symbol for and relate to Panel Report
 •

LIST OF ANNEXES

ANNEX A
WORKING PROCEDURES OF THE PANELS
Contents Page
Annex A-1 Working Procedures of the Panels A-2
Annex A-2 Additional Working Procedures on BCI A-7
ANNEX B
ARGUMENTS OF JAPAN AND THE EUROPEAN UNION
Contents Page
Annex B-1 Executive Summary of the First Written Submission of Japan B-2
Annex B-2 Executive Summary of the Second Written Submission of Japan B-10
Annex B-3 Executive Summary of the Statement of Japan at the First Panel Meeting B-18
Annex B-4 Executive Summary of the Statements of Japan at the Second Panel Meeting B-23
Annex B-5 Executive Summary of the First Written Submission of the European Union B-28
Annex B-6 Executive Summary of the Second Written Submission of the European Union B-34
Annex B-7 Executive Summary of the Statement of the European Union at the First Panel
Meeting
B-41
Annex B-8 Executive Summary of the Statements of the European Union at the
Second Panel Meeting
B-46
ANNEX C
ARGUMENTS OF CHINA
Contents Page
Annex C-1 Executive Summary of the First Written Submission of China C-2
Annex C-2 Executive Summary of the Statement of China at the First Panel Meeting C-7
Annex C-3 Executive Summary of the Second Written Submission of China C-9
Annex C-4 Executive Summary of the Statements of China at the Second Panel Meeting C-14
ANNEX D
ARGUMENTS OF THIRD PARTIES
Contents Page
Annex D-1 Third-Party Statement of the Republic of Korea D-2
Annex D-2 Third-Party Statement of the Kingdom of Saudi Arabia D-4
Annex D-3 Third-Party Statement of Turkey D-7
Annex D-4 Integrated Executive Summary of the Arguments of the United States D-12
WT/DS454/R • WT/DS460/R

CASES CITED IN THESE REPORTS
Short title Full case title and citation
China – Autos (US)  Panel Report, China – Anti-Dumping and Countervailing Duties on Certain
Automobiles from the United States , WT/DS440/R and Add.1, adopted
18 June 2014
China – Raw Materials Appellate Body Reports, China – Measures Related to the Exportation of
Various Raw Materials, WT/DS394/AB/R - WT/DS395/AB/R -
WT/DS398/AB/R, adopted 22 February 2012, DSR 2012:VII, p. 3295
China – X-Ray Equipment Panel Report, China – Definitive Anti-Dumping Duties on X-Ray Security
Inspection Equipment from the European Union, WT/DS425/R and Add.1,
adopted 24 April 2013
EC – Bed Linen Appellate Body Report, European Communities – Anti-Dumping Duties on
Imports of Cotton-Type Bed Linen from India, WT/DS141/AB/R, adopted
12 March 2001, DSR 2001:V, p. 2049
EC – Fasteners (China) Appellate Body Report, European Communities – Definitive Anti-Dumping
Measures on Certain Iron or Steel Fasteners from China, WT/DS397/AB/R,
adopted 28 July 2011, DSR 2011:VII, p. 3995
EC – Fasteners (China) Panel Report, European Communities – Definitive Anti-Dumping Measures on
Certain Iron or Steel Fasteners from China, WT/DS397/R and Corr.1,
adopted 28 July 2011, as modified by Appellate Body Report
WT/DS397/AB/R, DSR 2011:VIII, p. 4289
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products
(Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998,
DSR 1998:I, p. 135
EC – Salmon (Norway) Panel Report, European Communities – Anti-Dumping Measure on Farmed
Salmon from Norway, WT/DS337/R, adopted 15 January 2008, and Corr.1,
DSR 2008:I, p. 3
EC – Tube or Pipe Fittings Appellate Body Report, European Communities – Anti-Dumping Duties on
Malleable Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/AB/R,
adopted 18 August 2003, DSR 2003:VI, p. 2613
EC – Tube or Pipe Fittings Panel Report, European Communities – Anti-Dumping Duties on Malleable
Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/R, adopted
18 August 2003, as modified by Appellate Body Report WT/DS219/AB/R,
DSR 2003:VII, p. 2701
EC and certain member
States – Large Civil Aircraft
Appellate Body Report, European Communities and Certain Member States
– Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R, adopted
1 June 2011, DSR 2011:I, p. 7
Egypt – Steel Rebar Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel Rebar from
Turkey, WT/DS211/R, adopted 1 October 2002, DSR 2002:VII, p. 2667
Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding
Portland Cement from Mexico, WT/DS60/AB/R, adopted 25 November 1998,
DSR 1998:IX, p. 3767
Korea – Alcoholic Beverages Panel Report, Korea – Taxes on Alcoholic Beverages, WT/DS75/R,
WT/DS84/R, adopted 17 February 1999, as modified by Appellate Body
Report WT/DS75/AB/R, WT/DS84/AB/R, DSR 1999:I, p. 44
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of
Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000,
DSR 2000:I, p. 3
Mexico – Anti-Dumping
Measures on Rice
Panel Report, Mexico – Definitive Anti-Dumping Measures on Beef and Rice,
Complaint with Respect to Rice, WT/DS295/R, adopted 20 December 2005,
as modified by Appellate Body Report WT/DS295/AB/R, DSR 2005:XXIII,
p. 11007
Thailand – H-Beams Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes
and Sections of Iron or Non-Alloy Steel and H-Beams from Poland,
WT/DS122/AB/R, adopted 5 April 2001, DSR 2001:VII, p. 2701
WT/DS454/R • WT/DS460/R

Short title Full case title and citation
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain
Corrosion-Resistant Carbon Steel Flat Products from Germany,
WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX,
p. 3779
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and Application
of Zeroing Methodology, WT/DS350/AB/R, adopted 19 February 2009,
DSR 2009:III, p. 1291
US – Countervailing and
Anti-Dumping Measures
(China)
Panel Report, United States – Countervailing and Anti-Dumping Measures on
Certain Products from China, WT/DS449/R and Add.1, adopted 22 July 2014,
as modified by Appellate Body Report WT/DS449/AB/R
US – Countervailing Duty
Investigation on DRAMS
Appellate Body Report, United States – Countervailing Duty Investigation on
Dynamic Random Access Memory Semiconductors (DRAMS) from Korea,
WT/DS296/AB/R, adopted 20 July 2005, DSR 2005:XVI, p. 8131
US – Softwood Lumber V Appellate Body Report, United States – Final Dumping Determination on
Softwood Lumber from Canada, WT/DS264/AB/R, adopted 31 August 2004,
DSR 2004:V, p. 1875
US – Softwood Lumber VI
(Article 21.5 – Canada)
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, WT/DS277/AB/RW, adopted 9 May 2006,
and Corr.1, DSR 2006:XI, p. 4865
US – Tyres (China) Appellate Body Report, United States – Measures Affecting Imports of Certain
Passenger Vehicle and Light Truck Tyres from China, WT/DS399/AB/R,
adopted 5 October 2011, DSR 2011:IX, p. 4811
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton,
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, p. 3
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven
Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997,
and Corr.1, DSR 1997:I, p. 323
WT/DS454/R • WT/DS460/R

ABBREVIATIONS USED IN THESE REPORTS
Abbreviation Description
Anti-Dumping Agreement Agreement on Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994
BCI Business confidential information
BCI Procedures Additional working procedures of the Panels concerning business confidential
information
Complainants Japan and the European Union
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
Final Determination notice MOFCOM Notice No. 72 [2012]
GAAP Generally accepted accounting principles
GATT 1994 General Agreement on Tariffs and Trade 1994
HP-SSST High-performance stainless steel seamless tubes
Kobe Kobe Special Tube Co., Ltd.
MOFCOM Ministry of Commerce of the People's Republic of China
China People's Republic of China
Preliminary Determination
notice
MOFCOM Notice No. 21 [2012]
SMI Sumitomo Metal Industries, Ltd.
Vienna Convention Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969,
1155 UNTS 331; 8 International Legal Materials 679
WTO World Trade Organization
WT/DS454/R • WT/DS460/R

1 INTRODUCTION
1.1 Complaints by Japan and the European Union
1.1. On 20 December 2012, Japan requested consultations
1 with China pursuant to Articles 1
and 4 of the DSU, Article XXII:1 of the GATT 1994, and Articles 17.2 and 17.3 of the Anti-
Dumping Agreement with respect to the measures and claims set out below. On 13 June 2013, the
European Union requested consultations 2 with China pursuant to the same, above-mentioned
provisions and with respect to the measures and claims set out below. In both complaints, the
consultations concerned China's measures imposing anti-dumping duties on certain HP-SSST from
Japan and the European Union respectively, as set forth in MOFCOM's Preliminary Determination
notice, and MOFCOM's Final Determination notice, including any and all annexes and any
amendments thereof.
3
1.2. Consultations were held between Japan and China on 31 January and 1 February 2013, and
between the European Union and China on 17 and 18 July 2013. These consultations failed to
resolve the disputes.
1.2 Panel establishment and composition
1.3. On 11 April 2013 and 16 August 2013 respectively, Japan and the European Union each
requested the establishment of a panel pursuant to Articles 4.7 and 6 of the DSU, Article XXIII of
the GATT 1994, and Article 17.4 of the Anti-Dumping Agreement with standard terms of
reference.
4 At its meetings on 24 May 2013 and 30 August 2013, the DSB established two panels
pursuant to, respectively, the request of Japan in document WT/DS454/4 and the request of the
European Union in document WT/DS460/4, in accordance with Article 6 of the DSU.5
1.4. The Panels' terms of reference are the following:
To examine, in the light of the relevant pr ovisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by Japan in document
WT/DS454/4 and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements.6
To examine, in the light of the relevant pr ovisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by the European Union in
document WT/DS460/4 and to make such findings as will assist the DSB in making
the recommendations or in giving the rulings provided for in those agreements.
7
1.5. With respect to WT/DS454, on 17 July 2013, Japan requested the Director-General to
determine the composition of the Panel, pursuant to Article 8.7 of the DSU. On 29 July 2013, the
Director-General accordingly composed the Panel as follows:
Chairperson: Mr Miguel Rodríguez Mendoza

Members: Ms Stephanie Sin Far Lee
 Mr Gustav Francois Brink

1.6. With respect to WT/DS460, following the agreement of the parties, the Panel was composed
with the same persons on 11 September 2013. Following consultations with the parties, the Panels

1 See WT/DS454/1.
2 See WT/DS460/1.
3 See WT/DS454/1 and WT/DS460/1.
4 WT/DS454/4 and WT/DS460/4.
5 WT/DS454/5, WT/DS460/5/Rev.1, WT/DSB/M/332, and WT/DSB/M/336.
6 WT/DS454/5.
7 WT/DS460/5/Rev.1.
WT/DS454/R • WT/DS460/R

in the two disputes decided to harmonize their timetables to the greatest extent possible, in
accordance with Article 9.3 of the DSU.8
1.7. India, Korea, the Russian Federation, the Kingdom of Saudi Arabia, Turkey and the
United States reserved their rights to participate in the Panel proceedings as third parties in both
disputes. In addition, the European Union reserved its rights to participate as a third party in the
Panel proceedings in WT/DS454, and Japan reserved its rights to participate as a third party in the
Panel proceedings in WT/DS460.
1.3 Panel proceedings
1.3.1 General
1.8. After consultation with the parties, the Panel adopted its Joint Working Procedures
9 and
timetable on 27 September 2013. The Panel introduced modifications to its Joint Working
Procedures and timetable on 22 May 2014.10
1.9. The Panel held a first substantive meeting with the parties on 25-26 February 2014. A
session with the third parties took place on 26 February 2014. The Panel held a second substantive
meeting with the parties on 20-21 May 2014. On 18 July 2014, the Panel issued the descriptive
part of its Report to the parties. The Panel issued its Interim Report to the parties on
19 September 2014. The Panel issued its Final Report to the parties on 7 November 2014.
1.3.2 Working procedures on Business Confidential Information (BCI)
1.10. After consultation with the parties, th e Panel adopted additional working procedures
concerning BCI on 27 September 2013.
11 The Panel introduced modifications to its additional
working procedures concerning BCI on 22 May 2014.
2 FACTUAL ASPECTS
2.1 The measures at issue
2.1. These disputes concern China's measures im posing anti-dumping duties on certain HP-SSST,
as set forth in MOFCOM's Preliminary Determination, and MOFCOM's Final Determination, including
any and all annexes and any amendments thereof.
3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1 Japan
3.1. Japan requests the Panel to find that:
a. China's injury determination is inconsistent with Articles 3.1, 3.2, 3.4 and 3.5 of the
Anti-Dumping Agreement. Specifically:

8 For the reader's convenience, the Panels in WT/DS454 and WT/DS460 are herein collectively referred
to as the "Panel".
9 See the Panel's Joint Working Procedures in Annex A-1.
10 China requested the Panel to amend paragraph 10 of the Joint Working Procedures, so that parties
have more time to object to the accuracy of translations provided to the Panel. (China's first written
submission, paras. 802-807.) The European Union considered China's request unnecessary. The
European Union noted that paragraph 10 does not contain an absolute rule as it uses the term "should".
Nevertheless, the European Union accepted that paragraph 10 could be amended albeit not in the
precise manner proposed by China. (European Union's opening statement at the first meeting of the Panel,
paras. 25-32; and second written submission, para. 30.) China agreed with the European Union's
counterproposal, to the extent that it "would result in the rule not being interpreted as absolute". (China's
response to Panel question No. 5, para. 32.) Japan did not comment on this matter. In light of the foregoing,
we have amended paragraph 10 as proposed by the European Union.
11 Additional working procedures of the Panel concerning BCI in Annex A-2.
WT/DS454/R • WT/DS460/R

i. China's price effects analysis is inconsistent with Articles 3.1 and 3.2 of the Anti-
Dumping Agreement;
ii. China's impact analysis is inconsistent with Articles 3.1 and 3.4 of the Anti-
Dumping Agreement;
iii. China's demonstration of the alleged causal relationship between the imports under
investigation and the alleged injury to the domestic industry is inconsistent with
Articles 3.1 and 3.5 of the Anti-Dumping Agreement; and
iv. China's attribution of the domestic industry's injury to imports under investigation is
inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement;
b. China's treatment of certain information supp lied by the applicants as confidential is
inconsistent with Article 6.5 of the Anti-Dumping Agreement;
c. China acted inconsistently with Article 6.5.1 of the Anti-Dumping Agreement by failing to
require applicants to furnish adequate non-confidential summaries of information treated
as confidential or explanations as to why summarization was not possible;
d. China's reliance on facts available to calculate the dumping margin for all Japanese
companies other than SMI and Kobe is inconsistent with Article 6.8 and Paragraph 1 of
Annex II to the Anti-Dumping Agreement;
e. China acted inconsistently with Article 6.9 of the Anti-Dumping Agreement by failing to
adequately disclose essential facts in connection with:
i. the determination of the existence of dumping and the calculation of dumping
margins for SMI and Kobe, including relevant data and calculation methodologies;
ii. the determination and the calculation of the dumping margins for all Japanese
companies other than SMI and Kobe; and
iii. China's determinations of injury and causation, including the import prices and
domestic prices used therein;
f. China's application of provisional measures for a period exceeding four months is
inconsistent with Article 7.4 of the Anti-Dumping Agreement;
g. China acted inconsistently with Article 12.2 of the Anti-Dumping Agreement by failing to
set forth in sufficient detail in its Final Determination notice or a separate report China's
findings and conclusions on all material issues of fact and law in connection with:
i. the determination and the calculation of dumping margins for all Japanese
companies other than SMI and Kobe; and
ii. the determinations of injury and causation, including the import prices and domestic
prices used therein;
h. China acted inconsistently with Article 12.2. 2 of the Anti-Dumping Agreement by failing
to include in its Final Determination notice or a separate report all relevant information
on matters of fact and law and reasons in connection with:
i. the determination and the calculation of the dumping margins for all Japanese
companies other than SMI and Kobe; and
ii. the determinations of injury and causation, including the import prices and domestic
prices used therein; and
WT/DS454/R • WT/DS460/R

i. As a consequence of the inconsistencies described above, China's anti-dumping
measures on HP-SSST from Japan are also inconsistent with Article 1 of the Anti-
Dumping Agreement and Article VI of the GATT 1994.
3.2. Pursuant to Article 19.1 of the DSU, Japan requests the Panel to recommend that China bring
its measures into conformity with the GATT 1994 and the Anti-Dumping Agreement.12
3.3. Japan also requests that the Panel make findings with respect to each of Japan's claims under
the GATT 1994 and the Anti-Dumping Agreement, including each claim under Article 3.1, 3.2, 3.4,
and 3.5 of the Anti-Dumping Agreement, without ex ercising judicial economy as to any of Japan's
claims, so as to secure a prompt resolution of this dispute.13
3.2 European Union
3.4. The European Union requests the Panel to find that:
a. China's determination of certain SG&A amount is inconsistent with Articles 2.2, 2.2.1,
2.2.1.1 and 2.2.2 of the Anti-Dumping Agreement;
b. China acted inconsistently with Articles 2.4 and 2.4.2 of the Anti-Dumping Agreement by
failing to establish the existence of margins of dumping on the basis of a fair comparison
between the export price and the normal value;
c. China's volume and price effect analyses in connection with MOFCOM's injury
determination are inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement;
d. China's impact analysis in connection with MOFCOM's injury determination is inconsistent
with Articles 3.1 and 3.4 of the Anti-Dumping Agreement;
e. China's determination of causal link is incons istent with Articles 3.1 and 3.5 of the Anti-
Dumping Agreement;
f. China acted inconsistently with Article 6.4 of the Anti-Dumping Agreement by failing to
disclose to interested parties all information that is relevant to the presentation of their
cases and that is used by the authorities in an anti-dumping investigation;
g. China's treatment of certain information supp lied by the applicants as confidential is
inconsistent with Article 6.5 of the Anti-Dumping Agreement;
h. China acted inconsistently with Article 6.5.1 of the Anti-Dumping Agreement by failing to
require applicants to furnish adequate non-confidential summaries of information treated
as confidential or explanations as to why furnishing such summaries was not possible;
i. China acted inconsistently with Article 6.7 and Paragraph 7 of Annex I to the Anti-
Dumping Agreement by refusing to take into account information relevant for the
determination of the margins of dumping provided during the on-the-spot investigation;
j. China acted inconsistently with Article 6.8 and Paragraphs 3 and 6 of Annex II to the
Anti-Dumping Agreement by failing to take into account certain information pertaining to
the determination of the margins of dumping;
k. China's reliance on facts available to determine the margin of dumping for all
European Union companies other than those for which individual margins of dumping
were determined is inconsistent with Article 6.8 and Paragraph 1 of Annex II to the Anti-
Dumping Agreement;

12 Japan's first written submission, para. 325; and second written submission, para. 136.
13 Japan's opening statement at the first meeting of the Panel, para. 107; second written submission,
para. 62; and opening statement at the second meeting of the Panel, para. 70.
WT/DS454/R • WT/DS460/R

l. China acted inconsistently with Article 6.9 of the Anti-Dumping Agreement by failing to
inform the interested parties of the essential facts under consideration which form the
basis for the decision to impose definitive anti-dumping measures;
m. China's application of provisional measures for a period exceeding four months is
inconsistent with Article 7.4 of the Anti-Dumping Agreement;
n. China acted inconsistently with Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement
by failing to provide in sufficient detail the findings and conclusions reached on all issues
of fact and law considered material by the investigating authorities, as well as all
relevant information on the matters of fact and law and reasons which have led to the
imposition of final measures; and
o. As a consequence of the inconsistencies described above, China's anti-dumping
measures on HP-SSST from the European Union are also inconsistent with Article 1 of
the Anti-Dumping Agreement and Article VI of the GATT 1994.
3.5. Pursuant to Article 19.1 of the DSU, the European Union requests the Panel to recommend
that China bring its measures into conf ormity with the GATT 1994 and the Anti-
Dumping Agreement, and make appropriate suggestions to that effect, including that China refund
the duties collected with respect to the period in which the provisional measure was applied
inconsistently with Article 7.4 of the Anti-Dumping Agreement.
14
3.6. The European Union also requests the Panel to exercise its right, pursuant to Article 13.1 of
the DSU, to seek information from China equivalent to full disclosure that should have been made
during the underlying proceedings.15
3.3 China
3.7. China requests the Panel to find that certain of the European Union's claims under Article 2 of
the Anti-Dumping Agreement fall outside the Panel's terms of reference. In addition, China
requests the Panel to reject Japan's and the European Union's claims in these disputes.
4 ARGUMENTS OF THE PARTIES
4.1. The arguments of the parties are reflecte d in their executive summaries, provided to the
Panel in accordance with paragraph 19 of the Jo int Working Procedures adopted by the Panel (see
list of Annexes on page 3).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The arguments of Korea, the Kingdom of Saudi Arabia, Turkey and the United States are
reflected in their integrated executive summaries or third-party statements, provided in
accordance with paragraph 19 of the Joint Working Procedures adopted by the Panel (see list of
Annexes on page 3). India and the Russian Federation did not submit third-party written
submissions or statements to the Panel.
6 INTERIM REVIEW
6.1 Introduction
6.1. The Panel issued its Interim Reports to the parties on 19 September 2014. On
3 October 2014, the parties submitted written requests for review of precise aspects of the Interim
Reports. On 10 October 2014, the parties submitted comments on the other parties' requests for
review. None of the parties asked the Panel to hold an interim review meeting.

14 European Union's first written submission, para. 339; and second written submission, paras. 180
and 184.
15 European Union's first written submission, paras. 331-336.
WT/DS454/R • WT/DS460/R

6.2. The Panel explains below its response to issues raised by the parties in the context of interim
review. The Panel has also corrected a number of typographical errors identified by the parties,
and is grateful for their assistance in this regard.
6.3. Due to changes as a result of our review, the numbering of the footnotes in the Final Reports
has changed from the Interim Reports. The text below refers to the footnote numbers in the
Interim Reports, with the corresponding footnote numbers in the Final Reports provided in
parentheses for ease of reference. There is no change to the paragraph numbering of the Panel's
findings.
6.4. Before turning to the parties' requests for interim review, we address a procedural issue
raised by China concerning the fact that Japan, which brought the DS454 proceeding, requested
review in respect of the Panel's evaluation of claims also brought by the European Union in the
DS460 proceeding.
6.2 Procedural issue raised by China concer ning Japan's requests for interim review in
respect of claims also raised in the DS460 proceeding
6.5. China objects
16 to Japan being allowed to make requests for interim review in respect of the
Panel's Report in DS454 that would also affect the Panel's Report in respect of DS460. China
observes in this regard that Japan is a third pa rty in the DS460 proceeding, and that third parties
do not have the right to request interim review.
6.6. We are not persuaded by China's arguments. China's approach would undermine Paragraph 1
of the Panels' Working Procedures, which specifies that:
The Panels shall, to the greatest extent possible, conduct a single panel process, with
a single record, resulting in separate reports contained in a single document, taking
into account the rights of all Members concerned, and in such a manner that the rights
that parties or third parties would otherwise have enjoyed are in no way impaired.
6.7. Paragraph 1 of the Working Procedures is desi gned to simplify the drafting of their reports,
whereas China's position would complicate that task by requiring a panel to issue separate findings
in respect of claims brought by both complainants when they accept to modify their findings on the
basis of a request for interim review raised by only one of the complainants. China's position is
inconsistent with the single panel process envisaged in Paragraph 1 of the Working Procedures. In
our view, the Panels' approach should be governed by the overarching requirement in Paragraph 1
of the Working Procedures not to impair the rights of the parties or third parties. We note in this
regard that China neither states nor demonstrates that its rights have been impaired by the way
that the Panel has conducted Interim Review. In addition, we observe that the European Union has
in any event supported Japan's requests and comments in respect of the Interim Reports.
17
6.3 Requests for interim review by Japan
6.3.1 Paragraph 7.105: potential for subject imports to have price effects
6.8. Japan objects to the Panel suggesting that Japan had argued that an investigating authority
need only consider the potential for subject imports to have price effects. Japan asserts that an
investigating authority must consider whether subject imports had actual price effects. Japan asks
the Panel to amend paragraph 7.105 (and other parts) of its Interim Reports accordingly.
6.9. In order to avoid any risk of misrepresenting Japan's argument, we have made the changes
requested by Japan. In addition to amending paragraph 7.105, we have also amended the heading
to Section 7.5.1.3.2, footnote 252 (of the Final Reports), and paragraphs 7.121, 7.130, 7.138,
7.144, 8.2(a)(i) and 8.7(b)(i).

16 Paras. 6-7 of China's comments on Japan's request for Interim Review.
17 See the European Union's comments on the other parties' requests for Interim Review, page 1.
WT/DS454/R • WT/DS460/R

6.3.2 Paragraph 7.114: price comparability
6.10. Japan submits that record evidence with respect to pricing, which Japan relied on in the
context of other issues, also demonstrates the la ck of price comparability between imported and
domestic Product C. Japan asks the Panel to refer to this additional evidence in support of its
findings.
6.11. China objects to Japan's request. China asserts that Japan did not rely on the relevant
evidence in respect of the claim at issue.
6.12. We reject Japan's request. Japan did not rely on the relevant evidence when advancing its
claims before the Panel. In addition, the Panel's findings are adequately supported by the
reasoning provided.
6.3.3 Paragraph 7.130: competitive relationship
6.13. Japan asks the Panel to address its argument concerning the competitive relationship
between subject imports and domestic like products. Japan suggests that this argument is relevant
irrespective of whether the price undercutting an alysis necessarily involves the examination of
whether the dumped imports had an effect of placing downward pressure on domestic prices.
Japan refers to paragraph 23 of its second written submission and paragraph 9 of its oral
statement at the second substantive meeting to ar gue that its competitive relationship argument
relates to comparability and the making of price comparisons, irrespective of the effect issue.
6.14. China asks the Panel to reject Japan's request, on the basis that the Panel's position is
clear, and that Japan essentially requests the Panel to assess legal and factual questions that are
not at stake in the present dispute.
6.15. The relevant section of the Interim Reports is concerned with the complainants' effect
argument. Paragraph 23 of Japan's second written submission was also drafted in that context. We
note in this regard that the preceding paragraph relates expressly to China's argument that an
investigating authority is not required to establish that a price differential is an effect of dumped
imports. Similarly, paragraph 9 of Japan's oral statement at the second substantive meeting states
in relevant part that "[w]ithout such a competitive relationship, there can be no proper finding that
the dumped imports had an effect of placing do wnward pressure on domestic prices". Japan's
argument, therefore, was not made irrespective of the effect issue, as suggested by Japan. Since
the Panel rejects the notion that an investigating authority need consider the effect of subject
imports in the context of price undercutting, th ere is no need for the Panel to address the
complainants' argument that such effect cannot not exist absent a competitive relationship
between imported and domestic like products. We reject Japan's request accordingly.
6.3.4 Paragraph 7.132: clarification
6.16. Japan has proposed a minor modification to clarify the nature of the argument being made
by the complainants. Japan proposes to replace "deny" with "explain".
6.17. China agrees with Japan's proposal to delete "deny", but suggests the use of the word
"assert" instead.
6.18. We have clarified the argument being made, as requested by Japan. We have done so by
using the term "assert", as suggested by China.
6.3.5 Paragraphs 7.132 and 7.137, foot notes 239 and 246 (footnotes 254 and 262 of
the Final Reports): translation
6.19. Japan observes that the Panel failed to note Japan's objection to China's translation of part
of MOFCOM's Final Determination. Japan notes that it had used "noticeable", whereas China had
proposed the use of "significant" instead. Japa n asks the Panel to amend footnotes 239 and 246
accordingly.
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6.20. We have amended footnotes 254 and 262 – and paragraphs 7.132 and 7.137 – of the
Final Reports to address the concern raised by Ja pan. We have done so by including both the
terms "significant" and "noticeable" in square brackets. There is no need for the Panel to choose
between these terms, since the precise term used does not impact on the Panels' evaluation of the
substantive matter at hand.
6.3.6 Paragraphs 7.136-7.143: scope of MOFCOM's price undercutting determination
6.21. Japan suggests that the Panel has misunderstood the scope of the price undercutting finding
made by MOFCOM. Japan asserts that MOFCOM's fi nding is ambiguous, and may be interpreted in
a different manner. Japan also asks the Panel to rule that MOFCOM's determination is deficient
because of such alleged ambiguity.
6.22. China objects to Japan's request. China considers that Japan is essentially requesting the
Panel to reach beyond what is necessary to resolve the dispute and to make certain findings
assuming that the facts of the case would be different.
6.23. We see no need for the Panel to amend its findings. First, while we observe at
paragraph 7.137 that MOFCOM "might have expresse d itself more clearly", our understanding of
the scope of MOFCOM's finding is reasonable in light of the language used by MOFCOM. Second,
the specific part of MOFCOM's finding referred to by Japan (i.e. the sentence immediately
preceding the one cited by the Panel) does not refer to price undercutting per se. That sentence,
therefore, should not determine our understanding of the scope of MOFCOM's price undercutting
finding.
6.3.7 Paragraph 7.140: use of indefinite article
6.24. Japan suggests that the Panel's analysis of the use of the indefinite article "a" preceding
"like product" in the second sentence of Article 3. 2 is "absurd", since it means that only a trivial
volume of subject imports sold at undercutting prices would be sufficient to establish price effects
under Articles 3.1 and 3.2.
6.25. China asks the Panel to reject Japan's requ est. China suggests that Japan is merely seeking
to re-argue points that it made in its submissions to the Panel.
6.26. We are not persuaded by Japan's arguments. We consider that each case would need to be
examined on its facts, and that in any event establishment of price effects for the purpose of
Articles 3.1 and 3.2 is not sufficient, by itself, to establish causation under Article 3.5. Further, we
consider that Japan's suggestion that the Panel's analysis is "absurd" is not an appropriate basis
for requesting interim review.
6.3.8 Paragraph 7.141, footnote: request for deletion
6.27. Japan asks the Panel to delete a footnote in paragraph 7.141, on the basis that it is unclear,
and in any event not necessary to support the Panel's reasoning.
6.28. We accept that the relevant footnote is not necessary, and have deleted it accordingly.
6.3.9 Paragraphs 7.145 and 7.170: the number of claims pursued by Japan
6.29. Japan submits that the Panel has failed to acknowledge or address a fourth Article 3.4 claim
by Japan concerning MOFCOM's alleged failure to examine whether subject imports provided
explanatory force for the state of the domestic industry.
6.30. China objects to Japan's request, on the basis that the claim was addressed in the Panel's
findings.
6.31. We consider that the relevant claim falls outside the Panel's terms of reference. The Panel's
terms of reference are determined by Japan's Request for Establishment. Section 1.b of Japan's
Request for Establishment provides in relevant part:
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China's analysis of the impact of the dumped imports on the domestic industry:
(i) failed to make an objective examination, based on positive evidence, of the impact
of subject imports on the domestic industry based on the volume of such imports and
their effect on prices; (ii) failed to evaluate the magnitude of the margin of dumping;
and (iii) failed to objectively determine the relative importance and weight to be
attached to relevant economic factors an d indices, and improperly disregarded the
majority of those factors and indices indica ting that the domest ic industry did not
suffer material injury. Accordingly, China acted inconsistently with Articles 3.1
and 3.4 of the Anti-Dumping Agreement.
18
There is no reference in Japan's Request for Establishment to any claim concerning MOFCOM's
alleged failure to examine whether subject imports provided explanatory force for the state of the
domestic industry. We have reflected our analysis in footnote 274 of the Final Reports.

6.3.10 Paragraph 7.163: Article 3.4 implementing Article 3.1
6.32. Japan asks the Panel to delete the phrase "To the extent that" from the final sentence of
paragraph 7.163. Japan asserts that this phrase is unnecessary, since it is clear that Article 3.4
implements the requirement in Article 3.1 pertai ning to "the consequent impact" of dumped
imports on the domestic industry.
6.33. China objects to Japan's request, on the basis that the relevant provision contains multiple
obligations.
6.34. We uphold Japan's request. We have replaced the relevant phrase by the word "as".
6.3.11 Paragraphs 7.166-7.168: interplay between positive and negative injury factors
6.35. Japan disagrees with the Panel's finding that Japan failed to establish a prima facie case in
support of its claim. First, Japan asserts that , contrary to the Panel's finding, Japan did
demonstrate the inadequacy of specific elements of MOFCOM's analysis. Japan's assertion is based
on comments it made in its second written submission in respect of China's reply to Panel question
No. 34. Second, Japan suggests that the Panel's position is that provided an investigating authority
supplies some explanation concerning the interplay between positive and negative factors, any
Article 3.4 claim would fail.
6.36. China suggests that Japan is seeking to re-argue points that it made during its submissions.
6.37. Regarding Japan's first concern, we note that Panel question No. 34 was not concerned with
MOFCOM's assessment of the relationship betw een positive and negative injury factors.
Accordingly, there is no basis to conclude that Japan's comments in respect of China's reply to
Panel question No. 34 constitute a prima facie case in support of the claim at issue.
6.38. Regarding Japan's second point, the Panel manifestly did not find that any Article 3.4 claim
would fail provided an investigating authority supplies some explanation concerning the interplay
between positive and negative factors. The Panel's findings simply address in relevant part the
complainants' argument that the Final Determination was "silent" on the interplay between the
positive and negative injury factors, and their argument that MOFCOM failed to provide any
explanation "whatsoever" regarding the weighing of those factors. While Japan also refers to the
finding by the panel in Thailand – H-Beams that the investigating authority must provide a
"compelling explanation" of the interplay between positive and negative injury factors, we recall
that, even under the "compelling explanation" standard, the burden of proof is on the complainant.
As explained by the Panel, the complainants did not meet this burden.
6.3.12 Section 7.5.3 heading: inclusion of a reference to Article 3.1
6.39. Japan asks the Panel to include a reference to Article 3.1 of the Anti-Dumping Agreement in
the heading of Section 7.5.3.

18 Document WT/DS454/4, pages 1 and 2.
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6.40. Since the Panel's findings also cover Article 3.1, we have made the amendment requested
by Japan.
6.3.13 Paragraphs 7.173, 7.189, 7.192, and 7.205: independent Article 3.5 claims
6.41. Japan disagrees with the Panel's conclusion that Japan did not make independent Article 3.5
claims based on alleged flaws in MOFCOM's price effects and volume analyses. Japan explains that
the purpose of the approach it adopted in its firs t written submission was to argue both that: (i)
any instances where the Panel agrees with violations of Articles 3.2 and 3.4 result in consequent
violations of Article 3.5; and (ii) any instances where the Panel rejects violations of Articles 3.2
and 3.4 result in independent violations of Article 3.5.
6.42. China objects to Japan's request. China su ggests that Japan has failed to respond to the
Panel's reasoning.
6.43. We observe that, despite Japan's explanation of the way it intended its first written
submission to be read, this is not what its first written submission actually says. Furthermore,
while Japan refers to its reply to Panel question No. 88, we recall that the Panel addressed Japan's
reply to this question at paragraph 7.192 of its findings. The Panel concluded that the
complainants' replies to that question failed either to identify any relevant independent Article 3.5
claims in their written submissions, or to identify arguments explaining how the alleged flaws in
MOFCOM's price effects and impact analyses result in independent violations of Article 3.5. There is
nothing in Japan's request for interim review to suggest that the Panel's assessment of those
replies is inaccurate.
6.3.14 Paragraph 7.182: expansion of Panel's reasoning
6.44. Japan asks the Panel to include an additional element in its assessment of MOFCOM's
reliance on the market shares of subject imports. In particular, Japan asks the Panel to include a
reference to the fact that the sales and market share of domestic Grade A increased.
6.45. China objects to Japan's request. China does not consider the relevant facts as contrary to
MOFCOM's conclusion.
6.46. We uphold Japan's request, and have amended our findings accordingly.
6.3.15 Paragraph 7.184: inclusion of citation
6.47. Japan asks the Panel to include a citati on to Appellate Body case law concerning the
rejection of ex post rationalization. Japan notes that such citation has been provided elsewhere by
the Panel.
6.48. We have included the citation identified by Japan in footnote 331 of the Final Reports.
6.3.16 Paragraphs 7.202-7.203
6.49. Japan asks the Panel to delete the phrase "it is not meaningful" from paragraph 7.202.
Japan also asks the Panel to address certain fact-based arguments made by Japan concerning
MOFCOM's non-attribution analysis.
6.50. China objects to Japan's request, on the basis that the original wording more accurately
reflects the Panel's rationale for not engaging in an analysis of all aspects. China also suggests
that it would be inappropriate for the Panel to address all of Japan's non-attribution arguments,
since this would not be a meaningful exercise.
6.51. We consider that Japan's first request should be accommodated by using the words "it is not
necessary" instead of "it is not meaningful". Regarding judicial economy, we maintain our view
that, in light of the fundamental flaw in MOFCOM's analysis, it is not necessary to address every
aspect of the parties' non-attribution arguments in detail.
WT/DS454/R • WT/DS460/R

6.3.17 Paragraphs 7.208 and 7.221: scope of arguments
6.52. Japan asks the Panel to include Japan's argument that MOFCOM violated Article 6.8 and
Annex II by failing to use the "best information available" and "special circumspection" in applying
the highest margin of dumping as the all others rate. Japan also asks the Panel to address that
argument in its findings.
6.53. China objects to Japan's requests. China asserts that Japan failed to set out these
arguments in its first written submission.
6.54. We reject Japan's request. The relevant argument was first raised by Japan in
paragraphs 76-81 of its second written submission. Japan asserted that its argument raised a
"fundamental point". As explained in footnote 328 of the Interim Reports (footnote 347 of the Final
Reports), Japan was required by paragraph 7 of the Panel's Working Procedures to set out its case
and arguments in its first written submission. This provision serves an important due process
purpose. While a complainant may need to raise new arguments in its second written submission
in order to respond to arguments made by the other party, this was not the context in which Japan
raised its "fundamental point" in its second written submission.
6.3.18 Paragraph 7.259: correction of scope of findings
6.55. Japan identifies an error in the Panel's description of its treatment of Japan's Article 6.9
claim. Japan suggests that this should result in parts of paragraph 7.259 being deleted.
6.56. China objects to the point raised by Japan. China denies that there is any error in the
Panel's findings.
6.57. We have made the changes proposed by Japan, to avoid any possibility of error in the
Panel's findings.
6.3.19 Paragraph 7.260: expansion of quote
6.58. Japan asks the Panel to avoid uncertainty by including an additional part in its quotation of
paragraph 102 of Japan's second written submission.
6.59. We have included the additional language requested by Japan.
6.3.20 Paragraphs 7.277 and 7.281: judicial economy
6.60. Japan asks the Panel to reconsider its exercise of judicial economy in respect of Japan's
Article 12.2 and 12.2.2 claims, on the basis that th e obligations in these provisions differ from the
obligations in Article 3.2.
6.61. China considers that the Panel's exercise of judicial economy is appropriate.
6.62. We maintain our exercise of judicial economy. As indicated in the Panel's reasoning,
MOFCOM will in any event need to revise its Final Determination in order to implement the Panel's
finding under Article 3.2.
6.3.21 Paragraph 7.298, footnote 455 (f ootnote 475 of the Final Reports): cross-
referencing between DS454 and DS460
6.63. Japan notes that footnote 455 (footnote 475 of the Final Reports) cross-references
footnote 166 (footnote 174 of the Final Reports) , and that the latter relates only to the DS460
Report. For the avoidance of any doubt that the relevant footnote is pertinent to the DS454
Report, Japan suggests that the Panel repeat the entirety of the text of that footnote in
footnote 455.
6.64. China agrees with Japan's requests.
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6.65. We have amended footnote 475 of the final Reports in the manner requested by Japan.
6.3.22 Paragraph 7.336: consequential claims
6.66. Japan notes an inconsistency between the Panel's exercise of judicial economy in
paragraph 7.336 and the summary of its conclusions in paras. 8.1 and 8.6. Japan asks the Panel to
amend paragraph 7.336, and make the appropriate findings instead of exercising judicial economy.
6.67. China objects to Japan's request, in the sense that China asks
19 the Panel to make its
conclusions in paragraphs 8.1 and 8.6 consistent with its findings in paragraph 7.336, and
therefore continue to exercise judicial economy.
6.68. We have amended paragraph 7.336 in order to ensure consistency with Section 8 of the
Final Reports.
6.3.23 Paragraphs 8.2 and 8.7: scope of conclusions
6.69. Japan notes that the Panel has failed to include certain claims in its conclusions, and asks
the Panel to adjust its conclusions accordingly.
6.70. China objects to Japan's request to the extent that it also concerns the Panel's conclusions
in respect of a claim brought by the European Union in the DS460 proceeding.
6.71. As explained above, we do not consider that China's objection is consistent with the
Paragraph 1 of the Panel's Working Procedures. We have included the additional elements
proposed by Japan.
6.4 Requests for interim review by the European Union
6.4.1 Paragraph 7.114: price comparability
6.72. The European Union requests the addition of a reference to record evidence about prices
regarding the lack of comparability between domestic and imported Grade C products.
6.73. China objects to the European Union's requ est, on the ground that it is not sufficiently
specific. China also asserts that the European Union did not rely on the relevant evidence in
respect of the claim at issue.
6.74. We reject the European Union's request. We note that the same request was made by
Japan. Like Japan, the European Union did not re ly on the relevant evidence when advancing its
claims before the Panel. In addition, the Panel's findings are adequately supported by the
reasoning provided.
6.4.2 Paragraphs 7.132 and 7.137, foot notes 239 and 246 (footnotes 254 and 262 of
the Final Reports): translation
6.75. The European Union observes that the Panel failed to note its objection to China's
translation of part of MOFCOM's Final Determination. The European Union asks the Panel to amend
footnotes 239 and 246 of the Interim Reports accordingly.
6.76. We note that the same request was made by Japan. As explained in respect of Japan's
request, we have amended footnotes 254 and 26 2 – and paragraphs 7.132 and 7.137 – of the
Final Reports to address this issue.

19 See the discussion of China's request for review of paras. 8.1, 8.3, 8.6, and 8.8 below.
WT/DS454/R • WT/DS460/R

6.4.3 Paragraphs 7.226, 7.235, and 7.262: clarification of argument
6.77. The European Union asks the Panel to clarify that the European Union's argument described
in the second sentence of paragraph 7.226 – concerning the disclosure of a spread sheet by the
investigating authority - relates to Article 6.4, rather than Article 6.9.
6.78. China states that it has no objection to the Panel clarifying that the relevant argument
relates to Article 6.9 (whereas we observe that the European Union's request states that the
argument actually relates to Article 6.4).
6.79. We are not persuaded that the relevant argument should necessarily be understood to
relate to Article 6.4, as opposed to Article 6.9. The argument is made in paragraph 111 of the
European Union's first written submission. That paragraph is found in a section whose heading
refers to alleged inconsistencies with both Articles 6.4 and 6.9. The first sentence of
paragraph 111 contains a reference to Article 6.4. The relevant argument is contained in the
second sentence. While the proximity to the firs t sentence of paragraph 111 might suggest that
the argument set forth in the second sentence relates to Article 6.4, the third sentence of
paragraph 111 then refers to an Appellate Body Report concerning Article 6.9. In addition, the
second sentence of paragraph 111 (in which the re levant argument is set forth) refers to the
"disclosure" of a spread sheet by the investigating authority. The term "disclos[e]" is found in
Article 6.9, not Article 6.4. In these circumstances, there is no basis to conclude that the Panel
should necessarily understand the relevant argument to relate to Article 6.4, rather than Article
6.9. The European Union does not explain why this should be the case.
6.5 Requests for interim review by China
6.5.1 Footnote 16: overlap between the complainants' claims and arguments
6.80. China suggests that footnote 16 does no t reflect the extent to which the complainants'
claims and arguments differ, and proposes amended text.
6.81. In order to avoid any uncertainty, we have deleted the relevant footnote from the Final
Reports.
6.5.2 Paragraph 7.27: BCI Procedures
6.82. China objects to the Panel's statement that "[f]or purposes of Article 17.7, China's
interpretation effectively results in equating the term 'provided' with 'disclosed'". China agrees
with the Panel that the term "provided" has a different meaning from the term "disclosed". China
asks the Panel to delete this sentence, so as to prevent any suggestion that China took the
position that the term "provided" could be equated with "disclosing".
6.83. In order to avoid any misunderstanding of China's position, we have deleted the relevant
sentence.
6.5.3 Paragraphs 7.39, 7.45, and 7.110: scope of China's arguments
6.84. China asks the Panel to include additional elements in its summary of China's main
arguments.
6.85. We accept China's request with respect to paragraphs 7.39 and 7.110. However, we reject
China's request relating to paragraph 7.45. First, this paragraph introduces the Panel's evaluation
by setting out the main issue before it. Introd ucing a detailed explanation of one of China's
arguments would not necessarily help to identify the main issue in dispute. Second, the argument
China would like the Panel to include in paragraph 7.45 is already explained and addressed in
footnote 108 of the Final Reports. Third, by in cluding a detailed summary of this argument in
paragraph 7.39, we see no need to include another detailed summary of it – beyond what is
already included in the above-mentioned footnote 108.
WT/DS454/R • WT/DS460/R

6.5.4 Footnote 88 (footnote 94 of the Fi nal Reports): information obtained during
consultations
6.86. China asks the Panel to first cite to the European Union's first written submission, instead of
China's opening statement at the first meeting of the Panel, because the European Union was the
first party to refer to information obtained during the consultations.
6.87. We have amended footnote 94 of our Final Reports accordingly.
6.5.5 Paragraphs 7.59 and 7.60: facts before MOFCOM
6.88. China asks the Panel to amend its summary of China's argument to include that China
considers that MOFCOM relied on the facts that were before it during the investigation.
6.89. We have amended our Reports accordingly.
6.5.6 Footnote 128 (footnote 136 of the Final Reports): table 6-3
6.90. China disagrees with the Panel's interpretati on of China's position in this footnote. China
contends that its statement did not directly concern whether MOFCOM's determination complied
with Article 2.2.2 of the Anti-Dumping Agreemen t. Rather, according to China, its statement
rebutted the argument put forward by the European Union in support of its claim that MOFCOM did
not verify the SG&A data in table 6.3.
6.91. The Panel has not interpreted China's positi on in this footnote. Instead, the Panel quoted
China's argument directly from China's response to Panel question No. 22(a), paragraph 74, and
paragraph 52 of its second written submission. Further, this discussion took place in the context of
the European Union's Article 2.2.2 claim. As expl ained in paragraph 7.65 of the Panel Report, the
issue before the Panel, concerning Article 2.2.2 of the Anti-Dumping Agreement, was whether
table 6-3, which China submits was the basis for the SG&A amounts used in MOFCOM's calculation
of normal value, can be said to be based on "actual data pertaining to production and sales in the
ordinary course of trade of the like product". Thus, whether or not table 6-3 was verified may be
relevant in addressing this claim. In fact, in footnote 134 of the Final Reports, the Panel noted that
"nothing in the Panel record indicates that MO FCOM verified table 6.3". Nevertheless, it was
unclear how China's statement would excuse China from complying with the Article 2.2.2
requirements or justify MOFCOM's failure to meet such requirements. This is exactly what the last
sentence of footnote 128 of the Interim Repo rts (footnote 136 of the Final Reports) states.
Nevertheless, we have included text at the begi nning of footnote 136 of the Final Reports for
clarification.
6.5.7 Paragraph 7.95: MOFCOM's dumping determination
6.92. China asks the Panel to further develop the summary of China's argument in the section
summarizing China's main arguments.
6.93. We have amended paragraph 7.95 accordingly.
6.5.8 Paragraph 7.112: headings of sub-sections in the complainants' submissions
6.94. China disagrees with the relevance attached by the Panel to the titles of the relevant sub-
sections of the complainants' submissions. China asks the Panel to clarify that the relevant sub-
sections are not limited to the claim at issue.
6.95. Japan submits that China's request is unne cessary, and should be rejected by the Panel.
Japan asserts that the fact that Japan made two claims within the relevant sub-section of its
written submission does not detract from the fact that one of those claims relates to the claim at
issue.
6.96. We consider that it is appropriate for the Panel to refer to the headings of the relevant sub-
sections of the complainants' submissions to under stand the scope of a particular claim, even if
those sub-headings also cover other claims. We therefore reject China's request.
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6.5.9 Paragraph 7.113: clarification of China's arguments
6.97. China suggests that the Panel has misrepresented the position taken by China regarding the
effect of quantitative differences on comparability.
6.98. We do not consider that the Panel has misr epresented China's position. Notably, China does
not ask the Panel to delete the phrase "[t]here is no disagreement between the parties regarding
the potential for a large difference in the volume of imports and domestic sales to affect price
comparability". However, in order to avoid any risk of misunderstanding, we have amended the
relevant part of paragraph 7.113.
6.99. China has also suggested the inclusion of additional argumentation from paragraph 132 of
its second written submission, and its reply to Panel question No. 33. Rather than including such
arguments in the Panel's evaluation, we have included them in the description of China's
arguments at paragraph 7.110.
6.5.10 Paragraphs 7.120, 7. 134, 7.135, 7.157, 7.183, 7. 210, 7.230, 7.287, footnotes
436, 437, 440, 459, 461 (footnotes 456, 457, 460, 479 and 481 of the Final Reports):
clarification of China's position
6.100. China asks the Panel to include additional argumentation in the Panel's summary of the
main arguments made by China. For the most part, we have acceded to China's requests.
6.101. In respect of paragraph 7.135, Japan obje cts to China's formulat ion of the additional
argument at issue. Japan asserts that China's formulation does not properly reflect the findings in
MOFCOM's Final Determination. In order to accommodate Japan's request, we have used language
making it clear that the additional argument concerns China's understanding of the scope of
MOFCOM's findings.
6.5.11 Paragraph 7.171: inclusion of a cite to Final Determination
6.102. China asks the Panel to include a citation to the Final Determination.
6.103. We have included the relevant citation in footnote 306 of the Final Reports.
6.5.12 Paragraphs 7.180-7.188 and 7.192: market shares of subject imports
6.104. China disagrees with the Panel's reliance on elements relating to the price effects and
impact analyses when addressing the claim in respect of MOFCOM's reliance on market shares in
its causation analysis. China asserts that it has been unable to identify any arguments by the
complainants referring to those items in such context. China asserts that the complainants' claims
with respect to market share relate to only "two elements", namely: (i) whether the market share
retained by subject imports may be relevant for the causation analysis; and (ii) whether a
causation finding may be made absent a significant increase in subject import volume. In the
event that the Panel rejects China's request, China asks that the Panel should at least amend
footnote 325 of the Interim Reports (footnote 34 4 of the Final Reports) to clarify that China
objects to the scope of the claim as addressed by the Panel. China also asks the Panel to amend
the wording of paragraph 7.181, to avoid any suggestion that the Panel is "agreeing" with
arguments that the complainants did not make. China further observes that the Panel should only
refer to arguments made by Japan in this context.
6.105. Japan asserts that it should be evident from several aspects of its submissions that Japan's
causation claim as it related to market share wa s broader than the two elements identified by
China. Japan refers to a series of extracts from its written submissions and oral statements in
support.
6.106. We are not persuaded that we should amend our findings in the precise manner requested
b y C h i n a . I n r e s p e c t o f M O F C O M ' s f i n d i n g s o n the market share of subject imports, both
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complainants referred to the relevance of market share data in the context of price effects. 20 The
Panel's reasoning picks up on this point, and addresses the issue of whether or not MOFCOM
showed that the market shares of subject imports "enabled those imports, through price effects, to
cause injury to the domestic industry". While th e Panel's reasoning may be more detailed than the
arguments of the complainants, the basis for the Panel's reasoning nevertheless lies in the
complainants' submissions.
6.107. Regarding footnote 325 of the Interim Re ports (footnote 344 of the Final Reports), the
matter raised by China relates to interim review, and should therefore only be addressed in
Section 6 of the Panel's Final Reports. It should not feature in Section 7, which concerns the
Panel's findings.
6.108. Concerning the word "agree" in paragraph 7.181, we have replaced the phrase "agree with
the complainants" by the word "consider".
6.5.13 Paragraph 7.297 and 7.298: MOFCOM's statement and relevant appendices
6.109. China submits that it does not consider that it adopted a narrower approach, as suggested
in paragraph 7.297; rather China merely clarified its position. Thus, China proposes certain
amendments to paragraphs 7.297 and 7.298.
6.110. Japan considers that the Panel should not delete the final sentence of paragraph 7.298 as
proposed by China, but rather rephrase it.
6.111. We have amended paragraph 7.297 of the Final Reports according to China's request. We
have rephrased the relevant part of paragraph 7.298 of the Final Reports in accordance with
Japan's suggestion.
6.5.14 Footnotes 482, 495, and 501 (footno tes 502, 515 and 521 of the Final Reports):
non-confidential summaries
6.112. China understands the Panel to refer to the lack of an explicit statement by China as to
whether the relevant information should have been included in the non-confidential summary. In
addition, China notes that it has generally taken the position that "the non-confidential summaries
of the four appendices at issue are sufficiently de tailed to provide a 'reasonable understanding' of
the substance of the information submitted in confidence".
21 Thus, China asks the Panel to amend
these footnotes accordingly.
6.113. We have amended footnotes 502, 515 and 521 of the Final Reports, as requested by
China.
6.5.15 Paragraphs 8.1, 8.3, 8.6, and 8.8: consequential claims
6.114. As noted above in respect of Japan's request for interim review of paragraph 7.336, China
asks the Panel to record the exercise of judicial economy in respect of certain consequential claims
in the summary of its conclusions set forth in Section 8.
6.115. As explained above in respect of Japan's request, we have amended paragraph 7.336 to
reflect Section 8 (as requested by Japan), rather than the other way round (as requested by
China).

20 At paras. 199 and 200 of its first written submission, for example, Japan stated that its arguments
concerning MOFCOM's reliance on the market share of subject imports should be coupled with its arguments
concerning the alleged errors in MOFCOM's price effects and impact analyses. At paras. 120-123 of its oral
statement at the first substantive meeting, for example, the European Union asserts that causation must relate
to the specific effects of dumping that were the subject of the analysis under Articles 3.2 and 3.4. The
European Union observes that, by referring to "large quantities" and a "large market share", MOFCOM does not
base its determination of causation on the outcomes of the inquiries under Article 3.2 and 3.4. The
European Union refers expressly to MOFCOM's failure to find cross-grade price effects in this context.
21 China's first written submission, para. 763.
WT/DS454/R • WT/DS460/R

7 FINDINGS
7.1. These disputes concern China's measures imposing anti-dumping duties on certain imports of
HP-SSST from Japan and the European Union in th e context of the investigation at issue. The
complainants' claims pertain to various procedural and substantive provisions of the Anti-
Dumping Agreement and, consequently, to Article 1 of the Anti-Dumping Agreement and Article VI
of the GATT 1994. China asks the Panel to reject the complainants' claims.
7.2. We shall begin by examining certain requests relating to (i) the Panel's Joint Working
Procedures, and (ii) the Panel's terms of reference. Thereafter, we shall turn to the claims relating
to MOFCOM's dumping and injury determinations. Finally, we shall examine the remaining, mostly
procedural claims. Before examining the issues before us, though, we recall a number of general
principles regarding treaty interpretation, standard of review and burden of proof in WTO dispute
settlement proceedings.
7.1 General principles regarding treaty interpretation, the applicable standard of review
and burden of proof
7.1.1 Treaty Interpretation
7.3. Article 3.2 of the DSU provides that the dispute settlement system serves to clarify the
existing provisions of the covered agreements "in accordance with customary rules of
interpretation of public international law". It is generally accepted that the principles codified in
Articles 31 and 32 of the Vienna Convention are such customary rules.
7.1.2 Standard of Review
7.4. Panels generally are bound by the standard of review set forth in Article 11 of the DSU, which
provides, in relevant part:
[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 the relevant covered agreements. (emphasis added)
7.5. The Appellate Body has stated that the "objective assessment" to be made by a panel
reviewing an investigating authority's determination is to be informed by an examination of
whether the agency provided a reasoned and adequa te explanation as to: (i) how the evidence on
the record supported its factual findings; and (ii) how those factual findings supported the overall
determination.
22
7.6. The Appellate Body has also commented that a panel reviewing an investigating authority's
determination may not conduct a de novo review of the evidence or substitute its judgment for
that of the investigating authority. A panel must limit its examination to the evidence that was
before the agency during the course of the investigation and must take into account all such
evidence submitted by the parties to the dispute.
23 At the same time, a panel must not simply
defer to the conclusions of the investigating authority. A panel's examination of those conclusions
must be "in-depth" and "critical and searching".
24
7.7. Further to Article 11 of the DSU, Article 17.6 of the Anti-Dumping Agreement sets forth a
specific standard of review applicable to anti-dumping disputes, namely:
(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; and

22 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, para. 186.
23 Ibid. para. 187.
24 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 - Canada), para. 93.
WT/DS454/R • WT/DS460/R

(ii) the panel shall interpret the relevant provisions of the Agreement in accordance
with customary rules of interpretation of public international law. Where the panel
finds that a relevant provision of the Agreement admits of more than one permissible
interpretation, the panel shall find the authorities' measure to be in conformity with
the Agreement if it rests upon one of those permissible interpretations.
7.1.3 Burden of Proof
7.8. The general principles applicable to the al location of the burden of proof in WTO dispute
settlement require that a party claiming a violation of a provision of a WTO Agreement must assert
and prove its claim.
25 Therefore, as the complaining parties, Japan and the European Union bear
the burden of demonstrating that the Chinese measures are inconsistent with the
WTO agreements invoked by the complainants. The Appellate Body has stated that a complaining
party will satisfy its burden when it establishes a prima facie case, namely a case 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.
26 Finally, it is generally for each party asserting a fact to
provide proof thereof.27
7.2 BCI Procedures
7.9. The European Union takes issue with two aspects of the BCI Procedures originally adopted by
the Panel, namely (i) the designation of BCI, and (ii) the requirement to provide authorizing letters
from entities participating in the underlying anti-dumping proceedings. The European Union
requests that the Panel amend the BCI Procedures accordingly. While Japan generally agrees with
the European Union's requests, China asks the Panel to reject the European Union's requests.
7.2.1 Relevant provisions of the BCI Procedures
7.10. Paragraphs 1 and 2 of the BCI Procedures originally provided:
1. These procedures apply to any business confidential information (BCI) that a
party wishes to submit to the Panels. For the purposes of these procedures, BCI is
defined as any information that has been designated as such by the Party submitting
the information, that is not available in the public domain, and the release of which
could seriously prejudice an essential interest of the person or entity that supplied the
information to the Party. In this regard, BCI shall include information that was
previously submitted to China's Ministry of Commerce ("MOFCOM") as BCI in the anti-
dumping investigation at issue in these disputes. However, these procedures do not
apply to information that is available in the public domain. In addition, these
procedures do not apply to any BCI if the person who provided the information in the
course of the aforementioned investigation agrees in writing to make the information
publicly available.
2. The first time that a party submits to the Panels BCI as defined above from an
entity that submitted that information in the anti-dumping investigation at issue in
these disputes, the party shall also provide, with a copy to the other parties, an
authorizing letter from the entity. That letter shall authorize China, the
European Union and Japan to submit in these disputes, in accordance with these
procedures, any confidential information submitted by that entity in the course of the
investigation at issue. (emphasis added)

25 Appellate Body Report, US – Wool Shirts and Blouses, p. 14.
26 Appellate Body Report, EC – Hormones, para. 104.
27 Appellate Body Report, US – Wool Shirts and Blouses, p. 14.
WT/DS454/R • WT/DS460/R

7.2.2 Main arguments of the parties
7.2.2.1 European Union
7.11. The European Union claims that the pr ovisions in the BCI Procedures concerning
(i) designation of BCI, and (ii) authorizing letters from entities participating in the underlying anti-
dumping proceedings are WTO-inconsistent.
28
7.12. The European Union objects to the Panel automatically classifying as BCI information that
was submitted as confidential in the underly ing anti-dumping proceedings, because the
designation of confidential information cannot be delegated, in absolute terms, to non-WTO
entities or persons. The European Union recalls that, pursuant to Article 18.2 of the DSU, in
dispute settlement, Members shall treat as confidential information submitted by another Member
which the latter has designated as confidential. In addition, the European Union submits that, in
case of disagreement, WTO adjudicators should ulti mately decide on BCI designation, on the basis
of objective criteria, without delegating this decision to any other entity or person.
29 The
European Union requests that the relevant sentence in paragraph 1 of the BCI Procedures be
modified to read: "In this regard, parties and third parties are encouraged to designate as BCI
information that was previously submitted to China's Ministry of Commerce ('MOFCOM') as BCI in
the anti-dumping investigation at issue in these disputes". 30 The European Union also requests
that the following final sentence be added to this paragraph: "In case of disagreement, the Panels
shall decide on BCI designation".31
7.13. The European Union also objects to the requirement that a party must seek and provide
prior written authorization from the entity that submitted the confidential information in the
underlying anti-dumping proceedings when submitti ng such information to the Panel. Regardless
of whether the BCI designation was appropriate or not, the European Union contends that a
particular firm could simply withhold authorization and effectively limit the information that may be
submitted in WTO dispute settlement. According to the European Union, this is particularly
relevant when, as in these disputes, a Member challenges another Member to disclose certain
information that was originally submitted by private firms in the underlying anti-dumping
proceedings.
32 The European Union also contends that Article 17.7 of the Anti-Dumping Agreement
makes clear that a Member is not required to ob tain authorization before providing confidential
information to panels. 33 The European Union requests that paragraph 2 of the BCI Procedures be
deleted or modified by replacing the verb "shall" with "may" in both sentences. 34 Finally, to the
extent the Panel is concerned about protecting th e WTO from any consequences of disclosure, the
European Union suggests that the following senten ce be added: "Each party and third party shall
be solely responsible for ensuring its own compliance with any applicable confidentiality rules and
solely responsible for the confidentiality designation it makes when submitting information to the
Panel, and any consequences thereof".35
7.2.2.2 Japan
7.14. Japan generally agrees with the European Union's requests to modify paragraphs 1 and 2 of
the BCI Procedures. Japan recalls that it is Members that have the right to designate information

28 European Union's first written submission, paras. 46-48; opening statement at the first meeting of the
Panel, paras. 3 and 14; second written submission, paras. 6 and 25; and opening statement at the
second meeting of the Panel, para. 3.
29 European Union's first written submission, paras. 48, 59-60, and 65-67; opening statement at the
first meeting of the Panel, paras. 5 and 7; response to Panel question No. 1, para. 3; and opening statement at
the second meeting of the Panel, paras. 3, 5, and 7.
30 European Union's first written submission, para. 68.
31 European Union's first written submission, para. 68.
32 European Union's first written submission, paras. 48 and 70-72; opening statement at the
first meeting of the Panel, paras. 14, 16, 18-19, and 21-22; second written submission, para. 25; and opening
statement at the second meeting of the Panel, para. 13.
33 European Union's first written submission, para. 76. The European Union recalls that, pursuant to
Article 17.7 of the Anti-Dumping Agreement, "confidential information provided to a panel shall not be
disclosed without formal authorization from the person, body or authority providing such information". The
European Union contends that the "person providing" the information to a panel is the submitting WTO
Member, since firms have no standing in DSU proceedings. European Union's first written submission, para. 76.
34 European Union's first written submission, para. 73.
35 European Union's first written submission, para. 74.
WT/DS454/R • WT/DS460/R

as confidential in DSU proceedings. According to Japan, "a panel may not give total deference (or
an absolute delegation) for the resolution of th e issue of the designation of BCI to some other
party, such as the firm submitting the information in the underlying proceeding or even the
investigating authority".
36 With respect to paragraph 2 of the BCI Procedures, to the extent it
effectively takes out of the hands of the submitti ng Member and the Panel the question of what
may be submitted in DSU proceedings, Japan agrees with the European Union. Japan notes that a
firm that submitted information in the underlying domestic proceeding could withhold authorization
by simply refusing the issuance of an authorizing letter.
37
7.2.2.3 China
7.15. China notes that, after consulting with the parties, the Panel adopted additional protection
for certain confidential information, while at the same time balancing the interests of all WTO
Members by requiring the submission of non-conf idential versions of any written submission
containing BCI.
38 China contends that the challenged aspects of the BCI Procedures add to rather
than detract from the protection provided by th e DSU, as they do not deprive Members of the
possibility to designate information as confidential under Article 18.2 of the DSU. China also
submits that the additional protection in the BCI Procedures for information previously submitted
to MOFCOM as BCI is in line with the confidenti ality requirements set forth in Article 6.5 of the
Anti-Dumping Agreement.
39 Specifically with regard to paragraph 2 of the BCI Procedures, China
submits that "an authorizing letter is a necessary instrument to ensure compliance by the
investigating authority with its obligations under Article 6.5 of the Anti-Dumping Agreement".
40
China contends that it is not uncommon to require the presentation of such an authorizing letter in
WTO dispute settlement proceedings concerning trad e remedies, and this requirement, to China's
knowledge, has never been found to be WTO-inconsistent.41
7.2.3 Main arguments of third parties
7.2.3.1 United States
7.16. The United States submits that it is sympathetic to the concern that it could be difficult for
Members and panels to evaluate compliance with obligations under the Anti-Dumping Agreement
where a Member fails to meet its transparency obligations. However, the United States submits
that "the correct course of action is not for the Panel to request China to submit to the Panel
information which MOFCOM treated as confidenti al during the antidumping proceedings without
permission of the party that submitted the information to MOFCOM". 42 The United States contends
that such course of action would implicate Article 6.5 of the Anti-Dumping Agreement, which
requires investigating authorities to not disclose information accepted as confidential during anti-
dumping proceedings without permission of the party that submitted such information. The
United States notes that Article 6.5 does not contain any exception for WTO proceedings. 43 The
United States observes that if a Member ha s failed to meet its Anti-Dumping Agreement
transparency obligations, complaining Members may, as in these disputes, bring claims under such
transparency obligations. Should a panel find a breach of these obligations, the responding party

36 Japan's response to Panel question No. 1(a), paras. 2-3.
37 Japan also submits that, because paragraph 2 of the BCI Procedures does not refer to the acceptance
by the investigating authority of information as confidential, "the parties appear to be required to obtain an
authorization letter from the entity that originally submitted the information, as long as it submitted (or self-
designated) that information as confidential in the underlying investigation", regardless of whether the
investigating authority treated such information as confidential. Japan's response to Panel question No. 3,
paras. 10-11.
38 China's first written submission, para. 772.
39 China's first written submission, para. 774; and response to Panel question No. 3, paras. 15-16.
40 China's response to Panel question No. 3, para. 13. See also China's response to Panel question
No. 4, para. 23; second written submission, para. 310 ("[T]he mere fact that an anti-dumping proceeding has
resulted in a WTO dispute does not eliminate the confidentiality obligation imposed on an investigating
authority with respect to the information that was granted confidential treatment upon the showing of 'good
cause'."); and response to Panel questions after the second meeting with the Panel, paras. 4-5.
41 China's response to Panel question No. 3, para. 14; and response to Panel questions after the
second meeting with the Panel, para. 3.
42 United States' third-party submission, paras. 65-66.
43 United States' third-party submission, paras. 66-67. See also United States' third-party responses to
Panel questions No. 1, paras. 2-3 and 5; and No. 2, para. 8.
WT/DS454/R • WT/DS460/R

would then be required to bring its measures into compliance with those transparency
obligations.44
7.2.4 Evaluation by the Panel
7.17. There are two main issues before the Panel: (i) whether the Panel may delegate, in absolute
terms, the BCI designation to non-WTO entities; and (ii) whether disputing parties should be
required to provide an authorizing letter from the entity that submitted confidential information in
the underlying anti-dumping proceedings, when providing such information to the Panel. We
address below each of these issues.
7.2.4.1 BCI designation
7.18. The European Union takes issue with the "absolute" delegation of BCI designation to entities
participating in the underlying anti-dumping procee dings. The sentence at issue in paragraph 1 of
the BCI Procedures originally provided in relevant part: "BCI shall include information that was
previously submitted to … MOFCOM … as BCI in the anti-dumping investigation at issue in these
disputes". (emphasis added) We agree with the Eu ropean Union that the original wording of this
sentence suggests that BCI designation is determ ined by the party submitting information to
MOFCOM.
45 Thus, we have amended this sentence to read as follows in relevant part: "BCI shall
include information that was previously treated by … MOFCOM … as BCI in the anti-dumping
investigation at issue in these disputes".46 (emphasis added)
7.19. However, the European Union submits that it is for the submitting Member, in the
first place, to designate information as confidential. Thus, the European Union considers that its
concerns would not be addressed if the designation of BCI were dependent on the investigating
authority's determination to treat information as confidential in the underlying anti-dumping
proceedings.
47
7.20. We agree with China that the BCI Procedures do not detract from the ability of Members to
designate information as confidential under Article 18.2 of the DSU. It is clear that the designation
of confidential information in anti-dumping proceedings, as provided for in Article 6.5 of the Anti-
Dumping Agreement, is distinct from the design ation of BCI for purposes of DSU proceedings.
However, we consider that these designations are closely related because in disputes under the
Anti-Dumping Agreement the Panel is not the initial trier of facts. Rather, according to the proper
standard of review, the Panel must review whether the investigating authority's establishment of
the facts was proper, and whether its evaluation of those facts was unbiased and objective.
48 The
Panel's review must be based on the record deve loped by the investigating authority. The Panel
may not have regard to new information that was not on the authority's record.
7.21. In our view, Article 17.7 of the Anti-Dumping Agreement reflects this relationship when it
provides that "[c]onfidential information provided to the panel shall not be disclosed without
formal authorization from the person, body or authority providing such information". We note that
this provision is included as a special or additional rule and procedure in Appendix 2 of the DSU,
which prevail over the rules and procedures in th e DSU to the extent that there is a difference
between these two sets of provisions.
49 We understand that, in the context of a dispute brought

44 United States' third-party submission, para. 71.
45 See European Union's first written submission, para. 66; and opening statement at the first meeting
of the Panel, para. 5.
46 We note that China does not oppose this amendment. See China's response to Panel question No. 1,
paras. 3-5.
47 European Union's response to Panel question No. 1(a) and (b), paras. 2-4; and opening statement at
the second meeting of the Panel, para. 5. Japan also considers that the European Union's concerns would not
be addressed in the situation described above. See para. 7.24. below for Japan's argument.
48 Article 17.6(i) of the Anti-Dumping Agreement.
49 Article 1.2 and Appendix 2 of the DSU. See also Appellate Body Report, Guatemala – Cement I,
para. 66 ("We see the special or additional rules and procedures of a particular covered agreement as fitting
together with the generally applicable rules and procedures of the DSU to form a comprehensive, integrated
dispute settlement system for the WTO Agreement. The special or additional provisions listed in Appendix 2 of
the DSU are designed to deal with the particularities of dispute settlement relating to obligations arising under
a specific covered agreement, while Article 1 of the DSU seeks to establish an integrated and comprehensive
dispute settlement system for all of the covered agreements of the WTO Agreement as a whole. It is,
WT/DS454/R • WT/DS460/R

under the Anti-Dumping Agreement, the phrase "confidential information" in Article 17.7 refers to
the confidential information previously examined by the investigating authority and treated as
confidential pursuant to Article 6.5 – and whic h is now provided to a dispute settlement panel
pursuant to Article 17.7. This understanding is su pported by the terms of Article 17.7 of the Anti-
Dumping Agreement and Article 18.2 of the DSU. Ar ticle 17.7 refers to confidential information
provided by a "person, body or authority"; wherea s Article 18.2 refers to confidential information
provided by a "Member". In other words, Article 17.7 envisages that confidential information on
the authority's record – obtained from a "person, bo dy or authority" - may be provided to a panel,
and imposes on the panel a non-disclosure obligation
50 similar to that imposed on the authority by
the last sentence of Article 6.5. Considering that a panel's review is limited to the authority's
record, in practice the designation under Article 18.2 of the DSU should generally not arise in a
case brought under the Anti-Dumping Agreement, since the issue of designation of the information
on the authority's record is already addre ssed by Articles 6.5 and 17.7 of the Anti-
Dumping Agreement.
7.22. The European Union submits that "[s]hould [the European Union] choose to un-designate
information from [its] own firms (for example because, with the passage of time, it is no longer
sensitive or has come into the public domain) [the European Union] fail[s] to see what interest any
other party or third party might have in objecting to such course of action".
51 We are not
persuaded by the European Union's argument. First, we recall that paragraph 1 of the
BCI Procedures provides that "these procedures do not apply to information that is available in the
public domain". Second, if the information from the European Union's firms "is no longer
sensitive", we agree with the European Union and also fail to see the "interest any other party or
third party might have in objecting to [the 'u n-designation']". In our view, the hypothetical
scenario raised by the European Union should not result in any disagreement between the parties.
Indeed, if the information is no longer sensitive, even the entity that initially provided the
information would agree. The situation envisaged by the European Union would then fall within the
scope of paragraph 1 of the BCI Procedures, which provides that "these procedures do not apply to
any BCI if the person who provided the information in the course of the … investigation agrees in
writing to make the information publicly available". This safeguard is important, for a WTO Member
is not necessarily best placed to determine whether or not information submitted on a confidential
basis in the context of an anti-dumping proceeding remains sensitive. Indeed, the relevant
Member may not even be aware of the specific reasons why confidentiality was requested in the
first place.
52
7.23. Furthermore, we fail to see the concern relating to designation by WTO Members, as raised
by the European Union in the present case, because China, as a party to these disputes, has
designated all information treated as confidential in the underlying anti-dumping proceedings as

therefore, only in the specific circumstance where a provision of the DSU and a special or additional provision
of another covered agreement are mutually inconsistent that the special or additional provision may be read to
prevail over the provision of the DSU.")
50 As there shall be no ex parte communications with a panel (see Article 18.1 of the DSU), we note that
"[c]onfidential information provided to the panel" is also necessarily provided to all parties in dispute. In our
view, as Article 17.7 does not limit this non-disclosure obligation only to the panel, such obligation also applies
to all parties in dispute receiving "[c]onfidential information provided to the panel".
51 European Union's response to Panel question No. 2, para. 7.
52 We note that the European Union relies on the Appellate Body Report in EC and certain member
States – Large Civil Aircraft to state that the question of designation should be subject to objective criteria and,
in case of disagreement about designation, it is for the Panel to ultimately decide without delegating, in
absolute terms, the final decision to anyone else. (European Union's first written submission, paras. 65-66,
quoting Appellate Body Report, EC and certain member States – Large Civil Aircraft, Annex III, Procedural
Ruling of 10 August 2010, paras. 15-16; response to Panel questions No. 1(a) and (b), para. 2, and No. 4,
paras. 19-20; second written submission, paras. 6, 14, and 22; and opening statement at the second meeting
of the Panel, paras. 3 and 5.) It is unclear to us, and the European Union has not explained, how the
Appellate Body's understanding relates to a dispute under the Anti-Dumping Agreement, where, unlike in
EC and certain member States – Large Civil Aircraft, the Panel is not a first trier of facts. In any event, we
consider that, in adopting the definition in paragraph 1 of the BCI Procedures, the Panel has set out clear and
objective criteria concerning the type of information that may require additional protection, consistently with
the Appellate Body's understanding in EC and certain member States – Large Civil Aircraft. With respect to the
possible disagreement, as stated above, we understand that the hypothetical scenario raised by the
European Union should not result in any disagreement between the parties. In addition, the European Union
has not explained how another type of "disagreement about designation" under the BCI Procedures could occur
when information was properly treated as confidential in the underlying anti-dumping proceedings.
WT/DS454/R • WT/DS460/R

BCI for purposes of these DSU proceedings. 53 This constitutes designation by a WTO Member, as
proposed by the European Union.
7.24. The European Union also submits that "[i]f … information is automatically to be designated
as BCI in the present proceedings, then that woul d seriously risk to pre-judge one of the very
issues that is supposed to be in dispute". 54 Similarly, Japan contends that to "categorically include
within the definition of BCI any information accepted by the investigating authority as confidential
in an underlying proceeding would be problemati c, because this would presume or prejudge the
propriety of the BCI designation by the investigat ing authority in a dispute like the present one in
which the WTO consistency of the confidential treatment of information by the investigating
authority is itself in dispute".
55 The European Union and Japan appear to conflate the question of
proper BCI designation in the present DSU proceedin gs with the question of proper treatment of
confidential information in the underlying anti-dumping proceedings. 56 Designating information as
BCI in the present proceedings allows the Panel, the parties and third parties to receive and
examine such information, while controlling its disclosure to any person not authorized under the
BCI Procedures. We agree with China
57 that this has no bearing on the Panel's assessment of
whether MOFCOM treated information as confidential in the underlying anti-dumping proceedings
consistently with the provisions of the Anti-Dumping Agreement. In fact, contrary to the apparent
suggestion by the complainants, we consider that the BCI Procedures assist the Panel in accessing
all necessary information for a proper and objective examination of the claims, in the present
disputes, relating to the treatment of confidential information in the underlying anti-dumping
proceedings.
7.25. In light of the foregoing, we have decide d not to modify paragraph 1 of the BCI Procedures
in the manner proposed by the European Un ion. We have amended paragraph 1 of the
BCI Procedures only in the manner explained above in paragraph 7.18.
7.2.4.2 Authorizing letter
7.26. With respect to paragraph 2 of the BCI Procedures, the European Union takes issue with the
requirement for parties to provide an authorizing le tter from the entity that submitted confidential
information in the underlying anti-dumping proceedings, when submitting such information to the
Panel.
7.27. With respect to WTO dispute settlement, Article 17.7 of the Anti-Dumping Agreement sets
forth that "[c]onfidential information provided to the panel shall not be disclosed without formal
authorization from the person, body or authority providing such information". (emphasis added)
With respect to anti-dumping proceedings, Article 6.5 of the Anti-Dumping Agreement uses the
same terms, setting forth that "[a]ny information which is by nature confidential …, or which is
provided on a confidential basis … shall … be treated as such by the authorities. Such information
shall not be disclosed without specific permission …". (emphasis added) China argues that the
authorizing letter is necessary to ensure compliance by the investigating authority with its
obligations under Article 6.5, including when information is "disclosed" to the Panel in the context
of a dispute under the Anti-Dumping Agreement.
58 In China's view, "when … information is

53 China's response to Panel question No. 2(a), para. 11. We also note China's view that "[b]y making
the designation of BCI dependent on the investigating authority's determination to treat information as
confidential in the underlying anti-dumping proceedings, the designation of BCI is essentially left to the
Member seeking such designation". China's response to Panel question No. 1(a), para. 5.
54 European Union's first written submission, para. 67. See also European Union's response to Panel
question No. 2, para. 8; second written submission, paras. 22-23; and opening statement at the
second meeting of the Panel, para. 10.
55 Japan's response to Panel question No. 1(a), para. 2. See also Japan's response to Panel question
No. 2, para. 9.
56 Elsewhere the European Union appears to take a different view, stating that "Article 6.5 of the Anti-
Dumping Agreement does not govern the question of designation in DSU proceedings. It governs the question
of designation in municipal anti-dumping proceedings". European Union's response to Panel question No. 1(a)
and (b), para. 5. See also European Union's response to Panel question No. 3, paras. 9-10; and second written
submission, paras. 11 and 15.
57 See China's second written submission, para. 309.
58 China's response to Panel question No. 3, para. 13. See also China's response to Panel question
No. 4, para. 23; and response to Panel questions after the second meeting with the Panel, paras. 4-5.
WT/DS454/R • WT/DS460/R

'disclosed' to the panel under Article 6.5, it is 'provided' to the panel under Article 17.7". 59
However, in our view, the use of different terms – i.e. "provided" and "disclosed" – in the same
sentence in Article 17.7 strongly suggests that they have different meanings.
7.28. In addition, we consider there is a clear relationship between Articles 6.5 and 17.7. While
the former provision regulates when confidential information may be disclosed by investigating
authorities, the latter provision regulates when such information may be disclosed by a panel. As
stated above, panels are not the initial triers of facts. Rather, panels review an investigating
authority's establishment and evaluation of facts. Thus, it would seem logical that a panel should
be subject to similar non-disclosure obligations when reviewing the investigating authority's
assessment of the body of information, including confidential information, available on the record
of the anti-dumping proceedings.
60 In our view, this indicates that the "provision" of confidential
information to the panel in the context of a di spute under the Anti-Dumping Agreement does not
amount to its "disclosure" under Article 6.5. 61 Accordingly, we do not consider that a Member
"providing" confidential information to a panel under Article 17.7 of the Anti-Dumping Agreement
would cause its investigating authority to violate its obligation under Article 6.5 not to "disclose"
that information.
7.29. In light of the foregoing, we have decided to accommodate the European Union's request to
delete paragraph 2 of the original version of the BCI Procedures.62

59 China's response to Panel question No. 4, paras. 25-30. According to China, removing the
requirement for an authorizing letter is likely to result in systemic issues, creating strong disincentives for
parties to disclose confidential information to investigating authorities. China's response to Panel
question No. 3, paras. 13 and 17.
60 As noted above, parties in dispute are also subject to the same non-disclosure obligation as a panel.
See footnote 50 above.
61 Taking this view, we need not address China's submission that the "mere fact that an anti-dumping
proceeding has resulted in a WTO dispute does not eliminate the confidentiality obligation imposed on an
investigating authority with respect to the information that was granted confidential treatment upon the
showing of 'good cause'". (China's second written submission, para. 310. See also China's response to Panel
questions after the second meeting with the Panel, para. 4.)
62 We recall that, on 22 May 2014, the Panel (i) invited parties to submit any additional BCI, together
with an explanation of how such BCI supports any claims or arguments made to the Panel, and (ii) provided
two weeks for other parties to comment on such explanation. In this context, the European Union submitted
additional BCI to the Panel on 6 June 2014.

7.3 Panel's terms of reference
7.30. China submits that certain claims under Article 2 of the Anti-Dumping Agreement 63
advanced by the European Union in its first written submission fall outside the Panel's terms of
reference.
64 China's request is based on Article 6.2 of the DSU.
7.31. In its request for the establishment of a panel65, the European Union alleged a violation of:
Articles 2.2, 2.2.1, 2.2.1.1 and 2.2.2 of the Anti-Dumping Agreement because China
did not determine the amounts for administrative, selling and general costs and for
profits on the basis of records and actual data by the exporters or producers under
investigation. In particular, the amounts for administrative, selling and general costs
and for profits as constructed by China do not reflect the records and the actual data
of the exporters or producers under investigation.
7.32. In its first written submission, the European Union claims that China acted inconsistently
with the following provisions of the Anti-Dumping Agreement:
Article 2.2 because the unrepresentative and rejected data used by MOFCOM did not
permit a proper comparison, and the SG&A amount was not reasonable
66;
Article 2.2.1 because MOFCOM used free samples, which by definition are not sales in
the ordinary course of trade67;
Article 2.2.1.1 because MOFCOM used unrepresentative and rejected data which
(i) did not correspond to the records kept by SMST, (ii) were not in accordance with
GAAP, (iii) did not reasonably reflect the costs associated with the product under
consideration, and (iv) had been historically utilized by SMST
68; and
Article 2.2.2 because MOFCOM failed to determine an SG&A amount for SMST on the
basis of actual data pertaining to production and sales in the ordinary course of trade
of the like product.
69
7.3.1 Relevant WTO provisions
7.33. Article 6.2 of the DSU provides:
The request for the establishment of a panel shall … identify the specific measures at
issue and provide a brief summary of the legal basis of the complaint sufficient to
present the problem clearly.
7.34. Article 2.2 of the Anti-Dumping Agreement provides:
When there are no sales of the like product in the ordinary course of trade in the
domestic market of the exporting country or when, because of the particular market
situation or the low volume of the sales in the domestic market of the exporting
country, such sales do not permit a proper comparison, the margin of dumping shall
be determined by comparison with a comparable price of the like product when

63 China also submits that, although the European Union's references to paragraph 1 of Annex I to the
Anti-Dumping Agreement appear unintentional, to the extent the European Union actually intended to make a
claim under this provision, such claim would be outside the Panel's terms of reference. (China's first written
submission, para. 192.) The European Union clarifies that it does not make a claim under this provision.
(European Union's response to China's requests for preliminary rulings, para. 53.) In light of the
European Union's clarification, we need not address this issue.
64 The Panel's terms of reference for this dispute are set out in paragraph 2 of document
WT/DS460/5/Rev.1, following the standard terms of reference in Article 7.1 of the DSU.
65 Document WT/DS460/4 (referred to hereafter as "panel request").
66 European Union's first written submission, para. 174.
67 European Union's first written submission, paras. 167 and 173.
68 European Union's first written submission, para. 172.
69 European Union's first written submission, para. 170.

exported to an appropriate third country, prov ided that this price is representative, or
with the cost of production in the country of origin plus a reasonable amount for
administrative, selling and general costs and for profits. (footnote omitted)
7.35. Article 2.2.1 of the Anti-Dumping Agreement provides:
Sales of the like product in the domestic market of the exporting country or sales to a
third country at prices below per unit (fixed and variable) costs of production plus
administrative, selling and general costs may be treated as not being in the ordinary
course of trade by reason of price and may be disregarded in determining normal
value only if the authorities determine that such sales are made within an extended
period of time in substantial quantities an d are at prices which do not provide for the
recovery of all costs within a reasonable period of time. If prices which are below
per unit costs at the time of sale are above weighted average per unit costs for the
period of investigation, such prices shall be considered to provide for recovery of costs
within a reasonable period of time. (footnotes omitted)
7.36. Article 2.2.1.1 of the Anti-Dumping Agreement provides:
For the purpose of paragraph 2, costs shall normally be calculated on the basis of
records kept by the exporter or producer under investigation, provided that such
records are in accordance with the generally accepted accounting principles of the
exporting country and reasonably reflect the costs associated with the production and
sale of the product under consideration. Authorities shall consider all available
evidence on the proper allocation of costs, including that which is made available by
the exporter or producer in the course of the investigation provided that such
allocations have been historically utilized by the exporter or producer, in particular in
relation to establishing appropriate amortization and depreciation periods and
allowances for capital expenditures and other development costs. Unless already
reflected in the cost allocations under this sub-paragraph, costs shall be adjusted
appropriately for those non-recurring items of cost which benefit future and/or current
production, or for circumstances in which costs during the period of investigation are
affected by start-up operations. (footnote omitted)
7.37. Article 2.2.2 of the Anti-Dumping Agreement provides in relevant part:
For the purpose of paragraph 2, the amounts for administrative, selling and general
costs and for profits shall be based on actual data pertaining to production and sales
in the ordinary course of trade of the like product by the exporter or producer under
investigation.
7.3.2 Main arguments of the parties
7.3.2.1 China
7.38. China submits that certain of the claims in the European Union's first written submission
concerning Articles 2.2, 2.2.1, 2.2.1.1, and 2.2. 2 of the Anti-Dumping Agreement fall outside the
Panel's terms of reference because the European Union's panel request failed to comply with the
requirements of Article 6.2 of the DSU in respect of those claims.
7.39. China understands the European Union to have presented two sets of claims in its
first written submission: (i) main claims under Article 2.2.2, and (ii) "additional/support claims"
under Articles 2.2, 2.2.1, and 2.2.1.1 in support of its main claims. With regard to the
European Union's main claims, China accepts that the European Union's claim under Article 2.2.2
that the SG&A amount was not based on actual data falls within the Panel's terms of reference.
70
However, China contends that the European Union's panel request does not include a claim under
Article 2.2.2 that the SG&A amount did not pertain to production and sales in the ordinary course

70 China's first written submission, paras. 51-53 and 71; second written submission, para. 5; and
opening statement at the second meeting of the Panel, para. 51.

of trade. 71 With regard to the European Union's "additional claims", China accepts that the
European Union's claim under Article 2.2.1.1 that data used did not correspond to the records kept
by SMST falls within the Panel's terms of reference.
72 However, China contends that all remaining
"additional claims" under Articles 2.2, 2.2.1, and 2.2.1.1 were not included in the
European Union's panel request.73 China submits that such non-inclusion is not a matter of a lack
of any clarity or precision in the European Union's request for establishment of a panel. Rather,
China asserts that the European Union clearly specified the claims included in its request for
establishment. According to China, the European Union expressly limited its claims under Articles
2.2, 2.2.1, 2.2.1.1 and 2.2.2 of the Anti-Dumping Agreement to the claims that the SG&A amounts
"do not reflect the records and the actual data". China contends that the use of the term "in
particular" clearly defined the claims raised by the European Union.
74
7.3.2.2 European Union
7.40. The European Union submits that its pa nel request complies with the requirements of
Article 6.2 of the DSU in respect of the claims at issue.
7.41. With regard to Article 2.2.2 of the Anti-Dumping Agreement, the European Union submits
three main arguments. 75 First, the European Union contends that certain contextual elements
permitted China to fully understand the nature of the problem raised by the European Union in its
panel request before receiving the European Unio n's first written submission. The European Union
initially notes that China itself demonstrated that MOFCOM acted inconsistently with China's WTO
obligations, since "China expressly acknowledges … that it was relying on data that was not actual
and that it had already rejected as unrepresentative and unreliable".
76 Moreover, the
European Union contends that the defending Member's disclosure of the legal and factual basis for
its measure "sets the parameters for what the complaining Member may have to do in order to
fulfil the standard set out in Article 6.2 of the DSU".
77 Finally, the European Union argues that "the
sufficiency of a panel request must be assess ed in the light of the discussion between the

71 China's first written submission, paras. 54-55; response to Panel question No. 10, paras. 35 and 38;
second written submission, paras. 4, 6-7, 18, and 27; and opening statement at the second meeting of the
Panel, paras. 51 and 55-56. China argues that Article 2.2.2 contains multiple obligations. According to China,
the "actual data" requirement in Article 2.2.2 is distinct from the requirement relating to data pertaining to
sales and production in the ordinary course of trade, which is contained in the same provision. China's
first written submission, para. 67; opening statement at the first meeting of the Panel, paras. 19-21; response
to Panel question No. 7, paras. 33-34; second written submission, para. 21; opening statement at the
second meeting of the Panel, paras. 52-55; and comments on the European Union's response to Panel
question No. 81, para. 22.
72 China's first written submission, paras. 52, 55, and 71; second written submission, para. 5; and
opening statement at the second meeting of the Panel, para. 51.
73 China's first written submission, paras. 54-55; second written submission, para. 57; and opening
statement at the second meeting of the Panel, para. 51.
74 China's first written submission, para. 65; China's opening statement at the first meeting of the
Panel, para. 19; China's second written submission, paras. 4-7; and China' comments on the European Union's
reply to Panel question No. 81, para. 21.
75 In its response to China's request for preliminary rulings, the European Union also makes a number of
substantive arguments against China's claims under Articles 2.2, 2.2.1, 2.2.1.1, and 2.2.2 of the Anti-Dumping
Agreement. The relationship between the European Union's substantive arguments and the narrow procedural
issue raised by China relating to whether the European Union's panel request complies with the requirements
of Article 6.2 of the DSU is unclear.
76 European Union's response to China's requests for preliminary rulings, para. 28.
77 European Union's response to China's requests for preliminary rulings, para. 34. See also
European Union's opening statement at the second meeting of the Panel, para. 75. The European Union
contends that, "as a matter of law, the sufficiency of a panel request must be assessed in the light of the
sufficiency of the measure at issue and the disclosure afforded to the interested Member". European Union's
response to China's requests for preliminary rulings, para. 33. See also European Union's response to Panel
question No. 81, para. 19. The European Union submits that the only point reasonably clear to the
European Union was that China could not have based itself on the actual data in table 6-5, and thus must have
acted inconsistently with Article 2.2.2 of the Anti-Dumping Agreement. The European Union submits that this is
how the European Union's panel request was framed. European Union's response to China's requests for
preliminary rulings, paras. 35 and 37.

investigating Member and the interested party during the administrative proceedings, as reflected
in the measure at issue".78
7.42. Second, the European Union submits that complaining Members are entitled to refer in their
panel requests "to provisions of a covered agreement, in effect incorporating them by reference,
without writing them out verbatim in the Panel Request". 79 Thus, the European Union's reference
to "actual data" in its panel request does not limit the request only to this part of the single
sentence in Article 2.2.2.
80
7.43. Third, the European Union contends that Article 2.2.2 contains one single obligation. The
European Union argues that the terms "shall", "this basis", "be based on", and "pertaining to"
support the European Union's understanding.
81 The European Union "does not generally consider
that it makes much sense to attempt to deconstr uct complex, interlinked, compound rules into
different parts and characterise some … as an obligation, and … other … as a condition or separate
qualifier".82
7.44. Turning to the European Union's "additional claims" under Articles 2.2, 2.2.1 and 2.2.1.1,
the European Union submits that these provisions are clearly referenced in its panel request. The
European Union recalls that panel requests need not set out the text of the provisions verbatim,
particularly when the defending Member has failed to properly disclose the reasons for the
measure at issue.83 In addition, the European Union submits that these provisions contain a single
operative phrase with mandatory language, appare ntly suggesting that they contain each one
single obligation.84 Finally, with regard to "China's attemp t to split the terms of Article 2.2.1.1",
the European Union contends that the reference to a particular obligation in Article 2.2.1.1 must
be also understood as a reference to any related conditions included in this provision.85
7.3.3 Evaluation by the Panel
7.45. The main issue before the Panel is whether the European Union's panel request provides "a
brief summary of the legal basis of the complaint sufficient to present the problem clearly" in
respect of each of the claims at issue made by the European Union in its first written submission.
86
This issue arises principally because China and the European Union disagree on whether
Articles 2.2, 2.2.1, 2.2.1.1 and 2.2.2 of the Anti-Dumping Agreement each contain single or
multiple obligations. Therefore, we now examine each of these provisions separately below to
determine whether they contain single or multiple obligations.
7.46. Article 2.2 of the Anti-Dumping Agreement identifies the circumstances where an
investigating authority may be entitled to determine the margin of dumping through a comparison
between export price and (i) the export price of th e like product exported to a third country, or
(ii) the constructed normal value.
87 We agree with China that this provision contains multiple
obligations. The European Union emphasizes that "Article 2.2 contains a single operative phrase
with mandatory language ('shall be determined')". 88 In our view, the fact of whether or not a
particular provision contains a "single operative phrase with mandatory language" is not
necessarily determinative of whether such provision contains one or more distinct legal obligations.

78 European Union's response to China's requests for preliminary rulings, para. 41. See also
European Union's response to China's requests for preliminary rulings, para. 32; and response to Panel
question No. 81, para. 20.
79 European Union's response to China's requests for preliminary rulings, para. 31.
80 European Union's response to China's requests for preliminary rulings, paras. 31-32; response to
Panel question No. 81, para. 18; and opening statement at the second meeting of the Panel, paras. 73 and 75.
81 European Union's response to Panel questions No. 6, paras. 24-35; and No. 7, paras. 43-44.
82 European Union's response to Panel question No. 6, paras. 24-25. See also European Union's
83 European Union's response to China's requests for preliminary rulings, para. 50.
84 European Union's response to Panel question No. 6, paras. 39-41. The European Union submits that
"[i]t is not because there is a complex interlinked rule that includes some qualifiers or conditions that one
needs to discover multiple obligations". (European Union's response to Panel question No. 6, para. 39.)
85 European Union's response to China's requests for preliminary rulings, para. 51. The European Union
"rejects China's attempts to deconstruct the single interlinked complex rule in that provision by isolating one of
the relevant conditions". (European Union's response to Panel question No. 6, para. 41.)
86 Article 6.2 of the DSU.
87 Panel Report, EC – Salmon (Norway), para. 7.528.
88 European Union's response to Panel question No. 6, para. 39.

Indeed, we note that elsewhere, where the European Union explains its claim and arguments
under Article 2.2, even the European Union appear s to suggest that Article 2.2 contains multiple
obligations.89
7.47. While the Appellate Body has explained th at when "a provision contains not one single,
distinct obligation, but rather multiple obligations, a panel request might need to specify which of
the obligations contained in the provision is being challenged" 90, the Appellate Body has also
indicated that "compliance with the requirements of Article 6.2 [of the DSU] must be determined
on the merits of each case, having considered th e panel request as a whole, and in the light of
attendant circumstances".91 Thus, the mere fact that the European Union referred to a particular
provision in its panel request, allegedly without specifying the particular obligation being
challenged, does not necessarily mean that the European Union's panel request fails to meet the
requirements of Article 6.2 of the DSU. This is because the relevant WTO obligations may
nevertheless be identifiable from a careful reading of the panel request as a whole.
92 Accordingly,
we examine whether a careful reading of the European Union's panel request, including any
narrative explanation contained therein 93, permits a sufficiently clear identification of the legal
basis regarding each of the Article 2 claims pursued in the European Union's first written
submission.94

89 The European Union states that Article 2.2 "supports the view that the data used by an investigating
authority must 'permit a proper comparison', and that the amount for administrative, selling and general costs
must be 'reasonable'. The unrepresentative and rejected data used by China did not permit a proper
comparison because it did not result in the proper establishment of normal value. Furthermore, it was not
reasonable, because it did not reasonably reflect the costs associated with the production and sale of the
product under consideration, in the ordinary course of trade". (European Union's first written submission,
90 Appellate Body Report, China – Raw Materials, para. 220. See also Appellate Body Reports, Korea –
91 Appellate Body Report, US – Carbon Steel, para. 127.
92 With similar understanding, see the preliminary ruling of the panel in US – Countervailing and
Anti-Dumping Measures (China), para. 3.35, document WT/DS449/4 dated 7 June 2013.
93 We note in this regard that, in applying Article 6.2 of the DSU, the panel in Mexico – Anti-Dumping
Measures on Rice considered the listing of the relevant WTO provisions in the panel request at issue together
with the narrative which accompanied that listing. (Panel Report, Mexico – Anti-Dumping Measures on Rice,
para. 7.30.)
94 We note that the European Union and China refer to information allegedly exchanged during
consultations (see European Union's first written submission, para. 171; China's opening statement at the first
meeting of the Panel, para. 22; China's response to Panel request No. 10, para. 39; China's second written
submission, paras. 12-16; opening statement at the second meeting of the Panel, para. 57; China's comments
on the European Union's response to Panel question No. 81, paras. 24-26; and European Union's response to
statement at the second meeting of the Panel, paras. 74-75). The Panel was not privy to those consultations,
and is therefore unable to refer to their substance for present purposes. (See also Appellate Body, US – Upland
Cotton, para. 287, quoting Panel Report, Korea – Alcoholic Beverages, para. 10.19.) Thus, we need not
address the European Union's objection to the BCI designation of this information. (European Union's opening
statement at the second meeting of the Panel, para. 11.) We also note that the European Union submits that
"the sufficiency of a panel request must be assessed in the light of the discussion between the investigating
Member and the interested party during the administrative proceedings, as reflected in the measure at issue".
(European Union's response to China's requests for preliminary rulings, para. 41.) However, we consider that it
cannot be assumed that the range of issues raised by interested parties during the administrative proceedings
will be the same as the claims brought by the European Union in this dispute. In addition, while the defending
Member will be aware of the issues raised by interested parties during the administrative proceedings, other
Members, including the complaining Member, may not, particularly if they were not themselves parties to the
proceedings. Thus, we consider that the underlying administrative proceedings cannot normally, in and of
themselves, be determinative in assessing the sufficiency of the European Union's panel request. (In this
regard, see Appellate Body Report, Thailand – H-Beams, para. 94.) Finally, we note that the European Union
contends that, "as a matter of law, the sufficiency of a panel request must be assessed in the light of the
sufficiency of the measure at issue and the disclosure afforded to the interested Member". (European Union's
response to China's requests for preliminary rulings, para. 33.) We are unable to understand, and the
European Union has not explained, how the measure at issue (and its disclosure) prevented the
European Union from having sufficient information to prepare its panel request, but nevertheless allowed the
European Union to raise a number of specific claims and arguments in its first written submission. (See also
China's comments on the European Union's response to Panel question No. 81, para. 23.) Furthermore, it is
unclear to us why, "as a matter of law", the sufficiency of a panel request should relate to the sufficiency of the
measure at issue (and its disclosure).

7.48. With respect to the European Union's Article 2.2 claim, we do not consider that the narrative
explanation contained in the European Union's panel request refers to this claim. We are unable to
see, and the European Union has not explained, ho w this narrative explanation specifies which of
the multiple obligations contained in Article 2.2 is being challenged. 95 Thus, we find that the
European Union's panel request does not comply wi th the requirement of Article 6.2 of the DSU to
"provide a brief summary of the legal basis of the complaint sufficient to present [any] problem
clearly" in respect of the European Union's Article 2.2 claim. Consequently, we conclude that the
Article 2.2 arguments in the European Union's submissions
96 relate to a claim that is not within the
Panel's terms of reference.
7.49. With regard to the European Union's Article 2.2.1 claim, we observe that Article 2.2.1 of the
Anti-Dumping Agreement describes a methodology for determining whether below-cost sales may
be treated as not being made in the ordinary course of trade, setting forth the only circumstances
under which sales of the like product may be disregarded.97 We consider that Article 2.2.1 contains
one single obligation relating to when sales of the like product may be treated as not being in the
ordinary course of trade.98 In our view, a reference to Article 2.2.1 is sufficient to clearly present a
problem pertaining to the treatment of below-cost sales. Thus, it puts the responding party on
notice that the treatment of below-cost sales, i.e. sales "below per unit … costs of production plus
administrative, selling and general costs", of the like product outside the ordinary course of trade
will be an issue in dispute. China accepts that "[w]here a provision contains only a single
obligation, a simple reference to the provision may be a sufficient summary of the legal basis of
the complaint".
99 Thus, we find that, the European Union's panel request complies with the
requirement of Article 6.2 of the DSU to "provi de a brief summary of the legal basis of the
complaint sufficient to present [a] problem clearly" in respect of the European Union's Article 2.2.1
claim. Consequently, we conclude that the Article 2.2.1 arguments in the European Union's
submissions
100 relate to a claim that is within the Panel's terms of reference.
7.50. Article 2.2.1.1 of the Anti-Dumping Ag reement concerns the calculation of costs of
production for the purpose of constructing normal value, and for the purpose of determining
whether below-cost sales may be treated as not being made in the ordinary course of trade. 101
This provision contains three sentences. In our vi ew, the wording of each sentence makes it clear
that this provision contains multiple legal obligations. The first sentence provides that "cost shall
normally be calculated on the basis of reco rds kept by the exporter or producer under
investigation". The second sentence provides that "[a]uthorities shall consider all available
evidence on the proper allocation of cost". The third and final sentence provides that "cost shall be
adjusted appropriately" for those non-recurring cost and start-up costs. We note that the narrative
explanation contained in the European Union's pane l request states that "China did not determine

95 The European Union submits that "there is no dispute between the parties that the disagreement in
this case relates to the determination of administrative, selling and general costs, a matter with respect to
which one can only discern one rule in Article 2.2: the amount must be 'reasonable'. Consequently, … the
[European Union] submits that its Panel Request identified the issue, also with respect to Article 2.2, with
sufficient particularity". (European Union's response to Panel question No. 6, para. 39.) We are unable to
reconcile this statement with the European Union's explanation of its claim and argument under Article 2.2,
where the European Union appears to refer to two distinct obligations. (See footnote 89 above.) In our view,
the latter explanation suggests that, in theory, there is more than one disagreement between China and the
European Union. Finally, it is unclear to us, and the European Union has not explained, how the alleged clarity
with regard to the "disagreements" between the parties explains whether or not the European Union's panel
request complies with the requirement of Article 6.2 of the DSU to "provide a brief summary of the legal basis
of the complaint sufficient to present the problem clearly" pertaining to the European Union's Article 2.2 claim.
96 European Union's first written submission, para. 174; and response to Panel question No. 8, para. 47.
97 Panel Report, EC – Salmon (Norway), para. 7.231; and Appellate Body Reports, US – Continued
Zeroing, footnote 636; and US – Softwood Lumber V, para. 100.
98 We also note that China has not demonstrated to us how multiple obligations can be read into
Article 2.2.1 of the Anti-Dumping Agreement. See China's first written submission, paras. 66-67; and opening
statement at the first meeting of the Panel, para. 21.
99 China's opening statement at the first meeting of the Panel, para. 19. Although we do not
consider this to be determinative in our analysis of Article 2.2.1, we note that, unlike with respect to
Articles 2.2, 2.2.1.1, and 2.2.2, China only refers to one obligation in Article 2.2.1 when summarizing the
European Union's claims. ("[T]hat although 'by definition free samples are below cost', MOFCOM failed to
disregard 'sales made below cost as being not made in the ordinary course of trade', contrary to what is
required by Article 2.2.1". China's first written submission, paras. 54 and 66.)
100 European Union's first written submission, para. 173; and response to Panel question No. 8,
para. 48.
101 Panel Report, EC – Salmon (Norway), paras. 7.252 and 7.482.

the amounts for administrative, selling and general costs and for profits on the basis of records …
by the exporters or producers under investigation". We also note that China accepts that the
European Union's claim under Article 2.2.1.1 relating to the obligation that "cost shall normally be
calculated on the basis of records kept by the exporters" is within the Panel's terms of
reference.
102 However, we are not persuaded that the European Union's panel request as a whole,
including the narrative explanation contained therein, clearly presents any problem pertaining to
the remaining obligations contained in Article 2. 2.1.1. In our view, the European Union's panel
request is not sufficient to bring these remaining obligations within the Panel's terms of
reference.
103 Thus, we find that the European Union's panel request does not comply with the
requirement of Article 6.2 of the DSU to "provi de a brief summary of the legal basis of the
complaint sufficient to present [a] problem clearly" pertaining to these remaining Article 2.2.1.1
obligations. Consequently, we conclude that the Article 2.2.1.1 arguments in the European Union's
submissions referring to such obligations104 relate to claims that are not within the Panel's terms of
reference.
7.51. Article 2.2.2 of the Anti-Dumping Agreement sets forth how the amounts for SG&A and
profits are to be calculated for purposes of a constructed normal value. 105 This provision provides
that SG&A amounts "shall be based on actual data pertaining to production and sales in the
ordinary course of trade of the like product". 106 We note that the narrative explanation contained
in the European Union's panel request states that "China did not determine the amounts for
administrative, selling and general costs and for profits on the basis of … actual data by the
exporters or producers under investigation". We also note that China accepts that the
European Union's claim under Article 2.2.2 relating to "actual data" is within the Panel's terms of
reference.
107 We recall that the European Union's panel request includes a reference to
Article 2.2.1 of the Anti-Dumping Agreement. Wi th regard to the latter provision, we have
concluded above that a reference to Article 2.2.1 puts the responding party on notice that below-
cost sales, i.e. sales "below per unit … costs of production plus administrative, selling and general
costs", of the like product outside the ordinary course of trade will be an issue in dispute. Although
the narrative explanation contained in the European Union's panel request does not refer to
"administrative, selling and general costs … pertai ning to production and sales in the ordinary
course of trade of the like product", in our view , a reasonably informed reader would understand
from the reference to Article 2.2.1 that the European Union also takes issue, in its panel request,
with whether or not SG&A amounts are based on data pertaining to the production and sales in the
ordinary course of trade. 108 Thus, we find that the European Union's panel request complies with

102 China's first written submission, paras. 52, 55, and 71; second written submission, para. 5; and
opening statement at the second meeting of the Panel, para. 51.
103 We note that, with respect to Article 2.2.1.1, the European Union simply "rejects China's attempt to
deconstruct the single interlinked complex rule in that provision by isolating one of the relevant conditions".
(European Union's response to Panel question No. 6, para. 41. See also European Union's response to China's
requests for preliminary rulings, para. 51.) As explained above, the wording of Article 2.2.1.1 strongly suggests
that this provision contains different obligations. We consider that the European Union has not explained how
each sentence in Article 2.2.1.1 may be nevertheless understood to refer to the same legal obligation.
104 See European Union's first written submission, para. 172; and response to Panel question No. 8,
para. 49.
105 Appellate Body Report, EC – Bed Linen, para. 67.
106 See Appellate Body Report, EC – Tube or Pipe Fittings, para. 97 ("Examining the text of the chapeau
of Article 2.2.2, we observe that this provision imposes a general obligation ('shall') on an investigating
authority to use 'actual data pertaining to production and sales in the ordinary course of trade' when
determining amounts for SG&A and profits.")
107 China's first written submission, paras. 52, 65, 67, and 77; second written submission, para. 5; and
opening statement at the second meeting of the Panel, para. 51.
108 Taking the view explained above, we need not address the European Union's and China's arguments
relating to whether Article 2.2.2 of the Anti-Dumping Agreement contains multiple obligations. China also
submits that the European Union's panel request is "expressly limited, by the use of the words 'in particular', to
the obligation[] for the SG&A to … be based on actual da ta". (China's opening statement at the first meeting of
and comments on the European Union's response to Panel question No. 81, para. 21.) We do not agree with
China that the expression "in particular" limits the coverage of the European Union's panel request to only what
comes after it. As noted above, we must consider the European Union's panel request as a whole to assess
compliance with the requirements of Article 6.2 of the DSU. Moreover, we note that the relevant part of the
European Union's panel request contains two sentences, both of which refer to "the amounts for
administrative, selling and general costs and for profits" and the alleged disconnection from "the records and
the actual data by the exporters or producers under investigation". However, the second sentence, which starts
with the expression "[i]n particular", refers to such amounts "as constructed by China". Thus, we understand

the requirement of Article 6.2 of the DSU to "pro vide a brief summary of the legal basis of the
complaint sufficient to present [a] problem clearly" pertaining to the European Union's Article 2.2.2
claim. Consequently, we conclude that the Article 2.2.2 arguments relating to "actual data
pertaining to production and sales in the ordinary course of trade" in the European Union's
submissions relate to claims that are within the Panel's terms of reference.
7.4 MOFCOM's dumping determination
7.52. The European Union makes a number of claims in respect of MOFCOM's dumping
determination for SMST, one of the European Union exporters/producers. These claims concern (i)
the use of SG&A amounts for Grade B; (ii) the fa ir comparison concerning Grade C; and (iii) the
alleged double-counting of certain administrative expenses concerning Grade B.
7.4.1 The use of SG&A amounts for Grade B
7.53. The European Union claims that China acted inconsistently with Articles 2.2.1, 2.2.1.1,
and 2.2.2 of the Anti-Dumping Agreement beca use "China did not determine the amount for
[SG&A] on the basis of records and actual da ta kept by the exporter or producer under
investigation (SMST) or in a manner that reasonably reflects the costs associated with the
production and sale of [Grade B]".
109 China asks the Panel to reject the European Union's claims.
7.4.1.1 Relevant WTO provisions
7.54. Articles 2.2.1, 2.2.1.1, and 2.2.2 of the Anti-Dumping Agreement are set forth above.110
7.4.1.2 Main arguments of the parties
7.4.1.2.1 European Union
7.55. The European Union claims that China acted inconsistently with Article 2.2.2 of the Anti-
Dumping Agreement by failing to determine an SG&A amount for SMST on the basis of actual data
pertaining to production and sales in the ordinary course of trade of the like product.
111 The
European Union submits that the data from table 6-3 of SMST's questionnaire response, which was
used by China to construct normal value, was not "actual data pertaining to production and sales
in the ordinary course of trade". This is because, the European Union argues, table 6-3 (i) included
SG&A amounts derived from planned rates – i.e. hypothetical projected administrative expense –
and not the actual expense; 112 and (ii) was based on abnormally high cost of production, as it
included two free sample product transactions, which are unrepresentative and cannot be used to
construct normal value.
113
7.56. The European Union also claims that China acted inconsistently with Article 2.2.1.1 of the
Anti-Dumping Agreement because "it is the representa tive and duly verified data in [Table 6-5 of
SMST's Questionnaire Response] that corresponds to the records kept by SMST, and that is in
accordance with GAAP and reasonably reflects the costs associated with the production and sale of
the product under consideration".114

that the expression "in particular" serves to highlight that the European Union's claims under the provisions at
issue will focus on the manner in which China constructed such amounts.
109 European Union's first written submission, para. 160. See also European Union's first written
submission, para. 175; response to China's requests for preliminary rulings, para. 3; second written
submission, para. 88; and opening statement at the second meeting of the Panel, para. 68.
110 See paras. 7.35. -7.37. above.
111 European Union's first written submission, paras. 170 and 175; response to Panel questions No. 8,
paras. 45-46; and No. 20, para. 89; and opening statement at the second meeting of the Panel, para. 68.
112 European Union's first written submission, paras. 164-166; second written submission, para. 88; and
opening statement at the second meeting of the Panel, para. 72.
113 European Union's first written submission, paras. 167-169 and 171; second written submission,
para. 88; response to Panel question No. 81, para. 22; and opening statement at the second meeting of the
Panel, para. 71.
114 European Union's first written submission, para. 172; and response to Panel question No. 8,
para. 49. See also European Union's first written submission, para. 175; and responses to Panel questions

7.57. Finally, the European Union claims that Chin a acted inconsistently with Article 2.2.1 of the
Anti-Dumping Agreement. The European Union subm its that this provision "expressly provides for
the treatment of sales made below cost as being not made in the ordinary course of trade …, and
further indicates that they should be disregarded. By definition, free samples are below cost, and
thus not sales in the ordinary course of trade".
115
7.4.1.2.2 China
7.58. China submits that MOFCOM determined the SG&A amount on the basis of actual data
reported by SMST for Grade B sold in the European Union, which according to China was included
in table 6-3 of SMST's Questionnaire Response. China also submits that there was no evidence
that such data were neither actual nor based on SMST's records.
116
7.59. China contends that, on the basis of the facts before MOFCOM during the investigation 117,
the costs of production included in table 6-3 are actual data. According to China, since the SG&A
amounts at issue were based on costs of production in table 6-3, it is clear that the SG&A amounts
used by MOFCOM were based on "actual data". 118 China considers that it is irrelevant whether or
not the coefficients used to determine the SG&A amounts are also actual data, because the SG&A
amounts at issue were "based on" actual data, i. e. actual costs of production, and Article 2.2.2
does not require the SG&A amount to be actual data in itself. In any event, China contends that
the coefficients themselves also constitute "actual data", because "[t]he coefficients were used by
SMST in its daily operations and are data that pertained to acts, existed in fact, are real, and were
in existence at the time".
119
7.60. Moreover, China submits that, on the basis of the facts before MOFCOM during the
investigation120, the data used by MOFCOM were based on SMST's records. China contends that it
was reasonable for MOFCOM to conclude that the source of the SG&A amount was SMST's records
because SMST stated that "[t]he figures reported in Table 6-3 were taken from cost calculations
for the individual orders of subject merchandise produced during the POI".
121
7.4.1.3 Main arguments of third parties
7.4.1.3.1 Kingdom of Saudi Arabia
7.61. Saudi Arabia submits that Article 2.2.1.1 of the Anti-Dumping Agreement imposes an
obligation on investigating authorities to use an exporter's records when such records (i) are in
accordance with GAAP, and (ii) reasonably reflect the costs associated with the production and sale
of the product under consideration.
122 Saudi Arabia contends that the "second condition is met
where there is a sufficiently close relationship between the recorded cost and the actual cost to the
company for the production and sale of the product at issue".123
7.4.1.3.2 United States
7.62. With respect to the European Union's claim under Article 2.2.2 of the Anti-
Dumping Agreement, the United States contends that the Anti-Dumping Agreement does not
require an investigating authority to treat all sample sales as outside the ordinary course of trade.

115 European Union's first written submission, para. 173; and response to Panel question No. 8, para. 48
(footnote omitted). See also European Union's first written submission, para. 175; and response to Panel
question No. 8, para. 45.
116 China's first written submission, paras. 80, 98, 102, 104, 114, and 126.
117 China's first written submission, paras. 100-103.
118 China's first written submission, para. 123; response to Panel question No. 22, para. 71; and
No. 22(b)(ii), para. 76; second written submission, para. 33; and opening statement at the second meeting of
the Panel, paras. 60-61.
119 China's second written submission, paras. 34-35. See also China's response to Panel question
No. 22, paras. 69-70; and No. 22(b)(ii), paras. 76-77; and opening statement at the second meeting of the
Panel, para. 61.
120 China's first written submission, paras. 100-103.
121 China's first written submission, paras. 124-126; opening statement at the second meeting of the
Panel, para. 62; and SMST dumping questionnaire response, Exhibit CHN-5, p. 16; Exhibit EU-10, p. 5.
122 Saudi Arabia's third-party statement, paras. 2-4.
123 Saudi Arabia's third-party statement, para. 4.

According to the United States, an authority must instead evaluate the record evidence to
determine whether it supports finding that the sample sale was concluded on terms and conditions
that are incompatible with normal commercial practice for sales of the like product, in the market
in question, at the relevant time.
124 The United States understands that "China acted inconsistently
with Article 2.2.2 of the [Anti-Dumping] Agreement to the extent that MOFCOM relied on
information for sales outside the ordinary course of trade when information on sales in the
ordinary course of trade were available".
125
7.63. With respect to the European Union' s claim under Article 2.2.1.1 of the Anti-
Dumping Agreement, the United States submits that if the evidence establishes that the records of
the exporter or producer under investigation were in accordance with GAAP and reasonably
reflected the costs associated with the production and sale of the products under consideration,
"MOFCOM would have been obligated to use those records … or … provide a reason supported by
the record evidence to depart from the 'normal' methodology provided for in Article 2.2.1.1".
126
7.4.1.4 Evaluation by the Panel
7.64. The disagreement between the European Union and China concerns the SG&A amounts used
by MOFCOM in its calculation of normal value for Grade B produced and sold by SMST. As
Article 2.2.2 of the Anti-Dumping Agreement sets forth how the amounts for SG&A are to be
calculated for purposes of a constructed normal value, we start our assessment with this provision.
7.65. Concerning Article 2.2.2 of the Anti-Dumping Agreement, the issue before the Panel is
whether table 6-3, which China submits was the basis for the SG&A amounts used in MOFCOM's
calculation of normal value
127, can be said to be based on "actual data pertaining to production
and sales in the ordinary course of trade of the like product". It is undisputed that the SG&A
amounts in table 6-3 consist of the cost of production multiplied by certain coefficients. These
coefficients are the planned internal rates used by SMST in preparing price/cost allocations for
orders.
128
7.66. We note that it appears that there was a disagreement between MOFCOM and SMST with
respect to the source of data to determine the SG&A amount. While the European Union submits
that SMST understood that MOFCOM should have been using the SG&A amount based on actual
data from table 6-5 129, China submits that MOFCOM understood that it made clear in its
disclosures that it was using the data contained in table 6-3. 130 Irrespective of these

124 United States' third-party submission, para. 47; and United States' third-party statement, para. 16.
125 United States' third-party submission, para. 48. See also United States' third-party statement,
para. 16.
126 United States' third-party submission, para. 51. See also United States' third-party statement,
para. 18.
127 See China's response to Panel question No. 22(b)(i), para. 75.
128 SMST supplemental dumping questionnaire response, Exhibit CHN-10, internal page 4; and
Exhibit EU-14; SMST dumping questionnaire response, Exhibit EU-10, internal page 69. See also
European Union's first written submission, footnote 174; and China's response to Panel questions No. 22,
statement at the second meeting of the Panel, para. 59.
129 European Union's response to Panel question No. 18(b), para. 84 ("From MOFCOM's preliminary
disclosure, SMST and its Chinese counsel understood that MOFCOM was not satisfied with the explanation of
the calculation method of SG&A in Table 6-3 and therefore was using the 'actual' SG&A, which SMST
understood as the actual reported figures in Tables 6-6 through 6-8 (as summarized in Table 6-5).") and
para. 86 ("With receipt of the final disclosure SMST could only surmise that MOFCOM had not used or had
incorrectly used the actual data in Tables 6-5 to 6-8. Even today, MOFCOM has still not provided a disclosure
reconciling the specific numbers used in the calculation with what appears in the measure at issue, so even
today neither SMST nor the EU can be sure what China has done"); European Union's response to China's
requests for preliminary rulings, para. 21; and second written submission, para. 106 and footnote 126. See
also SMST comments on preliminary dumping disclosure (BCI), Exhibit EU-19, pp. 2-3 ("the SG&A rate … used
by BOFT in calculating the constructed value for [Grade B] is not supported by any information on the record of
this proceeding and BOFT has not explained how it calculated this rate. Rather than using this unsupported
SG&A rate, BOFT should have used the … SG&A rate reported in Table 6-5 for EU sales").
130 China's first written submission, paras. 80, 82, 84, 86, 105-106, 108-109, 111 ("The comments by
SMST … obviously did not allow MOFCOM to understand that SMST intended to claim that the data reported as
actual data in Table 6-3 for EU sales were not actual"), 120-121; and second written submission, para. 48
("SMST was able (or at the very least should have been able) to understand that the amounts in table 6-3
were used in line with MOFCOM's statement in the questionnaire response and MOFCOM's consistent practice.

understandings, we observe that it is undisputed that SMST requested MOFCOM, and
MOFCOM accepted, not to use in the constructed normal value calculations the cost of production
in table 6-3 for Grade B sales in the European Union, because such cost of production was
distorted due to the inclusion of the two free sample transactions.
131 Despite MOFCOM's decision to
disregard the cost of production data in tabl e 6-3 for Grade B sales in the European Union,
MOFCOM nevertheless used the SGA amounts in table 6-3, even though they had been derived by
applying certain coefficients to that disregarded cost of production data. We note China's argument
that the "SG&A data affected by the disregarded co st of production could have been corrected by
[the relevant] coefficients" used in the calculation of the SG&A amounts.
132 Although China has
submitted that (i) MOFCOM requested SMST to ex plain its SG&A methodology and the sources of
the coefficients at issue, and (ii) SMST failed to do so 133, we do not consider that an unbiased and
objective investigating authority could have assumed the corrective potential of the relevant
coefficients without any supporting analysis or evidence.134 We agree with the European Union that
any such assumption would have been "speculative". 135 In our view, by using SGA data based on
the application of coefficients to data that had already been excluded for the purpose of
constructing normal value, MOFCOM failed to fulfil the requirements of Article 2.2.2136, namely that
the SG&A amounts "be based on actual data pertai ning to production and sales in the ordinary
course of trade of the like product". 137 In light of the foregoing, we uphold the European Union's
claim that China acted inconsistently with Article 2.2.2 of the Anti-Dumping Agreement by failing
to determine an SG&A amount for SMST on the basis of actual data pertaining to production and
sales in the ordinary course of trade of the like product.
7.67. Having upheld the European Union's claim under Article 2.2.2, we exercise judicial economy
with respect to the European Union's claims under Articles 2.2.1 and 2.2.1.1 of the Anti-
Dumping Agreement.
138

SMST should have realized that the specific SG&A rate used corresponded exactly to the figure it had itself
reported in table 6.3"). See also China's opening statement at the second meeting of the Panel, para. 63;
SMST preliminary dumping disclosure, Exhibit CHN-12 (BCI), internal pages 2-3; preliminary determination,
Exhibits JPN-7 and EU-18, internal page 27; SMST final dumping disclosure, Exhibit EU-25 (BCI), internal
page 3; and final determination, Exhibits JPN-2 and EU-30, internal page 38.
131 SMST dumping questionnaire response (BCI), Exhibit CHN-5, p. 17; SMST preliminary dumping
disclosure, Exhibit CHN-12 (BCI), internal pages 2-3; preliminary determination, Exhibits JPN-7 and EU-18,
internal page 27; final determination, Exhibits JPN-2 and EU-30, internal page 38; European Union's
first written submission, para. 168; and China's first written submission, paras. 98, 107, and 116; response to
Panel question No. 22(b)(iii), para. 78; and second written submission, para. 42.
132 China's response to Panel question No. 22(b)(iii), para. 79. See also China's response to Panel
question No. 24, para. 86 ("the SG&A data were not necessarily 'particular', since the coefficients could well
have taken into account the inflated nature of the costs").
133 China's response to Panel question No. 24, para. 86; and SMST preliminary dumping disclosure,
Exhibit CHN-12 (BCI), internal pages 2-3.
134 We note that nothing in the Panel record indicates that MOFCOM verified table 6-3. (See SMST
verification disclosure (BCI), Exhibit EU-23; China's first written submission, para. 113; response to Panel
question No. 22(a), para. 73; and European Union's response to Panel question No. 21, para. 92; and
second written submission, para. 107.)
135 European Union's second written submission, paras. 110 and 114.
136 Addressing whether MOFCOM had verified the information in table 6-3 pertaining to SG&A as actual
data, China submits that "[a]n investigating authority only needs to satisfy itself of the accuracy of the
information supplied, pursuant to Article 6.6 of the Anti-Dumping Agreement" and that "[n]o claim was made
under this provision". (China's response to Panel question No. 22(a), para. 74; and second written submission,
para. 52.) We are unable to see how this statement would excuse China from complying with the requirements
set forth in Article 2.2.2 of the Anti-Dumping Agreement, or justify MOFCOM's failure to meet such
requirements.
137 Taking this view, we need not address the disagreement between the European Union and China
concerning the correct translation into English of SMST's request to exclude the cost of production in table 6-3
for Grade B sales in the European Union, and the issue of whether such request also referred to SG&A amounts
in table 6-3. (See China's first written submission, para. 112; response to Panel question No. 23, paras. 81-84;
and second written submission, para. 42; and European Union's second written submission, paras. 111-112.)
Similarly, we need not address whether or not SMST's reported coefficients, i.e. the planned internal rates used
by SMST in preparing price/cost allocations for orders, are "actual data" for purposes of Article 2.2.2 (see
China's first written submission, paras. 102, 104 and 113-116; response to Panel question No. 22, paras. 70-
72; and second written submission, paras. 34-35 and 44; and European Union's response to Panel question
No. 21, paras. 90-94; and second written submission, paras. 103-104).
138 We note that the European Union agrees with the exercise of judicial economy in these
circumstances. See European Union's response to Panel question No. 81, para. 23.

7.4.2 Fair comparison: SMST's sales of Grade C
7.68. The European Union claims that China acted inconsistently with Article 2.4 of the Anti-
Dumping Agreement because China did not establis h the existence of a margin of dumping for
SMST on the basis of a fair comparison between the export price and the normal value for
Grade C.139 China asks the Panel to reject the European Union's claim.
7.4.2.1 Relevant WTO provision
7.69. Article 2.4 of the Anti-Dumping Agreement provides in relevant part:
A fair comparison shall be made between th e 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 made 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 characteristics, and any other differences which are also
demonstrated to affect price comparability. … 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. (footnote omitted)
7.4.2.2 Main arguments of the parties
7.4.2.2.1 European Union
7.70. The European Union contends that, when calculating the normal value for Grade C,
MOFCOM failed to account for differences in physical characteristics between certain goods sold in
the European Union and goods exported to China. The European Union submits that, as explained
by SMST, "[l]arge differences in tube outer diameter … affected price comparability" because
"[t]hin diameter tube requires more extensive rolling/drawing, resulting in higher costs of
production and prices", and "[t]hin diameter tubes also cannot be used in a primary boiler system
but rather are used in secondary systems such as measuring temperatures or controlling
valves".
140 The European Union argues that it was not appropriate for China to include certain
sales of thinner tubes, which were designed and produced for secondary systems, in calculating
the normal value for Grade C, because such sales are not comparable, without adjustment, to the
Grade C primary boiler tube exported to China. 141 By doing so, the European Union submits that
China's comparison of export prices and domestic prices included different product mixes. The
European Union contends that China failed to take any steps to control for differences in physical
characteristic affecting price comparability, or ma ke the necessary adjustments in order to ensure
a fair comparison.
142
7.4.2.2.2 China
7.71. China submits that, in order to minimize the need for adjustments, "MOFCOM requested
[SMST] … to list its own product types … [and] used these product types to carry out the
comparison under Article 2.4 [of the Anti-Dumping Agreement]".
143 China contends that SMST
initially stated, through its questionnaire responses and supporting documents, that there were no
physical differences affecting price comparability between Grade C exported to China and Grade C

139 European Union's first written submission, paras. 176 and 186; opening statement at the
first meeting of the Panel, para. 33; second written submission, para. 115; and opening statement at the
second meeting of the Panel, para. 76.
140 European Union's first written submission, para. 177. (See translation correction in Exhibit EU-33,
p. 17.) See also European Union's opening statement at the first meeting of the Panel, para. 33;
second written submission, para. 115; opening statement at the second meeting of the Panel, paras. 77-78;
and response to Panel question No. 79, paras. 8-9.
141 European Union's first written submission, para. 178.
142 European Union's first written submission, paras. 176 and 186; opening statement at the
first meeting of the Panel, para. 33; and second written submission, para. 115.
143 China's opening statement at the second meeting of the Panel, paras. 64 and 69-70.

sold domestically by SMST. 144 China submits that subsequently, when SMST referred to physical
differences, it did not attempt to "quantify the pr ice difference or to provide any evidence in
support of its claim", and "provided no explanation concerning the manifest contradiction between
the newly introduced claim based on physical differences and the very clear and detailed answers
in its questionnaire response, in which it stated, and repeated several times, exactly the
opposite".
145 China submits that, while SMST made several contradictory and incoherent
statements, SMST never lodged any substantiated request in relation to a fair comparison
concerning the relevant sales.146
7.4.2.3 Main arguments of third parties
7.4.2.3.1 Korea
7.72. Korea contends that the burden under Article 2.4 of the Anti-Dumping Agreement to ensure
a fair comparison does not shift to an exporter only because such exporter failed to claim that
there is a price difference between the prod ucts being compared under this provision.
147 Korea
notes that the parties in this dispute agree that SMST claimed that there were differences in
physical characteristics between certain products sold in the European Union and products
exported to China. Korea considers that "[i]f such a factual claim was raised at the time of the
investigation, through which an investigating authority could have thrown suspicion on the issue of
fair comparison, the investigating authority should have evaluated further to determine whether
the product it ha[d] chosen for the comparison was appropriate, and if it did not, the investigating
authority's obligation … under Article 2.4 … could not be deemed to have been released".
148
7.4.2.3.2 Kingdom of Saudi Arabia
7.73. Saudi Arabia submits that the adjusted values that form the basis for a determination of
dumping should depart as little as possible fr om actual prices in the markets at issue. 149 In
addition, Saudi Arabia contends that "normal value" must be specific to the exported product and
its unique product and pricing characteristics. 150 Saudi Arabia also submits that the comparison in
Article 2.4 refers to two interrelated values, and does not permit an investigating authority to
ignore any similarity or difference that might affect "comparability".
151
7.4.2.3.3 United States
7.74. The United States submits that a fair comparison, under Article 2.4 of the Anti-
Dumping Agreement, requires an investigating authority to strive to compare similar products as
well as transactions. Where the product under consideration consists of two or more significantly
diverse product models, the United States contends that an investigating authority "must conduct
an exercise such as a model matching", whereby certain imported and domestic like products are
matched "to assure accurate price comparisons within but not across relevant product
categories".
152 The United States submits that "because model matching ensures that only sales of
products with similar physical characteristics are compared to each other or necessary
adjustments for the differences are made, some sort of model matching exercise is an essential
component of establishing a fair comparison between the export price and normal value".
153

144 China's first written submission, paras. 131-155, 178, and 182; response to Panel question No. 13,
para. 48; second written submission, paras. 66-68; and opening statement at the second meeting of the Panel,
para. 65. See also SMST dumping questionnaire response (BCI), Exhibit CHN-5, pp. 6 and 9.
145 China's first written submission, para. 162. See also China's first written submission, paras. 165,
167, 179, 184, and 187; second written submission, paras. 69-70 and 81; and opening statement at the
second meeting of the Panel, para. 76.
146 China's first written submission, paras. 167 and 179; opening statement at the second meeting of
the Panel, para. 65; and comments on the European Union's response to Panel question No. 80, para. 13.
147 Korea's third-party statement, para. 8.
148 Korea's third-party statement, para. 9.
149 Saudi Arabia's third-party statement, para. 6.
150 Saudi Arabia's third-party statement, para. 7.
151 Saudi Arabia's third-party statement, paras. 8-9.
152 United States' third-party submission, para. 55.
153 United States' third-party submission, para. 55.

7.75. The United States also submits that a failure to make due allowance for differences in
physical characteristics that affect price comparability would be a breach of the obligation
contained in Article 2.4 of the Anti-Dumping Agreement.
154 The United States contends that "[i]f
an investigating authority sought … information [on differences in physical characteristics that may
affect price comparability], but an exporter or pr oducer merely identified differences in physical
characteristics … without claiming that those differences affected price, then the investigating
authority need not independently undertake an analysis of the differences in physical
characteristics to determine whether they affected price comparability".
155
7.4.2.4 Evaluation by the Panel
7.76. The main issue before the Panel is whether or not SMST actually made a request for due
allowance concerning physical differences affecting price comparability within the meaning of
Article 2.4 of the Anti-Dumping Agreement.
7.77. Article 2.4 provides that "[d]ue allowance shall be made in each case, on its merits, for
differences which affect price comparability, including differences in … physical characteristics".
The Appellate Body in EC – Fasteners stated that "[d]ifferences between products … would not
always affect price comparability and require adjustments by the authorities".
156 The
Appellate Body considered that the investigating authority may be unduly burdened if it were
required "to assess each difference in order to determine whether adjustment is needed in every
case, even without a request by the interested party".157 Yet, the Appellate Body concluded that "it
is the investigating authority's duty to review the requested adjustments in order to determine
whether any physical differences identified before it are differences that affect price comparability
within the meaning of Article 2.4".158
7.78. Concerning the methodology in Article 2.4, there is no guidance in this provision as
to how due allowance for differences affecting price comparability is to be made. 159 The Panel in
EC – Fasteners explained that "most investigating authorities either make comparisons of
transaction prices for groups of goods within the like product that share common characteristics,
or by making an adjustments for each difference affecting price comparability to either the normal
value or the export price of each transaction to be compared".
160 I n t h a t s a m e c a s e , t h e
Appellate Body later considered that:
For example, the authority may choose to make comparisons of transaction prices for
a number of groups of goods within the like product that share common
characteristics, thus minimizing the need for adjustments, or it may choose to make
adjustments for each difference affecting price comparability to either the normal
value or the export price of each transaction to be compared.
161
7.79. Turning to the facts before the Panel, we note that SMST's Questionnaire Response did not
request any adjustments for differences in physical characteristics. 162 Nevertheless, it is
undisputed that, in its comments on MOFCOM's preliminary dumping disclosure, SMST stated that

154 United States' third-party submission, para. 56. See also United States' third-party statement,
para. 20.
155 United States' third-party response to Panel question No. 5, para. 15.
156 Appellate Body Report, EC – Fasteners, para. 517.
157 Appellate Body Report, EC – Fasteners, para. 517.
158 Appellate Body Report, EC – Fasteners, para. 519.
159 Panel Reports, EC – Fasteners, para. 7.297; and EC – Tube or Pipe Fittings, para. 7.178. See also
European Union's first written submission, para. 181; and China's second written submission, paras. 61-62.
160 Panel Report, EC – Fasteners, para. 7.297. (footnote omitted)
161 Appellate Body Report, EC – Fasteners, para. 490. The panel in EC – Fasteners had a similar
understanding: "It is clear to us that investigating authorities may find the first method more practical in
certain cases, since it may minimize, or even eliminate, the need to make adjustments for each difference that
affect price comparability, which may be a difficult task. However, the authorities are free to follow the
second approach and make adjustments for each difference in physical characteristics that affects price
comparability". (footnote omitted) (Panel Report, EC – Fasteners, para. 7.297)
162 SMST dumping questionnaire response (BCI), Exhibit CHN-5, pp. 6, 9, and 10.

MOFCOM should not have included certain sales because they involved very thin tubes that are not
used in primary boiler systems.163 SMST submitted that:
These thin tubes cannot be used in the primary boiler system designed to transport
steam. Rather, they are used in secondary system such as measuring temperatures or
controlling [valves]. Also, because of their very thin dimensions, they require more
extensive rolling/drawing resulting in higher costs of production. The price of these
thin tubes can therefore not be properly compared to the price of the DMV 310N
[i.e. Grade C] tubes exported to China.164
7.80. It is also undisputed that, during verification, (i) SMST provided a diagram showing that
tubes in certain European Union sales were thinner than those sold in China and that there were
certain differences in the production process between comparatively thinner and thicker tubes;
165
and (ii) MOFCOM's officials marked such document, at the verification site, with hand-written text
that translates as: "Why SMST-I's [certain] domestic transactions … cannot be included in the
domestic sales and compared with the export sale s? Because the small tube of H310N is used for
the connection of boiler's control system".
166
7.81. With respect to Grade C, MOFCOM stated in the SMST final dumping disclosure that:
[SMST] presented evidence in the course of the verification in order to prove that the
product [in certain sales] that should be allegedly excluded has a difference with
[SMST]'s products exported to China in terms of processing technology, etc. However,
since no evidence proves that aforementioned products do not meet the specific
description of the investigated products provided for in the initiation notice, the
investigating authority decides to maintain, in the final determination, its decision in
the preliminary determination not to exclude the aforementioned … relatively small
amount transactions when determining the normal value of this grade.
167
7.82. In its comments on the final dumping disclosure, SMST stated that:
In calculating normal value for [Grade C], BOFT included [certain] EU sales of
merchandise that were not comparable to the merchandise sold for export to China. …
Large differences in tube outer diameter affected price comparability. Thin diameter
tube requires more extensive rolling/drawing, resulting in higher costs of production
and prices. Thin diameter tubes also cannot be used in the primary boiler system but
rather are used in secondary systems such as measuring temperatures or controlling
valves and therefore are sold in much smalle r quantities than normal boiler tube. This
also affects price comparability.
It is therefore not appropriate for BOFT to continue to include [certain sales] in
calculating normal value for DMV 310N [i.e. Grade C] …
This issue was thoroughly reviewed at verification. At verification, the BOFT officials
reviewed technical information concerning boiler construction, as well as technical
specifications and invoices for [certain] transactions. … The information confirmed the
difference between primary and secondary boiler systems and showed that the
secondary system tube sold … had a price per metric ton that was [higher than] the
thicker DMV 310N primary boiler tube sold in the EU and Chinese markets.

163 See SMST's comments on preliminary dumping disclosure (BCI), Exhibit EU-19, p. 3, para. 5; China's
first written submission, para. 160; and European Union's first written submission, para. 177; and
second written submission, para. 115.
164 SMST's comments on preliminary dumping disclosure (BCI), Exhibit EU-19, p. 3, para. 5.
165 See SMST-Germany verification exhibit 10 (BCI), Exhibit EU-21, p. 2; China's first written
submission, paras. 165 and 183; response to Panel question No. 14(a), para. 49; and second written
166 European Union's first written submission, footnote 194; and China's response to Panel
question No. 15(c), para. 57.
167 SMST final dumping disclosure (BCI), Exhibit EU-25, p. 3, with translations from Exhibits CHN-16,
pp. 23-24, and EU-33, p. 9.

The only reason given by BOFT in its disclosure before the final determination for
continuing to include the secondary system tube in its normal value calculation was
that SMST 'did not prove that these products do not meet the scope description of the
subject merchandise in the initiation notice.' It is however not an issue of whether
secondary system tube is included within the scope of subject merchandise but rather
whether secondary system tube can properly be compared to primary boiler tube
under Article 2.4 of the WTO Antidumping Agreement.
Article 2.4 … requires that a 'fair comparison shall be made between the export price
and the normal value' and that 'due allowance' shall be made for any 'differences
which affect price comparability,' including differences in 'physical characteristics.' As
discussed above the verified record evidence in this case demonstrates that major
differences in outer dimensions affect the price comparability of secondary system
tube and primary boiler tube, with the unit prices of secondary system tube being
[higher than] primary boiler tube. Given the fact that there were sufficient home
market sales of DMV 310N primary boiler tube for comparison with the DMV 310N
p r i m a r y b o i l e r t u b e e x p o r t e d t o C h i n a , B O F T s h o u l d h a v e e x c l u d e d t h e s e c o n d a r y
system tube sold [in the EU market] in its calculation of normal value for
DMV 310N.
168
7.83. In light of the foregoing, we consider that SMST did request an adjustment, under
Article 2.4169, to reflect physical differences affecting price comparability. 170 Although SMST had
initially reported in its questionnaire response that there were no differences affecting price
comparability, it should have been clear to MOFCOM that SMST changed its position in this regard
during the course of the investigation. In it s comments on MOFCOM's final dumping disclosure,
SMST clearly referred to differences affecting price comparability, and the obligation on MOFCOM
to ensure a fair price comparison pursuant to Arti cle 2.4. In these circumstances, we consider that
an objective and impartial investigating authority would not have "assessed the physical
differences and the information provided by SMST in this respect in the framework of exclusion
from the scope of products under consideration", as MOFCOM did.
171 At a minimum, an objective
and impartial investigating authority would have acknowledged the fact that an adjustment was
being sought, and considered whether that adjustment was warranted, and if the necessary
information had been provided.
7.84. China contends that MOFCOM should not have understood SMST to have requested any
adjustment to differences in physical characteristics because SMST did not present a substantiated
request to that effect. China submits that SMST did not attempt to quantify or explain the price

168 SMST comments on final dumping disclosure (BCI), Exhibit EU-28, pp. 2-4, with translation
correction in Exhibit EU-33, p. 18. In its final determination, MOFCOM upheld its practice in the preliminary
determination, on the basis that there was no evidence to prove that the transactions at issue involved
products that are not covered by the specific description of the productions under investigation in the initiation
notice. (See final determination, Exhibits JPN-2 and EU-30, internal page 38.)
169 China submits that (i) "[i]n SMST's Comments on Preliminary Disclosure and Comments on Final
Disclosure, SMST raised the issue of tubes of thinner diameter with more production processes, but merely
referred to Article 2.4 of the Anti-Dumping Agreement to support its exclusion claim, rather than making a
request for due allowance" (China's response to Panel question No. 15(b), para. 56); and (ii) "SMST did not
request any adjustment or an amendment to the product types used for the comparison (product types that
[SMST] had put forward itself and had used to report its transactions)". (China's response to Panel question
No. 17(a), para. 66.) As to whether China's understanding is accurate, we consider that SMST's comments on
the preliminary disclosure and on the final disclosure speak for themselves.
170 China emphasizes the contradiction between SMST's earlier statements and SMST's comments on the
preliminary disclosure and on the final disclosure. (See, e.g., China's first written submission, paras. 9, 162,
165, 179, and 184; response to Panel question No. 15(b), para. 54; second written submission, para. 84;
opening statement at the second meeting of the Panel, paras. 70-71, 74, and 76; and comments on the
European Union's response to Panel question No. 80, para. 12.) We do not consider that an interested party is
barred from making different statements throughout anti-dumping proceedings, particularly when reacting to
subsequent developments and disclosures, and when such newer statements are substantiated with proper
evidence. We understand that this is an intrinsic element of what has been described as the "dialog" between
an investigating authority and interested parties. (With respect to this "dialog", see Appellate Body Report,
171 China's response to Panel question No. 17(a), para. 65.

difference or provide any evidence suggesting that such differences had an impact on prices or
costs.172
7.85. We note that China accepts that, during verification, MOFCOM received a diagram from
SMST showing that certain tubes sold in the European Union were thinner than those sold in
China, and that there were certain differences in the production process between comparatively
thinner and thicker tubes.173 China has not shown that MOFCOM rejected SMST's request for want
of it being "substantiated". We recall that it is well established that a Member may not offer,
during WTO dispute settlement, a new rationale for its investigating authority's determinations. 174
MOFCOM's determinations must be evaluated in li ght of the rationale provided by MOFCOM during
the underlying anti-dumping proceedings. Thus, we find that China's arguments relating to such
lack of a "substantiated" request constitute ex post rationalization, which we are bound not to
consider when examining the European Union's claim at issue.
7.86. In light of the foregoing, we uphold the European Union's claim that China acted
inconsistently with Article 2.4 of the Anti-Dumping Agreement by failing to address SMST's
adjustment request under this provision with a vi ew to determining the existence of a margin of
dumping for SMST on the basis of a fair compar ison between the export price and the normal
value for Grade C.
7.4.3 Alleged failure to take into acco unt certain information provided during
verification
7.87. The European Union claims that China acte d inconsistently with Article 6.7 and Paragraph 7
of Annex I to the Anti-Dumping Agreement becaus e MOFCOM refused to take into account certain
information provided by SMST during the verification "[o]n the ground that the company did not
raise this point before the onsite verification started, the Investigation Authority decided to deny
the above request".
175 The European Union further claims that China acted inconsistently with
Article 6.8 and Paragraphs 3 and 6 of Annex II to the Anti-Dumping Agreement by failing to
comply with the requirements to apply "facts available". 176 China asks the Panel to reject the
European Union's claims.
7.4.3.1 Relevant WTO provisions
7.88. Article 6.7 of the Anti-Dumping Agreement provides:
In order to verify information provided or to obtain further details, the authorities may
carry out investigations in the territory of other Members as required, provided they
obtain the agreement of the firms concerned and notify the representatives of the
government of the Member in question, and unless that Member objects to the
investigation. The procedures described in Annex I shall apply to investigations carried
out in the territory of other Members. Subject to the requirement to protect
confidential information, the authorities shall make the results of any such
investigations available, or shall provide disclosure thereof pursuant to paragraph 9,

172 China's first written submission, paras. 162, 165, 167, 179, 184-185, and 187; responses to Panel
questions No. 14(a), paras. 49-50; No. 15(b), para. 56; and No. 15(c), para. 57; No. 16, paras. 58-63;
No. 17, paras. 64-66; second written submission, paras. 63, 69-70, 79, and 81-83 ("[SMST] did not even
attempt to demonstrate that [the physical] differences affect price comparability. The European Union cannot
point to a single piece of evidence submitted by SMST to demonstrate an impact on price comparability
(which … is a consideration separate from different prices)"); opening statement at the second meeting of the
Panel, paras. 65-67 and 76; and comments on the European Union's response to Panel questions No. 79,
paras. 7-8; and No. 80, paras. 11, 13, 15, and 17-20.
173 China's first written submission, paras. 165 and 183; response to Panel question No. 14(a), para. 49;
and second written submission, para. 81. See also SMST-Germany verification exhibit 10 (BCI), Exhibit EU-21,
p. 2
174 See e.g. Appellate Body Report, US – Tyres (China), para. 329 ("[D]uring panel proceedings a
Member is precluded from providing an ex post rationale to justify the investigating authority's
determination").
175 Final determination, Exhibits JPN-2 and EU-30, internal pages 38-39. See also SMST final dumping
disclosure (BCI), Exhibit EU-25, p. 4.
176 European Union's first written submission, paras. 98 and 109; second written submission, para. 46;
opening statement at the second meeting of the Panel, para. 36; and response to Panel question No. 82,
para. 24.

to the firms to which they pertain and may make such results available to the
applicants.
7.89. Paragraph 7 of Annex I to the Anti-Dumping Agreement provides:
As the main purpose of the on-the-spot investigation is to verify information provided
or to obtain further details, it should be carried out after the response to the
questionnaire has been received unless the firm agrees to the contrary and the
government of the exporting Member is informed by the investigating authorities of
the anticipated visit and does not object to it; further, it should be standard practice
prior to the visit to advise the firms concerned of the general nature of the information
to be verified and of any further informatio n which needs to be provided, though this
should not preclude requests to be made on the spot for further details to be provided
in the light of information obtained.
7.90. Article 6.8 of the Anti-Dumping Agreement provides:
In cases in which any interested party refuses access to, or otherwise does not
provide, necessary information within a reasonable period or significantly impedes the
investigation, preliminary and final determinations, affirmative or negative, may be
made on the basis of the facts available. Th e provisions of Annex II shall be observed
in the application of this paragraph.
7.91. Paragraph 3 of Annex II to the Anti-Dumping Agreement provides:
All information which is verifiable, which is appropriately submitted so that it can be
used in the investigation without undue difficulties, which is supplied in a timely
fashion, and, where applicable, which is supplied in a medium or computer language
requested by the authorities, should be taken into account when determinations are
made. If a party does not respond in the preferred medium or computer language but
the authorities find that the circumstances set out in paragraph 2 have been satisfied,
the failure to respond in the preferred medi um or computer language should not be
considered to significantly impede the investigation.
7.92. Paragraph 6 of Annex II to the Anti-Dumping Agreement provides:
If evidence or information is not accepted, the supplying party should be informed
forthwith of the reasons therefor, and should have an opportunity to provide further
explanations within a reasonable period, due account being taken of the time-limits of
the investigation. If the explanations are considered by the authorities as not being
satisfactory, the reasons for the rejection of such evidence or information should be
given in any published determinations.
7.4.3.2 Main arguments of the parties
7.4.3.2.1 European Union
7.93. The European Union contends that, in the context of calculating SMST's margin of dumping
for Grade B, (i) SMST submitted to the investigating authorities that certain financial expenses had
been inadvertently double-counted in the SMST dumping questionnaire response, and (ii) SMST
adduced corrected information that was duly verified. The European Union claims that China acted
inconsistently with Article 6.7 and Paragraph 7 of Annex I to the Anti-Dumping Agreement by
refusing to take into account the corrected information provided during the verification.
177 The
European Union takes issue with the fact that "[t]he only reason provided by China in the SMST
Final Disclosure and in the Final Determination for refusing to take the corrected information into
account was that SMST did not raise this point before the verification started".178

177 European Union's first written submission, paras. 98-99 and 109.
178 European Union's second written submission, para. 46. See also European Union's first written
submission, paras. 99-100; responses to Panel questions No. 26, para. 96; No. 27, para. 97; and No. 82,

7.94. In addition, the European Union claims that China acted inconsistently with Article 6.8 and
Paragraphs 3 and 6 of Annex II to the Anti-Dumping Agreement because China failed to take into
account all information pertaining to the determination of SMST's margin of dumping which was
(i) verifiable; (ii) appropriately submitted so that it could have been used in the investigation
without undue difficulties, and (iii) supplied in a timely fashion.
179 The European Union contends
that "the question of what information an investigating authority must rely on is closely linked to
the related question of the circumstances in which an investigating authority may rely on other
information, which is essentially what China did in this case when it relied on the erroneous and
uncorrected data relating to financial expenses".
180 The European Union submits that it "makes the
same claim with respect to the information contained in" certain of SMST's questionnaire
responses and verification exhibits.
181
7.4.3.2.2 China
7.95. China contends that there was no double-counting in the dumping margin determination
and that, accordingly, the claims lack any factual basis and that the alleged procedural violation
did not and could not have had any adverse impact on the European Union, as there is no case of
nullification or impairment of the European Union's rights. 182 In addition, China argues that
Article 6.7 and Paragraph 7 of Annex I to the Anti-Dumping Agreement do not mandate
investigating authorities to accept all information presented during a verification visit. 183 China
submits that these provisions grant an investigating authority the right to conduct an on-the-spot
verification in the territory of the exporting Me mber under certain circumstances. China contends
that such provisions do not, by contrast, impose any obligation to conduct any verification or
accept all information. According to China, the fact that the purpose of a verification visit is to
"verify information provided or to obtain further details" does not imply that an investigating
authority is compelled to verify information provided or to obtain further details.
184 Moreover,
China submits that Article 6.8 and Annex II of th e Anti-Dumping Agreement are irrelevant to the
matter at issue because MOFCOM did not make any determinations on the basis of "facts
available".
185 Finally, China submits that European Union's claims concerning the SMST's
questionnaire responses and verification exhibits are difficult to understand and fall short of
making a prima facie case.186
7.4.3.3 Main arguments of third parties
7.4.3.3.1 Turkey
7.96. Turkey submits that "there should be no legal responsibility on side of the authority to
accept or consider any newly prepared informat ion [submitted at verification] which profoundly
alters the basis of dumping calculation, namely no rmal value, export price and cost of production,
or explanations that extensively modify the answers in the questionnaire".
187
7.4.3.3.2 United States
7.97. The United States agrees with the European Union that an investigating authority is "not
entitled to reject information on the sole ground that such information was proffered at

para. 24; second written submission, para. 49; and opening statement at the second meeting of the Panel,
para. 37. See also SMST final dumping disclosure (BCI), Exhibit EU-25, p. 4; SMST comments on final dumping
disclosure (BCI), Exhibit EU-28, p. 2; and final determination, Exhibits JPN-2 and EU-30, internal pages 38-39.
179 European Union's first written submission, paras. 98 and 109; second written submission, para. 46;
and response to Panel question No. 82, para. 24.
180 European Union's first written submission, para. 103.
181 European Union's first written submission, para. 108.
182 China's first written submission, paras. 207-209; and response to Panel question No. 27, para. 89.
183 China's first written submission, paras. 218-222; response to Panel question No. 26, para. 88;
second written submission, para. 88; comments on the European Union's response to Panel question No. 82,
para. 28; and opening statement at the second meeting of the Panel, para. 44.
184 China's first written submission, paras. 216-222.
185 China's first written submission, para. 227; second written submission, para. 89; and opening
statement at the second meeting of the Panel, para. 46.
186 China's first written submission, paras. 197 and 229-231.
187 Turkey's response to Panel question No. 6.

verification".188 Nevertheless, the United States submits that on-the-spot investigations are not
opportunities for interested parties to submit a significant amount of new information.189 According
to the United States, "if a firm always could provide substantial corrections once it realized what
specific information an investigating authority was verifying during an on-the-spot investigation,
the effectiveness of the on-the-spot investigatio n would be undermined … [T]he flexibility to
accept clerical corrections should not be construed such that the firm could be less motivated to
prepare carefully its data submissions".
190 Finally, the United States submits that Article 6.8 and
Annex II of the Anti-Dumping Agreement provide re levant context to the consideration of what
information must be accepted by the investigating authority.191
7.4.3.4 Evaluation by the Panel
7.98. Although the European Union refers to an actual occurrence of double-counting, we
understand that the European Union is rather concerned with the potential for double-counting
that results from the fact that financial expe nses of the headquarters were included in
both table 6-6 and table 6-8.
192 We note that table 6-8 was not used by MOFCOM in its
SG&A determination for Grade B in the initial investigation, because MOFCOM relied instead on
table 6-3.193 However, we understand that the European Union is concerned that, when
implementing the Panel's possible findings regarding its Article 2 claims against the SGA
determined by MOFCOM for Grade B, MOFCOM will rely on table 6-8, which could then result in
double-counting of the relevant financial expens es, since they could be imported into the SGA
amount from both table 6-6 and table 6-8. For th is reason, the European Union seeks a finding by
the Panel that MOFCOM committed a procedural error in failing to allow SMST to rectify certain
information only on the basis that SMST did not raise this matter before the verification started. 194
Thus, with respect to the European Union's first set of claims, the issue before the Panel is whether
MOFCOM acted inconsistently with Article 6.7 and Paragraph 7 of Annex I to the Anti-
Dumping Agreement by rejecting SMST's rectification only on the basis that SMST did not raise
this matter before the verification started.195

188 United States' third-party submission, para. 12.
189 United States' third-party submission, para. 7; and response to Panel question No. 6, para. 17.
190 United States' third-party submission, para. 11.
191 United States' third-party submission, para. 9. See also United States' response to Panel
question No. 6, para. 16.
192 European Union's responses to Panel questions No. 27, paras. 97-98; and No. 28, para. 99; and
second written submission, para. 47. See also China's first written submission, para. 209 ("This amount
corresponds to the data in Table 6-6 … and ordinari ly already includes the financial expenses of the
headquarters. … [A]mount reported for financial expenses of the headquarters in Table 6-8").
193 China's first written submission, paras. 207-208; and response to Panel question No. 27, para. 90.
194 European Union's first written submission, para. 100 ("[T]he specific matter in dispute and placed
before this Panel by the European Union is a procedural issue. The procedural issue is whether or not China
acted inconsistently with the Anti-Dumping Agreement when, in the measure at issue, it refused to take the
corrected information into account only on … the narrow procedural ground that SMST did not raise this point
before the verification started."); response to Panel questions No. 26, para. 96; No. 27, para. 97; No. 29,
para. 102; and No. 82, para. 24; second written submission, paras. 46 and 48-49; opening statement at the
second meeting of the Panel, para. 37; and comments on China's response to Panel question No. 83, para. 3.
195 We note that the European Union and China disagree on whether double counting of certain financial
expenses has occurred. (See European Union's first written submission, para. 99; response to Panel questions
No. 27, para. 97; No. 28, para. 99; and No. 29, paras. 101-102; and comments on China's response to Panel
question No. 83, para. 3; and China's first written submission, para. 209; second written submission, paras. 86
and 91; opening statement at the second meeting of the Panel, paras. 44 and 49-50; and responses to Panel
questions No. 27, para. 89; and No. 83, para. 7 ("[T]he absence of double-counting of financial expenses is not
limited to table 6-5. There is equally no double-counting of financial expenses in any other table, given that
none of the tables include the same financial expenses twice.") In light of the issue before the Panel, we need
not address the question of whether financial expenses of the headquarters were double-counted.

7.99. We note that SMST's rectification request relates to tables 6-6 and 6-8. 196 It is undisputed
that the detailed information concerning SG&A in tables 6-6 and 6-8 is summarized in table 6-5. 197
In our view, there is therefore a clear and direct connection between the information in tables 6-6
and 6-8, on the one hand, and the information in table 6-5, on the other hand. We also note that
in MOFCOM's notification to SMST prior to verification, MOFCOM requested SMST to prepare
documents relating inter alia to table 6-5. 198 Thus, in our view, SMST's rectification request
(concerning tables 6-6 and 6-8) has a clear and direct connection to the information (concerning
table 6-5) expressly requested by MOFCOM to be verified during the on-the-spot investigation.
Recalling that Paragraph 7 of Annex I of the Anti-Dumping Agreement provides that "the main
purpose of the on-the-spot investigation is to verify information", we consider that an investigating
authority would normally welcome the rectification of information in these circumstances. On this
basis, we consider that MOFCOM acted contrary to the main purpose of the on-the-spot
investigation when it expressly requested SMST to prepare documents relating to table 6-5, but
later rejected information which was potentially relevant to such table on the sole ground that
SMST did not raise this matter before the verification started.
7.100. We agree with China that Article 6.7 and Paragraph 7 of Annex I to the Anti-
Dumping Agreement "contain no obligation for an investigating authority to accept all information
presented to it during the verification visit".
199 As indicated by the United States, an authority does
not necessarily have to accept new information during verification. 200 Nor does it have to accept
voluminous amounts of corrected information. Late in the investigation, such information probably
could not be used without undue difficulties by the authority. However, we understand that the
present case simply concerns the rectification of one piece of information: the financial expenses
of the headquarters. There seems to be no valid reason why MOFCOM did not accept the rectified
information from SMST, particularly since MOFCOM appears to have understood the matter
explained by SMST concerning the financial expens es at issue (as evidenced by the verification
disclosure
201).
7.101. In light of the foregoing, we uphold the European Union's procedural claim that China
acted inconsistently with Article 6.7 and Paragraph 7 of Annex I to the Anti-Dumping Agreement
by rejecting SMST's rectification at issue only on the basis that it was not provided prior to
verification.
7.102. Turning to the European Union's claims under Article 6.8 and Paragraphs 3 and 6 of
Annex II to the Anti-Dumping Agreement, the European Union suggests that MOFCOM applied
"facts available" when MOFCOM "relied on the erroneous and uncorrected data relating to financial
expenses".
202 However, China submits that "MOFCOM di d not make any determinations on the
basis of 'facts available'" and that "the situation at hand simply does not fall within the scope of
the Article 6.8 and Annex II of the Anti-Dumping Agreement". 203 The European Union has pointed
to no evidence on the Panel record to demonstrate otherwise. In addition, we note that China
submits that "MOFCOM did not rely on the SG&A reported in table 6-5 [rather] MOFCOM used
the … SG&A data provided by SMST in table 6-3". 204 We recall our conclusion above that it appears
there was a disagreement between MOFCOM and SMST concerning the use of tables 6-3 and 6-5
with regard to the proper SG&A amount for MOFCOM's constructed normal value. 205 Thus, we fail
to see how this may be considered as a determination on the basis of "facts available". In our
view, MOFCOM based its determination on evidence contained in the records, which at that time

196 See SMST verification disclosure (BCI), Exhibit EU-23, p. 3; and SMST comments on final dumping
disclosure (BCI), Exhibit EU-28, p. 2.
197 China's first written submission, paras. 198 and 209; responses to Panel questions No. 27, para. 89;
and No. 83, paras. 9-12; and second written submission, para. 91; and European Union's responses to Panel
198 SMST verification notification, Exhibit CHN-11, p. 3. See also China's first written submission,
para. 202.
199 China's first written submission, para. 218.
200 United States' third-party submission, paras. 7 and 12.
201 SMST verification disclosure, Exhibit EU-23, p. 3. (SMST "provided the relevant materials supporting
that certain financial expenses were double counted".)
202 European Union's first written submission, para. 103.
203 China's first written submission, paras. 227-228.
204 China's response to Panel question No. 27, para. 90. See also China's first written submission,
para. 207.
205 See para. 7.66. above.

MOFCOM considered were the correct facts submitted by SMST.206 As MOFCOM did not apply "facts
available" in making the determination at issue, we see no factual basis for the European Union's
claims under Article 6.8 and Paragraphs 3 and 6 of Annex II. Thus, we reject these claims
accordingly.
207

206 However, we recall our conclusion above that MOFCOM made an improper assumption in its
determination. See para. 7.66. above.
207 The European Union also submits that it "makes the same claim with respect to the information
contained in" certain of SMST's questionnaire responses and verification exhibits. (European Union's first
written submission, para. 108.) China submits that it is difficult to comprehend the European Union's claim,
and that this vague "discussion" falls short of making a prima face case. (China's first written submission,
paras. 229-231.) We note that the European Union has not further explained its claim at issue. Thus, we are
unable to understand the European Union's claim with respect to these measures. Thus, we reject these claims
accordingly.
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7.5 MOFCOM's determination that subject imports caused material injury to the
domestic industry
7.103. The complainants, Japan and the European Union, make a number of claims concerning
MOFCOM's determination that dumped imports from Japan and the European Union caused
material injury to the domestic industry. First, they claim that MOFCOM's consideration of the price
effects of subject imports is inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement.
Second, they claim that MOFCOM's assessment of the impact of the dumped imports on the state
of the domestic industry is inconsistent with Ar ticles 3.1 and 3.4 of the Anti-Dumping Agreement.
Third, they claim that MOFCOM's determination that there is a causal link between dumped
imports and material injury to the domestic industry is inconsistent with Articles 3.1 and 3.5 of the
Anti-Dumping Agreement.
208
7.104. China asks the Panel to reject each of the complainants' claims.
7.5.1 Whether MOFCOM's consideration of the price effects of subject imports is
inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement
7.5.1.1 Introduction
7.105. The complainants submit that MOFCOM's consideration of price undercutting in respect of
subject imports is inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement. First, the
complainants contend that MOFCOM's analysis of the price effects of Grade C subject imports is
analytically and factually flawed. The complainants contend in this regard that MOFCOM improperly
compared the price of Grade C subject imports with the price of Grade C domestic products,
despite significant differences between the quantiti es of imported and domestic product sold. The
complainants also assert that MOFCOM improperly found price undercutting simply on the basis
that the price of Grade C subject imports was less than the price of domestic Grade C products,
without any consideration of evidence suggesting that Grade C subject imports did not have any
price undercutting effect on Grade C domestic products. Second, the complainants submit that
MOFCOM improperly extended its finding of price undercutting in respect of Grades B and C to the
like domestic product as a whole, including Grade A.
7.5.1.2 Relevant provisions
7.106. Article 3.1 of the Anti-Dumping 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.
7.107. Article 3.2 of the Anti-Dumping Agreement provides:
With regard to the volume of the dumped 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.

208 In its reply to Panel question No. 78, the European Union submitted additional BCI concerning the
volume and pricing of EU exports to China during the investigation period. The European Union asserted that
the additional BCI "would be of assistance to it in pursuing its injury claims". Since the European Union did not
explain which particular injury claims the additional BCI related to, or how that BCI would support those
claims, the Panel did not rely on that additional BCI in making its findings.
WT/DS454/R • WT/DS460/R

7.5.1.3 Alleged flaws in MOFCOM's consider ation of price undercutting in respect of
Grade C
7.5.1.3.1 The difference between the volume of Grade C subject imports and the volume
of domestic Grade C products
7.5.1.3.1.1 Main arguments of the parties
Japan and the European Union209
7.108. The complainants submit that MOFCOM improperly compared the price of imported
Grade C with the price of domestic Grade C for 2009 and 2010, despite its finding that there was a
"huge difference in quantity" between the volume s of imported and domestic products during
these years. The complainants contend that the significant difference meant that the relevant
import and domestic prices were not comparable. They assert that the price comparison
undertaken by MOFCOM therefore lacked objectivit y and provided no basis for establishing the
existence of price undercutting, contrary to Articles 3.1 and 3.2 of the Anti-Dumping Agreement.
7.109. The complainants observe that the Appellate Body in China – GOES stated that "an
investigating authority's consideration under Article[] 3.2 … must be reflected in relevant
documentation, such as an authority's final determination, so as to allow an interested party to
verify whether the authority indeed considered such factors".
210 The complainants submit that
MOFCOM failed to explain how it considered that these import and domestic prices could properly
be considered comparable, despite the significant difference in quantity. The complainants contend
that it was therefore impossible to verify ho w MOFCOM considered the existence of price
undercutting in respect of Grade C, with the result that its consideration of that matter is
inconsistent with Article 3.2 of the Anti-Dumping Agreement.
China
7.110. China contends that the methodology adopted by MOFCOM to take into account the
quantity differences in respect of Grade C was clearly set out in the Final Determination and other
documents. China submits that the complainants' claims thus lack any factual basis.
211 China
further asserts that there is no legal basis in Articles 3.1 or 3.2 for any claim that MOFCOM failed
to explain how it accounted for the relevant differences. China contends that there is no obligation
to explain in Articles 3.1 or 3.2. China contends that the obligation to explain is rather found in
procedural provisions of the Anti-Dumping Agreement, such as Article 12.2.2. China contends that
the complainants' reliance on the finding of the Appellate Body in China – GOES is inapposite,
since that finding only means that the fact that the authority has considered price effects needs to
be reflected in the relevant documentation.
212 China explains that the complainants limit
themselves to alleging that MOFCOM provided no explanation of the methodology followed, but
notes that, in any event, MOFCOM had discretion regarding the methodology to follow in taking
into account the quantitative difference, and asserts that MOFCOM applied its methodology in an
objective way.
213 In addition, China maintains that MOFCOM ensured that Grade C subject import
prices could properly be compared with Grade C domestic prices, without any risk of price
distortions resulting from the relevant quantitative difference. 214 China contends that, under
Article 3.2, the relevant element of a price effects consideration is the perception by the market215,
and that quantitative differences between the tota l import volume and the total domestic sales do

209 The complainants' first written submissions are virtually identical in respect of their claims against
MOFCOM's injury determination. Accordingly, we generally do not consider it necessary to distinguish between
the complainants when summarizing their main arguments in support of these claims.
210 Appellate Body Report, China – GOES, para. 131; Panel Report, Thailand – H-Beams, para. 7.161;
and Panel Report, Korea – Certain Paper, para. 7.253. (emphasis omitted)
211 China's first written submission, paras. 268-272.
212 China's first written submission, para. 274.
213 China's first written submission, para. 277. See also China's reply to Panel question No. 33,
para. 104.
214 China's reply to Panel question No. 33, para. 103.
215 China's second written submission, para. 132.
WT/DS454/R • WT/DS460/R

not "have a perceived importance to customers" (while a quantitative difference may impact costs,
which could mandate an adjustment in a dumping determination).216
7.5.1.3.1.2 Evaluation by the Panel
7.111. We begin by addressing China's argument that the complainants' claims lack any basis in
law.
217 According to China, the complainants' claims concern the alleged failure by MOFCOM to
explain its treatment of the difference in quantities, rather than the substance of how MOFCOM
actually addressed that difference with a view to ensuring price comparability. China submits that
there is no obligation to explain in Articles 3.1 or 3.2 of the Anti-Dumping Agreement.
7.112. We are not persuaded by China's understan ding of the scope of the complainants' claims.
We acknowledge that the complainants did refer in their first written submissions
218 to the
Appellate Body's finding in China – GOES that "an investigating authority's consideration under
Article[] 3.2 … must be reflected in relevant documentation …". 219 However, we do not understand
the complainants' claim to principally concern merely whether or not MOFCOM adequately
explained its treatment of the difference in qu antity between imports and domestic sales of
Grade C. Rather, we understand their claim to co ncern whether MOFCOM's determination in this
regard was, as explained, consistent with the requirements of Article 3.2. We note that the
heading of the relevant sub-section in the European Union's first written submission reads "China's
analysis of price-undercutting with respect to Grade C is flawed".
220 The relevant heading in
Japan's first written submission reads "MOFCOM's analysis of the price effects of imported Grade C
is analytically and factually flawed".
221 At paragraph 85 of its oral statement at the Panel's first
substantive meeting with the parties, the European Union asserted that the limited number of
domestic Grade C transactions provided "an unreliable basis for any price undercutting
conclusions". For its part, Japan asserted that "[w] ithout a meaningful quantity of both import and
domestic sales for a given product, it is difficult to see how any objective price undercutting
conclusion could be reached with respect to that product". 222 In its oral statement at the first
substantive meeting, Japan stated that "the trivial quantity of domestic sales of [Grade] C in both
2009 and 2010 should indicate that those domestic sales may have been one-off outlier
transactions made for any variety of reasons, and therefore not comparable with such a large
quantity of imports sales of [Grade] C …".
223 In light of these considerations, we understand the
complainants' claim to concern the substantive issue of comparability, to which we now turn.
7.113. Although investigating authorities have discretion in how they consider price effects in the
context of Article 3.2, this discretion is not unlimited. Given the overarching requirements of
Article 3.1, an investigating authority's price effects analysis must involve an "objective
examination", and must be based on "positive evidence". This means inter alia that, whenever an
investigating authority's consideration of the price effects of imports involves a comparison
between imported and domestic prices, the au thority must ensure that such prices are
comparable.
224 In the words of the China – GOES panel, "[a]s soon as price comparisons are
made, price comparability necessarily arises as an issue". 225 China has not expressly denied this.
China acknowledges that MOFCOM verified whether such quantitative difference might "preclude[]
a meaningful price effect consideration". 226 In addition, MOFCOM referred to "the huge difference
in quantity", and stated that such difference "should be taken into consideration when making
[the] price comparison".227 We similarly consider that significant differences in quantities are likely

216 China's reply to Panel question No. 33, para. 105.
217 China's first written submission, para. 273.
218 Japan's first written submission, para. 132. The European Union's first written submission, para. 229.
219 Appellate Body Report, China – GOES, para. 131. (emphasis omitted)
220 European Union's first written submission, section VIII.B.1.
221 Japan's first written submission, section V.A.1.b.i.
222 Japan's oral statement at the first substantive meeting with the parties, para. 73.
223 Japan's oral statement at the first substantive meeting with the parties, para. 73.
224 Appellate Body Report, China – GOES, para. 200.
225 Panel Report, China – GOES, para. 7.530, upheld in Appellate Body Report, China – GOES,
para. 200.
226 China's first written submission, para. 262.
227 Final Determination, Exhibit JPN-02, page 51. Translation amended by Exhibit CHN-16. In the
absence of any objection by the complainants to the amended translation proposed by China, we proceed on
the basis of that amended translation.
WT/DS454/R • WT/DS460/R

to have an impact on comparability, and thus, if there are such differences, they must be looked
into in considering price effects.228
7.114. China submits that MOFCOM properly en sured price comparability, notwithstanding the
volume difference at issue, by ascertaining that "the difference was similar" in both 2009
and 2010".229 According to China, this provided the basis for MOFCOM to proceed with its price
comparison "without risking the distortion of any considerations by the quantitative differences".230
In this regard, we note that MOFCOM did find th at "there was a similar quantitative difference"
between the volume of Grade C imports and the volume of Grade C domestic sales for both 2009
and 2010.231 However, there is no explanation by MOFCOM of how this fact is relevant to ensuring
price comparability in light of the differences in quantities. Nor is there any explanation of how this
fact eliminates the risk of distortion, as sugge sted by China. The risk of a distorted price
comparison results from the fact that there is a significant difference between the volumes of the
products whose prices are being compared, which may have an effect on their prices. The fact that
such a difference remains constant over a period of time does not address the possible distortion
of the comparison. It simply means that if there is any distortion, it continues for that period.
Accordingly, in the absence of additional expl anation or clarification by MOFCOM, we are not
persuaded that MOFCOM properly established that, notwithstanding the significant difference
between the quantities of Grade C imports and the quantity of Grade C domestic sales, the prices
of imports and domestic product were comparable for the purpose of considering price
undercutting by imports of Grade C.
7.115. For the above reasons, we uphold the complainants' claims that MOFCOM's failure to
properly account for differences in quantities when comparing the price of Grade C subject imports
with the domestic Grade C price is inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping
Agreement.
7.5.1.3.2 Whether Grade C subject import s had any price undercutting effect on
domestic Grade C products
7.5.1.3.2.1 Main arguments of the parties
Japan and the European Union
7.116. The complainants submit that a determin ation that price "undercutting" exists cannot be
based solely on the existence of a mathematical difference between import and domestic prices.
They submit that, pursuant to Article 3.2, an investigating authority must also consider whether
any price difference enabled subject imports to have a price undercutting effect on domestic
prices.
7.117. The complainants contend that their position is based on: the text of Article 3.2, including
the phrase "the effect of the dumped imports on prices" and relevant definitions of the term
"undercutting"; its context, including Articles 3.1 ("the effect of the dumped imports on prices in
the domestic market for like products") and 3.5 ("the effects of dumping, as set forth in
paragraphs 2 and 4"); the purpose of Article 3 (to ensure that anti-dumping measures are
imposed only where dumped imports are found to be causing injury through a "logical progression"
of inquiry); and previous panel and Appellate Body reports.
232 Concerning dictionary definitions of
the term "undercut", the complainants suggest that the relevant definitions of "undercut" are:
"[t]o supplant … by selling at lower prices" or "[t]o render unstable; to render less firm, to
undermine".233 According to the complainants, these definitions indicate that, for a proper price

228 Contextual guidance on this matter is afforded by Article 2.4 of the Anti-Dumping Agreement, which
provides that due allowance shall be made, on its merits, for "differences which affect price comparability,
including differences in … quantities". We observe th at the Appellate Body referred to Article 2.4 when
confirming the panel's finding in China – GOES that "[a]s soon as price comparisons are made, price
comparability necessarily arises as an issue" (Appellate Body Report, China – GOES, para. 200, footnote 331,
229 China's reply to Panel question No. 33, para. 103.
230 China's reply to Panel question No. 33, para. 103.
231 Final Determination, Exhibit JPN-02, pp. 53 and 54.
232 Japan's second written submission, paras. 17-28. European Union's oral statement at the
first substantive meeting, paras. 57-84, and reply to Panel question No. 31.
233 The Oxford English Dictionary, OED Online, Oxford University Press, accessed 18 March 2014.
WT/DS454/R • WT/DS460/R

"undercutting" finding to be made, the mere fact that the import price is lower than the domestic
price does not suffice. They submit that an investigating authority must also show that dumped
imports replaced domestic like products and thereby resulted in a loss of domestic sales volumes,
or at least placed downward pressure on domestic prices. Concerning precedent, the complainants
refer in particular to the finding by the Appellate Body in China – GOES that Article 3.2 requires
the investigating authority to consider "domestic prices in conjunction with subject imports", or
"the relationship between subject imports and prices of like domestic products", to determine
whether dumped imports provide "explanatory force" for the occurrence of effects on the prices of
the domestic like product.
234 The European Union relies on the Appellate Body's findings to argue
that an investigating authority is required to consider whether a first variable – that is, a price
differential per se – has explanatory force for the occurrence of a second variable – that is, price
undercutting.
7.118. The complainants contend that there was no basis for MOFCOM to conclude that Grade C
subject imports had a price undercutting effect on domestic Grade C products, because subject
import prices remained higher than domestic prices until the latter increased by 112.80%. The
complainants observe in this regard that, according to MOFCOM's own analysis, in 2010 the price
of the domestic Grade C increased by 112.80% from 2009, while the price of the subject imports
of the same grade decreased by 36.32%. The complainants assert that the dynamic relationship of
the prices of both imported and domestic products shows that subject imports of Product C did not
have a significant undercutting effect on the prices of the corresponding like domestic products.
The complainants assert that MOFCOM failed to ta ke account of the increase in domestic price of
Grade C in its price undercutting consideration. The complainants also assert that the vast
difference in import and domestic price levels and the inverse price movements suggest that the
domestic sales of Grade C were not in competition with imports of Product C during the POI in the
Chinese market. They refer to record evidence showing that domestic importers unanimously
considered the subject imports and domestic like products not to be substitutable.
235 The
complainants assert that, in these circumstances, there was no basis for MOFCOM to conclude that
subject imports of Grade C drove down domestic Gr ade C prices, or otherwise caused any tangible
decrease, or prevented any increase, in domestic Grade C prices.236
China
7.119. China considers that Article 3.2 allows an investigating authority to "presume conclusively"
that there is price undercutting within the meanin g of Article 3.2 whenever dumped import prices
are below comparable domestic prices. 237 According to China, no additional "effect" consideration
is required since price undercutting is in itself an effect. China asserts that the complainants only
refer to one of the definitions of the term "undercut" given in the Oxford English Dictionary. China
notes that the dictionary also defines the term "undercut" as meaning to "sell at lower prices
than".
238 Further, China contends that if an investigating authority were required by Article 3.2 to
show that a price differential had the effect of depressing or suppressing domestic prices, the
Article 3.2 distinction between price undercutting on the one hand, and price depression and price
suppression on the other, would be undermined.
7.120. China also submits that MOFCOM properly found, in the context of its like product
determination, that Grade C imports and Grade C domestic products are substitutable, and do
compete with one another. 239 China contends that MOFCOM properly found that domestically
produced Grade C is "like" imported Grade C. In this respect, China considers that a likeness
finding does not necessarily imply that all domestic products within the basket of "like products"
are "like" all imported products. However, China considers that such finding does imply a
"likeness" between the domestic product type that was explicitly found to be "like" the

234 The European Union refers to Appellate Body Report, China – GOES, para. 138.
235 See Minmetals Questionnaire Response, Exhibit JPN-13, questions 19, 22, 31; Shanghai Boiler Works
Questionnaire Response, Exhibit JPN-14, questions 19, 22, 31; Babcock & Wilcox Questionnaire Response,
Exhibit JPN-15, questions 19, 22, 31; Shanghai Foreign Trade Questionnaire Response, Exhibit JPN-16,
questions 19, 22, 31; Harbin Boiler Questionnaire Response, Exhibit JPN-17, questions 19, 22, 31.
236 Japan's second written submission, para. 37, European Union's second written submission,
para. 170.
237 China's second written submission, para. 120.
238 China's reply to Panel question No. 47, para. 158.
239 China's second written submission, paras. 92-115.
WT/DS454/R • WT/DS460/R

corresponding product type of the product under consideration. 240 China asserts that such
determination of likeness inevitably implies that there is a competitive relationship between
imported Grade C and domestically produced Grade C
241, relying on the Appellate Body's findings
in previous disputes. 242 China contends that because the complainants have not challenged
MOFCOM's likeness determination under Article 2. 6 of the Anti-Dumping Agreement, they are
precluded from challenging the existence of co mpetition between Grade C subject imports and
Grade C domestic products in the context of Articles 3.1 and 3.2.
7.5.1.3.2.2 Evaluation by the Panel
7.121. The main issue raised by the complainants' claims is whether MOFCOM was precluded by
Articles 3.1 and 3.2 of the Anti-Dumping Agreemen t from finding price undercutting purely on the
basis that the price of imported Grade C was lower than the price of domestic Grade C, or whether
MOFCOM was required by Article 3.2 to consider if Grade C subject imports had a price
undercutting effect on the price of domestic Grade C, in the sense of placing downward pressure
on those domestic prices by being sold at lower prices.
7.122. Article 3.1 of the Anti-Dumping Agreemen t sets forth an overarching requirement that a
determination of injury shall involve inter alia an objective examination of "the effect of the
dumped imports on prices in the domestic market for like products". In respect of price
undercutting, Article 3.2 provides that "[w]ith 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 wi th the price of a like product of the importing
Member".
7.123. We note that the complainants rely on the Appellate Body's discussion of Article 3.2 in
China – GOES to argue that dumped imports must be shown to have "explanatory force" for the
price undercutting effect on domestic like products.
243 The complainants refer in particular to
paragraphs 135 and 136 of the Appellate Body's report in this regard. Since we shall refer to those
Appellate Body findings to guide us in our own in terpretation of Article 3.2 of the Anti-Dumping
Agreement, we reproduce them here:
135. The definition of the word "effect" is, inter alia , "something accomplished,
caused, or produced; a result, a consequenc e " . T h e d e f i n i t i o n o f t h i s w o r d t h u s
implies that an "effect" is "a result" of something else. Although the word "effect"
could be used independently of the factors that produced it, this is not the case in
Articles 3.2 and 15.2. Rather, these provisions postulate certain inquiries as to the
"effect" of subject imports on domestic pr ices, and each inquiry links the subject
imports with the prices of the like domestic products.
136. First, an investigating authority must consider "whether there has been a
significant price undercutting by the [dumped or subsidized ] imports as compared
with the price of a like product of the importing Member". Thus, with regard to
significant price undercutting, Articles 3.2 and 15.2 expressly establish a link between
the price of subject imports and that of like domestic products, by requiring that a
comparison be made between the two. Second, an investigating authority is required
to consider "whether the effect of such [dumped or subsidized] imports" on the prices
of the like domestic products is to depress or suppress such prices to a significant
degree. By asking the question " whether the effect of " the subject imports is
significant price depression or suppression, the second sentence of Articles 3.2 and
15.2 specifically instructs an investigating authority to consider whether certain price
effects are the consequences of subject imports. Moreover, the syntactic relation
expressed by the terms " to depress prices" and "[ to] prevent price increases" is of a
subject (dumped or subsidized imports) doing something to an object (domestic
prices). The language of Articles 3.2 and 15.2 thus expressly links significant price
depression and suppression with subject imports, and contemplates an inquiry into

240 China's first written submission, para. 302.
241 China's second written submission, para. 94.
242 China's first written submission, paras. 307-308.
243 Japan's reply to Panel question No. 31, para. 19. European Union's oral statement at the
first substantive meeting, paras. 67-77.
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the relationship between two variables, name ly, subject imports and domestic prices.
More specifically, an investigating authority is required to consider whether a first
variable—that is, subject imports—has explanatory force for the occurrence of
significant depression or suppression of a second variable—that is, domestic prices.
244
7.124. We understand the Appellate Body to have considered that, with regard to price effects
generally, Article 3.2 of the Anti-Dumping Ag reement is concerned with considering the
relationship between subject imports and the price of like domestic products. In respect of price
depression or price suppression, the Appellate Body explained that such a relationship is addressed
when the investigating authority considers whether the first variable, subject imports, has
"explanatory force" for the second variable, domestic prices. In respect of price undercutting,
however, the Appellate Body observed that Arti cle 3.2 establishes a "link" (i.e. relationship)
between the price of subject imports and that of like domestic products by "requiring that a
comparison be made between the two". The Appe llate Body referred simply to a comparison
between subject import prices and domestic prices . There is no suggestion by the Appellate Body
that, in respect of price undercutting, one variable must be shown to have "explanatory force" for
the second. Indeed, although the Appellate Body repeated the phrase "explanatory force"
numerous times in its findings, at no time did it do so when addressing the requirements of
Article 3.2 in respect of price undercutting. This is consistent with the Appellate Body's express
statement that, because the two inquiries provided for in the second sentence of Article 3.2 are
separated by the words "or" and "otherwise", "the elements relevant to the consideration of
significant price undercutting may differ from those relevant to the consideration of significant
price depression or suppression".
245
7.125. In our view, the Appellate Body's approach is entirely consistent with the text of
Article 3.2. The second sentence of Article 3.2 begins "[w]ith 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 import s as compared with the price of a like product
of the importing Member" (emphasis supplied). The text therefore suggests that the consideration
of whether there "has been" a significant pric e undercutting provides the requisite insight
"regard[ing] … the effect of the dumped imports on prices", that is, whether as a matter of fact,
"undercutting" existed during the POI. The text of Article 3.2 envisages that the existence of price
undercutting (i.e. whether there "has been" price undercutting) should be established on the basis
of a comparison of subject import prices and domestic prices.
7.126. With regard to price depression and price suppression, by contrast, the text of Article 3.2
requires more than a simple comparison of the prices of two products. In this context,
investigating authorities are required to consider whether one variable, namely subject imports,
has "the effect of" depressing or suppressing a second variable, namely the domestic price
("whether the effect of such imports is otherwise to depress prices to a significant degree or
prevent price increases, which otherwise would ha ve occurred, to a significant degree") (emphasis
supplied). As observed by the Appellate Body, "[b]y asking the question ' whether the effect of' the
subject imports is significant price depression or suppression, the second sentence of Articles 3.2
and 15.2 specifically instructs an investigating authority to consider whether certain price effects
are the consequences of subject imports".
246 It is this analysis that provides the relevant insight
into the relationship between subject import and domestic prices, by revealing whether the
first variable has "explanatory force for" the second variable. However, as noted above, the text of
Article 3.2 does not require that authorities consider whether one variable has any particular effect
on, or "explanatory force for", the second vari able in the context of price undercutting. The
relevant relationship between the prices of the two products with respect to price undercutting is
the factual question of which is higher and whic h is lower. The Article 3.2 phrase "whether the
effect of" applies only in respect of price depre ssion or suppression. The text of Article 3.2 does
not refer to "whether the effect of subject imports is price undercutting". Rather, it refers simply to
whether or not "there has been" price undercutting. This is a simple factual issue - is there price
undercutting or not? – which can be answered, as Article 3.2 suggests, by a comparison of prices
for domestic and imported product. The text of Article 3.2 envisages that the existence of price
undercutting itself provides the requisite insight into the effect of the dumped imports (and the
relationship of subject import prices with domestic prices). It is such "effect[] of dumping as set

244 Appellate Body Report, China – GOES, paras. 135 and 136. (emphasis original) (footnotes omitted)
245 Appellate Body Report, China – GOES, para. 137.
246 Emphasis in original.
WT/DS454/R • WT/DS460/R

forth in paragraph[] 2" – that is, the effect of any price undercutting found, which must then be
considered, pursuant to the first sentence of Article 3.5 of the Anti-Dumping Agreement, in
determining whether the requisite causal link exists.
7.127. We note that the complainants find support for their interpretation of Article 3.2 in the
dictionary definition of the word "undercut" as meaning "to supplant … by selling at lower prices".
According to Japan, this means that an investigating authority must show that dumped imports are
having the effect of taking the place of domestic like products by selling at lower prices, or of
depressing domestic prices. Japan contends that the word "undercut" may also mean: "To render
unstable; to render less firm, to undermine".
247 According to Japan, this suggests that, even if
subject imports are not replacing domestic like products and thereby resulting in a loss of domestic
sales volumes, subject imports must still have the effect of rendering domestic prices less firm –
that is, placing downward pressure on domestic prices – in order for a finding of "price
undercutting" to be made. As a result, Japan asserts that an investigating authority must consider
whether the effect of dumped imports was such th at the observed differential between import and
domestic prices may be considered to have given rise to an actual decrease or prevention of
increase in prices in the domestic market for like products.
248 The European Union similarly relies
on the dictionary definitions advanced by Japan to argue that subject imports of Grade C did not
drive down domestic Grade C prices, or prevent any increase in those prices.249
7.128. We accept that the complainants have referred to recognized dictionary definitions of the
term "undercut". However, other recognized dictio nary definitions also exist. In particular, the
term "undercut" is also defined, very simply, as to "sell at lower prices than". 250 In the context of
Article 3.2, we see no reason why the term "und ercut" should necessarily be interpreted in the
particular manner proposed by the complainants. Since there is no reference to the notion of
"supplanting" or "render[ing] unstable" in the text or context of Article 3.2, we see no reason why
an investigating authority should not adopt a more simple definition, and simply consider whether
subject imports "sell at lower prices than" comparable domestic products.
7.129. Furthermore, if an authority were required to show that price undercutting by imports had
the effect of depressing or suppressing prices, as suggested by the complainants, this would
duplicate the other price effects considerations provided for in Article 3.2. The fact that Article 3.2
identifies three distinct price effects, and di stinguishes between price undercutting on the one
hand, and price depression and price suppression on the other, suggests that there is no need to
establish price depression or suppression when co nsidering the existence of price undercutting, or
indeed, vice versa. Moreover, we see nothing in the text of Article 3.2 that would suggest that the
fact that import prices are lower than domestic prices may be disregarded unless the investigating
authority determined that, as a consequence of such lower import prices, the domestic industry
has lost sales, as suggested by the complainants' arguments.
251 While price undercutting by
imports may lead to lost domestic sales, or price depression or price suppression, there is no
requirement in Article 3.2 to demonstrate th e existence of these other phenomena when
considering the existence of price undercutting.

247 The Oxford English Dictionary, OED Online, Oxford University Press, accessed 30 January 2014.
248 Japan's second written submission, para. 21.
249 European Union's second written submission, para. 170.
250 Shorter Oxford English Dictionary.
251 Regarding the notion of dumped imports having the effect of taking the place of domestic like
products by selling at lower prices, we observe that Article 6.3(c) of the SCM Agreement refers separately to
price undercutting, price depression, price suppression and "lost sales". This provision strongly suggests,
therefore, that the phenomenon of lost sales is distinct from price undercutting. We also note Japan's
argument that the issue of whether the price differential is an effect of subject import prices could require
additional consideration of: "the competitive relationship between the dumped imports and the domestic like
products, the degree of competition, exogenous factors that may explain the price differential, domestic prices
in the hypothetical situation of fairly priced imports, the magnitude of the margins of dumping, and the extent
of the price differential between the dumped imports and the domestic like products" (Japan's Replies to Panel
questions Nos. 31 and 32, paras. 23-26 and 30). This is a highly detailed analysis that is not envisaged by the
plain language of Article 3.2, which refers simply to a comparison of two price variables. While such an analysis
may be necessary in considering the question of causal link, that is, whether any price undercutting found has
the effect of causing injury, that inquiry is guided by Article 3.5, and not Article 3.2.
WT/DS454/R • WT/DS460/R

7.130. For the above reasons, we reject the complainants' claims that MOFCOM acted
inconsistently with Articles 3.1 and 3.2 of the Anti-Dumping Agreement by failing to consider
whether Grade C subject imports had any price undercutting effect on domestic Grade C products,
in the sense of placing downward pressure on those domestic prices by being sold at lower
prices.
252
7.5.1.4 Whether MOFCOM improperly extend ed its findings of price undercutting in
respect of Grades B and C to the domestic like product as a whole
7.5.1.4.1 Main arguments of the parties
Japan and the European Union
7.131. The complainants submit that MOFCOM erroneously extended its findings of price
undercutting in respect of Grades B and C to the domestic like product as a whole, including
domestic Grade A products. The complainants contend that MOFCOM thereby acted inconsistently
with Articles 3.1 and 3.2 of the Anti-Dumping Agreement.
7.132. The complainants 253 contend that, although MOFCOM only found price undercutting by
subject imports of Grades B and C, MOFCOM ma de a more general determination that "[t]he
imports of the subject products had a relatively [noticeable/significant] price undercutting effect on
the price of domestic like products". 254 The complainants understand that MOFCOM's reference to
"the price of domestic like products" means that MOFCOM determined that subject imports had a
price undercutting effect on the domestic like product as a whole, including domestic Grade A.
According to the complainants, MOFCOM's extension of its price undercutting findings with respect
to Grades B and C to the domestic like product as a whole is erroneous, since MOFCOM found no
price undercutting in respect of Grade A (because of an absence of Grade A subject imports). The
complainants assert that MOFCOM could only have made such a general finding regarding the
domestic like product as a whole if it had examined whether subject imports of Grades B and/or C
had any price effect on domestic Grade A. The complainants observe that MOFCOM failed to
undertake any such cross-grade analysis. The complainants assert that there was no record
evidence suggesting that subject imports of Grad es B and C had any price undercutting effect on
the domestic Grade A.
7.133. The complainants also contend that MOFCOM's analysis runs counter to the Article 3.2
requirement that the investigating authority consider whether there has been a "significant" price
undercutting.
255 The complainants assert that the majority of domestic production was of Grade A.
According to the complainants, the fact that China found some price undercutting limited to a
minority industry sector (Grades B and C) that does not actually compete with other sectors
(Grade A) means that the price undercutting found to exist is not "significant" within the meaning
of Article 3.2 of the Anti-Dumping Agreement.
China
7.134. China
256 denies that MOFCOM was under an obligation to make any finding of price
undercutting in respect of the domestic like product as a whole, including domestic Grade A. China
asserts that MOFCOM's methodology was not specifically directed at considering whether or not
the price undercutting by all dumped imports – i.e. Grade B and C subject imports - concerned

252 As a result, there is no need for us to consider the parties' arguments regarding the competitive
relationship between subject imports and domestic products of that grade.
253 Japan's first written submission, paras. 140-151. European Union's first written submission,
paras. 235-246.
254 Final Determination, Exhibit JPN-02, page 54. The square brackets indicate a disagreement between
the parties as to the precise manner in which MOFCOM's determination should be translated. It is not
necessary for us to resolve this disagreement for the purpose of evaluating the complainants' claims.
255 Japan's first written submission, paras. 152 and 153. European Union's first written submission,
paras. 247 and 248.
256 China's first written submission, paras. 337-346. China asserts at para. 346 of its first written
submission that Article 3.2 of the Anti-Dumping Agreement did not require MOFCOM to consider whether or not
domestic prices of Grade A were being undercut, and that MOFCOM's consideration of the absence of price
undercutting by the dumped imports of Grade A does not imply that the domestic prices of Grade A were not
being undercut.
WT/DS454/R • WT/DS460/R

each and every single like product or, in other words, the like product as a whole.257 China submits
that no such finding was required by Article 3.2. 258 China contends that MOFCOM complied with
Article 3.2 by comparing the prices of the pr oduct grades that were actually imported
(i.e. Grades B and C) with the prices of the corresponding domestic product grade. China notes
that Article 3.2 provides for the price of the impo rted product to be compared to the price of " a
like product". China contends that the use of the indefinite article ("a") means that Article 3.2 does
not require consideration of price undercutting in respect of the domestic like product as a whole.
7.135. In the event that the Panel were to find that Article 3.2 required MOFCOM to find price
undercutting effects in respect of the domestic like product as a whole, China asserts that
MOFCOM properly found price correlation between the three product grades at issue. In this
respect, China asserts that in its findings concerning the scope of the product under investigation,
MOFCOM found that the imports (mainly consisting of high-end Grades B and C) could also impact
the domestic products (mainly consisting of low-end Grade A). China contends that MOFCOM's
finding took into account the price correlation between the different grades (imported grades and
domestically produced grades). China asserts that such finding of cross-grade price correlation was
justified because the price correlation is a clear consequence of the ability of subject imports of the
high-end grades (Grades B and C) to substitute for the low-end grade (Grade A).
259 China refers to
evidence on the record in this regard.260
7.5.1.4.2 Evaluation by the Panel
7.136. The complainants submit that MOFCOM improperly extended its findings of price
undercutting in respect of Grades B and C to the domestic like product as a whole, including
domestic Grade A, in a manner inconsistent with Articles 3.1 and 3.2 of the Anti-
Dumping Agreement. In our view, the complainants' claim is based on an erroneous understanding
of the scope of the determination made by MOFCOM.
7.137. We observe that MOFCOM initially found th at "the adjusted import prices of the subject
products were higher than the sales prices of the domestic like products".
261 Because of price
differences between the three grades of HP-SSST at issue, MOFCOM then conducted grade-by-
grade price comparisons. MOFCOM found price undercutting in respect of Grades B and C.
MOFCOM did not make any finding of price under cutting in respect of Grade A, because this
product was only imported in 2008, in very small quantities. MOFCOM did not conduct any cross-
grade price analysis. After finding price undercutting in respect of Grades B and C, MOFCOM
determined that "[t]he imports of the subject pr oducts had a relatively [noticeable/significant]
price undercutting effect on the price of domestic like products".
262 While MOFCOM might have
expressed itself more clearly, we consider that, in the context of MOFCOM's determination, it is
clear that MOFCOM was only referring to price undercutting in respect of certain grades of the
domestic like product, namely Grades B and C. This is because MOFCOM's preceding analysis only
found price undercutting in respect of those grades. We see no basis to conclude that MOFCOM
also purported to find price undercutting in respect of Grade A, particularly since MOFCOM
expressly ruled out any such finding on the basis of the limited volume of Grade A subject imports,
and because of the absence of any cross-grade price analysis.
263
7.138. It may be that the complainants' misunderstanding of the scope of MOFCOM's
determination derives from their view that Article 3.2 required MOFCOM to "reach a price effects
finding with respect to the product as a whole". 264 This view leads the complainants to assert that
MOFCOM "erroneously applied its findings with respect to a minority sector of domestic production
to the domestic HP-SSST industry as a whole, de spite the fact that, according to MOFCOM's own
conclusions, the vast majority of domestic production was not subject to price undercutting by

257 China's oral statement at the second substantive meeting, para. 5.
258 China's first written submission, para. 320.
259 China's second written submission, paras. 141-142.
260 China's second written submission, paras. 143 and 147-150, and China's reply to Panel question
No. 92, paras. 16 and 18.
261 Final Determination, Exhibit JPN-02, page 53.
262 Final Determination, Exhibit JPN-02, page 54. The square brackets indicate a disagreement between
the parties as to the precise manner in which MOFCOM's determination should be translated. It is not
necessary for us to resolve this disagreement for the purpose of evaluating the complainants' claims.
263 Final Determination, Exhibit JPN-02, page 53.
264 Japan's first written submission, para. 146. European Union's first written submission, para. 241.
WT/DS454/R • WT/DS460/R

subject imports". 265 To the extent that the complainants' claim is concerned with MOFCOM's
alleged extension of the Grade B and C price undercutting effect to the domestic like product as a
whole266, we have already explained that Articles 3.1 and 3.2 do not, in our view, require an
investigating authority to consider whether subject imports had a price undercutting effect in the
manner suggested by the complainants.
7.139. Nor do we consider that MOFCOM was required by Articles 3.1 and 3.2 to find price
undercutting in respect of the domestic like product as a whole. In our view, when an investigating
authority considers the existence of price undercutting for the purpose of Article 3.2, that authority
need only consider the existence of price undercutti ng in respect of the subject imports at issue.
Where those imports are of different grades, it is in our view appropriate to consider price
undercutting with respect to the comparable domestic grades. Our view is consistent with the text
of both Articles 3.1 and 3.2 of the Anti-Dumping Agreement. Thus, Article 3.1 refers to the "effect
of the dumped imports on prices in the domestic market for like products". While we consider that
the reference to "the" dumped imports means the totality of such dumped imports, we observe
that the definite article is not used before the phrase "like products". If Article 3.1 had been
intended to require an analysis of the effect of (all) subject imports on the prices of the domestic
like products as a whole, the drafters would have referred to the need to consider the effect of the
subject imports on prices in the domestic market for "the" like products. They did not do so. The
text refers simply to "prices in the domestic market for like products".
7.140. Furthermore, the second sentence of Article 3.2 refers to price undercutting being
established on the basis of a comparison of subject import prices with "the price of a like product"
of the importing Member. Article 3.2 therefore uses the indefinite article in respect of the domestic
like product, and does not refer to any obligation to compare subject import prices with the prices
of all domestic like products, or the domestic like product as a whole. By contrast, Article 3.2 (like
Article 3.1) does envisage consideration of price undercutting in respect of "the" dumped imports
as a whole.
7.141. We note the complainants'
267 argument that Article 3.1 refers to "the effect of the dumped
imports on prices in the domestic market for like products". 268 According to them, the use of the
definite article "the" in conjunction with "domes tic market for like products" is necessarily a
reference to the entire domestic market and therefore the like product as a whole. We disagree.
We see nothing in Article 3.1 to suggest that the existence of price undercutting must be
considered in respect of the entire range of the like product in the domestic market of the
importing Member. Rather, Article 3.1 admits of an interpretation whereby an authority considers
the effect of subject import prices on prices for certain goods within the like product in the
domestic market. The reference to "the" domest ic market simply means that prices in the
domestic market should be used, rather than thos e in any other market. We note in this context
that there can be one domestic like product, or more than one domestic like product,
corresponding to the imports subject to an anti-dumping investigation. Thus, while the text leaves
open the possibility of more than one like product, it does not, in our view, establish that price
undercutting must be found with respect to the enti re range of goods making up the domestic like
product(s).
269
7.142. Regarding the complainants' argument that MOFCOM improperly found the relevant price
undercutting to be "significant", given that the majority 270 of domestic production (of Grade A
products) was unaffected by such price undercutting, we note that this argument is again

265 Japan's first written submission, para. 149. European Union's first written submission, para. 244.
266 See, for example, Japan's oral statement at the first substantive meeting, paras. 51 and 52.
267 Japan's second written submission, para. 26. European Union's oral statement at the first substantive
meeting, para. 99.
268 Emphasis added.
269 Of course, if price undercutting is found with respect to only part of the domestic like product, this
would have to be taken into account in determining whether the dumped imports are, through the
undercutting, causing injury, pursuant to Article 3.5.
270 The complainants estimate that only about 20% of domestic production concerned Grade B or C
products, with the remaining +/-80% concerning Grade A products (Japan's first written submission,
para. 148, European Union's first written submission, para. 243). China challenges the accuracy of Japan's
estimates, but does not provide the actual numbers. We do not consider it necessary to examine this
discrepancy in any detail, since China in any event acknowledges that "the majority" of domestic HP-SSST
production related to Grade A (China's comments on Japan's reply to Panel question No. 84, para. 31).
WT/DS454/R • WT/DS460/R

premised on the complainants' flawed understanding that MOFCOM was required by Article 3.2 to
establish that subject imports had a price undercutting effect in respect of the domestic like
product as a whole , including domestic Grade A. Furthermore, we observe that the panel in
United States – Upland Cotton
271 found that "it is the degree of price suppression or depression
itself that must be 'significant' (i.e. important, notable or consequential)", and that "it may be
relevant to look at the degree of the price suppression or depression in the context of the prices
that have been affected – that is, at the degree of significance of suppression or depression". 272
We agree with this finding, and consider that the significance of price undercutting by subject
imports of Grades B and C should be assessed in relation to the price of domestically produced
Grades B and C, and not in relation to other factors such as the proportion of domestic production
for which no price undercutting was found. Furthermor e, we recall that price undercutting must be
established on the basis of a comparison of the prices of comparable goods. As a result, there may
well be domestic product models or grades for which no price undercutting is established. This fact
is merely a consequence of only comparing the prices of comparable goods and should not
preclude a finding of "significant" price undercutting.
273
7.143. In light of the above, we reject the complainants' claims that MOFCOM acted inconsistently
with Articles 3.1 and 3.2 by improperly extendin g its finding of price undercutting in respect of
Grades B and C to the domestic like product as a whole, including domestic Grade A.
7.5.1.5 Conclusion
7.144. We uphold the complainants' claims that MOFCOM's failure to properly account for
differences in quantities when comparing the pric e of Grade C subject imports with the domestic
Grade C price is inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement. We reject
the complainants' claims that MOFCOM acted incons istently with Articles 3.1 and 3.2 of the Anti-
Dumping Agreement by failing to consider whether Grade C subject imports had any price
undercutting effect on domestic Grade C. We also reject the complainants' claims that MOFCOM
acted inconsistently with Articles 3.1 and 3.2 by improperly extending its finding of price
undercutting in respect of Grades B and C to the domestic like product as a whole, including
domestic Grade A.
7.5.2 Whether MOFCOM's assessment of the im pact of dumped imports on the state of
the domestic industry is inconsistent with Articles 3.1 and 3.4 of the Anti-Dumping
Agreement
7.5.2.1 Introduction
7.145. The complainants submit that MOFCOM's ev aluation of the impact of subject imports on
the state of the domestic industry falls short of an objective examination, based on positive
evidence. The complainants pursue three claims. First, they claim that MOFCOM improperly
considered the impact of subject imports on the domestic industry as a whole, in respect of all
three product grades, even though it had only found price effects in respect of Grades B and C.
The complainants submit that MOFCOM should rather have undertaken a segmented impact
analysis, focusing on those segments of the dome stic industry producing Grades B and C. Second,
the complainants claim that MOFCOM failed to ev aluate the magnitude of the margin of dumping.
Third, they claim that MOFCOM disregarded the relevant economic factors and indices showing
that the domestic industry was not injured.
274
7.146. China asks the Panel to reject the complainants' claims.

271 Panel Report, United States – Upland Cotton, para. 7.1325.
272 Panel Report, United States – Upland Cotton, para. 7.1328, emphasis supplied.
273 Of course, as noted above, this fact may become relevant in the consideration of causation of injury,
pursuant to Article 3.5 of the Anti-Dumping Agreement.
274 At para. 159 of its first written submission, Japan also includes a fourth claim that MOFCOM failed to
examine whether subject imports provided explanatory force for the state of the domestic industry. We decline
to make any findings in respect of this additional claim, since it was not included in Japan's Request for
Establishment (Document WT/DS454/4), and therefore falls outside the Panel's terms of reference.
WT/DS454/R • WT/DS460/R

7.5.2.2 Relevant provisions
7.147. The text of Article 3.1 is set forth above. Article 3.4 provides:
The examination of the impact of the du mped imports on the domestic industry
concerned shall include an evaluation of all relevant economic factors and indices
having a bearing on the state of the industry, including actual and potential decline in
sales, profits, output, market share, producti vity, return on investments, or utilization
of capacity; factors affecting domestic prices; the magnitude of the margin of
dumping; actual and potential negative effects on cash flow, inventories,
employment, wages, growth, ability to raise capital or investments. This list is not
exhaustive, nor can one or several of these factors necessarily give decisive guidance.
7.5.2.3 Whether MOFCOM should have undert aken a segmented analysis of the impact
of dumped imports
7.5.2.3.1 Main arguments of the parties
7.5.2.3.1.1 Japan and the European Union
7.148. The complainants submit that MOFCOM's Ar ticle 3.4 impact analysis was at odds with and
did not follow from its Article 3.2 volume and price effects analyses. This is because MOFCOM
assessed the impact of subject imports as a whol e on the domestic industry as a whole, even
though it had found no significant increase in the volume of subject imports, and had allegedly
found price effects with respect to Grades B and C only.
275 The complainants assert that, having
found no significant increase in volume whatsoever and price undercutting effects with respect to
only Grades B and C, to ensure a logical progression of inquiry, MOFCOM should have proceeded
to analyse the impact of subject imports only on the segment of the domestic industry producing
Grades B and C. While the complainants acknowledge that the impact of dumped imports should
be examined on the domestic industry as a whole, they suggest that such examination should be
premised on the fact that the segments of the do mestic industry producing certain like products
with respect to which no volume or price effects have been found could not have been impacted by
the dumped imports. The complainants refer in this regard to the finding by the Appellate Body in
China – GOES that Article 3.4 "contemplate[s] that an investigating authority must derive an
understanding of the impact of subject imports on the basis of such an examination".
276 They also
note the Appellate Body's finding that Article 3. 4 is concerned not just with the state of the
domestic industry in isolation, but rather with "the relationship between subject imports and the
state of the domestic industry" – that is, with "the explanatory force of subject imports for the
state of the domestic industry".277 The complainants contend that the domestic industry segments
producing Grade A products should have been excluded from the Article 3.4 impact analysis.
According to Japan, MOFCOM's earlier conclusions with respect to volume and price effects could
not plausibly have indicated that the segment of the domestic industry producing Grade A could be
impacted by subject imports.
278
7.5.2.3.1.2 China
7.149. China denies that MOFCOM was required to conduct a segmented analysis of the impact of
subject imports on the domestic industry. According to China, it is legally erroneous to require an
investigating authority, which has carried out its price effects consideration on a per grade basis,
to also carry out a segmented impact analysis or to explain how it viewed the industry-wide impact
data in light of the logic of the grade-based consid eration of the price effects. China contends that
any difference between the nature of the price undercutting analysis undertaken by MOFCOM, and
the nature of the impact analysis, was dictated by the requirements of Articles 3.2 and 3.4. China
asserts in this regard that MOFCOM was required by Article 3.2 to carry out its price effects
analysis on a per grade basis, in order to ensure comparability. China states, though, that
MOFCOM was required by Article 3.4 to assess th e impact of subject imports on the domestic
industry "as a whole". China also notes that the two domestic producers making up the domestic

275 Japan's first written submission, para. 159. European Union's first written submission, para. 253.
276 Appellate Body Report, China – GOES, para. 149. (emphasis in original)
277 Appellate Body Report, China – GOES, para. 149.
278 Japan's first written submission, para. 167.
WT/DS454/R • WT/DS460/R

industry are both producers of all three grades of the like product, such that it is not possible to
distinguish any part of the domestic industry that is producing only Grade A.
7.5.2.3.2 Main arguments of third parties
7.5.2.3.2.1 Kingdom of Saudi Arabia
7.150. Saudi Arabia considers that an investigat ing authority's determination under Article 3 of
the Anti-Dumping Agreement must establish a logical progression of analysis among its "essential
components" in order to constitute the requisite "objective examination" of "positive evidence".
Saudi Arabia asserts that the sequential analysis contemplated by Article 3 and its repeated
emphasis on the "same imports" establish that the injury components are "closely interrelated"
279
and work together to produce a "logical" conclusion about whether subject imports caused material
injury to the domestic industry. Saudi Arabia contends that although an investigating authority
enjoys discretion as to the methodologies employed to determine injury under Article 3, its
examination of the impact of subject imports on the domestic industry under Article 3.4 will
constitute an "objective examination" only wher e it logically progresses from the assessment of
those imports' volume effects and price effects under Article 3.2. Saudi Arabia submits that the
inquiry under Article 3.4 complements and conforms to the analyses carried out under Article 3.2
in order to produce the ultimate conclusion on causation under Article 3.5. According to
Saudi Arabia, this analysis necessarily involves a linkage between the identified volume and price
effects and the state of the domestic industry.
7.5.2.3.2.2 Turkey
7.151. Turkey queries whether the "logical progre ssion" proposed by the complainants involves a
legal obligation that requires an investigating authority to terminate its injury and causation
analysis once it concludes that there is no absolute/relative increase in the volume of dumped
imports and/or no price undercutting, depression or suppression caused by dumped imports.
Turkey considers that, pursuant to Article 3.5 of the Anti-Dumping Agreement, the essence of
causality should be the negative effects of dumped imports on the domestic industry, through the
act of dumping, as set forth in paragraphs 2 and 4 of Article 3. The examination should include all
relevant evidence before the authorities incl uding those that weaken the causality between
dumped imports and injury incurred by the domestic industry. Furthermore the investigating
authority is also obliged to focus on known factor s other than the influence of dumped imports to
identify whether these factors erode the link be tween dumping and injury. Turkey suggests that
the legal mechanics of Article 3.5 require the author ity to undertake a full examination of different
parts of the injury analysis, without keeping any relevant information out of the scope.
7.5.2.3.3 Evaluation by the Panel
7.152. The complainants' claims regarding the scope of MOFCOM's impact analysis are premised
on their interpretation of Article 3.2 of the An ti-Dumping Agreement. The complainants contend
that the Article 3.4 impact analysis must "logically progress" from the Article 3.2 price effects
analysis, and that MOFCOM's finding of price undercutting effects with respect to only Grades B
and C required it to analyse the impact of subjec t imports only on the segments of the domestic
industry producing Grades B and C. The complainants contend that this is because MOFCOM's
conclusions on price effects indicate that the segment of the domestic industry producing Grade A
could not be impacted by subject imports.
280 As indicated above, we do not consider that
Article 3.2 requires an investigating authority to consider the price undercutting effect of subject
imports on the domestic like product. Thus, in finding price undercutting in respect of Grades B
and C, MOFCOM was not required by Article 3.2 to consider the effect of subject Grade B and C
imports on domestic Grade A. Accordingly, MOFCOM's failure to make this consideration did not
require it to conclude, when conducting its Arti cle 3.4 impact analysis, that the segment of the
domestic industry producing Grade A products could not be impacted by subject imports.
281

279 Appellate Body Report, EC – Tube or Pipe Fittings, para. 115.
280 Japan's first written submission, para. 167. European Union's first written submission, para. 253.
281 We do not mean to suggest that the scope of MOFCOM's price effects conclusions is of no relevance
to the remainder of MOFCOM's injury analysis. As previously noted, a limited finding of price undercutting will
have obvious implications for an authority's assessment of whether dumped imports caused material injury to
WT/DS454/R • WT/DS460/R

7.153. Furthermore, we note that "the examination of the impact of the dumped imports on the
domestic industry" provided for in Article 3.4 "shall include an evaluation of all relevant economic
factors and indices having a bearing on the state of the industry" (emphasis supplied). In our
view, the complainants' approach to Article 3.4, and its focus on particular segments of the
domestic industry, is overly focused on the causal connotations of the term "impact", and
overlooks the obligation in Article 3.4 to evaluate the state of the domestic industry, as defined
by Article 4.1 of the Anti-Dumping Agreement.
282 In the present case, MOFCOM defined the
domestic industry as comprising two domestic producers accounting for a major proportion of total
domestic production of the domestic product like the subject imports. The evaluation of the state
of the domestic industry envisaged by Article 3.4 must therefore consider the state of those
two producers, with respect to their production of all types of HP-SSST. We see no basis in either
Article 3.4 or Article 4.1 for limiting this evalua tion to the state of those two domestic producers
with respect to their production of only Grades B and C.
7.154. The complainants acknowledge that the Article 3.4 impact inquiry must generally be
conducted with respect to the domestic industry as a whole.283 However, the complainants observe
the statement by the Appellate Body in China – GOES that the various provisions of Article 3
"contemplate a logical progression of inquiry leading to an investigating authority's ultimate injury
and causation determination". 284 According to the complainants, this means that the impact
analysis with respect to the domestic industry as a whole must proceed on the premise that the
segments of the domestic industry producing g oods within the scope of the like product with
respect to which no volume or price effects have been found have not been impacted by the
dumped imports.285 In a similar vein, the European Union argues that MOFCOM had "no reasonable
basis to undertake an impact analysis with respect to the entire domestic industry". 286 We do not
accept these arguments, for it is unclear to us how a determination of injury in respect of the
domestic industry as a whole – including an evalua tion of the state of that industry as a whole -
may be premised, from the outset, on the exclusion of a given segment of that industry.
7.155. Nor are we persuaded by the argument that the complainants' claim is supported by the
findings of the Appellate Body in China – GOES . As indicated above, we consider that our
interpretation of Article 3.2 is entirely consistent with the findings of the Appellate Body in that
case. And we consider that our interpretation of Article 3.4 is entirely consistent with our approach
to Article 3.2. This is an important consideration because, as confirmed by the Appellate Body in
China – GOES , "the relationship between subject imports and the state of the domestic industry"
envisaged by Article 3.4 "is analytically akin to the type of link contemplated by the term 'the
effect of' under Article[] 3.2…". Since the Article 3. 4 analysis is "analytically akin" to the Article 3.2
analysis, and since the Article 3.2 analysis in respect of price undercutting does not require the
effect analysis proposed by the complainants, there is no reason why any such effect analysis
should determine the nature of the Article 3.4 impact analysis undertaken following a finding of
price undercutting. This would certainly not be a "logical progression" of the sort suggested by the
complainants on the basis of the Appellate Body's findings in China – GOES. The Appellate Body's
findings do not exclude that, in the context of price undercutting, the appropriate "relationship
between subject imports and the state of the dome stic industry" exists when the state of the
domestic industry shows injury, and the subject imports are sold at prices that undercut certain
like products produced and sold by that industry. Whether that relationship is sufficient to support
a finding that subject imports caused injury to the domestic industry is a matter for consideration
under Article 3.5, with due regard to all of the factors and considerations set forth in that
provision.

the domestic industry. However, this is an assessment to be made pursuant to Article 3.5, rather than 3.4, of
the Anti-Dumping Agreement.
282 We are aware that the Appellate Body stated in China – GOES that the Article 3.4 impact inquiry is
not simply an inquiry about the state of the domestic industry, and that Article 3.4 "contemplate[s] that an
investigating authority must derive an understanding of the impact of subject imports on the basis of such an
examination" (Appellate Body Report, China – GOES, para. 149 (emphasis in original)). However, this does not
mean that the need to examine the state of the domestic industry, as a whole, should be entirely overlooked.
283 Japan's second written submission, para. 7. European Union's first written submission, para. 254.
284 Appellate Body Report, China – GOES, para. 128.
285 Japan's second written submission, para. 8.
286 European Union's oral statement at the first substantive meeting, para. 109. The European Union
also suggests that most of the inconsistencies addressed by the European Union in this case can be described
as a breach of the "logical progression of inquiry" referred to by the Appellate Body in China – GOES
(European Union's second written submission, para. 138).
WT/DS454/R • WT/DS460/R

7.5.2.4 Whether MOFCOM properly evaluated the magnitude of the margin of dumping
7.5.2.4.1 Main arguments of the parties
7.5.2.4.1.1 Japan and the European Union
7.156. The complainants submit that China failed to evaluate the role played by the magnitude of
the margin of dumping.
287 They contend that MOFCOM merely referred to the margin of dumping,
without evaluating the significance of the margin of dumping for the impact of subject imports on
the domestic industry.
7.5.2.4.1.2 China
7.157. China submits that it is factually incorrect for the complainants to state that MOFCOM
"simply referred to the dumping margins in the sub-section entitled 'Dumping Margin' at page 41
of its Final Determination, as well as in the section entitled 'Final Conclusions' at pages 79 and 80
of the same document".
288 China observes that, in the section of the Final Determination
addressing injury, MOFCOM considered that "the dumping margins of the subject products from
the EU and Japan are both above 2%".
289 China further submits that no analysis of the magnitude
of the dumping margin is required beyond the analysis of such margin as set out in those other
provisions, similar to the type of evaluation required in relation to "factors affecting domestic
prices".
290 In this respect, China relies on the fact that factors affecting domestic prices and the
magnitude of the margin of dumping are possible causes of an industry's condition, rather than
descriptors of the state of the industry (as with all other factors listed in Article 3.4). Moreover,
China asserts that other provisions of the Anti-Dumping Agreement also address these
two factors.
291
7.5.2.4.2 Main arguments of third parties
7.5.2.4.2.1 United States
7.158. The United States notes that Articles 3.1 and 3.4 do not require an authority to evaluate
the significance of dumping margins. Moreover, neither Article 3.1 nor Article 3.4 requires that the
magnitude of the margins of dumping be given any pa rticular weight, or that they be evaluated in
any particular way. The United States asserts that it is also unclear what further evaluation of the
dumping margins the European Union and Japan consider MOFCOM should have performed
pursuant to Article 3.4.
292
7.5.2.4.3 Evaluation by the Panel
7.159. Pursuant to Article 3.4 of the Anti-Dumping Agreement, investigating authorities are
required to evaluate of all relevant economic factors and indices having a bearing on the state of
the industry, including the magnitude of the margin of dumping. China does not deny that
MOFCOM was required to undertake that evalua tion. China argues rather that MOFCOM did
evaluate the magnitude of the margin of dumpin g, as evidenced by various references to the
amount of the margin of dumping in MOFCOM's Final Determination.
7.160. We note that MOFCOM's Final Determinatio n contains several references to the magnitude
of the margin of dumping, as asserted by China. However, we do not consider that such references
constitute an evaluation of the magnitude of the margin of dumping, as required by Article 3.4.
MOFCOM's Final Determination merely lists the margins at issue, but does not assess in any way
the relevance of the margins of dumping in the determination, or indicate what weight it attributed
to the margins of dumping in the injury assessment. We agree with the panel in China – X-ray

287 Japan's first written submission, paras. 170–174; and European Union's first written submission,
paras. 260–265.
288 Japan's first written submission, para. 171; and European Union's first written submission, para. 260.
289 Final Determination, Exhibit JPN–2, Exhibit EU–30, pp. 41–42.
290 China's second written submission, paras. 184-185, referring to para. 7.62 of Panel Report, Egypt –
Steel Rebar.
291 China's first written submission, paras. 430-436.
292 United States' third party submission, paras. 57-58.
WT/DS454/R • WT/DS460/R

Equipment that a mere listing of the margins of dumping does not constitute evaluation within the
meaning of Article 3.4.293
7.161. China submits that MOFCOM provided more than a mere listing of the margins of dumping
because, in addressing the cumulative assessment of injury, MOFCOM noted that "the dumping
margins of the subject products from the EU and Japan are both above 2%". 294 According to
China, this provides "sufficient evidence that the magnitude of the margin of dumping was
evaluated in the context of examining the state of the domestic industry". 295 We disagree.
MOFCOM's simple assertion that the margins of dumping are more than de minimis provides no
basis on which we can conclude that MOFCOM actually evaluated the magnitude of those margins
in the context of its Article 3.4 analysis.
7.162. We also reject China's argument that no analysis of the margin of dumping is required
beyond that set out in substantive provisions governing the determination of the margin of
dumping. The text of Article 3.4 is clear in requir ing an evaluation of the magnitude of the margin
of dumping in the assessment of the impact of dumped imports on the domestic industry.
Accordingly, that evaluation must be undertaken as a substantive matter, and not merely paid lip
service by referring to the margins determined. Whether the margin of dumping was determined in
a manner consistent with, for example, Article 2 of the Anti-Dumping Agreement, is irrelevant to
the question of whether or not the evaluation required by Article 3.4 has been undertaken.
7.163. We therefore uphold the complainants' claims that MOFCOM failed to evaluate the
magnitude of the margin of dumping, contrary to Article 3.4 of the Anti-Dumping Agreement. As
Article 3.4 implements the requirement in Article 3.1 pertaining to "the consequent impact" of
dumped imports on the domestic industry, we also uphold the complainants' claims under that
provision.
7.5.2.5 Whether MOFCOM properly weighed positive and negative injury factors
7.5.2.5.1 Main arguments of the parties
7.5.2.5.1.1 Japan and the European Union
7.164. The complainants submit that MOFCOM im properly disregarded the economic factors and
indices which showed that the domestic industry was not injured.
296 In particular, they claim that
MOFCOM "did not provide any explanation whatsoever regarding the weight attributed to any
given factor, nor of the inferences it drew from those factors and indices that were positive for the
domestic industry".
297 According to them, the Final Determination is "silent" as to why MOFCOM
"disregarded the relevance of the majority of the factors and indices having a positive bearing on
the state of the domestic industry".298
7.5.2.5.1.2 China
7.165. China considers that Japan and the European Union fail to make a prima facie case
concerning MOFCOM's weighing of the positive and negative injury factors, because they fail to
discuss any particular indicators that were "improperly disregarded".
299 China submits that
MOFCOM's Final Determination in any event evaluated each of the requisite injury factors, with the
exception of capacity utilization.300 China asserts that MOFCOM explained that this factor could not
be effectively evaluated because of difficulties in allocating capacity to the product at issue. With
respect to the positive factors, China submits that MOFCOM properly weighed these factors against
other negative factors, and in light of other positive factors. China notes in this regard that
MOFCOM explained that the increase in salary per head had to be seen in light of the general

293 Panel Report, China – X-Ray Equipment, para. 7.184.
294 Final Determination, Exhibit JPN–2, Exhibit EU–30, pp. 41–42.
295 Panel Report, China – X-Ray Equipment, para. 7.183. (footnote omitted)
296 Japan's first written submission, paras. 175–184; and European Union's first written submission,
paras. 266– 276.
297 Japan's first written submission, para. 179; and European Union's first written submission, para. 270.
298 Japan's first written submission, para. 183; and European Union's first written submission, para. 274.
299 China's first written submission, para. 437.
300 China's first written submission, paras. 447-451.
WT/DS454/R • WT/DS460/R

background of rising labour costs in China. In re lation to the increase in domestic sales, MOFCOM
stated that this was "outstripped by price cuts". MOFCOM also considered that job creation and
labour productivity were a result of a synchronous increase in capacity and output of the domestic
industry. China contends that the Final Determination thus provides a solid reflection of MOFCOM's
reasoned evaluation of the weight and relevance of the positive and negative factors, also in
relation to the other factors.
7.5.2.5.2 Evaluation by the Panel
7.166. We are not persuaded by the complainants ' argument that MOFCOM failed to provide any
explanation "whatsoever" regarding the weight attributed to any given factor, or of the inferences
it drew from those factors and indices that were positive for the domestic industry. Nor do we
accept their argument that MOFCOM's Final Determination is "silent" as to why MOFCOM
disregarded the relevance of the majority of the factors and indices having a positive bearing on
the state of the domestic industry. MOFCOM explains its consideration of the various positive and
negative injury factors in the following terms:
The Investigation Authority is of the view that available evidence suggests from 2008
to 2010, domestic sales and market share of the domestic industry of like products
have both increased. The capacity and output of the domestic industry of like products
have increased synchronously. Driven by capacity and output growth, job creation and
labor productivity of the domestic industry of like products also increased. Against the
general backdrop of rising labor costs dome stically, salary per head in the domestic
industry of like products showed an upward trend. However, EOP inventories of the
domestic industry of like products was rising year on year whereas the domestic sales
price of domestic like products dropped by 31.05% on an annualized basis. Despite a
year-on-year increase of 22.43% in domestic sales, such increase was outstripped by
price cuts. As a result, domestic sales revenue for 2009 was down 61.07% from 2008.
The number for 2010 was up 83.41% on 2009. From 2008 to 2010, revenue decline
on an annualized basis was 15.50%. The differential between domestic sales price and
cost of goods per unit narrowed further. Unit operating margin decreased 56.39%
annually. As a consequence, pretax profits and net cash flow from operating activities
of the domestic industry of like products both dropped, 67.47% and 47.78%
respectively on an annualized basis. Shrinking pretax profits resulted in lower ROI for
the domestic industry of like products. ROI for 2010 was 29.70 percentage points
lower than that of 2008. Due to continue d profitability erosion and deteriorating
operating conditions of the domestic industry of like products, capital investment in
capacity expansion by the domestic industry had been suspended or blocked.
In the first six months of 2011, profitability levels of the domestic industry of like
products continued to go down and operating conditions further worsened. Despite
recoveries of varying degree in the domestic industry on indicators such as domestic
sales, market share, capacity, output, labor productivity, salary per head and net cash
flow from operating activities, EOP inventories nonetheless increased by 23.49%
compared with the same period of 2010. Domestic sales price of domestic like
products was 8.90% lower than the same period of 2010. As a direct result, sales
revenue dropped by 0.38% year on-year. The differential between domestic sales
price and cost of goods per unit continued to narrow. Unit operating margin decreased
52.50% compared with the same period of 2010. As a consequence, pretax profits of
the domestic industry of like products dropped by 72.19% compared with the same
period of 2010. Shrinking pretax profits resulted in a drop of 2.58 percentage points in
ROI for the domestic industry of like products.
Based on the above, the Investigation Authority concludes the domestic industry is
materially injured.
301
7.167. Although brief, MOFCOM's determination does discuss the interplay between the positive
and negative injury factors. Thus, while MOFCOM acknowledges that factors such as domestic
sales, market share, capacity, output and employ ment indicate that the domestic industry has
grown, it also observes that sales revenue has declined as a result of the fall in domestic prices.

301 Final Determination, Exhibit JPN-02, p. 63.
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MOFCOM finds that this, in turn, has resulted in a decline in profitability, as sales revenue has not
kept pace with cost increases. MOFCOM's Final Determination is therefore not "silent" on the
interplay between positive and negative injury factors. Nor does MOFCOM fail to provide any
explanation "whatsoever" regarding its weighing of negative and positive injury factors.
7.168. As complainants, the onus is on Japan and the European Union to establish that MOFCOM's
analysis and explanation is inconsistent with Article 3.4. The complainants fail in this regard,
because they fail to demonstrate the inadequacy of the specific elements of analysis and
explanation set out in MOFCOM's Final Determination, relying instead on generalities. Thus, they
fail to establish that MOFCOM's explanation is not a reasoned analysis of the facts, or that
MOFCOM erred in its consideration of the interplay of the positive factors in relation to the decline
in sales revenue and profitability. The complainants also fail to establish that MOFCOM's
assessment is insufficient, or inadequately reasoned in light of the facts. For this reason, we find
that the complainants fail to establish a prima facie case in support of their claim.
7.169. We note the complainants' argument that MOFCOM's dismissal of certain positive factors is
"contradicted" by MOFCOM's findings in other parts of its Final Determination.
302 The complainants
observe in this regard that, in assessing non-attribution factors for the purpose of Article 3.5,
MOFCOM referred to the rapid increase in the sales volume of domestic products in concluding that
the decline in domestic demand for HP-SSST products did not "materially injure[]" the domestic
industry in terms of volume.
303 The complainants contend that MOFCOM failed to attach
appropriate weight to this positive indicator when assessing the state of the domestic industry
pursuant to Article 3.4.
304 In its Final Determination, MOFCOM noted the increase in domestic
sales, but continued by referring to the decr ease in sales price and pre-tax profit. The
complainants have not explained why MOFCOM could not, in considering the impact of imports
under Article 3.4, discount the increase in domestic sales given that the increase was accompanied
by a decline in sales price and profit. The mere fact that the increase in domestic sales is referred
to by MOFCOM in different contexts, and in a manner that ultimately supports a determination that
injury is caused by subject imports, does not necessarily mean that MOFCOM's reference to that
factor in those different contexts is contradictory, or otherwise flawed. It is simply a reflection of
the substance of MOFCOM's analysis. In the absence of any meaningful critique by the
complainants of the substance of that analysis, the alleged contradiction provides no basis for
drawing conclusions regarding the consistency of MOFCOM's impact analysis with Article 3.4 of the
Anti-Dumping Agreement.
7.5.2.6 Conclusion
7.170. For the above reasons, we uphold the complainants' claims that MOFCOM failed to evaluate
the magnitude of the margins of dumping, contrary to Articles 3.1 and 3.4 of the Anti-Dumping
Agreement. We reject the complainants' claims that MOFCOM was required by Articles 3.1 and 3.4
to undertake a segmented impact analysis. We also reject the complainants' claims that MOFCOM
acted inconsistently with Articles 3.1 and 3.4 by failing to properly weigh the positive and negative
injury factors.
7.5.3 Whether MOFCOM's causation analysis is inconsistent with Articles 3.1 and 3.5 of
the Anti-Dumping Agreement
7.5.3.1 Introduction
7.171. MOFCOM determined that "the large quan tities of imports of the subject products …
dumped into China at low prices" caused material injury to the domestic industry.
305 The
determination was based on the price effects of the subject imports. MOFCOM did not find that
subject imports had any volume effects on the domestic industry, in light of the fact that the
absolute volume of subject imports declined during the period of investigation.
306 However,
MOFCOM did find that the market share of su bject imports as a whole "remained high at

302 Japan's first written submission, para. 183. European Union's first written submission, para. 274.
303 Final Determination, Exhibit EU-30, p. 68.
304 See complainants' replies to Panel question No. 56.
305 Final Determination, Exhibit JPN-02, p. 67.
306 China's first written submission, paras. 516-518; Final Determination, Exhibit JPN-02, p. 65.
WT/DS454/R • WT/DS460/R

around 50%".307 M O F C O M a l s o f o u n d t h a t t h e m a r k e t s h a r e h e l d b y s u b j e c t i m p o r t s o f b o t h
Grade B and C was around 90%. 308 MOFCOM considered this market share relevant in assessing
the price undercutting effect of subject imports. After considering the market share data and
pricing information, MOFCOM found that "the imports of the subject products had a relatively big
impact on the price of the domestic like products".309
7.172. MOFCOM's causation determination was also based on its findings of price undercutting,
and its assessment of the impact of subject im ports on the state of the domestic industry. 310 We
have addressed the complainants' specific challenges under Articles 3.2 and 3.4 to those aspects
of MOFCOM's analysis above. MOFCOM also cons idered whether any injury was caused by other
known factors, including a decline in apparent consumption and an expansion in domestic
production capacity, and concluded that any inju ry caused by these factors did not break the
causal link between subject imports and material injury to the domestic industry.
311
7.173. The complainants make three claims concerning MOFCOM's causation determination. First,
they claim that MOFCOM's reliance on the market share of subject imports in its causation analysis
is inconsistent with Article 3.5. Second, the complainants also make consequential claims in
respect of MOFCOM's reliance on its price effects and impact analyses in determining causation.
They submit that because, in their view, those an alyses are inconsistent with Articles 3.2 and 3.4
respectively, MOFCOM's subsequent reliance on those analyses and conclusions in the context of
its causation determination is inconsistent with Article 3.5. Third, the complainants challenge
MOFCOM's non-attribution analysis in respect of the decrease in apparent consumption, and the
increase in domestic production capacity.
7.174. China asks the Panel to reject Japan's claims.
7.5.3.2 Relevant provisions
7.175. Article 3.1 of the Anti-Dumping Agreemen t is set forth above. Article 3.5 of the Anti-
Dumping Agreement provides:
It must be demonstrated that the dump ed 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 patterns of consumption, trade restrictive
practices of and competition between the foreign and domestic producers,
developments in technology and the expo rt performance and productivity of the
domestic industry.
7.5.3.3 MOFCOM's reliance on the market share of subject imports
7.5.3.3.1 Main arguments of the parties
7.5.3.3.1.1 Japan and the European Union
7.176. The complainants challenge MOFCOM's relia nce on the market share of subject imports in
finding a causal link between subject imports and material injury to the domestic industry. The
complainants note that MOFCOM found that the absolute volume of subject imports decreased by a
considerable amount during the period of investigation. They also note that the market share of

307 Final Determination, Exhibit JPN-02, p. 65.
308 Final Determination, Exhibit JPN-02, p. 66.
309 Final Determination, Exhibit JPN-02, p. 66. (Translation amended by Exhibit CHN-16, and accepted
by the complainants in Exhibits JPN-29 and EU-32.)
310 Final determination, Exhibit JPN-02, p. 66.
311 Final Determination, Exhibit JPN-02, pp. 67-77.
WT/DS454/R • WT/DS460/R

subject imports as a whole decreased during the period of investigation. The complainants submit
that the fact that the market share of imported products under investigation was still relatively
large at the end of the period of investigation is "irrelevant"
312 for an objective examination under
Articles 3.1 and 3.2 of the Anti-Dumping Agreement, and accordingly for a causation
determination under Article 3.5. The complainants contend that Article 3.2 requires an
investigating authority to consider "whether there has been a significant increase in dumped
imports". They assert that the text of Article 3.2 does not envisage consideration of the market
share retained by subject imports at the end of the period of investigation.
7.177. The complainants acknowledge that the abse nce of a significant increase in the volume of
subject imports does not necessarily preclude a fi nding of causation. However, they contend that
the consideration of whether imports increased significantly cannot be stripped of all significance
by overlooking the fact that, despite dumping and price undercutting, there was a considerable
decrease in the volume and market share of subject imports of HP-SSST. The complainants argue
that the decrease in imports to China of HP-SSST tends to exclude the possibility that such imports
caused injury to the domestic industry.
313
7.5.3.3.1.2 China
7.178. China submits that a distinction must be made between MOFCOM's conclusion that there
was no significant increase in the volume of th e dumped imports under Article 3.2 of the Anti-
Dumping Agreement, and MOFCOM's reliance on th e fact that dumped imports retained a high
market share in a finding of causal link under Article 3.5. China asserts that, consistent with its
conclusion under Article 3.2 that there was no significant increase in the volume of subject
imports, MOFCOM did not rely on any volume ef fects of subject imports for the purpose of its
causation determination. China contends that MOFC OM's reference to the market share of subject
imports should not be understood as a finding that the volume of imports, in itself, had an impact
on the domestic industry, nor that the material injury suffered by the domestic industry was
caused by the volume of subject imports in itself. According to China, MOFCOM simply referred to
the market share of subject imports in order to fully assess the price effects of subject imports,
concluding that "the imports of the subject products had a relatively big impact on the price of the
domestic like products".
314 China submits that this approach is consistent with the finding by the
panel in EC – Tube or Pipe Fittings that "[t]he interaction of two variables would essentially
determine the extent of impact of price undercutti ng on the domestic industry: the quantity of
sales at undercutting prices; and the margin of undercutting of such sales".315
7.5.3.3.2 Main arguments of third parties
7.5.3.3.2.1 United States
7.179. The United States disagrees with the compla inants to the extent that they suggest that an
authority may not attach significance to the fact that imports "retain" a significant share of the
market over the period. The United States notes that although Article 3.2 does specify that an
authority "shall consider whether there has been a significant increase in dumped imports", either
on an absolute or relative basis, Article 3.2 does not expressly or implicitly prevent an authority
from considering in its analysis the fact that imports have a significant market share level. The
United States asserts that in a situation in which significant volumes of subject imports are having
a significant adverse impact on domestic prices, the existence of significant import volumes or
market share is obviously one item of "relevant ev idence" that an authority may want to consider
in its analysis under Article 3.5.
316

312 Japan's first written submission, para. 201. European Union's first written submission, para. 292.
313 Japan's first written submission, paras. 202 and 203. European Union's first written submission,
paras. 293 and 295.
314 Final Determination, Exhibit JPN–2, Exhibit EU–30, as amended by Translation Exhibit, Exhibit CHN–
16 (BCI), p. 66.
315 Panel Report, EC – Tube or Pipe Fittings, para. 7.277.
316 United States' third party submission, paras. 59 and 60.
WT/DS454/R • WT/DS460/R

7.5.3.3.3 Evaluation by the Panel
7.180. As a general matter, we are not persuaded that it is erroneous for an investigating
authority to take the market share of subject imports into consideration in its Article 3.5 causation
analysis, even if the volume of those imports has not increased in absolute terms. Article 3.5
provides that causation "shall be based on an examination of all relevant evidence before the
authorities". We agree with China that the market share of subject imports sold at undercutting
prices may be relevant in considering the overall price effects of those imports in an Article 3.5
causation analysis. In addition, we note that the Appellate Body has confirmed that while
"significant increases in imports have to be 'considered' by investigating authorities under
Article 3.2, (…) the text does not indicate that in the absence of such a significant increase, these
imports could not be found to be causing injury" within the meaning of Article 3.5.
317 If a
significant increase in the volume of imports is not necessary in order to find causation, we see no
reason why the relative significance of the volume of imports, that is, its market share, may not be
a relevant consideration in the assessment of causation.
7.181. However, having regard to the facts of the present case, we consider that MOFCOM's
reliance on the market shares of subject imports did not establish a sufficient basis for a
determination that "the imports of the subject products had a relatively big impact on the price of
the domestic like products"
318, and a consequent finding of causation consistent with Article 3.5.
We note that although MOFCOM relied on the fact that the market share of subject imports
"remained high at around 50%"
319, MOFCOM failed to account for the fact that the market share of
subject imports had actually dropped from around 90% in 2008 and 2009 to around 50% in 2010
and H1 2011, and that domestic market shares increased correspondingly. 320 While an
investigating authority might properly determine, given the necessary facts, that high market
shares exacerbate the price effects of dumped imports, an objective and impartial investigating
authority would also consider whether the fact that import market shares are declining significantly
indicates that the price effects are in fact somewhat attenuated.
7.182. Furthermore, after referring to the 50% market share for the subject imports as a whole,
MOFCOM observed that subject imports of Grades B and C both held market shares of
around 90%. MOFCOM then found that "the import s of the subject products had a relatively big
impact on the price of the domestic like products".
321 We note that the market share of imported
Grade B fluctuated, rising from 89.48% in 2008 to 96.65% in 2009, falling to 90.49% in 2010, and
rising to 97.63% in the first half of 2011. 322 The market share of imported Grade C was 100%
in 2008, 99.94% in 2009, 99.10% in 2010, and 90.69% in the first half of 2011, which shows a
decrease of almost 10 percentage points during the POI.
323 The majority 324 of domestic sales,
however, were of Grade A. The market share held by Grade A subject imports in 2008 was
only 1.45%.325 There were no Grade A subject imports thereafter. Nor was there any finding of
price undercutting in respect of Grade A subject imports. Furthermore, although subject imports
and domestic sales were concentrated in different segments of the HP-SSST market, MOFCOM
made no finding of cross-grade price effects, whereby price undercutting by subject imports of
Grades B and C might be shown to affect the price of domestic sales of Grade A. In these
circumstances, we would expect an objective and impartial investigating authority to have
examined and explained how the 90% market shar es of Grade B and C subject imports enabled
those imports, through price effects, to cause injury to the domestic industry as a whole,
notwithstanding the fact that the bulk of dome stic production was of Grade A, the sales and
market share of domestic Grade A increased, the negligible market share of subject imports of
Grade A and the absence of cross-grade price effe cts, and despite the decline in the absolute
volume of those imports and the declining market share of Grade C imports and the fluctuating

317 EC – Tube or Pipe Fittings (AB), footnote 114.
318 Final Determination, Exhibit JPN-02, p. 66. (Translation amended by Exhibit CHN-16, and accepted
by the complainants in Exhibits JPN-29 and EU-32.)
319 Final Determination, Exhibit JPN-02, p. 65.
320 See Final Determination, Exhibit JPN-2, pp. 43-49.
321 Final Determination, Exhibit JPN-02, page 66. (Translation amended by Exhibit CHN-16, and
accepted by the complainants in Exhibits JPN-29 and EU-32.)
322 Final Determination, Exhibit JPN-2, p. 44.
323 Final Determination, Exhibit JPN-2, p. 44.
324 China concedes that the "majority" of domestic production concerned Grade A products. See
footnote 270 above.
325 MOFCOM's Final Determination, Exhibit JPN-02, p. 65.
WT/DS454/R • WT/DS460/R

market share of Grade B imports. MOFCOM failed to provide any such explanation. In the absence
of any such examination or analysis, it remain s unclear how the market shares of imports of
Grade B and C HP-SSST are relevant in assessing whether subject imports caused injury to a
domestic industry producing primarily Grade A HP-SSST.
7.183. China argues326 that, although MOFCOM made no finding of cross-grade price effects, it
expressly found that "the price changes of the three [grades] are to a certain extent correlated
with one another".
327 China states that this finding was based on the fact that higher-grade
Grade B and C can, "as a matter of logic", subs titute for lower-grade Grade A products. China
asserts that because of such substitutability, a price decrease in high-end HP-SSST (Grades B
and C) produces price pressure on the low-end HP-SSST (Grade A), which need to maintain a
certain price differential with the high-end HP-SSST. China contends that MOFCOM's finding of
price correlation was supported by the Petitioners' assertion that "a large margin decrease of the
prices of [Grade B] and [Grade C] products, both high-end products, will certainly drive down the
price of [Grade A] products, so that a certain price difference among the three can be
maintained".
328 According to China, the correlation between prices of Grade A, on the one hand,
and Grade B and C, on the other hand, is a normal feature for a single product consisting of high-
end and low-end grades. China contends that, as a result of MOFCOM's finding that the
three grades constitute a "single product" with correlation between their prices, the finding of price
undercutting in respect of imports of Grades B and C necessarily implies that this price
undercutting had an effect on the domestic industry as a whole, including domestic Grade A. China
describes this conclusion as a corollary to MOFCOM's findings concerning product scope, also
taking into account MOFCOM's like product findings.
329
7.184. We are unable to accept China's argument regarding the existence of cross-grade price
correlation as sufficient to demonstrate cross-grade price effects. Even assuming, as China
contends, that such correlation is a normal feature for a single product consisting of high-end and
low-end grades, there is no meaningful analysis in MOFCOM's Final Determination of whether or
how this feature manifests itself in the specific circumstances of the product at issue, being HP-
SSST. After recording the Applicants' argument th at price correlation exists, MOFCOM simply
states that "the price changes of the three [grades] are to a certain extent correlated with one
another".
330 There is no discussion of the basis on which MOFCOM makes that finding, nor any
evaluation of the Applicants' argument. This implies that MOFCOM simply accepted the Applicants'
argument, without any consideration of the accura cy thereof. China seems to suggest that there
was no need for MOFCOM to evaluate this matter, since its finding of price correlation follows "as a
matter of logic" from the fact that higher-grade products may substitute for lower-grade products.
However, there is no evidence of any consid eration of whether there is, in fact, such
substitutability of lower and higher-end HP-SSST by MOFCOM. For us, this demonstrates that
China's substitutability argument is, therefore, ex post rationalization rather than an element of
MOFCOM's analysis, and thus of no import for our determination.
331 China also asserts that
evidence of substitutability was provided by a Japanese exporter, SMI. 332 However, there is no
reference to this evidence in MOFCOM's Final Determination. In addition, even if evidence of some
form of substitutability did exist and was presente d to MOFCOM, in the absence of any analysis by
MOFCOM of the extent to which higher-grade (Grades B and C) imports are actually used in
domestic Grade A applications, such evidence cannot be considered to show that the alleged
substitutability demonstrates price correlation.
333 Nor is there any consideration by MOFCOM of
how this unspecified degree of substitutability, and resultant price correlation, might enable
Grade B and C subject imports to cause injury to the domestic industry's Grade A operations.

326 China's first written submission, para. 501.
327 Final Determination, Exhibit JPN-02, p. 48.
328 Final Determination, Exhibit JPN–2, Exhibit EU–30, p. 48.
329 China's first written submission, para. 504; China's second written submission, para. 214.
330 Final Determination, Exhibit JPN-02, p. 48.
331 See e.g. Appellate Body Report, US – Tyres (China), para. 329 ("[D]uring panel proceedings a
Member is precluded from providing an ex post rationale to justify the investigating authority's
determination").
332 China's reply to Panel question No. 92, para. 18, and China's second written submission, para. 143.
333 The extent of substitutability should not be taken for granted for, according to Japan, Grade B is
about double the price of Grade A, and Grade C is about triple the price of Grade A (Japan's oral statement at
the second substantive meeting, para. 35, citing page 26 of the Petition (Exhibit JPN-03), and page 55 of
MOFCOM's Final Determination (Exhibit JPN-02)). China has not disputed Japan's description of the inter-grade
price differentials.
WT/DS454/R • WT/DS460/R

7.185. Furthermore, we emphasise that MOFCOM on ly found that prices of the different grades
were to a "certain extent" correlated with one another. 334 This leaves open the important issue of
the degree of impact that movements in the prices of imported Grades B and C might have had on
the price of domestic Grade A. MOFCOM makes no assessment of whether the effect would be
minimal, or sufficiently pronounced to cause prices for domestic Grade A to fall by the amounts
that they did. MOFCOM's reference to the market shares of subject imports sheds no light on this
issue.
7.186. In addition, it would appear that MOFCOM failed to account for record evidence that trends
in domestic prices by grade had no apparent rela tionship in terms of magnitude or direction with
trends in import prices. This is particularly apparent in respect of domestic Grade C, the price of
which increased by 112.80% from 2009-2010, without any corresponding movement in prices for
subject imports of Grades B and C, which actually fell over that period. In addition, the price of
domestic Grade A increased by 9.35% from 2010 to H1 2011, whereas the price of imported
Grade B fell by 10.63% during that period. An objective and impartial investigating authority
would not have found price correlation without at least addressing, and explaining, such contrary
price movements.
335
7.187. It would also appear that MOFCOM assu med that the alleged cross-grade price correlation
would result in Grade B and C subject import prices driving down domestic prices for Grade A,
rather than vice-versa. This is a particularly important consideration given that the domestic
i n d u s t r y ' s p r o d u c t i o n w a s p r i m a r i l y o f G r a d e A . I n t h i s r e g a r d , w e n o t e C h i n a ' s r e l i a n c e o n t h e
Petitioners' argument that "[a] large margin decrease of the prices of [Grades B and C] … will
certainly drive down the price of [Grade A] products, so that a certain price difference among the
three can be maintained".
336 However, there is nothing in the Final Determination to suggest that
MOFCOM ever explored this issue meaningfully. In finding a "certain extent" of price correlation,
MOFCOM made no finding that the prices of imported Grades B and C had pushed down the price
of domestic Grade A. Thus, MOFCOM never consider ed, and certainly failed to exclude, the equally
logical possibility that Grade B and C subject import prices declined in response to the decline in
domestic Grade A prices in 2009 and 2010, in order to maintain the price differential between the
various grades.337
7.188. For all of the above reasons, we consider that MOFCOM's reference to the market shares
held by subject imports is not sufficient to establish that subject imports, through price
undercutting, had "a relatively big impact on the price of the domestic like products", and
therefore caused injury to the domestic industry through their price effects. We consider that
MOFCOM's reliance on the market shares of subject imports was central to its determination that
subject imports, through their price effects, caus ed injury to the domestic industry. Given the
flaws in MOFCOM's analysis of those market shar e s i n t h a t c o n t e x t , w e f i n d t h a t M O F C O M ' s
determination of causation is inconsistent with Article 3.5 of the Anti-Dumping Agreement.338

334 Final Determination, Exhibit JPN-02, p. 48.
335 China submits at para. 155 of its second written submission that "[t]he fact that prices of certain
products are correlated does not imply that they have identical movements. Rather, it implies that the
movement of prices of certain goods will affect the movement of prices of other goods, irrespective of whether
these were moving in the same direction". China provides no explanation in support of this statement. Nor
does China indicate where MOFCOM undertook any meaningful consideration of how the movement of prices of
one grade of HP-SSST affected the movement of prices of other grades of HP-SSST.
336 Final Determination, p. 48.
337 MOFCOM's conclusion that "the domestic industry was practically unable to sell domestically" (Final
Determination, Exhibit JPN-02, p. 66) follows MOFCOM's analysis of price undercutting in respect of Grades B
and C, and therefore does not relate to domestic sales of Grade A being affected by subject import pricing. This
is confirmed in China's reply to Panel question No. 36 (para. 124), where China explains that, in making the
above-mentioned finding, MOFCOM determined that "the domestic industry's ability to sell Grade B and C was
hampered by unfair competition from, imports". MOFCOM's conclusion therefore does not suggest that
domestic Grade A operations were affected by subject imports of Grades B and C.
338 In this regard, we recall the Appellate Body's finding in Japan – DRAMs (Korea) that "there may be
cases in which certain intermediate findings may be so central to the ultimate conclusion of an
investigating authority that an error at an intermediate state of reasoning may invalidate the final conclusion"
(paras. 131-135). See also, Panel Report, China – GOES, paras. 7.450-7.542 and Appellate Body Report,
China – GOES, paras. 219-220.
WT/DS454/R • WT/DS460/R

7.5.3.4 Consequential Article 3.5 claims concerning MOFCOM's reliance on its Article 3.2
and 3.4 analyses of the price effects and impact of subject imports
7.5.3.4.1 Main arguments of the parties
7.5.3.4.1.1 Japan and the European Union
7.189. The complainants have made consequential Article 3.5 claims based on alleged
inconsistencies in MOFCOM's Article 3.2 price effects and Article 3.4 impact analyses. The
complainants recall their claims that MOFCOM's price effects and impact analyses are respectively
inconsistent with Articles 3.2 and 3.4 of the An ti-Dumping Agreement. Th ey submit that, as a
consequence, MOFCOM's reliance on those price effects and impact analyses to determine
causation is inconsistent with Article 3.5 of the Anti-Dumping Agreement. The complainants rely in
this regard on the finding of the panel in China – X-Ray Equipment that, because the investigating
authority's price effects analysis was inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping
Agreement, "the flaws in the price effects analysis also undermine[d] … the conclusion on the
causal link between the subject imports and the injury suffered by the industry".
339
7.5.3.4.1.2 China
7.190. China asks the Panel to reject the co mplainants' claims. China submits that MOFCOM
properly linked its Article 3.2 price effects consideration and its Article 3.4 impact analysis in
making its causation determination. 340 China contends that because MOFCOM's price effects and
impact analyses are not inconsistent with Arti cles 3.2 and 3.4, MOFCOM's reliance on those
analyses for the purpose of determining causation is not inconsistent with Article 3.5.341
7.5.3.4.2 Evaluation by the Panel
7.191. We recall our findings that certain aspects of MOFCOM's price effects analysis are
inconsistent with Article 3.2 of the Anti-Dumping Agreement, and that one aspect of its impact
analysis is inconsistent with Article 3.4 of the Anti-Dumping Agreement. We find that MOFCOM's
reliance on the WTO-inconsistent aspects of its price effects and impact analyses in determining
that subject imports caused material injury to the domestic industry undermines MOFCOM's
analysis of causation, and therefore renders MOFCOM's causation determination inconsistent with
Article 3.5 of the Anti-Dumping Agreement.
342
7.192. We have not upheld all aspects of the complainants' Article 3.2 and 3.4 claims. Those
aspects of the claims that we have rejected cl early cannot form the basis for any consequential
Article 3.5 claims. While many of the issues rais ed by the complainants in the context of their
Article 3.2 and 3.4 claims could, in our view, form the basis for independent claims under
Article 3.5, the complainants did not originally dispute China's position343 that no such independent
Article 3.5 claims based on MOFCOM's price effect s and impact analyses had been pursued by the
complainants.344 To avoid uncertainty, we asked the complainants to address China's
understanding of the scope of their claims. 345 We also asked China to explain the basis for its
view.346 In their replies to the Panel's question, and their comments on China's reply, the
complainants neither identify any relevant independent Article 3.5 claims set out in their written
submissions347, nor identify arguments explaining how alleged flaws in MOFCOM's price effects and
impact analyses result in independent violations of Article 3.5, as distinct from violations of
Articles 3.2 or 3.4. Accordingly, we conclude that the complainants have not advanced any

339 Panel Report, China – X-Ray Equipment, para. 7.239.
340 China's first written submission, para. 498.
341 China's first written submission, para. 489.
342 We note that this finding is consistent with that made in Panel Report, China – X-Ray Equipment,
para. 7.239.
343 China's first written submission, paras. 489 and 490.
344 China did not dispute that the complainants made independent Article 3.5 claims in respect of
MOFCOM's reliance on market shares (addressed above at Section 7.5.3.3 ), and MOFCOM's non-attribution
analysis (addressed in the next section of our findings).
345 Panel question No. 88.
346 Panel question No. 94.
347 We note that, pursuant to Paragraph 7 of the Panel's Working Procedures, the complainants were
required to set out their case and arguments in their first written submissions to the Panel.
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independent Article 3.5 claims, other than those concerning MOFCOM's reliance on market shares,
and MOFCOM's non-attribution analysis, concerning MOFCOM's price effects and impact analyses.
7.5.3.5 Whether MOFCOM properly ensured that the injury caused by certain known
factors was not attributed to subject imports
7.193. Pursuant to the third sentence of Article 3.5, investigating authorities are required, as part
of their causation analysis, to examine all "known factors" other than dumped imports which are
causing injury to the domestic industry. Where such other known factors are causing injury, the
investigating authority must ensure that the injurious effects of these factors are not "attributed"
to the dumped imports.
7.194. The complainants claim that MOFCOM failed to properly ensure that injury caused by
two known "other factors", the decline in appare nt consumption, and the increase in domestic
production capacity, was not attributed to subject imports. China asks us to reject the
complainants' claim.
7.5.3.5.1 Main arguments of the parties
7.5.3.5.1.1 Japan and the European Union
7.195. The complainants submit that MOFCOM conducted its non-attribution analysis regarding
the decline in domestic demand and expansion of domestic production capacity with respect to all
grades of HP-SSST taken together, without considering any possibility that these other factors may
have influenced different segments of the market differently. They contend that MOFCOM did this
despite the facts on the record demonstrating that imported and domestic HP-SSST were
concentrated in different segments of the market (i.e., imported products were concentrated
almost entirely in Grades B and C, while domest ic HP-SSST was concentrated overwhelmingly in
Grade A), and despite the absence of any cross-gr ade price effects of subject imports of Grade B
and C on domestic grade A.
348 The complainants also contend that MOFCOM's non-attribution
analysis, which considered whether injury caused by other factors broke the causal link between
subject imports and injury to the domestic industry, would necessarily be flawed if its initial
determination of the causal link between subject imports and material injury to the domestic
industry were itself flawed.
349
7.196. Concerning the decline in apparent consumption, the complainants contend that despite
acknowledging that a decline in apparent consumption could negatively affect the volume and
price of domestic sales
350, MOFCOM simply concluded that "the price undercutting effect of the
imports of subject products [was] the reason for the drop in price of domestic like products". 351
They assert that a sudden drop in domestic demand for a good on a given market causes the
market price of such a good to decrease accordingly.
7.197. Concerning the increase in the domestic industry's production capacity, the
complainants
352 note MOFCOM's statement that "capacity expansion can lead to output increase
and supply increase in the domestic market, thus intensifying competition and indirectly affecting
such operational metrics as price, sales volume, sales revenue and pre-tax profit". 353 The
complainants contend that, having acknowledged the possibility that an increase in capacity can
cause injury, MOFCOM improperly went on to find that the increase in production capacity did not
break the causal link between dumped imports and material injury. The complainants challenge
MOFCOM's finding that, despite the increase in production capacity, "there was no case of
oversupply" because the output of like domest ic products "was much less than apparent
consumption among domestic producers" and "remained far below demand". They contend that

348 Japan's second written submission, para. 59. European Union's oral statement at the first substantive
meeting, para. 126.
349 Japan and European Union's comments on China's reply to Panel question No. 95.
350 Final Determination, p. 68.
351 Final Determination, Exhibit EU-30, p. 70.
352 Japan's first written submission, paras. 225-233. European Union's first written submission,
paras. 316-324. Japan's second written submission, para. 59. European Union's oral statement at the
first substantive meeting, para. 130.
353 Final Determination, Exhibit JPN-2, p. 74.
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MOFCOM failed to take account of imports in its consideration of supply and demand in the
domestic market as a whole. The complainants also contend that MOFCOM erroneously
compared domestic production - the vast majority of which was of Grade A - to domestic demand
for all HP-SSST, rather than domestic demand for Grade A only. The complainants assert that
MOFCOM's analysis should have been grade-specif ic, because of the lack of competition between
the grades. They observe that, although demand for Grade A increased, the price of domestic
Grade A fell. They suggest that this was because of oversupply of Grade A, resulting from the
expansion in capacity.
7.5.3.5.1.2 China
7.198. Regarding apparent consumption, China notes the complainants' assertion that a sudden
drop in domestic demand of a good on a given ma rket causes the market price of such a good to
decrease accordingly. China asserts, though, that MOFCOM only found that apparent consumption
of Grades B and C declined. MOFCOM found that apparent consumption of Grade A increased
significantly. China queries why, if domestic prices for Grades B and C dropped due to reduced
apparent consumption, prices for Grade A dropped at the same rate, despite apparent
consumption of Grade A increasing by 74.07% during the POI.
354 China contends that MOFCOM
properly found that, although reduced apparent consumption had a certain effect on the domestic
prices, it could not explain the drop in domestic prices that actually occurred – including the
decline in the price for Grade A. According to Ch ina, therefore, MOFCOM properly found that the
effects of the reduced apparent consumption are not sufficient to break the causal link between
the dumped imports and the material injury.
7.199. Regarding the increase in domestic capaci ty, China contends that MOFCOM was entitled to
consider potential oversupply on the basis of domestic supply only, since there was no evidence to
suggest that imports might occur at non-dumped prices. China submits that MOFCOM was not
required to assess supply in the abstract, on the basis that imports might occur at non-dumped
prices. China asserts that MOFCOM's analysis was rather based on its concrete finding that, during
the POI, all imports were dumped. China also disagrees with the complainants' suggestion that
MOFCOM should have compared domestic production of Grade A with Chinese demand for Grade A
only. China contends that the domestic industry was able to manufacture and sell all three
grades
355, which constituted a single product. China also contends that the fact that, during most
of the POI, growth in domestic output was nearly double the increase in production capacity, is
crucial to MOFCOM's conclusion that the increased domestic capacity had no material effects on
domestic prices.356
7.5.3.5.2 Evaluation by the Panel
7.200. It is well established that, in order to ensure that any injury caused by other factors is not
attributed to dumped imports, Article 3.5 requires investigating authorities to "separate and
distinguish" the injurious effects of the dumped imports from the injurious effects of known other
factors causing injury at the same time.
357 M O F C O M s o u g h t t o c o m p l y w i t h t h i s o b l i g a t i o n b y
considering whether certain other factors broke th e causal link between subject imports and the
material injury to the domestic industry it had found. As a matter of law, we consider that such
methodology provides an appropriate basis for ensuring non-attribution. Indeed, this "break the
causal link" methodology has been accepted in other WTO dispute settlement proceedings.
358 In
the factual circumstances of the present case, however, we consider that MOFCOM's application of
this methodology was fundamentally flawed, and therefore its determination is inconsistent with
the requirements of Article 3.5.
7.201. Before it becomes relevant or necessary for an investigating authority to separate and
distinguish the injury caused by other factors fr om the injury caused by subject imports, the
investigating authority must first properly establish that the dumped imports have caused material
injury, and the "nature and extent"
359 of the injury caused by subject imports and the injury

354 China's first written submission, para. 550.
355 Final Determination, Exhibit JPN–2, Exhibit EU–30, p. 27.
356 Final Determination, Exhibit JPN–2, Exhibit EU–30, p. 74.
357 See, for example, Appellate Body Report, US – Hot Rolled Steel, para. 226.
358 See, for example, Panel Report, EU – Footwear (China), para. 7.483.
359 Appellate Body report, US – Hot-Rolled Steel, para. 226.
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caused by the other factor(s). As discussed in detail above, we have concluded that MOFCOM
failed to properly establish the causal link between subject imports and material injury to the
domestic industry in this case. In these circum stances, MOFCOM's assessment of the "nature and
extent" of the injury caused by subject imports was necessarily flawed. Thus, having failed to
properly establish the causal link between subjec t imports and material injury to the domestic
industry, MOFCOM could not have meaningfully a ssessed whether or not injury caused by other
factors was sufficient to break that wrongly-determined causal link.
7.202. In light of the fundamental flaw in MOFCOM's causation determination, it is not necessary
for us to address every aspect of the parties' no n-attribution arguments in detail. We do observe,
however, that MOFCOM's analyses of the injuri ous effects of both the decline in apparent
consumption and the increase in domestic production capacity failed to address the fact that
subject imports were comprised almost exclusively of Grades B and C, while the domestic
industry's operations were focused on Grade A. Those analyses also failed to account for the fact
that MOFCOM had not established that subject imports of Grades B and C had injurious price
effects on domestic Grade A. In these circumstance s, and bearing in mind the standard of review
set forth in Article 17.6(i) of the Anti-Dumping Agreement, we would expect an investigating
authority to have considered the possibility that other known causes of injury might affect the
different grades produced and sold by the domestic industry differently. We would also expect an
investigating authority to have considered whether injury suffered by the domestic industry
affected its Grade A operations disproportionately to its overall HP-SSST operations, whether this
disproportionate effect might have been caused by factors other than subject imports, and
whether these other factors might also account for injury suffered in respect of Grade B and C
operations.
360
7.203. By way of example, we note that MOFCOM's analysis regarding the decline in apparent
consumption is based in part on the fact that the domestic price for Grade A fell at the same rate
as the price of Grades B and C 361, even though apparent consumption of Grade A increased. China
explains that MOFCOM determined that "the decrease in prices of Grade A can only be explained
by the dumped imports"362, and that "MOFCOM could properly consider that injury to Grade A was
caused by dumped imports of Grade B and Grade C, which can substitute Grade A". 363 However,
since MOFCOM did not find that subject imports of Grades B and C had price effects on domestic
Grade A products, and since there was no basis for MOFCOM to find cross-grade substitution or
price correlation 364, MOFCOM had no basis for determining that subject imports (of Grades B
and C) had any effect on the price of domestic Grade A. In these circumstances, there was no
basis for MOFCOM to rely on the fact that the domestic Grade A price had fallen at the same rate
as domestic Grade B and C prices as a basis to reject the decline in apparent consumption as a
potential cause of injury.
7.204. For the above reasons, we find that MOFC OM's examination of the injury caused by the
decrease in apparent consumption and the increase in production capacity is flawed and not
objective. MOFCOM's non-attribution analysis of these factors is therefore insufficient, and its
determination inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement.
7.5.3.6 Conclusion
7.205. For the above reasons, we uphold the complainants' claims that MOFCOM's reliance on the
market share of subject imports in its causation analysis is inconsistent with Articles 3.1 and 3.5.
We also uphold the complainants' consequential claims that because MOFCOM's price effects and

360 We found, in the context of the complainants' Article 3.4 claims, that MOFCOM was not required to
undertake a segmented impact analysis. This does not mean, however, that MOFCOM's Article 3.5 causation
determination should not reflect the conclusions of its grade-specific price effects analysis, and might indeed be
more meaningful and robust as a result.
361 China's first written submission, para. 550. We note that China does not refer to any finding by
MOFCOM that the domestic prices for Grades A, B and C all dropped by the same "pace". This raises questions,
given the very substantial increase in the domestic price of Grade C. However, it was not necessary for us to
pursue these questions in order to resolve the claims before us.
362 China's second written submission, para. 234.
363 China's second written submission, para. 236.
364 China relies on alleged cross-grade price correlation to argue cross-grade substitutability (China's
second written submission, para. 142). We have already rejected China's price correlation arguments at
paras. 7.183. - 7.187.
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impact analyses are inconsistent with Articles 3.2 and 3.4 respectively, MOFCOM's subsequent
reliance on those analyses and conclusions in the context of its causation determination is
inconsistent with Article 3.5. We also uphold the complainants' claims that MOFCOM's non-
attribution analysis in respect of the decrease in apparent consumption and the increase in
domestic production capacity is inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping
Agreement.
7.6 Use of facts available for the all others rate
7.6.1 Introduction
7.206. MOFCOM applied all others rates that were based on the highest margins of dumping for
the cooperating European and Japanese exporters. The all others rate for European companies was
based on the margin of dumping established for SM ST. The all others rate for Japanese exporters
was based on the margin of dumping established for Kobe. Japan and the European Union
challenge the all others rates for Japanese and Eu ropean exporters respectively, claiming that the
requirements of Article 6.8 and Annex II:1 of the Anti-Dumping Agreement were not complied
with. China asks the Panel to reject their claims.
7.6.2 Main arguments of the parties
7.6.2.1 Japan and the European Union
7.207. The complainants contend that MOFCOM failed to fulfil the requirements of Article 6.8 and
Annex II:1 in applying facts available to determine the all others rates. They submit that MOFCOM
could not properly have determined that unkno wn exporters had failed to provide necessary
information, in the sense of Article 6.8, since MOFCOM had failed to "specify in detail the
information required" of unknown exporters, or "ensure" that unknown exporters were "aware that
if information is not supplied within a reasonable time, the authorities will be free to make
determinations on the basis of the facts availabl e", consistent with Annex II:1. According to the
complainants
365, the Appellate Body in Mexico – Rice explained that an exporter must be given the
opportunity to provide information required by an investigating authority before the investigating
authority could resort to facts available that could be adverse to the exporter's interests. The
complainants assert that this Appellate Body finding was relied on by the panel in China – GOES ,
where the panel found that the investigating authority had improperly applied facts available
because the authority failed to inform interested parties of the necessary information required of
them.
7.208. In addition, Japan asserts that even if MOFCOM could be understood to have requested
certain quantity and value information in its Notice of Initiation, the application of facts available to
determine the all others rate was much broader in scope. The European Union raises
two additional, consequential claims regarding MO FCOM's use of facts available to determine the
all others rate. First, the European Union contends that alleged flaws in MOFCOM's determination
of a margin of dumping for SMST (which was used as the basis for the all others rate) render the
application of such determination, through the facts available mechanism, inconsistent with
Article 6.8. Second, the European Union contends that MOFCOM violated Article 6.8 and
paragraph 1 of Annex II of the Anti-Dumping Agreement as a result of "any possible substantive
consequences" for the SMST margin "of any and all of the above procedural claims insofar as they
relate to dumping".
366
7.6.2.2 China
7.209. In respect of the complainants' principal claims, China refers to the findings of the panel in
China – Broiler Products to argue that the reference to the use of facts available for non-
cooperating exporters in MOFCOM's Notice of Initiation was sufficient for the purposes of
Article 6.8 and Annex II:1. China also asserts that the facts of the present case are different from
those in China – GOES because, in addition to its Notice of Initiation, MOFCOM also posted the

365 Japan's first written submission, para. 306.
366 European Union's first written submission, para. 187.
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exporters' questionnaire on its website. According to China, therefore, exporters had ample notice
of the information that they were required to submit, and of the consequences for not doing so.
7.210. Regarding the additional claim pursued by Japan, China notes that the failure by unknown
producers/exporters to register and provide info rmation requested in the Notice of Initiation
implied that MOFCOM had no basis on which to determine their margin of dumping, and that
MOFCOM was thus justified in determining this margin on the basis of facts available. Moreover,
China denies that MOFCOM applied facts available more broadly than the scope of the information
requested in the Notice of Initiation. China co ntends that MOFCOM applied facts available in
respect of the information requested in the export ers' questionnaire, which was published on the
website address provided in the Notice of Initiation.
7.211. China also asks the Panel to reject the European Union's consequential claim regarding
alleged inconsistencies with Article 2 of the Anti -Dumping Agreement. China in any event denies
that the application of a dumping rate that is inconsistent with Article 2 as facts available would
necessarily violate Article 6.8 and Annex II. China submits that this is a matter that should be
assessed under paragraph 7 of Annex II, the only provision dealing with the substantive quality of
the "facts available" that are relied upon. China notes that no such claim has been brought by the
European Union. Concerning the European Union's second consequential claim regarding the
potential substantive consequences of procedural violations in respect of SMST's margin, China
argues that it is unclear as to which possible consequences should allegedly form the basis of this
consequential claim.
7.6.3 Main arguments of third parties
7.6.3.1 United States
7.212. The United States considers that China acted inconsistently with Article 6.8 and Annex II:1
of the Anti-Dumping Agreement by applying fact s available to the extent that MOFCOM had no
evidence that any interested party "refused access to" or otherwise "did not provide" information
that was "necessary" to the antidumping investigation, or otherwise "significantly impeded" the
antidumping investigation.
367
7.6.4 Evaluation by the Panel
7.6.4.1 The complainants' principal claims
7.213. We are unable to accept the complainants' principal Article 6.8 claims since, taking into
account the totality of the facts, we consider that MOFCOM had sufficient basis to determine that
unknown exporters had failed to provide necessary information it had sought to obtain.
7.214. We note the complainants' reliance on the findings of the panel in China – GOES . We
observe in particular that panel's finding that "given that the unknown exporters were not notified
of the "necessary information" required of th em, the Panel cannot conclude that they refused
access to or failed to provide the information".
368
7.215. China, on the other hand, relies on the findings of the panel in China – Broiler Products .
Although that case involved facts similar to those in China – GOES , the panel did not follow the
analysis of the China – GOES panel, and reached a different conclusion. The panel observed that
requiring an authority to establish that unknown exporters had actually failed to cooperate with
the investigation "would make it difficult, if not impossible, for a Member to determine an
appropriate anti-dumping duty rate for certain unknown producers/exporters and thus apply anti-
dumping measures with respect to their imports".
369 The panel also observed that MOFCOM had
posted the Notice of Initiation and Registration Form - which requested information from
interested parties, including producers/exporters, in order to register to participate in the
proceedings, and included a warning that facts available could be resorted to in the case of failure
to register - on its website. The panel concluded that "MOFCOM reasonably considered that the

367 United States' third party submission, para. 31.
369 Panel Report, China – Broiler Products, para. 7.305.
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failure to register meant that an interested party failed to 'otherwise … provide … necessary
information' within the meaning of Article 6.8".370
7.216. There are similarities between the facts of the present case and the facts in the two above-
mentioned proceedings. Most notably, in all three cases MOFCOM published a Notice of Initiation
calling on interested parties to register for the investigation. The Notice specified that:
If any interested party fails to register for responding to the investigation within the
time limit, MOFCOM shall have the right to reject the relevant materials submitted by
the interested party and make determinations on the basis of the available materials
when that determination is made.371
7.217. There is also a significant difference between the facts of the present case and the facts of
China – GOES and China – Broiler Products . This difference concerns the fact that, in the present
case, MOFCOM published the exporter questionnaire on its website, at a web address set forth in
the Notice of Initiation. 372 The questionnaire informed export ers of the information that was
required of them. The questionnaire also specified that:
If your company fails to provide the respon se to this questionnaire according to the
requirements in this questionnaire within the prescribed time limit, or fails to provide
the complete and accurate response, or does not allow the Bureau of Fair Trade for
Imports & Exports of MOFCOM to verify the provided information and materials,
pursuant to the provisions of the Antidumping Regulations of the People's Republic of
China, the Bureau of Fair Trade for Imports & Exports of MOFCOM may make its
determinations on the facts already known and best information available.
373
7.218. We consider that the publication of MOFCOM's questionnaire on its website 374 is an
important factor, since it informed all export ers – even those unknown to MOFCOM – of the
necessary information that MOFCOM required them to provide. It also indicated that facts available
would be used in the event that they failed to provide that information. In other words, unknown
exporters were on notice of what information was required of them, and of what the consequences
would be if they failed to provide that information. Thus, in our view, this action by MOFCOM
satisfied the requirement of Annex II:1 to "specify in detail the information required" of foreign
producers and exporters, including those not known to MOFCOM, sufficiently to allow MOFCOM to
conclude that the failure of such foreign produc ers or exporters to come forward constituted a
failure to provide necessary information within the meaning of Article 6.8, and thus that the facts
available could be used in making determ inations with respect to such entities.
375 In light of this
additional, and important, factual element, we consider that there is no basis for a finding that
"unknown exporters were not notified of the 'necessary information' required of them"
376, and
therefore that the use of facts available was not justified.
7.219. We note Japan's argument 377 that MOFCOM provided no official public notice that the
questionnaire would be available on its website. However, we agree with the panel in China –
Broiler Products that neither Article 6.8 nor Annex II of the Anti-Dumping Agreement specifies
what form the investigating authority's request for information should take. 378 We also agree with

370 Panel Report, China – Broiler Products, para. 7.306. (footnote omitted)
371 Initiation Notice, Exhibit JPN–10, Exhibit EU–2, p. 2. At footnote 564 of its first written submission,
China objects to the translation of these exhibits by the complainants. According to China, the wording "and
make determinations on the basis of the available materials when that determination is made" is missing.
Since the complainants do not respond to China's objection, we proceed on the basis of the English translation
proposed by China.
372 China asserts that the Notice of Initiation provides that "[t]he registration Form for
Dumping Investigation may be downloaded from the Notice Section on the website of [MOFCOM]
(http:gpj.mofcom.gov.cn)" (China's first written submission, footnote 564). The complainants do not dispute
China's version of the Notice of Initiation.
373 Blank Dumping Questionnaire, Exhibit CHN–4.
374 We note that the complainants do not contest that the questionnaire was published on MOFCOM's
website.
375 We consider that our position is broadly consistent with the recent findings made by the panel in
China – Autos (US) (Panel Report, China – Autos (US), paras. 7.121-7.140).
377 Japan's second written submission, paras. 69-71.
378 Panel Report, China – Broiler Products, para. 7.301.
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the finding by the panel in China – Autos (US) that an investigating authority need not "publicly
notify the dumping questionnaire in order to satisfy the requirements of Article 6.8 and
paragraph 1 of Annex II".
379 There may be more effective means through which MOFCOM could
have informed interested parties that its questionnaire would be published on its website.
However, the publication of MOFCOM's web address in the Notice of Initiation, and the subsequent
positing of its questionnaire at that address, meant that it was not unduly difficult for interested
parties that had not registered with MOFCOM to ascertain the information being sought by
MOFCOM.
7.220. For these reasons, we reject the complainants' claims that MOFCOM failed to comply with
the requirements of Article 6.8 and Annex II:1 when it applied facts available to determine the all
others rates.
7.6.4.2 Additional claims pursued by the complainants
7.221. While Japan claims that MOFCOM applied facts available more broadly than the scope of
the limited information sought in the Notice of Initiation, it has not argued that MOFCOM applied
facts available more broadly than the scope of the information requested in the exporters'
questionnaire. In light of our finding that MOFCOM informed exporters of the information required
of them by posting the exporters' questionnaire on its website, there is no basis for Japan's claim.
7.222. The European Union has made two consequential claims. The first relates to its substantive
Article 2 claim regarding the margin of dumping determined in respect of SMST. The
European Union contends that any substantive inconsistency regarding this margin will necessarily
contaminate any all others rate based on that margin, rendering the all others rate inconsistent
w i t h A r t i c l e 6 . 8 . W e r e c a l l t h a t w e h a v e u p h e l d t h e E u r o p e a n U n i o n ' s c l a i m s t h a t M O F C O M ' s
determination of a margin of dumping for SMST is inconsistent with Articles 2.2.2 and 2.4 of the
Anti-Dumping Agreement. We agree with the European Union that any all others rate determined
on the basis of the margin established for SMST as facts available therefore lacks an appropriate
factual foundation, contrary to Article 6.8 of the Anti-Dumping Agreement.
380 Since the
requirement that the use of facts available be ba sed on an appropriate factual foundation derives
from Article 6.8, there is no need for the European Union to have pursued a claim under
Annex II:7, as suggested by China.
7.223. Second, the European Union claims that China violated Article 6.8 and paragraph 1 of
Annex II of the Anti-Dumping Agreement by applying SMST's margin of dumping as the all others
rate as a result of "any possible substantive cons equences of any and all of the above procedural
claims insofar as they relate to dumping". 381 In response to China's argument that it is unclear as
to which possible consequences form the basis of this consequential claim, the European Union
states that "it is in the nature of a procedural claim that one does not know what the substantive
consequences may eventually be of remedying the procedural defect". 382 W e c o n s i d e r t h a t t h e
European Union has failed to establish a prima facie case in respect of this claim. At a minimum,
the European Union should have reviewed its procedural claims, and explained which alleged
inconsistencies resulted in a violation of Articl e 6.8 and Annex II:1, and how. The European Union
has failed to do so, and we decline to make out a case on its behalf. Furthermore, in its
second written submission the European Union asserts
383 that "what the substantive consequences
may or may not be is not a matter for these panel proceedings, but rather, in the first place, for
the implementing Member, subject to review in compliance proceedings". We agree. China will
need to consider the substantive consequences of any procedural violations as it implements any
recommendation of the DSB in respect of such violations. If the complainants consider that China
fails to address any substantive issues raised by the procedural violations, they would be able to
raise those substantive issues in Article 21.5 compliance proceedings. In referring to potential
review in compliance proceedings, the European Un ion appears to acknowledge that there is no

379 Panel Report, China – Autos (US), para. 7.139.
380 The text of Article 6.8 refers to "facts available". Accordingly, even when applying facts available, an
investigating authority's determination must have a factual foundation (Panel Report, China – GOES,
para. 7.296).
381 European Union's first written submission, para. 187.
382 European Union's oral statement at the first meeting of the Panels, para. 47.
383 European Union's second written submission, para. 135.
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basis for any findings by the Panel regarding the substantive consequences of procedural violations
in the present proceeding.
7.6.4.3 Conclusion
7.224. We reject the complainants' principal claims under Article 6.8 and Annex II:1 that
MOFCOM failed to properly apply facts available because it had failed to inform unknown exporters
of the information required of them. We also reject Japan's supplemental claim regarding the
scope of the facts available applied by MOFCOM. We uphold the European Union's claim that, as a
consequence of SMST's margin of dumping no t having been determined consistent with
Articles 2.2.2 and 2.4 of the Anti-Dumping Agreem ent, the use of SMST's margin of dumping as
facts available to establish the all others rate for exporters from the European Union is inconsistent
with Article 6.8 of the Anti-Dumping Agreement. We reject the European Union's claim regarding
the substantive consequences of procedural violations in respect of SMST's margin of dumping.
7.7 Essential facts
7.225. The complainants submit that MOFCOM failed to comply with the Article 6.9 obligation to
disclose essential facts regarding its dumping and injury determinations, and its determination of
the all others rates. The European Union also makes a claim under Article 6.4 in respect of
MOFCOM's determination of the all others rate on the same grounds.
7.7.1 Main arguments of the parties
7.7.1.1 Japan and the European Union
7.226. Regarding the dumping determination, the complainants contend that MOFCOM failed to
disclose essential facts, specifically: (i) the specific cost and sales data applied for the calculation
of normal value and export prices underlying the margin calculations; (ii) adjustments to this data,
for instance, to take account of taxes and freight; and (iii) information on the calculation
methodology, namely the formulae used in calculations, the data applied in these formulae, and
information on how MOFCOM applied these data in calculations for normal value, export price and
production costs. The complainants assert that MO FCOM failed to disclose any of this information.
The European Union submits that "[i]t is particularly difficult to understand why, if a firm provides
a spread sheet with certain data destined to be used to calculate a dumping margin, it should not
receive disclosure of what is in essence the same spread sheet, duly completed with the data
actually relied on by the investigating authority".
384 The European Union further submits that
MOFCOM's alleged failure to disclose the essential facts for its dumping determination also violates
Article 6.4.
7.227. Regarding the injury determination, th e complainants contend that MOFCOM failed to
disclose, specifically: (i) complete information about the import prices it used in its price effects
analysis for Grades A and C; (ii) any domestic prices; (iii) the percentage change in the domestic
price of Grade C in the first half of 2011 as compared with the first half of 2010; (iv) the margins
of overselling for Grade A in 2008 and the HP-SSST product as a whole (to the extent that there
were relevant domestic sales); (v) the margin of overselling or underselling for Grade C in the
first half of 2011; and (vi) the margin of und erselling for Grade B for the years 2008, 2009
and 2010.
385
7.228. Regarding the all others rates, the complainants claim that MOFCOM violated Article 6.9 by
failing to disclose (i) the facts leading to the conclusion that the use of facts available was
warranted to calculate the all others rate, (ii) the particular facts that were used to determine the
all others rates, and (iii) the justification for using the highest dumping margin found for a
cooperating exporter as the all others rate.
386 The European Union also claims a violation of
Article 6.4 on the same grounds.

384 European Union's first written submission, para. 111.
385 The complainants assert that MOFCOM disclosed only a range of underselling (i.e., -3% to -28%) for
those years, without specifying the particular margin of underselling for any given year.
386 Japan's first written submission, paras. 307 and 308. European Union's first written submission,
paras. 124 and 125.
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7.7.1.2 China
7.229. China asks the Panel to reject the co mplainants' claims. China submits that MOFCOM
disclosed all "essential facts", and provided sufficient non-confidential summaries in respect of
those "essential facts" for which it was bound by confidentiality obligations.
7.230. China submits that the complainants fail to make a prima facie case, as they only rely on
general allegations that are not substantiated in any way by means of a specific reference to the
disclosure documents. According to China, the Eu ropean Union's failure to provide the disclosure
document with respect to Tubacex as an exhibit implies that no prima facie case was made. China
further contends that MOFCOM disclosed all essential facts pertaining to its dumping
determinations in its preliminary and final dumping disclosures. In particular, China submits that
MOFCOM explained when it accepted data reported by the respondents, and when it resorted to
constructed normal values or export prices. Concerning production costs, SG&A and profits, China
asserts that MOFCOM explained when it accepted the data submitted by the exporting producers,
and when it resorted to other data. China also asserts that MOFCOM indicated when adjustments
requested by respondents were upheld, and the amount of adjustments made in other cases.
China also contends that MOFCOM provided the necessary information for respondents to
understand the margin calculation methodology. In addition, China contends that the margin
calculation methodology is part of MOFCOM's reas oning, and therefore falls outside the scope of
Article 6.9, which only applies in respect of "facts".
387 China also submits that MOFCOM generally
disclosed all relevant information supporting its injury and causation determinations. China
contends, though, that MOFCOM was not required to disclose some of the information identified by
the complainants because of its obligation (under Ar ticle 6.5) to protect confidentiality and that, in
this case, China in any event provided a sufficient non-confidential summary. China further
contends that the findings of the panel and Appellate Body in China – GOES confirm that the
relationship between the prices of the subject imports and the domestic prices is what is to be
disclosed.
388
7.231. China asks the Panel to reject the complainants' claims concerning the disclosure of
essential facts in respect of the all others rate s. China submits that MOFCOM properly disclosed
that facts available were applied in respect of the all others rates because of unknown exporters'
failure to respond to the Notice of Initiation, to register with MOFCOM, or to respond to MOFCOM
questionnaire for exporters. China submits that MOFCOM properly disclosed that the all others
rates would be determined on the basis of the highest dumping margin determined for European
and Japanese exporters respectively. China denies that MOFCOM's justification for applying the
highest rates from cooperating exporters as the all others rates is an "essential fact" within the
meaning of Article 6.9. With regard to the additional Article 6.4 claim pursued by the
European Union, China denies that Article 6.4 imposes any active disclosure obligation on
investigating authorities. China contends that, in order to pursue a claim under Article 6.4, the
European Union should have shown that MOFCOM ha d denied an interested party's request to see
information used by the authorities.
7.7.2 Main arguments of third parties
7.7.2.1 United States
7.232. The United States
389 asserts that the calculations relied on by an investigating authority to
determine the normal value and export prices, as well as the data underlying those calculations,
constitute "essential facts" forming the basis of the investigating authority's imposition of final
measures within the meaning of Article 6.9. The United States contends that the calculations and
underlying data are facts that are "absolutely indispensable" to the determination of the existence
and magnitude of dumping.
390 The United States asserts that, without such information, no

387 China's first written submission, paras. 665-677; China's second written submission, paras. 268-280.
388 China's first written submission, paras. 682-687; China's second written submission, paras. 281-285;
China's reply to Panel questions Nos. 72 and 75-77, paras. 186-188 and 189-197; China's reply to Panel
question No. 96, paras. 27-29.
389 United States' third party submission, paras. 18-24.
390 The United States refers in this regard to Panel Report, EC – Salmon, para. 7.805 (noting that the
ordinary meaning of "essential" includes "of or pertaining to a thing's essence" and "absolutely indispensable or
necessary").
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affirmative determination could be made and no definitive duties could be imposed. The
United States considers that if the interested parties are not provided access to these facts used
by the investigating authority on a timely ba sis, they cannot defend their interests. The
United States submits that the fact that a party has provided information to the investigating
authority does not mean that the exporter knows with certainty which of that information will be
used and in what capacity. The United States also asserts that MOFCOM should have disclosed the
essential facts forming the basis for the calculation of the all others rate. The United States also
considers that MOFCOM should have disclosed to the interested parties information related to
domestic prices, import prices, and the comparison of these prices.
391
7.7.3 Evaluation by the Panel
7.233. We begin by addressing the complainants' Article 6.9 claims in respect of MOFCOM's
dumping determination. We shall then turn to the Article 6.9 claims in respect of MOFCOM's injury
determination. Thereafter, we address the complainants' Article 6.9 and 6.4 claims in respect of
MOFCOM's determination of the all others rates.
392
7.7.3.1 MOFCOM's dumping determination
7.7.3.1.1 Data underlying MOFCOM's determination of dumping
7.234. The complainants' claims concerning MOFCOM's alleged failure to disclose the data
underlying its dumping determinations are based on the fact that MOFCOM provided a narrative
description of the cost and sales data, and adjustments, on which its findings would be based,
rather than disclosing the actual data.
393 The complainants consider that MOFCOM's choice to
provide a narrative description, rather than actual data, is insufficient for the purposes of
Article 6.9. Japan asserts in this regard that "MOFCOM's disclosure documents included only brief
narrative descriptions of how the dumping margins were calculated, without any disclosure of the
underlying cost or sales data that was used, how particular adjustments were applied to the cost
or sales data, and the calculation methodology applied to all of these data to determine dumping
margins".
394
7.235. Previous WTO dispute settlement proceedings have established that the basic data
underlying an investigating authority's dumping determination constitute "essential facts" within
the meaning of Article 6.9. 395 We agree. In addition, the panel in China – Broiler Products found
that a narrative description of the data used cannot ipso facto be considered insufficient disclosure,
provided the essential facts the authority is referring to are in the possession of the respondent. 396
We agree. In cases where the relevant essential facts are already in the possession of the
respondents, we do not consider that Article 6.9 requires investigating authorities to prepare
disclosures containing the entirety of the essential facts under consideration. In particular, we do

391 United States' third party submission, paras. 32-34.
392 The European Union requests the Panel to exercise its right, under Article 13.1 of the DSU, to seek
information from China "equivalent to the full disclosure that should have been made, that is, of all the
essential facts, having particular regard to the concerns raised by the European Union and Japan, and given
the BCI procedures in place". (European Union's first written submission, paras. 331 and 336.) China notes
that Article 13.1 of the DSU is generally used by panels to obtain expert advice and to accept amicus curiae
briefs. Exceptionally, panels have used this provision to request information from Members that are party to a
dispute. China submits that there will be sufficient information available to the Panel to conduct an objective
assessment of the matter pursuant to Article 11 of the DSU. (China's first written submission, paras. 782
and 787.) We consider that the parties have provided sufficient and relevant information for the Panel's
assessment of the claims and matter before it. Thus, we need not exercise our right under Article 13.1 of the
DSU to seek further information from the parties. Accordingly, we reject the European Union's request. We also
note that the European Union objects to the BCI designation of certain information submitted by China in
connection with MOFCOM's disclosure of essential facts. In its objection, the European Union states that "as we
further explain below, this material must not be designated BCI but must be complete[ly] expunged from the
Panel record". (European Union's opening statement at the second meeting of the Panel, para. 11.) As we were
unable to find, and the European Union does not identify, where it further explains its objections with respect
to the information at issue, we have no basis to properly consider the European Union's objections. We also
note that the designation of this information as BCI did not hamper us in making our findings.
393 Japan's first written submission, para. 290. European Union's first written submission, para. 115.
394 Japan's second written submission, para. 90.
395 See, for example, Panel report, China – X-Ray Equipment, para. 7.402.
396 Panel Report, China – Broiler Products, para. 7.95.
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not consider that the authority need necessarily disclose a spread sheet "duly completed with the
data actually relied on by the investigating authority", as suggested by the European Union. 397
While this would be one way of complying with Article 6.9, a narrative description would also
suffice in the appropriate circumstances, provided that such description does not leave uncertainty
as to the essential facts under consideration.
7.236. MOFCOM made both preliminary and final dumping disclosures to the Japanese and
European exporters at issue. The narrative in those disclosures described the sales data under
consideration, the basis for determining normal value and export price, and the adjustments made
thereto. MOFCOM specified when it used data or made adjustments requested by the exporters. In
addition, MOFCOM disclosed actual data when it departed from the data submitted by the
exporters.
398 Other than observing that MOFCOM failed to provide actual data that was already in
the respondents' possession, the complainants have not identified any flaws in MOFCOM's
narrative description, or otherwise explained how such description would not have been sufficient
for the relevant exporters to defend its interests. In these circumstances, there is no basis for us
to find that the narrative descriptions provided by MOFCOM do not satisfy the requirements of
Article 6.9 of the Anti-Dumping Agreement.
7.7.3.1.2 Calculation methodology
7.237. Regarding the complainants' claims that MOFCOM was required by Article 6.9 to disclose
its dumping margin calculation methodology, we note that the Article 6.9 disclosure obligation only
applies in respect of essential "facts". The ordinary meaning of the term "fact" is "[a] thing known
for certain to have occurred or to be true".
399 The word "methodology" is defined as "[a] body of
methods used in a particular branch of study or activity". 400 These definitions tend to suggest that
a dumping calculation "methodology" should not be treated as a "fact". However, pursuant to
Article 31.1 of the Vienna Convention, treaty terms must also be interpreted in their context, and
in the light of their object and purpose. In this regard, we note the immediate context provided by
the second sentence of Article 6.9, which provid es that the disclosure of essential facts "should
take place in sufficient time for the parties to defend their interests". This provision indicates that
the terms of the first sentence of Article 6.9 should be interpreted in a manner that allows
interested parties to defend their interests. We therefore agree with the finding by the panel in
EC – Salmon (Norway) that "the purpose of disclosure under Article 6.9 is to provide the interested
parties with the necessary information to enable them to … comment on or make arguments as to
the proper interpretation of those facts".
401
7.238. We are not persuaded that disclosure of the data underlying a dumping determination
would enable an interested party to properly defend its interests – through, for example,
commenting on the proper interpretation of those facts - unless that interested party were also
informed of the methodology applied by the investigating authority to determine the margin of
dumping. Since the application of different methodologies to the same data would likely give rise
to different results, merely disclosing the underlying data under consideration, without also
disclosing the methodology under consideration, would be of little use in clarifying the factual basis
of the investigating authority's determinations. We note that this was the approach adopted by the
panel in China – Broiler Products, which found that:
a proper disclosure of the comparison would require not only identification of the
home market and export sales being used, but also the formula being applied to
compare them. What formula was applied is an essential element of a comparison of
normal value to export price and is just as fundamental to an understanding of the
establishment of the margin of dumping as the data reflecting the individual sales.
The disclosure of the formulas applied is necessary to enable the respondent to
comment on the completeness and correctness of the conclusions the investigating
authority reached from the facts being considered, provide additional information or

397 European Union's first written submission, para. 111.
398 For example, MOFCOM explained in detail the data that it used to determine the cost of producing
certain steel billets when constructing normal value in respect of SMI (see Exhibits JPN-18 and 20).
399 New Shorter Oxford English Dictionary, 1993, 4th Edition, p. 903 (Exhibit CHN-5).
400 New Shorter Oxford English Dictionary, 1993, 4th Edition, p. 1759 (Exhibit CHN-4).
401 Panel Report, EC – Salmon (Norway), para. 7.805, cited with approval in Appellate Body Report,
China – GOES, footnote 390.
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correct perceived errors, and comment on or make arguments as to the proper
interpretation of those facts. Without these formulas, a respondent would have an
insufficient understanding of what the authority has done with its information and how
that information was being used to determine the dumping margin.
402
7.239. We agree with the approach adopted by the panel in China – Broiler Products, and adopt it
as our own. Accordingly, we consider that, in disclosing the essential facts underlying its dumping
determination, MOFCOM should also have disclosed the calculation methodology used to calculate
the margin of dumping on the basis of those essential facts. By failing to disclose that
methodology, MOFCOM acted inconsistently with Article 6.9 of the Anti-Dumping Agreement.
7.7.3.2 Essential facts concerning MOFCOM's injury determination
7.240. We recall that the purpose of the Article 6.9 disclosure obligation is to allow interested
parties to understand the factual basis for the decision whether to apply definitive measures in
order to be able to defend their interests, before a final determination is actually made. MOFCOM's
injury determination was based on its conclusions regarding the price effects of subject imports,
based on findings of price undercutting in respect of Grade B and C subject imports. Accordingly,
we consider that MOFCOM was required by Article 6.9 to disclose to interested parties the actual
price comparisons on which those findings of pric e undercutting and price effects were based, and
all of the underlying data considered by MOFCOM in making those findings. This approach is
consistent with the finding of the Appellate Body in China – GOES that all "essential facts relating
to the price comparisons"
403 should be disclosed. 404 O u r a p p r o a c h i s a l s o c o n s i s t e n t w i t h t h e
finding by the panel in China – X-ray Equipment that Article 6.9 requires the disclosure of "the
entire body of facts essential to [the investigating authority's] analysis of the price effects of the
dumped imports". 405 With these considerations in mind, we now turn to the detail of Japan's
Article 6.9 claims in respect of MOFCOM's injury determination.
7.7.3.2.1 Import price data
7.241. Turning first to the complainants' claims in respect of Grade A and C import price data, we
consider, for the reasons set forth in the preceding paragraph, that the import price data
considered by MOFCOM was part of the body of facts essential to MOFCOM's price effects analysis.
We do not understand China to deny that import price data constitute essential facts falling within
the scope of Article 6.9. China rather asserts that MOFCOM was prevented from disclosing such
data by virtue of the confidentiality requirements of Article 6.5. We recall in this regard that the
Appellate Body confirmed in China – GOES that the Article 6.5 obligation to protect confidentiality
does not excuse a total failure of disclosure, in the sense that a non-confidential summary of the
relevant essential facts should be disclosed instead. We agree with that finding, and adopt it as our
own.
7.242. Regarding Grade A, MOFCOM failed to di sclose any import price data whatsoever, even
though a small quantity of such products were imported in 2008. MOFCOM stated that this price
data was confidential, since imports came from only one exporter.
406 As indicated above, we do
not consider that the confidentiality of an essential fact justifies the total absence of any disclosure
in respect thereof. Rather than disclosing noth ing about Grade A import prices, MOFCOM should
have disclosed a meaningful non-confidential summary thereof. Japan suggests that MOFCOM
might, for example, have disclosed a meaningful non-confidential price range. We do not disagree,
although we are not suggesting that any particular form of non-confidential disclosure is required.
MOFCOM's failure to disclose any essential facts in respect of Grade A import prices for 2008 is
inconsistent with the requirements of Article 6.9.

402 Panel Report, China – Broiler Products, para. 7.91. (footnotes omitted)
403 Appellate Body Report, China – GOES, para. 247. By referring to essential facts "relating to" the
relevant price comparisons, the Appellate Body necessarily envisages that Article 6.9 requires more than the
mere disclosure of the price comparisons themselves. We therefore reject the more restrictive understanding of
the Appellate Body's findings proposed by China in its reply to Panel question No. 96.
404 This is also consistent with our finding that the data underlying MOFCOM's dumping determination
must be disclosed.
405 Panel Report, China – X-ray Equipment, para. 7.409.
406 Injury Disclosure, Exhibit JPN-23, Section 3, second sub-section D.
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7.243. Regarding Grade C, China asserts that MOFCOM properly treated the relevant import price
data as confidential because only two foreign producers exported that product during the POI.
China contends that MOFCOM complied with Article 6.9 by disclosing a meaningful non-confidential
summary thereof, in the form of the relative change in their adjusted annual weighted average
price. A similar argument was addressed by the panel in China – X-Ray Equipment . That panel
found that "by simply informing interested parties of the trends in subject import and domestic
prices, MOFCOM provided little basis for inte rested parties to defend their interests".
407 We agree
with that panel's finding. We do not consider th at MOFCOM's disclosure of the change in adjusted
annual weighted average prices provides any meaningful basis for interested parties to defend
their interests. MOFCOM's disclosure in respect of Grade C import prices is therefore inconsistent
with Article 6.9.
7.7.3.2.2 Domestic prices
7.244. For the reasons explained above
408, we consider that the domestic price data considered
by MOFCOM was part of the body of facts essentia l to MOFCOM's price effects analysis, and should
therefore have been disclosed by MOFCOM pursuant to Article 6.9 of the Anti-Dumping Agreement.
7.245. China asserts that domestic prices do not constitute "essential facts" to be disclosed
pursuant to Article 6.9 in respect of those grades and time periods for which either (i) the absence
of domestic sales or imports meant that no price comparisons could be made, or (ii) no price
undercutting was found. China further asserts that the domestic price information was provided by
only two producers, and therefore treated by MOFCOM as confidential. China contends that
MOFCOM complied with Article 6.9 by disclosing, where necessary, meaningful non-confidential
summaries of this information, in the form of year-on-year price differences expressed in
percentages.
409
7.246. We are not persuaded by China's argument that certain domestic price information falls
outside the scope of Article 6.9 because either no price comparisons were made, or because no
price underselling was found. The body of essential facts to be disclosed under Article 6.9 concerns
the facts "under consideration" by the investigating authority in determining whether (or not) to
apply measures. It is not comprised solely of the facts that support the final determination to
apply measures. In this regard, we note the finding by the Appellate Body in China – GOES that
Article 6.9 "refer[s] to those facts that are significant in the process of reaching a decision as to
whether or not to apply definitive measures. Such facts are those that are salient for a decision to
apply definitive measures, as well as those that are salient for a contrary outcome".
410 We agree
with this finding, and are guided by it in rejecting China's argument. Even though certain domestic
price information was not ultimately used in price comparisons, or comparisons based on that price
information did not reveal price undercutting, the domestic price information was still "under
consideration" by the authority, and should therefore have been disclosed to interested parties.
7.247. Regarding China's argument that MOFCOM complied with Article 6.9 by disclosing non-
confidential year-on-year price differences expressed in percentages 411, we have already found
that simple price trend information does not provide a meaningful basis for interested parties to
defend their interests. Accordingly, MOFCOM's disclosure of such information does not satisfy the
disclosure obligation specified in the second sentence of Article 6.9.
7.7.3.2.3 Price comparisons
7.248. Concerning price comparisons, the complainants claim that MOFCOM failed to disclose
(i) the margins of overselling for Grade A in 2008 and the HP-SSST product as a whole (to the
extent that there were relevant domestic sales); (ii) the margin of overselling or underselling for
Grade C in the first half of 2011; and (iii) th e margin of undersellin g for Grade B for the
years 2008, 2009 and 2010. The complainants challe nge MOFCOM's disclosure of only a range of
underselling (i.e., -3% to -28%) for Grade B for those years, without specifying the particular
margin of underselling for any given year.

407 Panel Report, China – X-ray Equipment, para. 7.409.
408 See para. 7.240. above.
409 China's second written submission, para. 283.
410 Appellate Body Report, China – GOES, para. 240.
411 Injury Disclosure, Exhibit JPN-23, Section 4.
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7.249. We consider that the price comparisons ma de by MOFCOM were part of the body of facts
essential to MOFCOM's price effects analysis, and should therefore have been disclosed by
MOFCOM pursuant to Article 6.9 of the Anti-Dumping Agreement. We note in this regard that the
Appellate Body stated in China – GOES that the essential facts to be disclosed "include the price
comparisons between subject imports and the like domestic products". 412 We recall our earlier
finding that the mere fact that a price comparison showed price overselling does not mean that it
need not be disclosed pursuant to Article 6.9.
413
7.250. Concerning the complainants' claim that MOFCOM failed to disclose the margin of
overselling or undersellin g for Grade C in the first half of 2011, China has explained in these
proceedings that there were either no imports or no domestic sales during this period, such that
no price comparison could be made.
414 While this means that there was effectively no price
comparison for MOFCOM to disclose pursuant to Article 6.9, the fact that interested parties were
not aware of this during MOFCOM's investigation confirms our view that MOFCOM should have
disclosed all of the domestic and import price data under its consideration, properly summarized
so as to avoid disclosing confidential information where necessary.
7.251. Regarding the margin of price overselling or underselling in respect of Grade A for 2008,
and for the product as a whole, China advances no specific defence. We note China's assertion that
MOFCOM found that the Grade A import price was higher than the domestic sales price in 2008.
415
W e a l s o n o t e M O F C O M ' s f i n d i n g t h a t " t h e a d j u s t e d i m p o r t p r i c e s o f t h e s u b j e c t p r o d u c t s w e r e
higher than the sales prices of the domestic like products"
416 as a whole. These price comparisons
should have been disclosed to interested parties, but were not. We therefore uphold the
complainants' claims in respect of these comparisons.
7.252. Regarding MOFCOM's disclosure that the range of underselling for Grade B for the
years 2008, 2009 and 2010 varied from 3-28%, the complainants do not dispute that MOFCOM
was entitled to disclose merely a range of underselling in order to protect the confidentiality of the
actual margins of underselling. However, they argu e that the disclosure of a single range to cover
underselling over a period of three years was not sufficient to enable interested parties to defend
their interests, as required by Article 6.9. We ag ree. In particular, disclosure of a single range
provides no indication as to whether the margin of underselling increased or decreased during that
three-year period. Nor does it disclose the year in which the margin of underselling was greatest,
even though this may be relevant to the issue of causation. In order to allow interested parties to
properly defend their interests, MOFCOM shou ld have provided a more nuanced disclosure,
perhaps of non-confidential ranges for each of the years at issue, as it did for the first half of 2011,
which would have provided a meaningful understanding of the essential facts and enabled the
parties to defend their interests. MOFCOM's failure to do so is inconsistent with Article 6.9 of the
Anti-Dumping Agreement.
7.253. For the above reasons, we uphold the complainants' claims in respect of MOFCOM's failure
to disclose the relevant margins of overselling or underselling for Grade A for 2008 and for the
product as a whole, and its failure to disclose the annual ranges of underselling for Grade B for the
years 2008, 2009, and 2010. We reject the complainants' claims regarding MOFCOM's failure to
disclose the margin of overselling or underselling in respect of Grade C for the first half of 2011.
7.7.3.3 Essential facts concerning the all others rates
7.254. The complainants' Article 6.9 claims are focused on the alleged shortcomings of MOFCOM's
Final Dumping Disclosures to the complainants' respective diplomatic representations in China.
417
In the Final Dumping Disclosure to Japan's Embassy, MOFCOM stated:

412 Appellate Body Report, China – GOES, para. 247.
413 See para. 7.246. above.
414 China's first written submission, para. 686 (where Grade C H1 2011 is identified as a grade/period
"where no price comparison was made in the absence of domestic sales or imports").
415 China's first written submission, para. 682.
416 Final Determination, Exhibit JPN-02, p. 53.
417 This is the disclosure referred to in footnote 420 of Japan's first written submission, and para. 125 of
the European Union's first written submission. There is no suggestion by the complainants that the relevant
essential facts were not disclosed to "unknown" interested parties (to whom the all others rate would apply),
who would not have received a copy of the Final Dumping Disclosures to Japan and the European Union.
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for those Japanese companies that did not respond or submit the questionnaire
response, the Investigation Authority decides to base its determinations on dumping
and dumping margin on facts already known or best information available, and apply
the highest dumping margin found for the Japanese respondents to such
companies.
418
7.255. In the Final Dumping Disclosure to the European Union, MOFCOM stated:
As regards other EU companies that did not respond to the questionnaire, the
Investigation Authority decided to use known facts or best information available to
determine the relevant dumping and dumping margin and to use the highest dumping
margin among the dumping margins of the EU responding companies.
419
7.256. Regarding the question of whether MOFCOM properly disclosed the facts leading to the
conclusion that the use of facts available was warranted to calculate the all others rate, we note
that the above extracts from MOFCOM's Final Dumping Disclosures expressly state that facts
available were used in respect of companies that did not respond or submit questionnaire
responses. We consider that, in the context of the use of facts available, the obvious implication of
this statement is that MOFCOM considered the us e of facts available warranted by virtue of the
failure of unknown exporters to provide the ne cessary information set forth in the exporter
questionnaire.
7.257. The complainants
420 rely on the finding of the panel in China – GOES to argue that,
because MOFCOM failed to comply with Article 6.8 by determining that the relevant entities had
either failed to provide necessary information or significantly impede the investigation, MOFCOM
was not able to disclose, pursuant to Article 6.9, that the factual basis for applying facts available
was failure to provide necessary information or significant impediment of the investigation. In
other words, the complainants' Article 6.9 claims are very closely tied to, if not dependent on, their
Article 6.8 claims. As we explained when rejecting the complainants' Article 6.8 claims
421, the facts
of the present case are different from those in China – GOES, and our conclusion is also different.
In our view, the finding by the panel in China – GOES in respect of Article 6.9 is a consequence of
it having upheld the United States' claim under Article 6.8. However, in the present case, we have
concluded that MOFCOM did not violate Article 6.8 in concluding that unknown exporters failed to
provide necessary information, and therefore in re sorting to the use of facts available. In these
circumstances, we reject the complainants' Articl e 6.9 claims that MOFCOM failed to disclose the
facts leading to the conclusion that the use of facts available was warranted to calculate the all
others rate.
7.258. Concerning the question of whether MOFCOM properly disclosed the particular facts that
were used to determine the all others rates, we note that the Final Dumping Disclosures clearly
indicate that the all others rates would be based on the highest margin of dumping for cooperating
exporters. In our view, such disclosure is suffic ient for the purpose of Article 6.9. Unlike the
situation in China – GOES , where the panel found the large disparity between the all others rate
and the rates determined for respondents left uncertainty as to how the all others rate had been
determined "based on transaction information of the respondents", in the present case, there is no
disparity between the all others rates and the rates of the cooperating respondents with the
highest margins of dumping, and thus no lack of clarity. In these circumstances, MOFCOM's
disclosure that the all others rates would be based on the highest margins determined for
cooperating respondents is sufficient for the purpose of Article 6.9.
7.259. Japan also claims that MOFCOM's alleged failure to disclose all essential facts pertaining to
Kobe, the Japanese exporter with the highest margin of dumping, also invalidated MOFCOM's
disclosure with respect to the all others rate for unknown Japanese exporters, which was based on
Kobe's rate.
422 However, as a matter of law, we recall that the purpose of Article 6.9 disclosure is
to allow interested parties to defend their interest s. The interests of an entity subject to an all

418 Exhibit JPN-22, Section III.1.C.
419 Exhibit EU-27, Section III.1.C.
420 Japan's second written submission, paras. 98-100. European Union's first written submission,
para. 125.
421 See Section 7.6.4.1
422 Japan's second written submission, para. 101.
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others rate based on facts available, or of the ex porting Member in respect of an all others rate
based on facts available, are not necessarily the same as those of cooperating respondents
participating in the investigation, whose margin is established on the basis of their own data. Such
respondents may wish to challenge the investigating authority's determination of their margin of
dumping, and the Article 6.9 disclosure obligation ensures that the essential facts underlying that
determination are disclosed to them in order to enable them to do so. This issue does not arise in
respect of exporters that have not cooperated and are not participating in the investigation, and
whose rate will be based on facts available pursuant to Article 6.8. The primary interest of such
exporters is to ensure that the requirements of Ar ticle 6.8 (including in particular the need for a
factual foundation) are complied with. If the authority discloses that the all others rate for non-
cooperating exporters will be based on facts available in the form of the highest margin for
cooperating exporters, and if the final determination states what that highest rate is, the interests
of the relevant interested parties are effectively addressed.
7.260. Regarding MOFCOM's failure to disclose the justification for using the highest dumping
margins found for cooperating exporters as the all others rates, we agree with China's argument
423
that such justification, or reasoning, need not be disclosed as an essential "fact" pursuant to
Article 6.9. Japan
424 asserts that "[a]n investigating authority must use the 'best information
available' and 'special circumspection', and may not resort to 'adverse inferences'. The facts
underpinning MOFCOM's determination that the highest dumping margin for an investigated
respondent was the 'best information available' fo r determining the all others rate are therefore
'essential' or 'material' facts necessary to understand MOFCOM's decision to impose final anti-
dumping measures on unknown Japanese exporters".
425 We disagree, and consider that Japan's
argument is really aimed at MOFCOM's qualitative assessment of why the highest margin of
dumping established for cooperating exporters was the best information available to use as the all
others rate. Such qualitative assessment is not a "fact" within the meaning of Article 6.9.426
7.261. For the above reasons, we reject the complainants' Article 6.9 claims that MOFCOM failed
to disclose certain essential facts regarding the all others rate.
7.262. Regarding the Article 6.4 claim pursue d by the European Union, we observe that
Article 6.4 requires investigating authorities "whenever practicable [to] provide timely
opportunities for all interested parties to see all information that is relevant to the presentation of
their cases, that is not confidential (…), and that is used by the authorities in an anti-dumping
investigation…". The panel in EC – Fasteners (China) held that Article 6.4 "does not obligate the
investigating authorities to actively disclose information to interested parties", and that "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
presentation of that interested party's case and which was not confidential".
427 We agree with
these findings, and adopt them as our own. Si nce the European Union has not even asserted,
much less demonstrated, that MOFCOM denied any request by any interested party to see
information used by MOFCOM, we reject the European Union's Article 6.4 claim.
7.8 Public notice
7.263. The complainants contend that MOFCOM failed to ensure that its public notice of the Final
Determination complied with the public notice requirements set forth in Articles 12.2 and 12.2.2 of
the Anti-Dumping Agreement. They claim that MOFCOM failed to include in its public notice "all
relevant information on the matters of fact or law and reasons which have led to the imposition of

423 China's first written submission, para. 626.
424 The European Union failed to respond to this argument by China in either its oral statement at the
first substantive meeting, or its second written submission.
425 Japan's second written submission, para. 102.
426 As explained above in Section 7.7.3.1.2 , in respect of the complainants' Article 6.9 claims
concerning MOFCOM's dumping calculation methodology, a somewhat broad interpretation of the term "fact"
may be required in certain circumstances. However, even in such circumstances, Article 6.9 only requires the
disclosure of elements that are essential to understanding the factual basis for the investigating authority's
determination. Understanding the reasons why MOFCOM elected to base the all others rate on the highest
margin calculated for a cooperating exporter would extend beyond an understanding of the factual basis for
that rate.
427 Panel Report, EC – Fasteners (China), para. 7.480.
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final measures". Their claims pertain to information concerning MOFCOM's injury determination,
and MOFCOM's determination of the all others rates.
7.264. China asks the Panel to reject the complainants' claims.
7.8.1 Main arguments of the parties
7.8.1.1 Japan and the European Union
7.265. In respect of MOFCOM's injury determination, the complainants contend that MOFCOM
failed to include two types of "key factual information" in its public notice.
428 First, they refer to the
"pricing information underlying [MOFCOM's] price undercutting analysis". Second, they refer to
details of how MOFCOM accommodated the "quant itative differences" between the volume of
subject imports of Grade C and the volume of dome stic sales of Grade C in its price undercutting
analysis.429
7.266. In respect of the all others rates, the complainants submit that MOFCOM's public notice is
inconsistent with Articles 12.2 and 12.2.2 because it fails to include (i) the facts leading to the
conclusion that the use of facts available was warranted to calculate the all others rates, (ii) the
facts that were used to determine the all others rates, and (iii) facts or reasoning behind why it
was appropriate to apply the highest margin of dumping calculated for cooperating exporters as
the all others rate.
430
7.8.1.2 China
7.267. Regarding the injury determination, China claims that, for reasons similar to those
explained in relation to the complainants' Article 6.9 essential facts claims, MOFCOM's Final
Determination included all relevant information on matters of fact where appropriate, in the form
of non-confidential summaries.
431 Regarding the "quantitative differences" in respect of Grade C,
China contends that the treatment of such "quantitative differences" was a methodological matter
falling within MOFCOM's discretion that, although it did not need to be included in the public
notice, was clearly explained by MOFCOM.
7.268. Regarding the all others rates, China submits that the Final Determination addresses the
efforts MOFCOM made to notify all interested parties and to inform them all of the consequences of
not registering as respondents and/or of not submitting questionnaire responses
432, before
specifying that MOFCOM resorts to facts available for "those EU and Japanese companies that did
not respond or submit the questionnaire response".
433 China also contends that the Final
Determination explains that the all others rate used for Japanese exporters is the margin of
dumping established for Kobe, and the all others rate used for European exporters is the margin of
dumping established for SMST.434
7.8.2 Main arguments of third parties
7.8.2.1 United States
7.269. The United States asserts that the factual and legal bases for the investigative authority to
resort to facts available with respect to all other exporters that it did not examine constitute
material issues of fact and law considered. The United States suggests that these issues go to the
very heart of the determination of what margin to apply to unexamined exporters, and should
therefore have been included in the public notice pursuant to Article 12.2. The United States
submits that Article 12.2.2 required MOFCOM include in its public notice "all relevant information"

428 Japan's first written submission, para. 257. European Union's first written submission, para. 152.
429 Japan's first written submission, paras. 259 and 262. European Union's first written submission,
paras. 154 and 157.
430 Japan's first written submission, paras. 102-103. European Union's first written submission, para. 73.
Japan's second written submission, para. 103. European Union's second written submission, para. 73.
431 China's first written submission, para. 693; China's second written submission, para. 281.
432 Final Determination, Exhibit JPN–02, Exhibit EU–30, pp. 35, 40.
433 Final Determination, Exhibit JPN–02, Exhibit EU–30, p. 41.
434 Final Determination, Exhibit JPN–02, Exhibit EU–30, p. 41.
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on the relevant facts underlying its determination that recourse to facts available was warranted in
the calculations of the all others rates. 435 The United States also asserts that any facts related to
the price comparisons of the subject imports and domestic products are relevant information on
the matters of fact that China should have disclosed in MOFCOM's Final Determination.
436
7.8.3 Evaluation by the Panel
7.8.3.1 General interpretive approach
7.270. Articles 12.2 and 12.2.2 have been interpreted by panels and the Appellate Body in a
number of prior cases. In China – X-ray Equipment , the panel provided the following overview of
the relevant case law:
In interpreting the scope of the obligation set forth in the first sentence of
Article 12.2.2, we note that the text of Article 12.2.2 refers to Article 12.2.1.
Accordingly, the information described in Article 12.2.1 must be included in public
notices issued pursuant to Article 12.2.2. We consider that it is also appropriate to
have regard to the contextual guidance a fforded by Article 12.2, which applies to
public notices of both preliminary and final determinations. Article 12.2 provides that
such public notices shall set forth "in sufficient detail the findings and conclusions
reached on all issues of fact and law considered material by the investigating
authorities". In considering the contextual guidance afforded by Article 12.2, we have
regard to the followings findings made by the panels in EU – Footwear (China) and
EC – Tube or Pipe Fittings:
The chapeau of Article 12.2.2, Article 12.2, requires the publication of
"findings and conclusions on all issues of fact and law considered material
by the investigating authorities " (emphasis added). In our view, this is
relevant context for a proper understanding of Article 12.2.2, and thus
informs our understanding of what must be included in a public notice
under that provision. China suggests that whether information and
reasons for the acceptance or rejection of arguments must be provided in
such a notice should be judged from the perspective of the interested
parties. We do not agree. We consider that while an investigating
authority must make innumerable decisions during the course of an anti-
dumping investigation, with respect to procedural matters, investigating
methods, factual considerations, and legal analysis, which may be of
importance to individual interested parties, not all of these are "material"
within the meaning of Article 12.2.2. In our view, what is "material" in
this respect refers to an issue which must be resolved in the course of the
investigation in order for the investigating authority to reach its
determination whether to impose a definitive anti-dumping duty. We
note in this regard the views of the panel in EC – Tube or Pipe Fittings:
Article 12.2 provides that the findings and conclusions on issues of
fact and law which are to be included in the public notices, or
separate report, are those considered "material" by the
investigating authority. The ordinary meaning of the term of
"material" is "important, essential, relevant".
We understand a "material" issue to be an issue that has arisen in
the course of the investigation that must necessarily be resolved in
order for the investigating authorities to be able to reach their
determination. We observe that the list of topics in Article 12.2.1 is
limited to matters associated with the determinations of dumping
and injury, while Article 12.2.2 is more generally phrased ("all
relevant information on matters of fact and law and reasons which
have led to the imposition of final measures, or the acceptance of a
price undertaking"). Nevertheless, the phrase "have led to", implies

435 United States' third party submission, paras. 37 and 38.
436 United States' third party submission, para. 41.
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those matters on which a factual or legal determination must
necessarily be made in connection with the decision to impose a
definitive anti-dumping duty. … contextual considerations also
support this interpretation since, the only matters referred to "in
particular" in subparagraph 12.2.2 are, in addition to the
information described in subparagraph 2.1, the reasons for
acceptance or rejection of relevant arguments or claims, and the
basis for certain decisions.
We cannot conclude that every single decision of an investigating
authority in the course of an investigation can be considered as having
"led to" the imposition of the final measures, such that it must be
described, together with the "information" relevant to the decision, in the
published notice of the final determination. Not every question or issue
which arises during an investigation, and which is resolved by the
investigating authority, is necessarily considered material by the
investigating authorities, and may be said to have "led to" the imposition
of the anti-dumping duty, even though it may be of interest or significant
to one or more interested parties. In our view, the notions of "material"
and "relevant" in Article 12.2.2 must be judged primarily from the
perspective of the actual final determination of which notice is being
given, and not the entirety of the investigative process. Other provisions
of the Dumping Agreement, notably Articles 6.1.2, 6.2, 6.4, and 6.9
address the obligations of the investigating authority to make information
available to parties, disclose information, and provide opportunities for
parties to defend their interests. In our view, Article 12.2.2 does not
replicate these provisions, but rather, requires the investigating authority
to explain its final determination, providing sufficient background and
reasons for that determination, such that its reasons for concluding as it
did can be discerned and are understood.
437
We are in broad agreement with these findings. Consistent therewith , we consider
that the first sentence of Article 12.2.2 requires an investigating authority to include
in its public notice a description of its findings and conclusions on the issues of fact
and law that it considered material 438 to its decision to impose final measures. That
description must include "sufficient detail". While the sufficiency of the detail of the
description may depend on the precise nature of the findings made by the
investigating authority, it should in any event be sufficient to ensure that the
investigating authority's reasons for concluding as it did can be discerned and
understood by the public
439. The ability of the public to understand the findings and
conclusions of the investigating authority is important, for the concept of "public" is
broad: it includes "interested parties" with in the meaning of Article 6.11 of the Anti-
Dumping Agreement and, for example, consumer organizations that might be
expected to have an interest in the imposition of anti-dumping measures. Article 13
of the Anti-Dumping Agreement provides for judicial review of the final determinations
referred to in Article 12.2.2. In our view, the level of detail of the description of the
authority's findings and conclusions must be sufficient to allow the abovementioned
entities to assess the conformity of those findings and conclusions with domestic law,
and avail themselves of the Article 13 judici al review mechanism where they consider
it necessary. In a similar vein, we also consider that the level of detail should be
sufficient to allow the relevant exporting Member to ascertain the conformity of the
findings and conclusions with the provisions of the WTO Agreement, and to avail itself
of the WTO dispute settlement procedures where it considers it necessary. Our
approach is consistent with the following findings recently made by the Appellate Body
in China – GOES:

437 Panel Report, EU – Footwear (China), para. 7.844. (footnotes omitted)
438 We note the finding by the Appellate Body in China – GOES (para. 265) that "the facts that an
investigating authority may consider material to its determinations are circumscribed by the framework of the
substantive provisions of the Anti-Dumping Agreement".
439 Our interpretation is consistent with the finding by the Appellate Body in China – GOES (para. 256)
that "[t]he inclusion of ["all relevant information"] should therefore give a reasoned account of the factual
support for an authority's decision to impose final measures".
WT/DS454/R • WT/DS460/R

Article[] 12.2.2 […] capture[s] the principle that those parties whose
interests are affected by the imposition of final anti-dumping and
countervailing duties are entitled to know, as a matter of fairness and due
process, the facts, law and reasons that have led to the imposition of
such duties. The obligation of disclosure under Article[] 12.2.2 … is
framed by the requirement of "relevan ce", which entails the disclosure of
the matrix of facts, law and reasons that logically fit together to render
the decision to impose final measures. By requiring the disclosure of "all
relevant information" regarding these categories of information,
Article[] 12.2.2 … seek[s] to guarantee that interested parties are able to
pursue judicial review of a final determination as provided in Article 13 of
the Anti-Dumping Agreement …
440
7.271. We agree with these findings, and shall be guided by them in evaluating the complainants'
claims.
7.8.3.2 Injury determination
7.272. The complainants' claim that MOFCOM's Final Determination omitted the pricing
information underlying MOFCOM's price undercutting analysis, and a description of MOFCOM's
treatment of the "quantitative differences" between the volume of subject imports of Grade C and
the volume of domestic sales of Grade C. The complainants contend that Articles 12.2 and 12.2.2
required the inclusion of such factual information in MOFCOM's Final Determination.
7.273. Regarding the requirements of Articles 12.2 and 12.2.2 in respect of MOFCOM's price
undercutting analysis, we consider that such analysis was "material" to its decision to impose
measures, such that "relevant information on the matters of fact" pertaining to that issue should
have been included in MOFCOM's public notice. However, we are not persuaded that such "relevant
information" should necessarily have included the pricing information underlying MOFCOM's price
undercutting analysis. We consider that the inclusion of such underlying information would have
introduced a level of detail into the Final Determination that was not necessary for the public to
understand the basis for MOFCOM's finding of price undercutting.
7.274. While detailed factual information may need to be disclosed as "essential facts" pursuant to
Article 6.9 of the Anti-Dumping Agreement, we ob serve that the scope of Articles 12.2 and 12.2.2
does not mirror the scope of Article 6.9. We note that the panel in China – X-ray Equipment made
the following finding in this regard:
Article 12.2.2 does not require that all "essential facts" underlying the margin of
dumping should be included in the public notice. The scope of Article 12.2.2 is more
nuanced, and would not require the inclusion of all underlying data.
441
7.275. We agree with this finding. The object of Article 6.9 is to provide interested parties with
sufficient factual information to defend their interests during the investigation. By contrast, the
object of Article 12.2.2 is to ensure that the investigating authority's reasons for concluding as it
did can be discerned and understood by the public. We are not persuaded that the public would
need the pricing information underlying MOFCOM's price undercutting analysis in order to
understand MOFCOM's finding that there was significant price undercutting.
7.276. The complainants suggest that the findings of the panel and Appellate Body in China –
GOES indicate that the "relevant information" to be set forth in MOFCOM's public notice should
have included domestic price data.
442 The complainants rely in particular on the Appellate Body's
observation in that case that the public notice had not included " the prices of domestic
products".443 We do not understand the Appellate Body to have found that domestic price
information should be included in the public notice by virtue of Article 12 of the Anti-Dumping
Agreement. The Appellate Body referred to th e absence of domestic price information when

440 Panel Report, China – X-ray Equipment, paras. 7.458 and 7.459.
441 Panel Report, China – X-ray Equipment, para. 7.465. (footnotes omitted)
442 Japan's first written submission, paras. 259 and 260. European Union's first written submission,
paras. 154 and 155.
443 Appellate Body Report, China – GOES, para. 263. (emphasis original)
WT/DS454/R • WT/DS460/R

summarizing the contents of the public notice. Th e Appellate Body observed that whereas subject
import price information was included, domestic price information was not. 444 However, the
Appellate Body did not refer to this fact as a basis for its findings. In making its findings, the
Appellate referred instead to the finding by the panel that the public notice did not contain
"information relating to the price comparisons between subject imports and domestic products".
The Appellate Body concluded on this basis that the public notice was not sufficient to convey all
the relevant information on the matters of fact relating to the investigating authority's finding of
low subject import pricing.
445 Thereafter, the Appellate Body stated that the public notice should
also have included "the facts of price undercutting that were required to understand" the
authority's finding of low subject import pricing. The Appellate Body faulted the public notice for
not including "any facts relating to the price comparisons of subject imports and domestic
products", and agreed with the findings of the panel in this respect.
446 For its part, the China –
GOES panel had found that the public notice did not meet the requirements of Article 12 because it
did not "include any indication that a comparative analysis of prices had been performed or
provide the factual information arising from the comparison". 447 Thus, although findings were
made in respect of facts relating to the price comparisons made, neither the panel nor the
Appellate Body in China – GOES made any finding that the price information underlying those price
comparisons should have been included in the public notice.
7.277. Regarding the "quantitative differences" between the volume of subject imports of Grade C
a n d t h e v o l u m e o f d o m e s t i c s a l e s o f G r a d e C , w e r e c a l l t h a t w e h a v e a l r e a d y u p h e l d t h e
complainants' Article 3.2 claims concerning this matter. Given our concerns with the substance of
MOFCOM's treatment of the relevant quantitative differences, and given the need for MOFCOM to
revise its Final Determination to reflect its implementation of our Article 3.2 finding, we see no
need to evaluate the complainants' procedural claim concerning this matter.
7.8.3.3 Dumping determination
7.278. The complainants submit that MOFCOM's pu blic notice is inconsistent with Articles 12.2
and 12.2.2 because it fails to include (i) the facts leading to the conclusion that the use of facts
available was warranted to calculate the all others rates, (ii) the facts that were used to determine
the all others rates, and (iii) the facts or reasoning behind why it was appropriate to apply the
highest margin of dumping calculated for cooperating exporters as the all others rates.
7.279. We observe that the complainants' claims under Articles 12.2 and 12.2.2 essentially mirror
their Article 6.9 claims concerning this matter. We also observe the complainants' assertion that
MOFCOM's Final Determination repeats the statements made in MOFCOM's Dumping Disclosures
concerning this matter.
448 We recall that we have rejected the complainants' Article 6.9 claims
concerning MOFCOM's disclosure of the essential facts leading to the conclusion that the use of
facts available was warranted, and the essential facts that were used to determine the all others
rates. Since MOFCOM's disclosure was sufficiently detailed to meet the requirements of Article 6.9,
since the complainants contend that the same information was included in the Final Determination,
and since the scope of the Article 6.9 ob ligation is broader than the relevant
449 scope of
Articles 12.2 and 12.2.2, we find that MOFCOM's Final Determination is sufficient to meet the
requirements of Articles 12.2 and 12.2.2.
7.280. Regarding the reasons why it was appropriate to apply the highest margins of dumping
calculated for cooperating exporters as the all others rates, we recall our finding that such
reasoning falls outside the scope of Article 6.9 disclosure obligation. However, we consider that the
scope of Articles 12.2 and 12.2.2 does cover such reasoning, for Article 12.2.2 refers to "relevant
information on the … reasons which have led to the imposition of final measures". (emphasis
supplied.) We consider that the all others rates are material and that "relevant information"
pertaining to the reasons for applying the highest margins of dumping as the all others rates
should therefore have been included in MOFCOM's Final Determination. We see nothing in the Final

444 Appellate Body Report, China – GOES, para. 263.
445 Appellate Body Report, China – GOES, para. 264.
446 Appellate Body Report, China – GOES, para. 267.
447 Panel Report, China – GOES, para. 7.591. (emphasis supplied)
448 Japan's first written submission, para. 313. European Union's first written submission, para. 145.
449 We refer in this regard to the scope of Articles 12.2 and 12.2.2 in respect of information on matters
of fact which have led to the imposition of final measures.
WT/DS454/R • WT/DS460/R

Determination concerning this matter. Nor has China identified any part of the Final Determination
explaining MOFCOM's reasoning in this regard. Accordingly, we find that the Final Determination is
inconsistent with the requirements of Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement.
7.8.3.4 Conclusion
7.281. For the above reasons, we reject the complainants' claims that MOFCOM's Final
Determination is inconsistent with Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement
because it does not contain relevant information concerning the pricing information underlying
MOFCOM's price undercutting findings, the facts leading to the conclusion that the use of facts
available was warranted to calculate the all others rates, or the facts that were used to determine
the all others rates. We exercise judicial econ omy in respect of the complainants' Article 12.2
and 12.2.2 claims concerning MOFCOM's treatment of the "quantitative differences" in respect of
Grade C. We uphold the complainants' Article 12.2 and 12.2.2 claim concerning MOFCOM's failure
to explain in the Final Determination the reasons why MOFCOM considered it appropriate to use
the highest margins of dumping for cooperating exporters as the all others rates.
7.9 Treatment of confidential information
7.282. Japan and the European Union claim that Ch ina acted inconsistently with Article 6.5 of the
Anti-Dumping Agreement because MOFCOM permitted the full text of certain reports to remain
confidential without a proper showing of "good cause" for such treatment by the petitioners.
450 In
addition, Japan and the European Union claim that China acted inconsistently with Article 6.5.1 of
the Anti-Dumping Agreement because MOFCOM fa iled to require sufficient non-confidential
summaries or explanations as to why such summaries were not possible.
451 China asks the Panel
to reject the complainants' claims.
7.9.1 Relevant WTO provisions
7.283. Article 6.5 of the Anti-Dumping Agreement provides in relevant part:
Any information which is by nature confidential (for example, because its disclosure
would be of significant competitive advantage to a competitor or because its
disclosure would have a significantly adverse effect upon a person supplying the
information or upon a person from whom that person acquired the information), or
which is provided on a confidential basis by parties to an investigation shall, upon
good cause shown, be treated as such by the authorities.
7.284. Article 6.5.1 of the Anti-Dumping Agreement provides:
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 susceptible of summary. In such exceptional circumstances, a
statement of the reasons why summarization is not possible must be provided.

450 Japan's first written submission, paras. 265, 271-272, and 280; responses to Panel questions No. 67,
para. 50; and No. 99, paras. 36-37; second written submission, paras. 115 and 118; opening statement at the
second meeting of the Panel, para. 66; closing statement at the second meeting of the Panel, p. 4; and
European Union's first written submission, paras. 77, 85-86, and 88; response to Panel question No. 67,
paras. 138 and 144; second written submission, para. 32; and opening statement at the second meeting of the
Panel, para. 25.
451 Japan's first written submission, paras. 265, 271, 281, and 289; response to Panel question No. 68,
para. 51; second written submission, para. 115; opening statement at the second meeting of the Panel,
para. 68; and European Union's first written submission, paras. 77, 85, 89, 92-93, 95, and 97; response to
Panel question No. 68, paras. 145 and 153; second written submission, paras. 32, 41, and 45; and opening
statement at the second meeting of the Panel, paras. 25, 32, and 35.
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7.9.2 Main arguments of the parties
7.9.2.1 Japan and the European Union
7.285. The complainants claim that China acted inconsistently with Article 6.5 of the Anti-
Dumping Agreement because MOFCOM permitted the full text
452 of the reports in (i) appendix V to
the petition; (ii) appendix VIII to the petition; (i ii) appendix 59 to the petitioners' supplemental
evidence of 1 March 2012; and (iv) the appendix to the petitioners' supplemental evidence of
29 March 2012 to remain confidential without a showing of "good cause" for such treatment by the
petitioners submitting such information. 453 The complainants argue that MOFCOM failed to
objectively assess the "good cause" alleged for confidential treatment, and scrutinize the
petitioners' showing to determine whether the request was sufficiently substantiated.
454
7.286. In addition, the complainants claim that China acted inconsistently with Article 6.5.1 of the
Anti-Dumping Agreement because MOFCOM failed to require sufficient non-confidential summaries
or explanations as to why such summaries were not possible for the following documents:
appendices V and VIII to the petition; appendices 1, 7-8, 24-28, 31-33, 35-52, and 56-59 to the
petitioners' supplemental evidence of 1 March 2012; and appendix to the petitioners' supplemental
evidence of 29 March 2012.
455
7.9.2.2 China
7.287. With respect to the complainants' claims under Article 6.5 of the Anti-Dumping Agreement,
China contends that "good cause" was adequately shown by the petitioners. China submits that
the petitioners provided several substantiated reasons as to why confidential treatment was
warranted for the names of the relevant third party institutes and the full text of the reports
referred to in the four appendices at issue. In addition, China argues that investigating authorities
have a broad margin of discretion in determining whether "good cause" has been shown. China
also notes that the Anti-Dumping Agreement imposes no obligation on an investigating authority
to explain why it considers that confidential information is warranted. Finally, China submits that
MOFCOM assessed and determined the demonstration of good cause for granting confidential
treatment to the relevant appendices.
456
7.288. As for the claims under Article 6.5.1 of the Anti-Dumping Agreement, China submits that
the petitioners provided either the required non- confidential summaries or statements as to why
summarization was not possible. With respect to (i) appendix V to the petition; (ii) appendix VIII
to the petition; (iii) appendix 59 to the petition ers' supplemental evidence of 1 March 2012; and
(iv) the appendix to the petitioners' supplementa l evidence of 29 March 2012, China submits that

452 The complainants accept that the petitioners demonstrated "good cause" for treating as confidential
the names of the third parties providing the reports. The complainants consider that the petitioners' concerns
could have been addressed by withholding such names. (Japan's first written submission, para. 278; and
comments on China's response to Panel question No. 103, para. 59; and European Union's first written
submission, para. 87; second written submission, para. 32; and comments on China's response to Panel
questions No. 103, para. 61.)
453 Japan's first written submission, paras. 265, 271-272, and 280; response to Panel question No. 99,
paras. 36-37; second written submission, para. 115; opening statement at the second meeting of the Panel,
para. 66; and closing statement at the second meeting of the Panel, p. 4; and European Union's first written
submission, paras. 77, 85-86, and 88; response to Panel question No. 67, para. 138; second written
submission, para. 32; and opening statement at the second meeting of the Panel, para. 25.
454 Japan's responses to Panel questions No. 67, para. 50; and No. 99, paras. 36-37; second written
submission, paras. 115 and 118; opening statement at the second meeting of the Panel, para. 66; closing
statement at the second meeting of the Panel, p. 4; and European Union's response to Panel question No. 67,
paras. 138 and 144.
455 Japan's first written submission, paras. 271-272, 280-281, and 289; response to Panel question
No. 68, para. 52; second written submission, paras. 115 and 128; opening statement at the second meeting of
the Panel, para. 68; and comments on China's response to Panel question No. 103, para. 54; and
European Union's first written submission, paras. 77, 85-86, 88-89 and 97; response to Panel question No. 68,
para. 145; second written submission, para. 41; opening statement at the second meeting of the Panel,
para. 32; and comments on China's response to Panel question No. 103, para. 46.
456 China's first written submission, paras. 697, 714, 725, 737, and 738; response to Panel question
No. 67, paras. 173 and 176; second written submission, paras. 292-295 and 299; opening statement at the
second meeting of the Panel, paras. 78-79; response to Panel questions Nos. 99-102, paras. 46-50; and
comments on Japan's response to Panel question No. 99, para. 55.
WT/DS454/R • WT/DS460/R

the non-confidential summaries even provided integral parts of the information contained in each
original, confidential report. China contends that these non-confidential summaries were
sufficiently detailed to provide a reasonable under standing of the substance of the information
submitted in confidence. As for the remaining 32 appendices at issue, China submits that the
petitioners adequately explained why summarization was not possible.
457
7.9.3 Main arguments of third parties
7.9.3.1 United States
7.289. The United States recalls that, in anti-dumping investigations, the submission of
confidential information is a necessary and frequent occurrence. The United States submits that,
while Article 6.5 of the Anti-Dumping Agreement requires that authorities, upon good cause
shown, ensure the confidential treatment of such information, Article 6.5.1 of the Anti-
Dumping Agreement balances the need to protect confidential information against the disclosure
requirements of other Article 6 provisions.
458 The United States contends that "where an
investigating authority accepts confidential information without providing or otherwise assuring
timely adequate non-confidential summaries of that information, significant prejudice to the ability
of companies and Members to defend their interests could occur".459
7.9.4 Evaluation by the Panel
7.9.4.1 Article 6.5 of the Anti-Dumping Agreement: showing of "good cause" with
respect to the full text of certain reports
7.290. The issue before the Panel is whether or not MOFCOM permitted the full text of the four
confidential reports in (i) appendix V to the petition; (ii) appendix VIII to the petition;
(iii) appendix 59 to the petitioners' supplemental evidence of 1 March 2012; and (iv) the appendix
to the petitioners' supplemental evidence of 29 March 2012 460 to remain confidential without
objectively assessing the "good cause" alleged fo r confidential treatment, and scrutinizing the
petitioners' showing to determine whether the requests were sufficiently substantiated.461
7.291. Article 6.5 of the Anti-Dumping Agreement provides that "[a]ny information which is by
nature confidential …, or which is provided on a confidential basis by parties to an investigation
shall, upon good cause shown , be treated as such by the authorities". (emphasis added) We note
that China accepts that the "investigating authority's obligation to afford confidential treatment to

457 China's first written submission, paras. 697, 761, 763, and 766-768; response to Panel question
No. 70, para. 184; and second written submission, paras. 300-303.
458 United States' third-party submission, para. 3; and third-party statement, paras. 11-12.
459 United States' third-party submission, para. 5.
460 China submits that the European Union failed to make a prima facie case of violation. More
specifically, China takes issue with the fact that the European Union allegedly failed to (i) specify the
four appendices to which its Article 6.5 claim relates, and (ii) refer to any of the statements made by
the petitioners regarding their requests for confidential information. (China's first written submission,
paras. 699-700, and 702-706; and second written submission, para. 290.) Although the European Union could
have been more specific in setting out its Article 6.5 claim in its first written submission, we consider that
overall the European Union sufficiently connected its Article 6.5 claim to the relevant appendices. We note that
although the European Union initially referred to the appendices at issue (together with other appendices) in a
general statement relating to its claims under Articles 6.5 and 6.5.1 (European Union's first written submission,
para. 77), the European Union later refers specifically to the fact that China did not require the applicants "to
disclose the full texts of any of the four aforementioned reports with the names of the 'authoritative third party
institute[s]' … redacted". (European Union's first written submission, para. 88.) We understand that the issue
under Article 6.5 only arises before the Panel with respect to the four appendices in question. In addition, we
note that, in its second written submission, the European Union clearly refers, in the context of its Article 6.5
claim, to appendices V and VIII to the petition, appendix 59 to the petitioners' supplemental evidence of
1 March 2012; and appendix to the petitioners' supplemental evidence of 29 March 2012. (European Union's
second written submission, para. 32; see also European Union's opening statement at the second meeting of
the Panel, para. 26.)
461 We note that the complainants also argue that the petitioners failed to show "good cause" for
treating as confidential the full text of the four confidential reports at issue. As explained in
para. 7.302. below, our review of MOFCOM's determinations must be based on the explanations provided by
MOFCOM. Thus, we start our review with MOFCOM's assessment of the alleged showing of "good cause".
WT/DS454/R • WT/DS460/R

information arises upon a showing of 'good cause'". 462 The requirement to show "good cause" was
examined by the Appellate Body in EC – Fasteners. The Appellate Body stated:
The requirement to show "good cause" for confidential treatment applies to both
information that is "by nature" confidential and that which is provided to the authority
"on a confidential basis". The "good cause" alleged must constitute a reason sufficient
to justify the withholding of information from both the public and from the other
parties interested in the investigation, who would otherwise have a right to view this
information under Article 6 of the Anti-Dumping Agreement. Put another way, "good
cause" must demonstrate the risk of a potential consequence, the avoidance of which
is important enough to warrant the non-disclosure of the information. "Good cause"
must be assessed and determined objectively by the investigating authority, and
cannot be determined merely based on the subjective concerns of the submitting
party.
We find that the examples provided in Article 6.5 in the context of information that is
"by nature" confidential are helpful in interpreting "good cause" generally, because
they illustrate the type of harm that might result from the disclosure of sensitive
information, and the protectable interests involved. Article 6.5 states that the
disclosure of such information "would be of significant competitive advantage to a
competitor" or "would have a significantly adverse effect upon a person supplying the
information or upon a person from whom that person acquired the information". These
examples suggest that a "good cause" which could justify the non-disclosure of
confidential information might include an advantage being bestowed on a competitor,
or the experience of an adverse effect on the submitting party or the party from which
it was acquired. These examples are only illustrative, however, and we consider that a
wide range of other reasons could constitute "good cause" justifying the treatment of
information as confidential under Article 6.5.
In practice, a party seeking confidential treatment for information must make its
"good cause" showing to the investigating authority upon submission of the
information. The authority must objectively assess the "good cause" alleged for
confidential treatment, and scrutinize th e party's showing in order to determine
whether the submitting party has sufficiently substantiated its request. In making its
assessment, the investigating authority must seek to balance the submitting party's
interest in protecting its confidential information with the prejudicial effect that the
non-disclosure of the information may have on the transparency and due process
interests of other parties involved in the investigation to present their cases and
defend their interests. The type of eviden ce and the extent of substantiation an
authority must require will depend on the nature of the information at issue and the
particular "good cause" alleged. The obligation remains with the investigating
authority to examine objectively the justification given for the need for confidential
treatment. If information is treated as co nfidential by an authority without such a
"good cause" showing having been made, the authority would be acting inconsistently
with its obligations under Article 6.5 to grant such treatment only "upon good cause
shown".
463 (footnotes omitted)
We agree with these findings, and shall be guided by them in evaluating the complainants' claims
under Article 6.5 of the Anti-Dumping Agreement.

7.9.4.1.1 Petitioners' requests
7.292. Turning to the facts before the Panel, it is undisputed that, with respect to the four reports
referred to in the appendices at issue, the petiti oners requested confidential treatment for certain
information. With regard to appendix V to the petition, the petitioners stated:
To produce this statement, the organizati on had spent a great amount of time and
resources into research, analysis, screening and consolidation of relevant fact and
data. The statement was provided in a form of a report to the petitioners at a cost.

462 China's first written submission, para. 719.
463 Appellate Body Report, EC – Fasteners, paras. 537-539.
WT/DS454/R • WT/DS460/R

The disclosure of the full text of the report itself and the name of the organization
would likely make it difficult for the organization to conduct a similar research exercise
(e.g. a third party may refuse to answer survey questions) and to provide the full
report with the same or similar information and data to other third parties for a fee. It
would also seriously jeopardize its normal conduct of business. Therefore, at the
request of the organization, the petitioners request confidentiality treatment of the full
text of the report itself.
464
7.293. With respect to appendix VIII to the petition, the petitioners stated:
The market information contained in this appendix was provided by a third party at a
cost. The disclosure of such information would likely cause disruption to normal
business or other adverse impact on the thir d party. Therefore, at the request of the
third party, the petitioners are keeping the full text of this appendix itself
confidential.
465
7.294. With respect to appendix 59 to the peti tioners' supplemental evidence of 1 March 2012,
the petitioners stated:
The market information contained in this appendix was provided by a third party at a
cost. The disclosure of such information would likely cause disruption to normal
business or other adverse impact on the thir d party. Therefore, at the request of the
third party, the petitioners are keeping the full text of this appendix itself
confidential.466
7.295. Finally, concerning the appendix to the petitioners' supplemental evidence of
29 March 2012, the petitioners stated:
This appendix is provided by a respected organization from the Chinese stainless steel
industry. It builds on the "summary of market conditions of certain high-performance
stainless steel seamless tubes" submitted [as appendix V to the petition].
In order to provide this further summary, the third-party organization has used its
proprietary sources and access and invested a tremendous amount of time and energy
in collecting, screening, analyzing and formatting relevant data and information. The
disclosure of the full text of the third-party summary itself and the organization's
name would likely cause serious adverse impact on the normal operation of the
organization. Therefore, at the request of the third-party organization, the petitioners
request that the full text of this further summary itself be kept confidential.
467
7.9.4.1.2 MOFCOM's statement
7.296. In its injury disclosure and final determination, MOFCOM stated:
With regard to the legitimacy of the petitioners' application to treat the name of the
"authoritative third party institute" as confidential, out of consideration that the
disclosure of the name of the said institute would affect the normal business of this
data providing institute and may lead to business retaliations, the Investigation
Authority acknowledges the reason for the confidential treatment request of the
petitioners
18, and accepts the confidentiality application.
EU-32, internal pages 15-16.
465 Petition, Exhibits JPN-3 and EU-1, p. 90, with translation amended in Exhibits CHN-16, JPN-29, and
EU-32, internal page 16.
466 Petitioners' supplemental evidence of 1 March 2012, Exhibits JPN-8 and EU-15, pp. 10-11, with
translation amended in Exhibits CHN-16, JPN-29, and EU-32, internal page 17.
467 Petitioners' supplemental evidence of 29 March 2012, Exhibits JPN-9 and EU-16, p. 4; and China's
first written submission, para. 713.
WT/DS454/R • WT/DS460/R

domestic and international markets for certain high-performance stainless steel seamless tubes.
To do this, the institute in question spent a large amount of time and energy on the research,
analysis and selection of relevant data and information, and provided the final report to the
petitioners at a certain price. If the petitioners were to disclose the full report itself and the name
of the said institute, it would on the one hand create obstacles for this institute to carry out
similar research in the future (for example, a third party may not want to cooperate with the
institute on its future researches) and on the ot her hand seriously affect the prospects of the
institute to sell reports with same or similar information and data to other third parties. In
addition, it would also cause seri ous negative impacts on the daily operations of the institute.
Therefore, at the request of this institute, the petitioners applied for confidential treatment for
the full text of the report itself.
468
7.297. Although MOFCOM's statement is directed at the request for confidential treatment in
appendix V to the petition 469, China submits that "MOFCOM's explanation can be extrapolated to
apply to the remaining three appendices, as the Petitioners' reasons for requesting confidential
treatment were similar, if not identical, for all four appendices in question".470 Subsequently, China
clarified that it submits that, since Appendix V was elaborated upon in the Appendix to the
Petitioners' Supplemental Evidence of 29 Marc h 2012, "MOFCOM's statements refer to both
Appendix V and the Appendix to the Petitioners' Suppl emental Evidence of 29 March 2012", and
that "[g]iven the similarity betw een the reasons for confidential treatment included in Appendix
VIII to the Petition and Appendix 59 to the Petitioners' Supplemental Evidence of 1 March 2012,
the reasoning included in footnote 18 can be ex trapolated to apply to the latter appendices as
well".
471 We therefore begin by examining the scope of MOFCOM's statement, in order to
determine the appendices to which it may reasonably be understood to apply.
7.298. There is no doubt that MOFCOM's statement concerns appendix V to the petition. To the
extent that the appendix to the petitioners' supplemental evidence of 29 March 2012 "builds on"
appendix V, providing "supplementary informat ion and further explanation" on the domestic
production of certain HP-SSST 472, MOFCOM's statement can also be reasonably understood to
apply to that supplemental appendix. However, China has not identified any basis for
understanding MOFCOM's statement to also apply to the remaining two appendices at issue. 473 We
agree with the complainants 474 that China's "extrapolation" argument constitutes ex post

468 Final determination, Exhibits JPN–2 and EU–30, internal page 46; injury disclosure, Exhibit JPN–23,
Exhibit EU–24, pp. 21–22, with translation amended in Exhibits CHN-16, JPN-29 and EU-32, footnote 1 and
internal pages 15-16.
469 China's response to Panel questions Nos. 99-102, para. 46.
470 China's second written submission, para. 295; and response to Panel questions Nos. 99-102,
para. 46.
471 China's comments on Japan's response to Panel question No. 99, para. 62.
472 Petitioners' supplemental evidence of 29 March 2012, Exhibits JPN-9 and EU-16, p. 4. See also
China's response to Panel questions Nos. 99-102, para. 46; and first written submission, para. 745.
473 See China's response to Panel question No. 101; and European Union's comments on China's
response to Panel question No. 101, para. 42. We also note that MOFCOM's comments were made in the
context of the petitioners' request for "using the data on domestic market demands from an authoritative
third party institute to calculate the import volume of the products under investigation and the share in the
domestic market". (Final determination, Exhibits JPN–2 and EU–30, internal page 44; injury disclosure,
Exhibit JPN–23, Exhibit EU–24, p. 20.) While appendix V includes information on the volume of domestic
production, demand, and imports and exports of the product under consideration (Petition, Exhibits JPN-3 and
EU-1, pp. 76-77), and appendix to the petitioners' supplemental evidence of 29 March 2012 contains
information on the domestic production of the product under consideration (Petitioners' supplemental evidence
of 29 March 2012, Exhibits JPN-9 and EU-16, p. 4), the remaining two appendices refer to other data.
Appendix VIII contains information on prices of exports of the product under consideration from Japan and the
European Union to China. (Petition, Exhibits JPN-3 and EU-1, p. 90) Appendix 59 to the petitioners'
supplemental evidence of 1 March 2012 contains information on costs and fees related to the imports of the
product under consideration. (Petitioners' supplemental evidence of 1 March 2012, Exhibits JPN-8 and EU-15,
p. 10.)
474 Japan's opening statement at the second meeting of the Panel, para. 67; and response to Panel
question No. 99, paras. 30-31; European Union's response to Panel question No. 99, para. 42; and comments
on China's response to Panel question No. 100, para. 41. See also Japan's second written submission,
para. 118. We note that China takes issue with the fact that, in European Union's response to Panel question
No. 99, the European Union simply agrees with Japan's submissions without providing further details. China
submits that a complaining party "cannot simply refer to and rely on the positions taken by a third party
[(Japan is a third party in DS460)] in order to develop its claims". China requests that the Panel in DS460
consider that the European Union failed to respond to Panel question No. 99. (China's comments on the
European Union's response to Panel question No. 99, paras. 65-66.) We consider that a complaining party may
agree with and refer to third-party arguments in support of its claims before WTO dispute settlement. In our
WT/DS454/R • WT/DS460/R

rationalization, which we are bound not to consider when examining the complainants' claims at
issue.475 This is also consistent with the clarification of the scope of MOFCOM's statement
subsequently expressed by China, as described above.
7.299. We now examine whether MOFCOM's statement is sufficient to demonstrate that MOFCOM
objectively assessed the alleged "good cause", and scrutinized the petitioners' showing of "good
cause" with regards to both the name of the third party institute and the full text of appendix V
and appendix to the petitioners' supplemental evidence of 29 March 2012. We note that the
petitioners' requests relating to the two appendices at issue refer to both (i) the name of the
institute, and (ii) the full text of the reports. In addition, the petitioners' requests allude to possible
adverse effects on the normal operation of the institute, and in conducting research and selling the
same or similar information in the future.
476 However, when "acknowledg[ing] the reason for the
confidential treatment request" and accepting the "confidentiality application", we agree with the
complainants477 that MOFCOM limited its statement to address only "the legitimacy of the
petitioners' application to treat the name of the 'authoritative third party institute' as
confidential".478 (emphasis added) China appears to understand that MOFCOM considered that the
request was justified with respect to the full text of the two reports at issue in footnote 18 of
MOFCOM's statement, quoted above.479 However, we agree with the complainants480 that it is clear
from the text of footnote 18 that it only summa rizes the petitioners' arguments for confidential
treatment and requests; rather than reflec ting MOFCOM's explanation or reasoning.481 Thus, there
is no evidence, and China has not demonstrated otherwise, that MOFCOM objectively assessed the
"good cause" alleged for confidential treatment, an d scrutinized the petitioners' requests relating
to the full text of appendix V, and appendix to the petitioners' supplemental evidence of
29 March 2012.
482
7.300. We now turn to the remaining two appendices at issue under the Article 6.5 claims. As
noted above 483, MOFCOM's explanation in its injury disclosure and final determination does not
apply to appendix VIII to the petition, or to appe ndix 59 to the petitioners' supplemental evidence
of 1 March 2012. In the absence of any evidence that MOFCOM objectively assessed the "good
cause" alleged for confidential treatment, and scrut inized the petitioners' requests relating to the
full text of these two appendices, there is no basis for us to conclude that it did.

view, this is particularly so in cases as the disputes before us where (i) the timetables have been harmonized,
to the greatest extent possible, in accordance with Article 9.3 of the DSU, and (ii) complainants have made the
same claims, and submitted the same or very similar arguments in both disputes. Thus, we reject China's
request accordingly.
475 See e.g. Appellate Body Report, US – Tyres (China), para. 329 ("[D]uring panel proceedings a
Member is precluded from providing an ex post rationale to justify the investigating authority's
determination").
476 Petition, Exhibits JPN-3 and EU-1, pp. 76-77; and petitioners' supplemental evidence of
29 March 2012, Exhibits JPN-9 and EU-16, p. 4.
477 Japan's response to Panel question No. 99, para. 30; and European Union's response to Panel
question No. 99, para. 42.
478 We note that the complainants accept that the petitioners demonstrated good cause for treating as
confidential the names of the third parties providing the reports in the appendices at issue. Japan's first written
submission, para. 278; and European Union's first written submission, para. 87. See also Japan's comments on
China's response to Panel questions Nos. 99-102, para. 59; and European Union's second written submission,
para. 32; and comments on China's response to Panel questions Nos. 99-102, para. 61.
479 See China's first written submission, para. 737; China's second written submission, para. 298; and
response to Panel questions Nos. 99-102, para. 45.
480 Japan's response to Panel question No. 99, para. 29; comments on China's response to Panel
questions Nos. 99-102, paras. 50-52; European Union's response to Panel question No. 99, para. 42; and
comments on China's response to Panel question No. 99, para. 40.
481 China submits that MOFCOM's statement was made in the context of "addressing comments raised
by interested parties who questioned the accuracy and reliability of certain data, and called into question the
confidential treatment of the name of the 'authoritative third party institute'". (China's comments on Japan's
response to Panel question No. 99, paras. 59-62; see also China's response to Panel questions Nos. 99-102,
paras. 43-46.) We are unable to understand, and China has not sufficiently explained, how this context, by
itself, is sufficient to demonstrate that MOFCOM's statements should rather refer to the full texts of appendix V
and appendix to the petitioners' supplemental evidence of 29 March 2012, or to the full text of all
four appendices at issue.
482 We are not finding that MOFCOM could not have treated the full text of the reports as confidential
information. We are merely finding that there is no evidence that MOFCOM ever considered whether good
cause had been shown for such treatment.
483 See para. 7.298. above.
WT/DS454/R • WT/DS460/R

7.9.4.1.3 Whether MOFCOM was required to examine the requests for confidential
treatment, and explain its conclusions
7.301. We have already established that MOFCOM did not objectively assess the "good cause"
alleged for confidential treatment, or scrutinize the petitioners' requests relating to the full text of
the four appendices at issue. China submits that an investigating authority enjoys a considerable
margin of discretion in its examination of a request for confidential treatment and in determining
whether "good cause" has been shown, provid ed that the outcome is not unreasonable.
484 China
also contends that "an investigating authority need not explain why it considers that confidential
treatment is warranted", and that the "Anti-Dumping Agreement does not require an investigating
authority which found that confidential treatment is warranted to do or specify anything, beyond
the obligation to treat such information as confidential".
485
7.302. We are not persuaded by China's argument, since it is well established that a panel's
review of an investigating authority's determinations must be based on the explanations provided
by that authority. We recall, for example, that the Appellate Body in US – Tyres (China) noted that
it had "previously clarified that a panel's examination of the conclusions of an investigating
authority '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 '".
486 In the absence of any
explanation by MOFCOM, we have no basis to conclude that MOFCOM properly determined that the
petitioners had shown "good cause" for their requests for confidential treatment. 487 There is
certainly also no basis for us to imply that MOFCOM properly determined that the petitioners had
shown "good cause" for their requests for confidential treatment from the fact that MOFCOM
ultimately granted their request for confidential treatment.
488
7.9.4.1.4 Conclusion
7.303. In light of the foregoing, we uphold the complainants' claims that China acted
inconsistently with Article 6.5 of the Anti-Dumpi ng Agreement by permitting the full text of the
reports in appendix V, appendix VIII, appendix 59 to the petitioners' supplemental evidence of
1 March 2012, and appendix to the petitioners' supplemental evidence of 29 March 2012 to remain
confidential without objectively assessing "good cause" and scrutinizing the petitioners' showing.

484 China's first written submission, paras. 723 and 725.
485 China's first written submission, para. 725. See also China's second written submission, para. 294;
opening statement at the second meeting of the Panel, para. 80; and response to Panel questions Nos. 99-102,
paras. 46-48.
486 Appellate Body Report, US – Tyres (China), para. 329. (footnote omitted, emphasis original)
487 Taking this view, we do not address the complainants' arguments relating to whether the petitioners'
failed to show "good cause" for treating as confidential the full text of the four confidential reports at issue; or
China's arguments as to whether confidential treatment was warranted. (See China's first written submission,
paras. 728-733; response to Panel question No. 67, paras. 178-183; second written submission, para. 297;
and opening statement at the second meeting of the Panel, paras. 80-81; Japan's comments on China's
response to Panel questions Nos. 99-102, paras. 55-59; and European Union's comments on China's response
to Panel questions Nos. 99-102, paras. 48-60.)
488 Late in these proceedings, China argues that, "[s]ince good cause can only be shown by the
interested party, a panel should scrutinize an investigating authority's compliance with Article 6.5 [of the Anti-
Dumping Agreement] on the basis of this request [by the interested party]. If the panel considers that this
request indeed provides 'good cause', an investigating authority will have acted consistently with Article 6.5 by
treating the information as confidential. If the panel considers that the request submitted by the interested
party does not provide 'good cause', it will find a violation of Article 6.5". (China's response to Panel questions
Nos. 99-102, para. 50; see also China's comments on Japan's response to Panel question No. 99, para. 55.)
However, pursuant to the proper standard of review to be applied in this case, we may not conduct a de
novo review of the evidence or substitute our judgement for that of the investigating authority. See
paras. 7.4. -7.7. for further details on standard of review. Thus, it is not for us to assess the petitioners'
requests; rather we should review MOFCOM's assessment of such requests. We also recall that "[t]he
obligation remains with the investigating authority to examine objectively the justification given for the need
for confidential treatment". (Appellate Body Report, EC – Fasteners, para. 539; see also Japan's opening
statement at the second meeting of the Panel, para. 67; comments on China's response to Panel
questions Nos. 99-102, paras. 46-49; and European Union's comments on China's response to Panel questions
Nos. 99-102, para. 43.) On this basis, we reject China's argument and do not evaluate de novo the petitioners'
showing of "good cause".
WT/DS454/R • WT/DS460/R

7.9.4.2 Article 6.5.1 of the Anti-Dumping Agreement
7.304. Turning to the claims under Article 6.5.1 of the Anti-Dumping Agreement, there are
two issues before the Panel. The first issue is wh ether MOFCOM required the petitioners to provide
sufficient non-confidential summaries of the substa nce of each type of confidential information
contained in (i) appendix V to the petition; (ii) appendix VIII to the petition; (iii) appendix 59 to
the petitioners' supplemental evidence of 1 March 2012; and (iv) the appendix to the petitioners'
supplemental evidence of 29 March 2012. The se cond issue is whether MOFCOM required the
petitioners to provide adequate statements as to why summarization was not possible with respect
to appendices 1, 7, 8, 24-28, 31-33, 35-52, and 56-58 to the petitioners' supplemental evidence
of 1 March 2012.
7.9.4.2.1 Non-confidential summaries
7.305. Article 6.5.1 of the Anti-Dumping Agreement sets forth that investigating authorities shall
require interested parties providing confidential information to furnish non-confidential summaries
thereof. We recall that the panel in China – X-Ray Equipment stated that "[t]he Article 6.5.1
obligation to summarize the substance of confidential information applies to all information
designated as confidential. In cases where multiple types of information are designated as
confidential, the substance of each type of confidential information must be summarized".
489 We
agree with these findings490, and shall be guided by them in evaluating the complainants' claims at
issue under Article 6.5.1.
7.306. The complainants submit that the non-conf idential summaries of the four appendices at
issue491 only disclose the final data provided in each confidential report, without summarizing other
confidential information492 pertaining to the methodologies utilized by the third party institutes to
obtain the relevant data, or the underlying evidence they relied upon. 493 The complainants also
submit that no explanation was provided as to why summarization is not possible.494

489 Panel Report, China – X-Ray Equipment, para. 7.341. We note that, in exceptional circumstances
where such confidential information is not susceptible of summary, interested parties may, alternatively,
provide a statement of the reasons why summarization is not possible.
490 We disagree with China's apparent suggestion that the findings of the panel in China – X-Ray
Equipment are only relevant "in the context of exhibits having received full confidential treatment and where
only the data was summarized". (China's first written submission, paras. 754 and 761-762.) In our view, the
Article 6.5.1 obligation to summarize the substance of each type of information designated as confidential
applies equally to these disputes.
491 The four appendices are: (i) appendix V to the petition; (ii) appendix VIII to the petition;
(iii) appendix 59 to the petitioners' supplemental evidence of 1 March 2012; and (iv) the appendix to the
petitioners' supplemental evidence of 29 March 2012.
492 In its response to our questions after the first meeting of the Panel, Japan comments that,
"surprisingly, China does not submit the confidential versions of these reports to the Panel, despite the
availability of protection for [BCI]. Without those confidential documents, the Panel cannot accept China's raw
assertions … Japan fails to see what additional eviden ce Japan could be expected to submit to support its
arguments". (Japan's response to Panel question No. 68, para. 51.) Similarly, the European Union states that
"[n]either the complainants nor the Panel have any means of commenting on [China's] assertion [that the
confidential versions do not contain further information regarding methodologies and underlying evidence] as
long as neither the document nor a properly constituted non-confidential summary of it has been provided".
(European Union's response to Panel question No. 69, para. 154.) We sympathize with the complainants'
difficulty to assess whether MOFCOM complied with its obligations under Article 6.5.1 of the Anti-
Dumping Agreement. We note that, despite the complainants' comments earlier in these proceedings, China
did not submit the original, confidential version of the four appendices at issue with its second written
submission. In light of the complainant's comments, we requested China to submit the confidential versions of
the reports at issue, which China did so in its responses to our questions after the second meeting of the Panel.
(See China's response to Panel question No. 103.)
493 We note that the complainants question whether the underlying reports appropriately serve as
"positive evidence" before the Panel, because the absence of additional information regarding the
methodologies and evidence utilized by the third parties that generated these reports should call into question
the very reliability of these reports. (Japan's response to Panel question No. 68, para. 52; comments on
China's response to Panel question No. 103, para. 53; European Union's second written submission, para. 44;
and comments on China's response to Panel question No. 103, para. 45.) We do not address the complainants'
arguments concerning this matter, since the complainants have not pursued any claim in this regard.
494 Japan's first written submission, paras. 283-284; response to Panel question No. 68, paras. 52-57;
second written submission, para. 129; opening statement at the second meeting of the Panel, para. 68; and
comments on China's response to Panel question No. 103, paras. 53-59; and European Union's first written
WT/DS454/R • WT/DS460/R

7.307. China generally disagrees with the complainants' allegations, submitting that "the
Petitioners provided detailed and adequate non-conf idential summaries of the four appendices at
issue, explaining the content of the reports, in cluding information and data. For every document,
the relevant information was summarized".495
7.9.4.2.1.1 Appendix V to the petition
7.308. With respect to the non-confidential version of this appendix 496, the complainants submit
that, although it includes data on domestic and global HP-SSST demand, it does not contain any
information on how this data was derived.497
7.309. China asserts that "[r]egarding the evidence on which the source relied and the
methodologies utilized, the Petitioners for instance explained that this evidence was obtained from
the third party's proprietary sources, and from th e collection, screening and analysis of relevant
market data". 498 China also submits that "[t]he original reports that received confidential
treatment do not contain further information regarding the methodologies utilized by the
third party institutes to obtain the data, or the underlying evidence they relied upon. Therefore,
such non-existent information could not be included in the non-confidential summaries of these
reports".
499
7.310. Concerning the methodology used in appendix V, we note China's reliance on the fact that
the non-confidential version of this appendix states that "[t]o produce this statement, the
organization had spent a great amount of time and resources into research, analysis, screening
and consolidation of relevant facts and data".
500 We do not consider this statement to be a
sufficiently detailed non-confidential summary to permit a reasonable understanding of or provide
any insight into the type of methodology used to determine domestic demand. In addition, we
note that the original, confidential version of appendix V briefly explains the methodology used to
obtain data on domestic demand, and contains information on the source of the underlying
evidence relied upon.
501 In our view, this information is not sufficiently reflected in the non-
confidential summary of appendix V.502

submission, paras. 91-92; response to Panel question No. 68, paras. 147-148; second written submission,
para. 41; opening statement at the second meeting of the Panel, para. 34; and comments on China's response
to Panel question No. 103, paras. 48-62.
495 China's second written submission, para. 300. (footnotes omitted) See also China's first written
submission, para. 763.
496 The non-confidential summary of appendix V to the petition, entitled "[s]ummary of market
conditions of certain high-performance stainless steel seamless tubes", includes information on (i) the main
ingredients of certain HP-SSST; (ii) domestic production of certain HP-SSST; (iii) domestic and global demand
of certain HP-SSST; and (iv) imports and exports of certain HP-SSST by China. (Petition, Exhibits JPN-3
and EU-1, pp. 76-77.)
497 Japan's response to Panel question No. 68, para. 53 ("[T]he report provides data regarding domestic
and global HP-SSST demand, but the non-confidential version says absolutely nothing about how these figures
were derived"); comments on China's response to Panel question No. 103, para. 55; and European Union's
comments on China's response to Panel question No. 103, paras. 44 and 49-50.
498 China's first written submission, para. 758 and footnote 777. See also China's first written
submission, para. 746 and footnote 762.
499 China's first written submission, para. 759 and footnote 778. China submits that the non-confidential
summary at issue contains the same number of pages as the original, confidential report. (China's first written
submission, para. 742.)
500 Petition, Exhibits JPN-3 and EU-1, p. 76; see also China's first written submission, para. 758.
501 Appendix V to the petition (BCI), Exhibit CHN-21-EN, p. 3 (section 3).
502 Petition, Exhibits JPN-3 and EU-1, pp. 76-77. We note that China does not submit specific arguments
relating to the methodology used to obtain data on domestic demand, or the source of the underlying evidence
concerning domestic demand. In particular, China has not explicitly expressed its disagreement with a position
that this particular information present in the confidential version should have been included in the non-
confidential summary so as to permit a reasonable understanding of its substance, but rather submits that the
information was adequately summarized. We also note that MOFCOM did not invoke the Article 6.5.1
exceptional circumstances mechanism in respect of appendix V.
WT/DS454/R • WT/DS460/R

7.9.4.2.1.2 Appendix to the petitioners' supplemental evidence of 29 March 2012
7.311. With respect to the non-confidential version of this appendix 503, the complainants submit
that it neither indicates the various grades of HP-SSST products, nor specifies which domestic
producers provided the data used to compile domestic production figures.504
7.312. China submits that the original, confidenti al version of this appendix "do[es] not contain
further information regarding the methodologies utilized by the third party institutes to obtain the
data, or the underlying evidence they relied upon. Therefore, such non-existent information could
not be included in the non-confidential summaries of these reports".
505
7.313. Concerning the fact that the non-confidential summary does not include which domestic
producers provided the data used to compile the domestic production figures 506, we note that the
original, confidential version of this appendix does not include this information. 507 MOFCOM clearly
cannot be faulted for failing to require the submitter to summarize the substance of certain
information which was not in the original, confidential version of this appendix. Turning to the
complainants' allegation that the non-confidential summary of this appendix does not indicate the
various grades of HP-SSST products
508, we disagree with the complainants' factual description. The
non-confidential summary includes the Sumi tomo/SMI serial number for HP-SSST product
classification, when it states "… for the th ree steel numbers of products, namely HR3C,
Super 304[H] and 347HFG". 509 On this basis, with respect to the appendix to the petitioners'
supplemental evidence of 29 March 2012, we reject the complainants' Article 6.5.1 claims
accordingly.
7.9.4.2.1.3 Appendix VIII to the petition
7.314. With respect to the non-confidential version of this appendix
510, the complainants submit
that it does not summarize confidential information pertaining to the methodology utilized, or the
source of data used.
511

503 The non-confidential summary of appendix to the petitioners' supplemental evidence of
29 March 2012, entitled "[f]urther summary of domestic production of certain high-performance stainless steel
seamless tubes", provides in relevant part: "[t]his appendix is provided by a respected organization from the
Chinese stainless steel industry. It builds on the 'summary of market conditions of certain high-performance
stainless steel seamless tubes' submitted in July 2011 [i.e. appendix V] and provides supplementary
information and further explanation on the domestic production of certain high-performance stainless steel
seamless tubes. The additions include gross production numbers for the three steel numbers of products,
namely HR3C, Super 304 and 347HFG. The combined total production numbers were also modified slightly.
The new numbers are more precise and should replace those in the first summary". (Petitioners' supplemental
evidence of 29 March 2012, Exhibits JPN-9 and EU-16, p. 4.)
504 Japan's response to Panel question No. 68, para. 57 ("as with the same aspect of Appendix V …, it
does not specify, for example, which domestic producers provided the data used by the third party to compile
these gross domestic production figures"); comments on China's response to Panel question No. 103, para. 58;
and European Union's comments on China's response to Panel question No. 103, paras. 44 and 59.
505 China's first written submission, para. 759 and footnote 778.
506 See Japan's response to Panel question No. 68, para. 57.
507 Appendix to the petitioners' supplemental evidence of 29 March 2012 (BCI), Exhibit CHN-24-EN.
508 Japan's comments on China's response to Panel question No. 103, para. 58; and European Union's
comments on China's response to Panel question No. 103, para. 59.
509 Petitioners' supplemental evidence of 29 March 2012, Exhibits JPN-9 and EU-16, p. 4.
510 The non-confidential summary of appendix VIII to the petition, entitled "[m]arket survey on certain
high-performance stainless steel seamless tubes", provides in relevant part: "[t]his appendix contains
information on the prices of exports of stainless steel high-performance seamless tubes used in high-pressure
boilers from Japan and the European Union to China under the three serial numbers of 08Cr18Ni11NbFG,
10Cr18Ni9NbCu3BN and 07Cr25Ni21NbN for the period of 2008 to the first half of 2011, freight and insurance
on such exports to China since July 2010, and the prices of these goods sold locally in Japan and the EU since
July 2010. … The marked information contained in this appendix was provided by a third party at a cost. …"
(Petition, Exhibits JPN-3 and EU-1, p. 90.)
511 Japan's response to Panel question No. 68, para. 55 ("[T]here is nothing describing, for example: …
precisely how the third party obtained its information and from whom (e.g., did it send pricing requests to
producers, survey consumers, etc?); how much data the third party actually obtained for each country, period,
and product (e.g., were there just single data points, or a sufficiently reliable number of data points?); how the
third party took the information it obtained and computed aggregate prices for Japan and the European Union
(e.g., did it take simple averages or weighted averages?); etc.); comments on China's response to Panel
WT/DS454/R • WT/DS460/R

7.315. China provides a general description of the non-confidential summary in appendix VIII 512,
and generally disagrees with the complainants' claims that information on methodology,
underlying evidence, and sources of data was not sufficiently summarized in the non-confidential
version.
513 However, China does not submit any specific argument relating to the methodology
used to obtain the relevant data or the source of data relied upon in appendix VIII.
7.316. We note that the original, confidential version of appendix VIII briefly explains the
methodology used to obtain the relevant data included in the report, and contains information on
the source of data relied upon. 514 In our view, this information is not sufficiently reflected in the
non-confidential summary of appendix VIII.515
7.9.4.2.1.4 Appendix 59 to the petitioners' supplemental evidence of 1 March 2012
7.317. With respect to the non-confidential version of this appendix 516, the complainants submit
that it does not summarize confidential information pertaining to the methodology utilized, or the
source of a certain fee.517
7.318. China provides a general description of the non-confidential summary in appendix 59 518,
and generally disagrees with the complainants' claims that information on methodology,
underlying evidence, and sources of data was not sufficiently summarized in the non-confidential
version.
519 However, China does not submit any specific argument relating to the methodology
used to obtain the relevant data or the source of data relied upon in appendix 59.
7.319. We note that the original, confidential version of appendix 59 very briefly explains the
methodology used to obtain the relevant data included in the report, and contains information on
the source of data with respect to one particular fee.
520 In our view, this information is not
sufficiently reflected in the non-confidential summary of appendix 59.521
7.9.4.2.1.5 Conclusion
7.320. In light of the foregoing, we uphold the complainants' claims that China acted
inconsistently with Article 6.5.1 of the Anti-Dum ping Agreement by failing to require that the

question No. 103, para. 56; and European Union's comments on China's response to Panel question No. 103,
paras. 44 and 52-53.
512 See China's first written submission, paras. 743 and 760.
513 See China's first written submission, paras. 746, 758, and 763.
514 Appendix VIII to the petition (BCI), Exhibit CHN-22-EN, pp. 3-5.
515 Petition, Exhibits JPN-3 and EU-1, p. 90. We also note that China has not explicitly expressed its
disagreement with a position that this particular information present in the confidential version should have
been included in the non-confidential summary so as to permit a reasonable understanding of its substance,
but rather submits that this information was adequately summarized. We also note that MOFCOM did not
invoke the Article 6.5.1 exceptional circumstances mechanism in respect of appendix VIII.
516 The non-confidential summary of appendix 59 to the petitioners' supplemental evidence of
1 March 2012, entitled "[r]esearch report on costs and fees related to the import of stainless steel seamless
tubes used in high pressure boilers", provides in relevant part: "[t]he market information contained in this
appendix was provided by a third party at a cost. … The da ta contained include: inspection fee on the import of
stainless seamless boiler tubes and pipes was 0.16%; miscellaneous port charges totalled 55-60 RMB/ton for
bulk transportation and 40-50 RMB/ton for container transportation; handling fee as a share of goods
value was below 0.01%". (Petitioners' supplemental evidence of 1 March 2012, Exhibits JPN-8 and EU-15,
pp. 10-11.)
517 Reponses to the Panels' Questions following the First Substantive Meeting with Parties, para. 56
("[This summary] contains no information regarding how [the] third party derived its figures for the
inspection fee, miscellaneous port charges, and handling fee"); comments on China's response to Panel
question No. 103, para. 57; and European Union's comments on China's response to Panel question No. 103,
paras. 44 and 55-56.
518 See China's first written submission, paras. 744 and 760.
519 See China's first written submission, paras. 746, 758, and 763.
520 Petitioners' supplemental evidence of 1 March 2012 (BCI), Exhibit CHN-23-EN, p. 2.
521 Petitioners' supplemental evidence of 1 March 2012, Exhibits JPN-8 and EU-15, pp. 10-11. We also
note that China has not explicitly expressed its disagreement with a position that this particular information
present in the confidential version should have been included in the non-confidential summary so as to permit
a reasonable understanding of its substance, but rather submits that this information was adequately
summarized. We also note that MOFCOM did not invoke the Article 6.5.1 exceptional circumstances mechanism
in respect of appendix 59.
WT/DS454/R • WT/DS460/R

petitioners provide sufficiently detailed non-co nfidential summaries of the substance of the
confidential information at issue in appendices V and VIII to the petition, and appendix 59 to the
petitioners' supplemental evidence of 1 March 2012.
522
7.9.4.2.2 Statements as to why summarization was not possible
7.321. With respect to the remaining 32 appendices523, the main issue before the Panel is whether
the petitioners provided adequate statements as to why summarization was not possible for
purposes of Article 6.5.1 of the Anti-Dumping Agreement.
7.322. Article 6.5.1 of the Anti-Dumping Agreemen t provides that in exceptional circumstances,
where parties indicate that confidential information is not susceptible of summary, a statement of
the reasons why summarization is not possible must be provided.
7.323. The Appellate Body in EC – Fasteners examined whether a particular statement addressed
the issue of why summarization was not possible. The Appellate Body stated:
With respect to Agrati, its statement asserting for each category that "[t]he
information cannot be summarized without disclosing confidential information" speaks
to a justification for providing confidential treatment in the first place. It does not
address the issue of why summarization of the information is not possible, or why the
particular information presents exceptional circumstances that would justify a failure
to provide a non-confidential summary. No r can the single statement repeated by
Agrati be read as adequate justification fo r treating a number of different pieces of
information as equally unsusceptible to summarization. … We agree with the Panel
that Agrati's statement did not "relate to any of the specific information for which no
non-confidential summary [was] provided or to anything having to do with Agrati
itself". Therefore, we consider that the Commission failed to ensure that Agrati
provided an appropriate statement of why summarization of certain portions of its
questionnaire response was not possible.
524
We agree with the reasoning underlying these findin gs, and shall be guided by them in evaluating
the complainants' claims under Article 6.5.1 of the Anti-Dumping Agreement.

7.324. In the present disputes, the petitioners repeatedly provided the following statement in
respect of all of the remaining 32 appendices:
Concerns the company's business secrets an d therefore confidential treatment is
requested, cannot be disclosed. [as translated by China]
It concerns the company's business secrets and therefore we request confidential
treatment and no disclosure is hereby made. [as translated by Japan and the
European Union]
525
7.325. According to China, this is a statem ent by petitioners of the reasons as to why
summarization is not possible. 526 China argues that this statement clarifies that no alternative
method of presenting that information can be developed that would not necessarily disclose the
sensitive information. In China's view, this is because of "the nature of the information, which

522 We note that China has neither alleged nor provided any evidence that the petitioners submitted a
statement of the reasons why summarization of the information at issue was not possible.
523 These 32 appendices are appendices 1, 7-8, 24-28, 31-33, 35-52, and 56-58 to the petitioners'
supplemental evidence of 1 March 2012.
524 Appellate Body Report in EC – Fasteners, para. 553. (footnotes omitted)
525 Petitioners' supplemental evidence of 1 March 2012, Exhibits JPN-8 and EU-15, pp. 6-10, with
translation amended in Exhibits CHN-16, JPN-29, and EU-32, internal page 18.
526 China's first written submission, paras. 766-767; response to Panel question No. 70, para. 184; and
second written submission, para. 301.
WT/DS454/R • WT/DS460/R

entirely consists of business confidential information. The sensitivity of this information makes it
impossible to summarize, as indicated by the statement made by the Petitioners".527
7.326. We are not persuaded by China's argument. The statement at issue only addresses the
question of why confidential treatment should be provided. It does not provide the reasons why
the particular information is not susceptible of summary. 528 In addition, the statement does not
relate to any specific information for which it was not possible to provide a non-confidential
summary. Our understanding is supported by the fact that the exact same statement is repeatedly
used with respect to a large number of different pieces of information. Guided by the
Appellate Body's findings in EC – Fasteners , we do not consider that the repetition of this single
statement can serve as a valid statement of the reasons why summarization of a number of
different pieces of information is not possible.
7.327. In light of the foregoing, we uphold the complainants' claims that China acted
inconsistently with Article 6.5.1 of the Anti-D umping Agreement, because MOFCOM failed to
require the petitioners to provide adequate statements as to why summarization was not possible.
7.10 Application of provisional measures
7.328. Japan and the European Union claim that, by applying provisional measures for a period
exceeding four months, China acted inconsistently with Article 7.4 of the Anti-
Dumping Agreement.
529 China does not submit arguments in response to this claim.
7.10.1 Relevant WTO provision
7.329. Article 7.4 of the Anti-Dumping Agreement provides:
The application of provisional measures shall be limited to as short a period as
possible, not exceeding four months or, on decision of the authorities concerned, upon
request by exporters representing a signific ant percentage of the trade involved, to a
period not exceeding six months. When authorities, in the course of an investigation,
examine whether a duty lower than the ma rgin of dumping would be sufficient to
remove injury, these periods may be six and nine months, respectively.
7.10.2 Main arguments of the parties
7.10.2.1 Japan and the European Union
7.330. Japan and European Union submit that MOFCOM imposed provisional anti-dumping
measures from 9 May 2012 to 9 November 2012, after which MOFCOM imposed final anti-dumping
measures. MOFCOM thus applied provisional measures for a period of six months.
530
7.331. Japan and European Union contend that provisional measures should not have been
applied for more than four months, because (i) there was no request by exporters representing a
significant percentage of the trade involved, and (ii) China did not examine whether a duty lower
than the margin of dumping would be sufficient to remove injury.
531

527 China's response to Panel question No. 70, para. 184. See also China's first written submission,
528 See Japan's second written submission, para. 131.
529 Japan's first written submission, para. 320; and second written submission, para. 135; and
European Union's first written submission, para. 326; and second written submission, para. 177.
530 Japan's first written submission, para. 321; and second written submission, para. 135; and
European Union's first written submission, para. 327.
531 Japan's first written submission, para. 322; second written submission, para. 135; and opening
statement at the second meeting of the Panel, para. 69; and European Union's first written submission,
para. 328.
WT/DS454/R • WT/DS460/R

7.10.2.2 China
7.332. Although China acknowledges the Article 7.4 claim532, China does not submit arguments in
response to it. China only submits that "it acknowledged this claim in good faith, and opted not to
rebut any prima facie case that may or may not have been made in this respect".
533
7.10.3 Main arguments of third parties
7.10.3.1 United States
7.333. The United States submits that "the text of Article 7.4 [of the Anti-Dumping Agreement]
provides that without [a] request from a sufficient percentage of exporters or the imposition of a
lesser duty, an investigating authority may not impose provisional measures for a period
exceeding four months".
534
7.10.4 Evaluation by the Panel
7.334. Article 7.4 of the Anti-Dumping Agreement is clear and explicit on the question of the
allowable duration of a provisional measure. 535 The complainants submit that MOFCOM imposed
provisional anti-dumping measures for six months. 536 The complainants also submit that (i) there
was no "request by exporters representing a significant percentage of the trade involved"; and
(ii) China did not "examine whether a duty lower than the margin of dumping would be sufficient
to remove injury".
537 Thus, the maximum period allowed for the provisional measures at issue was
four months. China does not submit arguments in resp onse to this claim. In light of the foregoing,
we uphold the complainants' claims that China acted inconsistently with Article 7.4 by applying
provisional measures for a period exceeding four months.
7.11 Consequential claims
7.335. Japan and the European Union claim that, by failing to comply with the provisions of
the Anti-Dumping Agreement, China has consequently acted inconsistently with Article 1 of the
Anti-Dumping Agreement and Article VI of the GATT 1994.
538
7.336. We note that the complainants' claims under Article 1 of the Anti-Dumping Agreement, and
Article VI of the GATT 1994 are purely consequential, in the sense that they depend on
the outcome of other claims pursued by the complainants under other provisions of the Anti-
Dumping Agreement. As a consequence of the incons istencies we have already found to exist with
the Anti-Dumping Agreement, we uphold the complainants' consequential claims under Article 1 of
the Anti-Dumping Agreement and Article VI of the GATT 1994.

532 China's first written submission, footnote 4; and opening statement at the second meeting of the
Panel, para. 94.
533 China's opening statement at the second meeting of the Panel, para. 94.
534 United States' third-party submission, para. 62.
535 See Panel Report, Mexico – Corn Syrup, para. 7.182.
536 Japan's first written submission, para. 321; and second written submission, para. 135; and
European Union's first written submission, para. 327. See also preliminary determination notice, section II,
Exhibits JPN-6 and EU-17; and final determination notice, sections II, III and IV, Exhibits JPN-1 and EU-29.
537 Japan's first written submission, para. 322; and second written submission, para. 135; and
European Union's first written submission, para. 328.
538 Japan's first written submission, para. 324; and European Union's first written submission,

8 CONCLUSIONS AND RECOMMENDATIONS
8.1 Complaint by Japan (DS454)
8.1.1 Conclusions
8.1. We uphold Japan's claims that:
a. China's injury determination is inconsistent with Articles 3.1, 3.2, 3.4 and 3.5 of the
Anti-Dumping Agreement, because:
i. MOFCOM failed to properly account for differences in quantities when comparing the
price of Grade C subject imports with the domestic Grade C price in its price effects
analysis, contrary to Articles 3.1 and 3.2 of the Anti-Dumping Agreement;
ii. MOFCOM failed to properly evaluate the magnitude of the margin of dumping in
considering the impact of subject imports on the domestic industry, contrary to
Articles 3.1 and 3.4 of the Anti-Dumping Agreement;
iii. MOFCOM improperly relied on the market share of subject impo rts, and its flawed
price effects and impact analyses, in determining a causal link between subject
imports and material injury to the domestic industry, contrary to Articles 3.1 and 3.5
of the Anti-Dumping Agreement; and
iv. MOFCOM failed to ensure that injury caused by the decrease in apparent
consumption and the increase in production capacity was not attributed to subject
imports, contrary to Articles 3.1 and 3.5 of the Anti-Dumping Agreement;
b. MOFCOM allowed certain information supplied by the petitioners to remain confidential
without objectively assessing "good cause" or scrutinizing the petitioners' showing of
"good cause", contrary to Article 6.5 of the Anti-Dumping Agreement;
c. China acted inconsistently with Article 6.5.1 of the Anti-Dumping Agreement by failing to
require petitioners to provide sufficiently detailed non-confidential summaries of
information treated as confidential, or explanations as to why summarization was not
possible;
d. China acted inconsistently with Article 6.9 of the Anti-Dumping Agreement by failing to
adequately disclose essential facts in connection with:
i. the methodology used to calculate the margins of dumping for SMI and Kobe; and
ii. import prices, domestic prices, and price comparisons considered by MOFCOM in its
injury determination;
e. China's application of provisional measures for a period exceeding four months is
inconsistent with Article 7.4 of the Anti-Dumping Agreement;
f. China acted inconsistently with Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement
by failing to set forth in sufficient detail in its Final Determination notice or a separate
report the reasons why MOFCOM considered it appropriate to apply the highest margin
of dumping calculated for cooperating exporters as the all others rate for Japanese
companies other than SMI and Kobe;
g. As a consequence of the inconsistencies described above, China's anti-dumping
measures on HP-SSST from Japan are also inconsistent with Article 1 of the Anti-
Dumping Agreement and Article VI of the GATT 1994.
8.2. We reject Japan's claims that:

a. China's injury determination is inconsistent with Articles 3.1, 3.2, 3.4 and 3.5 of the
Anti-Dumping Agreement, because:
i. MOFCOM failed to consider whether Grade C subject imports had any price
undercutting effect on domestic Grade C products, and improperly extended its
findings of price undercutting in respect of Grades B and C to the domestic like
product as a whole, contrary to Articles 3.1 and 3.2 of the Anti-Dumping Agreement;
and
ii. MOFCOM failed to undertake a segmented analysis, and failed to properly weigh the
positive and negative injury factors, when assessing the impact of subject imports on
the domestic industry, contrary to Articles 3.1 and 3.4 of the Anti-
Dumping Agreement;
b. China's reliance on facts available to calculate the dumping margin for all Japanese
companies other than SMI and Kobe is inconsistent with Article 6.8 and Paragraph 1 of
Annex II to the Anti-Dumping Agreement;
c. China acted inconsistently with Article 6.9 of the Anti-Dumping Agreement by failing to
adequately disclose essential facts in connection with:
i. the data underlying MOFCOM's determinat ion of dumping in respect of SMI and
Kobe; and
ii. the determination and the calculation of the dumping margins for all Japanese
companies other than SMI and Kobe.
d. China acted inconsistently with Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement
by failing to set forth in sufficient detail in its Final Determination notice or a separate
report:
i. relevant information concerning pricing information underlying MOFCOM's price
undercutting findings; and
ii. the facts leading to the conclusion that the use of facts available was warranted to
calculate the all others rate, and the facts that were used to determine the all others
rate.
8.3. In light of the conclusions set forth in paragraphs 8.1 and 8.2 above, we do not consider it
necessary to rule on Japan's claim that China acted inconsistently with Articles 12.2 and 12.2.2 of
the Anti-Dumping Agreement by failing to set forth in sufficient detail in its Final Determination
notice or a separate report MOFCOM 's treatment, in the context of its price effects analysis, of the
difference between the volume of Grade C subjec t imports and the volume of Grade C domestic
products.
8.1.2 Recommendations
8.4. Pursuant to Article 3.8 of the DSU, in ca ses where 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 benefits under that agreement. Accordingly, to the extent China has
acted inconsistently with certain provisions of the Anti-Dumping Agreement, we conclude that
China has nullified or impaired benefits accruing to Japan under that Agreement.
8.5. Pursuant to Article 19.1 of the DSU, having found that China acted inconsistently with certain
provisions of the Anti-Dumping Agreement, we recommend that China bring its measures into
conformity with its obligations under that Agreement.

8.2 Complaint by the European Union (DS460)
8.2.1 Conclusions
8.6. We uphold the European Union's claims that:
a. China acted inconsistently with Article 2.2.2 of the Anti-Dumping Agreement by failing to
d e t e r m i n e a n S G & A a m o u n t f o r S M S T o n t h e b a s i s o f a c t u a l d a t a p e r t a i n i n g t o
production and sales in the ordinary course of trade of the like product;
b. China acted inconsistently with Article 2.4 of the Anti-Dumping Agreement by failing to
address SMST's request for an adjustment to ensure a fair comparison between the
export price and the normal value for Grade C;
c. China acted inconsistently with Article 6.7 and Paragraph 7 of Annex I of the Anti-
Dumping Agreement by rejecting SMST's request for rectification only on the basis that it
was not provided prior to verification;
d. China's injury determination is inconsistent with Articles 3.1, 3.2, 3.4 and 3.5 of the
Anti-Dumping Agreement, because:
i. MOFCOM failed to properly account for differences in quantities when comparing the
price of Grade C subject imports with the domestic Grade C price in its price effects
analysis, contrary to Articles 3.1 and 3.2 of the Anti-Dumping Agreement;
ii. MOFCOM failed to properly evaluate the magnitude of the margin of dumping in
considering the impact of subject imports on the domestic industry, contrary to
Articles 3.1 and 3.4 of the Anti-Dumping Agreement;
iii. MOFCOM improperly relied on the market share of subject impo rts, and its flawed
price effects and impact analyses, in determining a causal link between subject
imports and material injury to the domestic industry, contrary to Articles 3.1 and 3.5
of the Anti-Dumping Agreement; and
iv. MOFCOM failed to ensure that injury caused by the decrease in apparent
consumption and the increase in production capacity was not attributed to subject
imports, contrary to Articles 3.1 and 3.5 of the Anti-Dumping Agreement;
e. MOFCOM allowed certain information supplied by the petitioners to remain confidential
without objectively assessing "good cause" or scrutinizing the petitioners' showing of
"good cause", contrary to Article 6.5 of the Anti-Dumping Agreement;
f. China acted inconsistently with Article 6.5.1 of the Anti-Dumping Agreement by failing to
require petitioners to provide sufficiently detailed non-confidential summaries of
information treated as confidential, or explanations as to why summarization was not
possible;
g. China acted inconsistently with Article 6.9 of the Anti-Dumping Agreement by failing to
adequately disclose essential facts in connection with:
i. the methodology used to calculate the margins of dumping for SMST and Tubacex;
and
ii. import prices, domestic prices, and price comparisons considered by MOFCOM in its
injury determination;
h. China's application of provisional measures for a period exceeding four months is
inconsistent with Article 7.4 of the Anti-Dumping Agreement;

i. China acted inconsistently with Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement
by failing to set forth in sufficient detail in its Final Determination notice or a separate
report the reasons why MOFCOM considered it appropriate to apply the highest margin
of dumping calculated for cooperating exporters as the all others rate for
European Union companies other than SMST and Tubacex;
j. As a consequence of the inconsistencies described above, China's anti-dumping
measures on HP-SSST from the European Union are also inconsistent with Article 1 of
the Anti-Dumping Agreement and Article VI of the GATT 1994.
8.7. We reject the European Union's claims that:
a. China acted inconsistently with Article 6.8 and paragraphs 3 and 6 of Annex II to the
Anti-Dumping Agreement by applying facts av ailable in respect of certain information
that SMST sought to rectify at verification;
b. China's injury determination is inconsistent with Articles 3.1, 3.2, 3.4 and 3.5 of the
Anti-Dumping Agreement, because:
i. MOFCOM failed to consider whether Grade C subject imports had any price
undercutting effect on domestic Grade C products, and improperly extended its
findings of price undercutting in respect of Grades B and C to the domestic like
product as a whole, contrary to Articles 3.1 and 3.2 of the Anti-Dumping Agreement;
and
ii. MOFCOM failed to undertake a segmented analysis, and failed to properly weigh the
positive and negative injury factors, when assessing the impact of subject imports on
the domestic industry, contrary to Articles 3.1 and 3.4 of the Anti-
Dumping Agreement;
c. China's reliance on facts available to calculate the dumping margin for all
European Union companies other than SMST and Tubacex is inconsistent with Article 6.8
and Paragraph 1 of Annex II to the Anti-Dumping Agreement;
d. China acted inconsistently with Article 6.9 of the Anti-Dumping Agreement by failing to
adequately disclose essential facts in connection with:
i. the data underlying MOFCOM's determination of dumping in respect of SMST and
Tubacex; and
ii. the determination and the calculation of the dumping margins for all European Union
companies other than SMST and Tubacex.
e. China acted inconsistently with Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement
by failing to set forth in sufficient detail in its Final Determination notice or a separate
report:
i. relevant information concerning pricing information underlying MOFCOM's price
undercutting findings; and
ii. the facts leading to the conclusion that the use of facts available was warranted
to calculate the all others rate, and the facts that were used to determine the all
others rate.
8.8. In light of the conclusions set forth in paragraphs 8.6 and 8.7 above, we do not consider it
necessary to rule on the European Union's claims that:
a. China acted inconsistently with Articles 12. 2 and 12.2.2 of the Anti-Dumping Agreement
by failing to set forth in sufficient detail in its Final Determination notice or a separate
report MOFCOM's treatment, in the context of its price effects analysis, of the difference

between the volume of Grade C subject imports and the volume of Grade C domestic
products; and
b. China acted inconsistently with Articles 2.2.1 and 2.2.1.1 of the Anti-Dumping
Agreement by failing to determine an SG&A amount for SMST on the basis of actual data
pertaining to production and sales in the ordinary course of trade of the like product.
8.9. Consistent with our terms of reference, we find that the Article 2.2.1 claim advanced by the
European Union in its first written submission fall s outside our terms of reference. We also find
that the Article 2.2.1.1 claims advanced by the European Union in its first written submission
pertaining to MOFCOM's use of data that allegedly were not in accordance with GAAP, did not
reasonably reflect the costs associated with the product under consideration, and were historically
utilized by SMST, fall outside our terms of reference.
8.2.2 Recommendations
8.10. Pursuant to Article 3.8 of the DSU, in cases where 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 benefits under that agreement. Accordingly, to the extent China has
acted inconsistently with certain provisions of the Anti-Dumping Agreement, we conclude that
China has nullified or impaired benefits accruing to the European Union under that Agreement.
8.11. Pursuant to Article 19.1 of the DSU, havi ng found that China acted inconsistently with
certain provisions of the Anti-Dumping Agreement, we recommend that China bring its measures
into conformity with its obligations under that Agreement. The second sentence of Article 19.1
provides the Panel with the discretion to suggest ways in which China might implement this
recommendation. In this regard, the European Union has proposed specific suggestions for us to
make, and requested the Panel to formulate other suggestions
539 Given the complexities to which
implementation may give rise, we decline to exercise our discretion under the second sentence of
Article 19.1 in the manner requested by the European Union.