UNITED STATES – SAFEGUARD MEASURE ON IMPORTS OF LARGE RESIDENTIAL WASHERS REPORT OF THE PANEL
Document: REPORT OF THE PANEL
Date: 8 February 2022
Document codes: WT/DS546/R
Complainant: South Korea
Respondent: U.S.
Third parties: Brazil, China, EU, Egypt, India, Japan, Kazakhstan, Mexico, Norway, Russia, Thailand, Vietnam
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. XIX:1  GATT 1994Art. 1, 3.1, 2.1, 4.1(c), 4.2, 4.1, 4.2(a), 4.2(b), 3.2, 4.2(c), 5.1, 7.4, 7.1, 8.1, 12.1, 12.2, 12.3  SafeguardsArt. II:1  GATT 1994

UNITED STATES – SAFEGUARD MEASURE ON IMPORTS OF
LARGE RESIDENTIAL WASHERS
REPORT OF THE PANEL

LIST OF ANNEXES
ANNEX A
PANEL DOCUMENTS
Contents Page
Annex A-1 Working Procedures of the Panel 4
Annex A-2 Additional Working Procedures of the Panel concerning Business Confidential
Information
11
Annex A-3 Additional Working Procedures of the Panel concerning holding a substantive
meeting conducted via Cisco WebEx
13
Annex A-4 Interim Review 18
ANNEX B
ARGUMENTS OF THE PARTIES
Contents Page
Annex B-1 Integrated executive summary of the arguments of the Republic of Korea 28
Annex B-2 Integrated executive summary of the arguments of the United States 47
ANNEX C
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex C-1 Integrated executive summary of the arguments of the European Union 61
Annex C-2 Integrated executive summary of the arguments of Japan 65
Annex C-3 Integrated executive summary of the arguments of Mexico 70

CASES CITED IN THIS REPORT
Short Title Full Case Title and Citation
Argentina – Footwear (EC) Appellate Body Report, Argentina – Safeguard Measures on Imports of
Footwear, , adopted 12 January 2000, DSR 2000:I, p. 515
Argentina – Footwear (EC) Panel Report, Argentina – Safeguard Measures on Imports of Footwear,
, adopted 12 January 2000, as modified by Appellate Body
Report , DSR 2000:II, p. 575
China – GOES (Article 21.5 –
US)
Panel Report, China – Countervailing and Anti-Dumping Duties on Grain
Oriented Flat-Rolled Electrical Steel from the United States – Recourse to
Article 21.5 of the DSU by the United States, and Add.1,
adopted 31 August 2015, DSR 2015:VII, p. 3865
Dominican Republic –
Safeguard Measures
Panel Report, Dominican Republic – Safeguard Measures on Imports of
Polypropylene Bags and Tubular Fabric, , ,
WT/DS417/R, WT/DS418/R, and Add.1, adopted 22 February 2012, DSR
2012:XIII, p. 6775
EC – Asbestos Appellate Body Report, European Communities – Measures Affecting
Asbestos and Asbestos-Containing Products, WT/DS135/AB/R, adopted
5 April 2001, DSR 2001:VII, p. 3243
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 – Hormones Appellate Body Report, European Communities – 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 – Seal Products Appellate Body Reports, European Communities – Measures Prohibiting the
Importation and Marketing of Seal Products, WT/DS400/AB/R /
WT/DS401/AB/R, adopted 18 June 2014, DSR 2014:I, p. 7
Japan – Alcoholic Beverages II Appellate Body Report, Japan – Taxes on Alcoholic Beverages,
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted
1 November 1996, DSR 1996:I, p. 97
Korea – Certain Paper Panel Report, Korea – Anti-Dumping Duties on Imports of Certain Paper
from Indonesia, WT/DS312/R, adopted 28 November 2005, DSR
2005:XXII, p. 10637
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
Korea – Dairy Panel Report, Korea – Definitive Safeguard Measure on Imports of Certain
Dairy Products, WT/DS98/R and Corr.1, adopted 12 January 2000, as
modified by Appellate Body Report WT/DS98/AB/R, DSR 2000:I, p. 49
Korea – Pneumatic Valves
(Japan)
Panel Report, Korea – Anti-Dumping Duties on Pneumatic Valves from
Japan, WT/DS504/R and Add.1, adopted 30 September 2019, as modified
by Appellate Body Report WT/DS504/AB/R, DSR 2019:XI, p. 5935
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
Philippines – Distilled Spirits Appellate Body Reports, Philippines – Taxes on Distilled Spirits,
WT/DS396/AB/R / WT/DS403/AB/R, adopted 20 January 2012, DSR
2012:VIII, p. 4163
Ukraine – Passenger Cars Panel Report, Ukraine – Definitive Safeguard Measures on Certain
Passenger Cars, WT/DS468/R and Add.1, adopted 20 July 2015, DSR
2015:VI, p. 3117
US – Cotton Yarn Appellate Body Report, United States – Transitional Safeguard Measure on
Combed Cotton Yarn from Pakistan, WT/DS192/AB/R, adopted
5 November 2001, DSR 2001:XII, p. 6027

Short Title Full Case Title and Citation
US – Gasoline Appellate Body Report, United States – Standards for Reformulated and
Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I,
p. 3
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia,
WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX,
p. 4051
US – Lamb Panel Report, United States – Safeguard Measures on Imports of Fresh,
Chilled or Frozen Lamb Meat from New Zealand and Australia,
WT/DS177/R, WT/DS178/R, adopted 16 May 2001, as modified by
Appellate Body Report WT/DS177/AB/R, WT/DS178/AB/R, DSR 2001:IX,
p. 4107
US – Line Pipe Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Circular Welded Carbon Quality Line Pipe from Korea,
WT/DS202/AB/R, adopted 8 March 2002, DSR 2002:IV, p. 1403
US – Steel Safeguards Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Certain Steel Products, WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R, adopted 10 December 2003, DSR
2003:VII, p. 3117
US – Steel Safeguards Panel Reports, United States – Definitive Safeguard Measures on Imports
of Certain Steel Products, WT/DS248/R and Corr.1 / WT/DS249/R and
Corr.1 / WT/DS251/R and Corr.1 / WT/DS252/R and Corr.1 / WT/DS253/R
and Corr.1 / WT/DS254/R and Corr.1 / WT/DS258/R and Corr.1 /
WT/DS259/R and Corr.1, adopted 10 December 2003, as modified by
Appellate Body Report WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R, DSR 2003:VIII, p. 3273
US – Wheat Gluten Appellate Body Report, United States – Definitive Safeguard Measures on
Imports of Wheat Gluten from the European Communities,
WT/DS166/AB/R, adopted 19 January 2001, DSR 2001:II, p. 717
US – Wheat Gluten Panel Report, United States – Definitive Safeguard Measures on Imports of
Wheat Gluten from the European Communities, WT/DS166/R, adopted
19 January 2001, as modified by Appellate Body Report WT/DS166/AB/R,
DSR 2001:III, p. 779
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

ABBREVIATIONS USED IN THIS REPORT
Abbreviation Description
Alliance Alliance Laundry Systems
AUV average unit value
BCI Business Confidential Information
CIM controlled-induction motor
COGS cost of goods sold
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of
Disputes
FL LRW front loading large residential washers
GATT 1994 General Agreement on Tariffs and Trade 1994
GE GE Appliances
LRW large residential washer
MFN most favoured nation
POI period of investigation
PSC permanent split-capacitor
PUC product under consideration
SG&A sales, general, and administrative
TL LRW top loading large residential washers
USITC United States International Trade Commission
USTR United States Trade Representative
Whirlpool Whirlpool Corporation
WTO World Trade Organization

1 INTRODUCTION
1.1 Complaint by Korea
1.1. On 14 May 2018, the Republic of Korea (Korea) requested consultations with the United States
pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes (DSU), Article XXII:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994),
and Article 14 of the Agreement on Safeguards with respect to the measures and claims set out
below.1
1.2. Consultations were held on 26 June 2018 but failed to resolve this dispute.
1.2 Panel establishment and composition
1.3. On 14 August 2018, Korea requested the establishment of a panel pursuant to Article 6 of the
DSU, Article XXIII of the GATT 1994, and Article 14 of the Agreement on Safeguards with standard
terms of reference. 2 At its meeting on 26 September 2018, the Dispute Settlement Body
(DSB) established a panel pursuant to the request of Korea in document WT/DS546/4, in accordance
with Article 6 of the DSU.3
1.4. The Panel's terms of reference are the following:
To examine, in the light of the relevant provisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by the Republic of Korea in
document WT/DS546/4 and to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements.4
1.5. On 20 June 2019, Korea requested the Director-General to determine the composition of the
panel, pursuant to Article 8.7 of the DSU . On 1 July 2019, the Director -General accordingly
composed the Panel as follows:
Chairperson: Mr Alexander Hugh McPhail

Members: Mr Welber Oliveira Barral

1.6. Brazil, China, Egypt, the European Union, India, Japan, Kazakhstan, Mexico, Norway,
the Russian Federation, Thailand, and Viet Nam notified their interest in participating in the Panel
proceedings as third parties.
1.3 Panel proceedings
1.3.1 General
1.7. After consultation with the parties, we adopted the timetable, Working Procedures 5 and
Additional Working Procedures on Business Confidential Information (BCI)6 on 9 October 2019.7
1.8. In view of the various restrictions imposed on gatherings and international travel in relation to
the COVID -19 pandemic, it was not possible to hold the Panel's first and second substantive
meetings with the parties in person. We continued to consult the parties throughout 2020 on the

1 Request for consultations by Korea, WT/DS546/1 (Korea's consultations request).
2 Request for establishment of a panel by Korea, WT/DS546/4 (Korea's panel request).
3 DSB, Minutes of Meeting held on 26 September 2018, WT/DSB/M/419, para. 7.4.
4 Constitution note of the Panel, WT/DS546/5, para. 2.
5 Working Procedures of the Panel (Annex A-1).
6 Additional Working Procedures of the Panel on Business Confidential Information (Annex A-2).
7 We revised these Additional Working Procedures on BCI on 18 October 2019 and on 31 October 2019.
We also revised the timetable over the course of the proceedings in consultation with the parties.

possibility of adopting alternative methods to an in-person meeting.8 However, taking into account
the views expressed by Korea and the United States in this regard, and considering in -person
meetings were not possible in 2020 due to the aforementioned restrictions caused by the COVID-19
pandemic, we decided not to hold these meetings in 2020.
1.9. Following additional consultation with the parties, we adopted on 29 January 2021
Additional Working Procedures that set out the procedures for holding the Panel 's substantive
meeting through a virtual format.9 After further consulting the parties, we held the first substantive
meeting with the parties on 23 and 26 February 2021 through a partially virtual format. The session
with the third parties took place on 24 February 2021. We held the second substantive meeting on
14, 15, and 18 June 2021, also through a partially virtual format.
1.10. We issued the descriptive part of its Report to the parties on 20 August 2021. We issued our
Interim Report and Final Report to the parties on 25 October 2021 and 15 December 2021
respectively.
2 FACTUAL ASPECTS
2.1 The measure at issue
2.1. The dispute concerns the definitive safeguard measure imposed by the United States on
imports of large residential washers (LRWs). The United States imposed this measure pursuant to
Proclamation 9694 issued by the US President on 23 January 2018.10 The measure was imposed
following an investigation conducted by the United States International Trade Commission
(USITC).11
3 PARTIES' REQUESTS FOR FINDINGS
3.1. Korea requests that the Panel find that the United States' definitive safeguard measure on
LRWs is inconsistent with the United States' obligations under the Agreement on Safeguards and
the GATT 1994. Specifically, Korea contends that the United States acted inconsistently with12:
a. Article XIX:1(a) of the GATT 1994 and Articles 1 and 3.1 of the Agreement on Safeguards,
by failing to provide a reasoned and adequate explanation of the "unforeseen
developments" and the "obligations incurred " by the United States, which would have
resulted in the alleged increased imports of LRWs causing serious injury;
b. Articles 2.1, 3.1, 4.1(c), 4.2(a), and 4.2(b) of the Agreement on Safeguards, by failing to
properly define the domestic industry;
c. Articles 2.1 and 3.1 of the Agreement on Safeguards, by failing to properly determine that
LRWs were imported in "such increased quantities, absolute or re lative to domestic
production, and under such conditions" to cause serious injury to the domestic industry;

8 In particular, we explored the possibility of (a) replacing the first substantive meeting of the Panel with
a written procedure, or (b) holding the substantive meetings through a fully virtual format, wherein all
participants would participate in the meeting by logging into a virtual platform such as Cisco WebEx, or a
partially virtual format, where a limited number of participants could be present at the designated room at the
WTO (taking into account the local restrictions on in-person meetings) whereas other participants, including
the panellists, would participate through the Cisco WebEx platform.
9 Additional Working Procedures of the Panel concerning holding a substantive meeting conducted via
Cisco WebEx adopted on 29 January 2021 (Annex A-3). We revised these Additional Working Procedures on
21 April 2021.
10 Presidential Documents, Proclamation 9694 of January 23, 2018 – To Facilitate Positive Adjustment to
Competition from Imports of Large Residential Washers, 83 FR 3553 (25 January 2018), (Exhibit KOR-3).
11 USITC, Public Report, Large Residential Washers, Inv. No. TA 201 076, USITC Pub. 4745
(December 2017) (USITC report), (Exhibit KOR-1). We note that in its comments to the Descriptive Part of the
Panel Report, Korea noted that the safeguard measure at issue was extended on 14 January 2021 for
two additional years, through 7 February 2023. (Korea's comments to the Descriptive Part of the Panel Report
(referring to US notification to the WTO, G/SG/N/10/USA/8/Suppl.7)).
12 Korea's first written submission, para. 573. See also Korea's second written submission, para. 333.

d. Articles 2.1, 3.1, 4.1(a), 4.2(a), and 4.2(c) of the Agreement on Safeguards, by failing to
provide a reasoned and adequate explanation of the exist ence of a significant overall
impairment in the position of the domestic industry based on all relevant factors to support
its conclusion that the domestic industry was suffering "serious injury or threat thereof";
e. Articles 2.1, 3.1, 4.2(b), and 4.2(c) of the Agreement on Safeguards, by failing to provide
a reasoned and adequate explanation of the "causal link" between the alleged increased
imports of LRWs and serious injury or threat thereof , and failing to ensure that injury
caused by other factors was not attributed to the increased imports;
f. Articles 5.1 and 7.1 of the Agreement on Safeguards, by failing to apply the safeguard
measure "only to the extent necessary to prevent or remedy serious injury and to facilitate
adjustment";
g. Articles 12.1 and 12.2 of the Agreement on Safeguards, by (i) failing to provide immediate
notifications of the different decisions; and (ii ) failing to provide all pertinent information
in its notifications, including evidence of serious injury or threat thereof caused by
increased imports, among others, as a result of the undue redaction of allegedly
confidential information and failing to provide adequate non-confidential summaries;
h. Articles 8.1 and 12.3 of the Agreement on Safeguards, by failing to endeavour to maintain
a substantially equivalent level of concessions and other obligations under the GATT 1994
between the United States and Korea in accordance with Article 12.3 of the Agreement on
Safeguards;
i. Article 11.1(a) of the Agreement on Safeguards as a consequence of the inconsistencies
identified in paragraphs (a)-(h) above; and
j. Article II:1 of the GATT 1994, because the safeguard measure amounts to a withdrawal
or modification of the United States' concessions without a justification under Article XIX
of the GATT 1994, the Agreement on Safeguards or any other provisions of the
WTO Agreement.
3.2. The United States requests that the Panel reject Korea's claims in this dispute in their entirety.
4 ARGUMENTS OF THE PARTIES
4.1. The arguments of the parties are reflected in their executive summaries, provided to the Panel
in accordance with paragraph 23 of the Working Procedures adopted by the Panel (see Annexes B-1
and B-2).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The arguments of the European Union, Japan , and Mexico are reflected in their executive
summaries, provided in accordance with paragraph 26 of the Working Procedures adopted by the
Panel (see Annexes C-1, C -2, and C-3). Brazil, China, Egypt, India, Kazakhs tan, Norway,
the Russian Federation, Thailand, and Viet Nam did not submit third-party written submissions or
make third-party oral statements to the Panel.
6 INTERIM REVIEW
6.1. On 25 October 2021, we issued our Interim Report to the parties. On 8 November 2021,
Korea submitted a written request asking us to review precise aspects of the Interim Report. The
United States did not submit such a request, but on 17 November 2021 submitted comments on
Korea's request for review.
6.2. The request and comments made at the interim review stage as well as our discussion and
disposition of Korea's request are set out in Annex A-4.

7 FINDINGS
7.1 General principles regarding standard of review, treaty interpretation, and burden of
proof
7.1.1 Standard of review
7.1. Article 11 of the DSU sets out a general standard of review for WTO panels, and provides as
follows:
The function of panels is to assist the DSB in discharging its responsibilities under this
Understanding and the covered agreements. Accordingly, 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, and make such other findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in the covered agreements.
Panels should consult regularly with the parties to the dispute and give them adequate
opportunity to develop a mutually satisfactory solution.
7.2. Dispute settlement reports previously ad opted by the Dispute Settlement Body (previous
DSB reports) have established that the general standard of review contained in Article 11 of the DSU
is applicable to disputes involving claims of violation of the Agreement on Safeguards and Article XIX
of the GATT 1994.13 We agree with previous DSB reports that, pursuant to this standard of review,
a panel is required to assess whether the competent authority has examined all pertinent facts and
provided an adequate explana tion as to how those facts support the determination. 14 However, in
conducting such a review, a panel must neither conduct a de novo review of the evidence nor
substitute its judgement for that of the competent authority.15
7.3. Moreover, Article 3.1 of the Agreement on Safeguards , last sentence, requires competent
authorities to publish a report setting forth their findings and reasoned conclusions reached on all
pertinent issues of fact and law. We agree with previous DSB reports that, based on this requirement,
the competent authorities ' published report must contain the reasoned and adequate explanation
that demonstrates compliance with the relevant obligations.16
7.1.2 Treaty interpretation
7.4. Article 3.2 of the DSU provides that the WTO dispute settlement system serves to clarify the
existing provisions of the covered agreements "in accordance with customary rules of interpretation
of public international law". The principles codified in Articles 31 and 32 of the Vienna Convention
on the Law of Treaties are generally accepted as such customary rules.17
7.1.3 Burden of proof
7.5. The general principles applicable to the allocation 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.18 Therefore, as the complaining party, Korea bears the burden of demonstrating
that the challenged measures are inconsistent with the Agreement on Safeguards and
the GATT 1994. A complaining party will satisfy its burden when it establishes a prima facie case,
namely a case that, without effective refutation by the defending party, requires a panel, as a matter

13 See, e.g. Appellate Body Reports, Argentina – Footwear (EC), para. 120; and US – Lamb,
paras. 100-102; and Panel Report, Dominican Republic – Safeguard Measures, para. 7.4.
14 Appellate Body Report, US – Cotton Yarn, para. 74.
15 Appellate Body Report, US – Cotton Yarn, para. 74. See also ibid. paras. 71-73 (referring to
Appellate Body Reports, Argentina – Footwear (EC), para. 121; US – Lamb, para. 103; and US – Wheat Gluten,
para. 55).
16 Appellate Body Report, US – Steel Safeguards, paras. 296-297.
17 Appellate Body Reports, US – Gasoline, DSR 1996:1, p. 15; Japan – Alcoholic Beverages II,
DSR 1996:1, p. 104, section D.
18 Appellate Body Report, US – Wool Shirts and Blouses, DSR 1197:1, p. 337.

of law, to rule in favour of the complaining party. 19 Generally, each party asserting a fact shall
provide proof thereof.20
7.2 "Unforeseen developments" and "the effect of obligations incurred" under
the GATT 1994
7.6. Korea makes two sets of claims under Article XIX:1(a) of the GATT 1994 as well as Articles 1
and 3.1 of the Agreement on Safeguards.
a. First, Korea claims that the USITC acted inconsistently with these provisions because it
failed to provide a reasoned and adequate explanation regarding the existence of
unforeseen developments, which would have resulted in the alleged increased imports of
LRWs causing serious injury to the US domestic industry.21
b. Second, Korea claims that the USITC acted inconsistently with these provisions because it
failed to provide a reasoned and adequate explanation regarding the obligatio ns incurred
by the United States, which would have resulted in the alleged increased imports of LRWs
causing serious injury to the US domestic industry.22
7.7. The United States asks us to reject Korea's claims.
7.8. We note that Article XIX:1(a) of the GATT 1994 provides as follows:
If, as a result of unforeseen developments and of the effect of the obligations incurred
by a contracting party under this Agreement, including tariff concessions, any product
is being imported into the territory of that contracting party in such increased quantities
and under such conditions as to cause or threaten serious injury to domestic producers
in that territory of like or directly competitive products, the contracting party shall be
free, in respect of such product, and to the extent and for such time as may be necessary
to prevent or remedy such injury, to suspend the obligation in whole or in part or to
withdraw or modify the concession.23
7.9. Article 3.1 of the Agreement on Safeguards states as follows:
A Member may apply a safeguard measure only following an investigation by the
competent authorities of that Member pursuant to procedures previously established
and made public in consonance with Article X of GATT 1994. This investigation shall
include reasonable publ ic notice to all interested parties and public hearings or other
appropriate means in which importers, exporters and other interested parties could
present evidence and their views, including the opportunity to respond to the
presentations of other parties and to submit their views, inter alia, as to whether or not
the application of a safeguard measure would be in the public interest. The competent
authorities shall publish a report setting forth their findings and reasoned conclusions
reached on all pertinent issues of fact and law.
7.10. Article 1 of the Agreement on Safeguards "establishes rules for the application of safeguard
measures which shall be understood to mean those measures provided for in Article XIX
of GATT 1994" whereas Article 11.1(a) of this agreement provides that "[a] Member shall not take
or seek any emergency action on imports of particular products as set forth in Article XIX
of GATT 1994 unless such action conforms with the provisions of that Article applied in accordance
with this Agreement".
7.11. In resolving Korea's claims, like previous DSB reports, we understand the references in
Article XIX:1(a) to "a result of unforeseen developments" and "the effect of obligations incurred" to
be references to "circumstances whi ch must be demonstrated as a matter of fact" in order for a

19 Appellate Body Report, EC – Hormones, para. 104.
20 Appellate Body Report, US – Wool Shirts and Blouses, DSR 1197:1, p. 335.
21 Korea's first written submission, paras. 59 and 85; second written submission, paras. 47 and 72.
22 Korea's first written submission, paras. 59 and 80; second written submission, para. 51.
23 Emphasis added.

safeguard measure to be applied consistently with Article XIX:1(a) of the GATT 1994.24 We note that
the United States does not dispute that Article XIX:1(a) obligates a Member to demonstrate these
circumstances. However, while Korea takes the view that the competent authorities must make this
demonstration in their published report, the United States contends that no such demonstration
needs to be included in the published report since neither Article XIX:1(a) nor the Agreement on
Safeguards require s the competent authorities to make any findings regarding these
two circumstances.25 Therefore, we will proceed as follows:
a. We will first determine whether the two factual circumstances set out in Articl e XIX:1(a)
need to be demonstrated as a matter of fact in the report of the competent authorities.
b. If yes, we will examine whether the USITC made such a demonstration in its published
report. In doing so, as discussed in more detail in paragraph 7.24 below, we note that the
United States acknowledges that the USITC made no finding on "unforeseen
developments" within the meaning of Article XIX:1(a) of the GATT 1994. With respect to
the "effect of GATT obligations", the United States submits that the USITC report
demonstrates that the United States undertook tariff obligations with respect to the
products at issue and thus complies with Article XIX:1(a) of the GATT 1994.26
7.2.1 Demonstration of factual circumstances set out in Article XIX:1(a) of
the GATT 1994
7.12. Korea contends that competent authorities must affirmatively find in their report that imports
were the result of the two factual circumstances set out in the first clause of Article XIX:1(a) of
the GATT 1994, i.e. "unforeseen developments" and the " effect of obligations incu rred
under GATT 1994".27 Noting in this regard that "unforeseen developments" and "effect of
obligations" are circumstances which must be demonstrated as a matter of fact, Korea contends that
they are therefore "pertinent issues of fact and law" under Arti cle 3.1 of the Agreement on
Safeguards.28 In Korea's view, considering that Article 3.1 requires competent authorities to publish
a report setting forth their findings and reasoned conclusions reached on all pertinent issues of fact
and law, the USITC report was required to contain reasoned and adequate explanations with respect
to these two factual circumstances.29
7.13. The United States contends that neither Article XIX:1(a) of the GATT 1994 nor Article 3.1 of
the Agreement on Safeguards require s competent authorities to make findings in their report on
"unforeseen developments" within the meaning of Article XIX:1(a) or to identify in the report the
relevant tariff concessions or obligations incurred under the GATT. 30 Instead, in the
United States' view, it is sufficient to demonstrate the existence of "unforeseen developments" and
the "effect of obligations incurred" upon challenge before a WTO panel.31
7.14. The United States notes in this regard that previous DSB reports have found that unforeseen
developments as well as the effect of GATT obligations are pertinent issues of fact and law under
Article 3.1 that must be reflected in the published report of the competent authorities.32 The
United States disagrees with the interpretation of Article XIX:1(a) set out in those reports. In this
regard, the United States distinguishes between the two clauses of Article XIX:1(a), stating that the
first clause reflects "circumstances" that must be shown (namely, "unforeseen developments" and
the "effect of GATT 1994 obligations") and the second clause reflects "conditions" that must be met
to undertake a WTO -consistent safeguard measure (namely, imports in such increased quantities

24 Appellate Body Report, Korea – Dairy, para. 85. We note that the United States also refers to "the
unforeseen developments" and "the effect of obligations incurred" as "factual circumstances".
(United States' opening statement at the first meeting of the Panel, para. 8).
25 Korea's first written submission, paras. 76 and 84; second written submission, para. 48;
United States' responses to Panel question No. 50, para. 90; and No. 52, para. 93.
26 United States' first written submission, paras. 54-55.
27 Korea's second written submission, para. 48.
28 Korea's first written submission, paras. 76 and 84; second written submission, para. 69.
29 Korea's first written submission, paras. 84-85.
30 United States' first written submission, para. 20; response to Panel question No. 52, para. 93.
31 United States' first written submission, para. 46; response to Panel question No. 52, para. 93.
32 United States' first written submission, para. 48 (referring to Appellate Body Report, US – Lamb,
para. 76); response to Panel question No. 47, paras. 86-87 (quoting Panel Report, Dominican Republic –
Safeguard Measures, paras. 7.145-7.146).

and under such conditions as to cause serious injury to the domestic industry).33 The United States
argues that while the "conditions" for the imposition of a safeguard measure are clarified in
Articles 2, 3, and 4 of the Agreement on Safeguards, the Agreement on Safeguards does not refer
to the "circumstances" set forth in the first clau se of Article XIX(1)(a).34 Thus, according to the
United States, the "pertinent issues of fact and law" for purposes of Article 3.1 are the "conditions"
that Articles 2.1 and 3.1 charge the competent authorities to investigate (whether goods are
imported in such quantities as to cause serious injury).35
7.15. The United States further argues that findings and reasoned conclusions can only be
understood as relating to the investigation and determination, which according to the United States
only cover whether increased imports have caused or are threatening to cause serious inju ry, and
not issues that may be pertinent to the application of the measure. 36 In support of this argument,
the United States draws a parallel between the first clause of Article XIX:1(a) of the GATT 1994 and
Article 5.1 of the Agreement on Safeguards, noti ng that previous DSB reports have found that
competent authorities are not obligated to make findings and reasoned conclusions under Article 3.1
on whether a measure was necessary to prevent or remedy serious injury and facilitate adjustment
(in the sense of Article 5.1).37 Thus, the United States takes the view that just like compliance with
Article 5.1 need not be demonstrated in the competent authority's report, compliance with the
circumstances set out in the first clause of Article XIX:1(a) need not be set out in that report.38
7.16. The United States concludes on this basis that unforeseen developments are not one of the
"pertinent issues of fact and law " under Article 3.1 that must be set forth in the report of the
competent authorities, and the absence of a finding on that issue in the USITC report does not show
that the USITC acted inconsistently with Article XIX of GATT 1994 or Articles 1 and 3.1 of
the Agreement on Safeguards.39 Instead, according to the United States, WTO panels may evaluate
whether an increase in imports was a result of unforeseen developments based on arguments and
evidence presented exclusively in dispute settlement. 40 The United States similarly submits with
respect to the "effect of GATT 1994 obligations" that nothing in Article XIX:1(a) of the GATT 1994
or the Agreement on Safeguards requires the competent authorities to identify the relevant tariff
concessions in their report.41
7.17. In making our determination, we note that Article XIX:1(a) contains two clauses. The
first clause refers to unforeseen developments and obligations incurred. The second clause refers to
imports entering in such increased quantities and under such conditions as to cause or threaten
serious injury to domestic producers of like or directly competitive products. We agree in this regard
with previous DSB reports, which note that while the second clause of Article XIX:1(a) sets out
conditions for the application of safeguard measures, which are reiterated in Article 2.1 of
the Agreement on Safeguards, "unforeseen developments" and "effect of obligations" are certain
circumstances which must be demonstrated as a matter of fact in order for a safeguard measure to
be applied consistently with Article XIX.42 We also note that there is no dispute between the parties
that, to comply with Article XIX:1(a) of the GATT 1994, it must be demonstrated that increased
imports were the result of unforeseen developments and obligations incurred within the meaning of
this first clause. The United States does not dispute that such a demonstration needs to be made,
and itself notes that Article XIX:1(a) of the GATT 1994 provides for a safeguard measure when
increased imports are "as a result of" unforeseen developments and the effect of the obligations
incurred.43

36 United States' first written submission, para. 50.
37 United States' first written submission, para. 50 (referring to Appellate Body Reports, Korea – Dairy,
38 United States' first written submission, para. 50.
39 United States' first written submission, para. 20.
40 United States' first written submission, para. 46.
41 United States' response to Panel question No. 52, para. 93.
43 See e.g. United States' response to Panel question No. 46, paras. 83-84; and opening statement at
second meeting of the Panel, para. 4.

7.18. However, the question before us is whether findings and reasoned conclusions demonstrating
the factual circumstances in the first clause of Article XIX:1(a) need to be set out in the report of
the competent authorities, i.e. the USITC.
7.19. Like previous DSB reports, we consider that the obligation under Article 3.1 to provide findings
and reasoned conclusions on all pertinent issues of fact and law requires findings and reasoned
conclusions reached on the factual circumstances set out in the first clause of Article XIX:1(a) of
the GATT 1994.44 In particular, because unforeseen developments and the effect of obligations
incurred are circumstances that must be demonstrated as a matter of fact in order for a safeguard
measure to apply, we consider them to be "pertinent issues" under Article 3.1.
7.20. In this regard, we also disagree with the United States' argument on the distinction between
the first and second clauses of Article XIX:1(a). Specifically, we disagree with its argument that the
"pertinent issues of fact or law" for purposes of Article 3.1 are the "conditions" set out in Article 2.1
(and the second clause of Article XIX:1(a)), meaning that competent authorities must address these
conditions as part of their Article 3.1 obligations, and not the "circumstances" set out in the
first clause of Article XIX:1(a). We do not see anything in the text of Article 3.1 that would suggest
that the phrase "pertinent issues of fact or law" should be read narrowly to exclude the circumstances
set out in the first clause of Article XIX:1(a). In particular, while the United States argues that
the Agreement on Safeguards does not refer to these circumstances (unlike the conditions in the
second clause of Article XIX:1(a), which are clarified in Articles 2, 3, and 4 of this agreement), we
do not consider such an omission to be dispositive or relevant to our determination. We note that
Article XIX:1(a) and the Agreement on Safeguards apply cumulatively when a Member applies a
safeguard measure.45 Since they apply cumulatively, they both could give rise to "pertinent issues
of fact and law" in equal measure.
7.21. We are also not persuaded by the parallel the United States draws between Article 5.1 of
the Agreement on Safeguards and the first clause of Article XIX:1(a) of the GATT 1994.
Article XIX:1(a) provides for a safeguard measure when increased imports are "as a result of"
unforeseen developments and the effect of the obligations incurred. Indeed, unless these
circumstances are demonstrated as a matter of fact, the right to apply a safeguard measure does
not arise. However, Article 5.1 concerns the application of the safeguard measure. 46 A
Member's application of a measure will follow, not precede, an assessment of whether it has a right
to apply a safeguard measure in the first place. Therefore, we are not persuaded by the
United States' argument based on the parallel between Article 5.1 of the Agreement on Safeguards
and the first clause of Article XIX:1(a) of the GATT 1994.
7.22. Therefore, we find that "unforeseen developments" and the "effect of GATT 1994 obligations"
within the meaning of the first clause of Article XIX:1(a) of the GATT 1994 are "pertinent issues of
fact or law" under Article 3.1 of the Agreement on Safeguards. Accordingly, competent authorities
must set out in their published repo rt their findings and reasoned conclusion on "unforeseen
developments" and the "effect of GATT 1994 obligations". We consider below whether the USITC did
so in its published report.
7.2.2 Unforeseen developments
7.23. In presenting its claim, Korea asserts that the USITC (a) did not demonstrate in its published
report the existence of "unforeseen developments" ; and (b) did not establish a link between those
"unforeseen developments" and the increase in imports causing or threatening to cause serious
injury to the domestic industry.47

44 Appellate Body Report, US – Lamb, para. 76; Panel Report, Ukraine – Passenger Cars, para. 7.56.
45 Appellate Body Reports, Argentina – Footwear (EC), para. 89; Korea – Dairy, paras. 74-75 and 77.
46 We note in this regard that while the United States' Article 5.1 argument is based on the report of the
Appellate Body in US – Line Pipe, the Appellate Body noted in that case that there are two basic enquiries that
an interpreter faces under the Agreement on Safeguards. First, whether there is a right to apply a safeguard
measure and second, whether that measure has been applied, in the words of Article 5.1, "only to the extent
necessary to prevent or remedy serious injury and to facilitate adjustment". The Appellate Body noted that it is
this second enquiry that is addressed in the first sentence of Article 5.1. (Appellate Body Report, US – Line
Pipe, para. 225).
47 Korea's first written submission, para. 85; second written submission, paras. 47 and 72.

7.24. We found above that findings and reasoned conclusions on "unforeseen developments" must
be set forth in the report of the competent authorities. The USITC report does not contain a finding
on "unforeseen developments" within the meaning of Article XIX:1(a) of the GATT 1994, as the
United States confirms.48 However, the United States submits that the USITC report provides
explanations of circumstances that qualify as "unforeseen developments". 49 The United States
specifically refers to the following statement in the USITC report:
Whirlpool and GE state that they did not foresee that LG and Samsung would move their
production of LRWs for the U.S. market first from Korea and Mexico to China, and then
from China to Thailand and Vietnam, and escape the disciplining effect of the resulting
antidumping and countervailing duty orders, moves that in Whirlpool's view would have
cost hundreds of millions of dollars.50
7.25. In the United States' view these observations demonstrate the existence of "unforeseen
developments" because, if knowledgeable industry participants (i.e. Whirlpool Corporation
(Whirlpool) and GE Appliances (GE) ) did not foresee such rapid shifts in production in the
2012-2016 period, it follows that the Uruguay Round negotiators did not foresee such events
18 years earlier. 51 We do not consider these references to be sufficient to meet the
United States' obligation under Article XIX:1(a) of the GATT 1994 and Article 3.1 of the Agreement
on Safeguards.
7.26. We note that the part of the report referred to by the United States describes a statement by
the domestic producers. The USITC did not make this statement or endorse it in any way. Nor does
this reference suggest that the USITC understood the scenario described in the domestic
producers' statement to be an unforeseen development within the meaning of Article XIX:1(a) of
the GATT 1994. Indeed, as noted above, the United States confirms that the USITC report does not
contain a finding on "unforeseen developments" within the meaning of Article XIX:1(a) of
the GATT 1994. In the absence of such a finding in the USITC report, we conclude that the USITC
has not demonstrated the existence of unforeseen developments under Article XIX:1(a) of
the GATT 1994. Having reached this conclusion, we do not find it necessary to address
Korea's additional argument that the USITC did not establish a link between those
"unforeseen developments" and the increase in imports causing or threatening to cause serious
injury to the domestic industry.
7.27. Based on the foregoing, we find that the USITC acted inconsistently with Article XIX:1(a) of
the GATT 1994 and Article 3.1 of the Agreement on Safeguards. Considering our findings on these
provisions, we do not find it necessary to address Korea's consequential claim under Article 1.
7.2.3 Effect of the obligations incurred under the GATT 1994
7.28. We found above that findings and reasoned conclusions on the "effect of GATT 1994
obligations" must be set forth in the report of the competent authorities. Unlike the situation on
unforeseen developments, where the United States acknowledged that the USITC report did not
contain any finding within the meaning of Article XIX:1(a) of the GATT 1994, the United States
contends that the USITC report explicitly demonstrates that the United States incurred obligations,
in the form of tariff concessions, with respect to the products at issue in this proceeding. 52 The
United States asserts that these tariff concessions prevented the United States from increasing
applied tariffs so as to modulate the increase in imports.53
7.29. Korea argues in this regard that the USITC report failed to identify the relevant obligations
incurred under the GATT 1994, and to establish a link between the effect of those obligations and
the increase in imports causing or threatening to cause serious injury to the domestic industry.54 In
Korea's view, a Member imposing a safeguard measure must demonstrate not only the existence of
the obligations incurred under the GATT 1994 per se, but also the effects that such obligations have

48 United States' response to Panel question No. 51, para. 91.
49 United States' response to Panel question No. 51, para. 91.
50 USITC report, (Exhibit KOR-1), p. 36 and fn 219.
51 United States' response to Panel question No. 51, para. 92.
52 United States' first written submission, para. 54.
53 United States' first written submission, para. 54.
54 Korea's first written submission, paras. 59 and 80; second written submission, para. 51.

produced.55 Korea contends that a competent authority must explain how the effects of the
obligations under the GATT 1994 have resulted in the increase in imports causing or threatening to
cause serious injury to the domestic industry, i.e. that there must be a "logical connection" between
the effects of the GATT 1994 obligation and the increased imports. 56 Korea notes that the USITC
report contains a description of the tariff lines at issue, including the applicable most favoured nation
(MFN) rates.57 However, according to Korea, the description of the applicable tariff lines is
"out-of-context" because there is neither a discussion of whether the applied rates are equal to the
bound rates nor a reference to WTO tariff commitments or any other GATT 1994 obligations.58
7.30. The United States responds that the tariff concessions speak for themselves, because they
reflect WTO bound rates that limit the United States' ability to reduce imports by raising tariffs. 59
According to the United States, no additional context is needed in the identifica tion of such tariff
concessions because the Schedules of Concessions annexed to the GATT 1994 are made an integral
part of Part I of that Agreement pursuant to paragraph 7 of Article II of the GATT 1994.60
7.31. We begin our analysis with Korea's argument that t he USITC report failed to identify the
relevant obligations incurred by the United States under the GATT 1994 with respect to the products
at issue.
7.32. The relevant passage in the USITC report, to which both parties refer, provides as follows:
U.S. tariff treatment
Finished LRWs are classifiable in subheading 8450.20.0063 of the Harmonized Tariff
Schedule of the United States ("HTS"), which has a general tariff duty rate of 1 percent
ad valorem . Parts and subassemblies covered by the scope of the investigation are
classified under HTS subheading 8450.90.20, which provides for tubs and tub
assemblies, and HTS subheading 8450.90.60, which provides for other parts. These
two subheadings … each have a general duty rate of 2.6 percent ad valorem .[65]
Decisions on th e tariff classification and treatment of imported goods are within the
authority of U.S. Customs and Border Protection.
[65] Harmonized Tariff Schedule of the United States (2017). Under the U .S.-Israel FTA, the
Caribbean Basin Economic Recovery Act ("CBERA") or the Generalized System of Preferences
("GSP") program, the rate of duty is 0 percent.61
7.33. We note that the USITC identified the subheadings of LRWs and LRW parts and their applicable
tariff rates under the Harmonized Tariff Schedule of the United States. There is no dispute between
the parties in this regard.62 However, the passage does not refer to the United States' bound tariff
rate under its WTO Schedule XX or any other obligations under the GATT 1994. In particular, we
note that the United States asserts that the tariff rates under the Harmonized Tariff Schedule of the
United States are the tariff concessions that the United States made, which prevented it from
increasing applied tariffs so as to modulate the increase in imports. However, the USITC report does
not identify them as the tariff concessions undertaken under the GATT 1994, which prevented it
from increasing applied tariffs so as to modulate the increase in imports. Consequently, there is no
basis for us to conclude that the USITC report contains a reasoned and adequate explanation of the
obligations incurred by the United States under the GATT 1994 with respect to LRWs and LRW parts,
within the meaning of Article XIX:1(a) of the GATT 1994. In light of this finding, we do not consider
it necessary to address Korea's additional argument that the USITC did not establish a link between

55 Korea's response to Panel question No. 46, paras. 214-218 (quoting Panel Reports, Dominican
56 Korea's first written submission, para. 73; second written submission, para. 77; and response to
Panel question No. 46, para. 214.
57 Korea's response to Panel question No. 49, para. 221; second written submission, para. 73.
58 Korea's response to Panel question No. 49, para. 221; second written submission, paras. 74-76.
59 United States' second written submission, para. 20.
60 United States' second written submission, para. 21 (referring to Appellate Body Report, Korea –
Dairy, para. 84).
61 USITC report, (Exhibit KOR-1), p. I-24. (fn omitted)
62 Korea's response to Panel question No. 49, para. 221; second written submission, para. 74;
United States' response to Panel question No. 45, para. 81; and second written submission, para. 19.

the effect of those obligations and the i ncrease in imports causing or threatening to cause serious
injury to the domestic industry.
7.34. Based on the foregoing, we find that the USITC acted inconsistently with Article XIX:1(a) of
the GATT 1994 and Article 3.1 of the Agreement on Safeguards. Considering our findings on these
provisions, we do not find it necessary to address Korea's consequential claim under Article 1.
7.2.4 Conclusion
7.35. In light of the above, we find that the USITC acted inconsistently with Article XIX:1(a) of
the GATT 1994 and Article 3.1 of the Agreement on Safeguards because its report does not contain
a reasoned and adequate explanation on "unforeseen developments" and the "obligations incurred"
by the United States, within the meaning of Article XIX:1(a) of the GATT 1994. We do not find i t
necessary to address whether the USITC also acted inconsistently with Article 1 of
the Agreement on Safeguards for these same reasons.
7.3 The USITC's definition of the domestic industry
7.36. In the underlying safeguard investigation, the USITC defined the product under consideration
(PUC) as LRWs and certain parts of LRWs (covered parts). 63 It specifically excluded belt-driven
washers from the PUC .64 Based on an analysis of physical properties, customs treatment,
manufacturing process, uses , and marketing c hannels, the USITC concluded that the belt -driven
washers produced by the domestic industry were like the LRWs that were included within the PUC.65
Therefore, the USITC included the producers of belt -driven washers within the domestic industry
producing the like product, even though it had specifically excluded imported belt -driven washers
from the scope of the PUC.
7.37. With respect to covered parts, the USITC noted that the petitioner acknowledged that
imported covered parts did not compete with domestically p roduced covered parts because they
may only be installed in specific LRW models for purposes of repairing them. 66 The USITC however
determined that domestic covered parts were "like" imported covered parts based on an assessment
of their physical propertie s, customs treatment, manufacturing process, uses 67, and marketing
channels.68 The USITC then stated that "[e]ven if domestically produced parts were not like imported
parts … [it] would still define the domestic industry to include domestic production of such parts
pursuant to the 'product line ' approach".69 In referring to this product line approach, the USITC
stated that it also included covered parts in its definition of the domestic industry based on the
vertically integrated nature of domestic parts and LRW production.70
7.38. Having defined the domestic like or directly competitive domestic product as LRWs, PSC/belt
drive TL LRWs, CIM/belt drive FL LRWs and covered parts, the USITC defined the domestic industry
as "all domestic producers of LRWs, PSC/belt drive TL washers, CIM/belt drive FL washers, and
covered parts".71
7.39. Korea challenges the USITC's definition of the domestic industry on the grounds that:
a. first, the USITC acted inconsistently with Articles 2.1, 3.1, and 4.1(c ) of
the Agreement on Safeguards by including producers of belt -driven washers in the

63 The covered LRW parts included the three largest components of a washer, i.e. "(1) [a]ll cabinets, or
portions thereof, designed for use in [LRWs]; (2) all assembled tubs designed for use in [LRWs] which
incorporate, at a minimum: (a) [a] tub; and (b) a seal; (3) all assembled baskets designed for use in [LRWs]
which incorporate, at a minimum: (a) [a] side wrapper; (b) a base; and (c) a drive hub; and (4) any
combination of the foregoing parts or subassemblies". (USITC report, (Exhibit KOR-1), pp. 7 and I-7).
64 USITC report, (Exhibit KOR-1), pp. 8 and I-8-I-9.
65 USITC report, (Exhibit KOR-1), pp. 15-16.
66 USITC report, (Exhibit KOR-1), p. 16.
67 The USITC stated that "[d]omestically produced and imported covered parts share the same general
functionality when installed in LRWs". (USITC report, (Exhibit KOR-1), p. 17 (emphasis added)).
68 USITC report, (Exhibit KOR-1), pp. 16-17. The USITC considered that like products need not be
directly competitive. (Ibid. fn 78 and p. 16).
69 USITC report, (Exhibit KOR-1), p. 17. See also, ibid. p. 19.
70 USITC report, (Exhibit KOR-1), p. 19.
71 USITC report, (Exhibit KOR-1), p. 19.

domestic industry while excluding such washers from the PUC without providing a
reasoned and adequate explanation in support of this decision;
b. second, the USITC acted inconsistently with Articles 2.1 and 4.1(c ) in finding that
domestically produced co vered parts were "like" imported covered parts, even though
those parts did not compete72; and
c. third, the USITC acted inconsistently with Article 4.1(c) by applying the "product line
approach" to define the domestic industry.73
7.40. In reviewing Korea's claims, we note that Article 4.1(c) of the Agreement on Safeguards reads
as follows:
For the purposes of this Agreement:
…
(c) [I]n determining injury or threat thereof, a "domestic industry" shall be understood
to mean the producers as a whole of the like or directly competitive products operating
within the territory of a Member, or those whose collective output of the like or directly
competitive products constitutes a major proportion of the total domestic production of
those products.
7.41. The text of Article 4.1(c) envisages that in defining the "domestic industry", the first step is
to identify the products that are "like or directly competitive" with the PUC. 74 The text of
Article 4.1(c) also suggests that an investigating authority must include in its consi deration all
products that are like or directly competitive with the PUC, and may not exclude certain like or
directly competitive products, and ultimately their producers from the domestic industry.75
7.42. Article 2.1 of the Agreement on Safeguards reads:
A Me mber may apply a safeguard measure to a product only if that Member has
determined, pursuant to the provisions set out below, that such product is being
imported into its territory in such increased quantities, absolute or relative to domestic

72 In response to our questions, Korea clarified that it challenges the USITC's inclusion of parts within
the domestic industry because such parts were not like or directly competitive with the PUC (neither imported
LRWs nor imported LRW parts). (Korea's responses to Panel question No. 5, paras. 28-29 and 32-34; and
No. 6, paras. 37-40; opening statement at the second meeting of the Panel, para. 33). The USITC did not find
that domestic LRW parts were "like or directly competitive" with LRW units, and neither party disputes this
fact. Therefore, this part of Korea's claim hinges on whether the USITC properly determined that
domestic covered parts were "like or directly competitive" with imported covered parts. The USITC found that
domestic covered parts were like (but not directly competitive with) imported covered parts. We address
Korea's challenge against this finding in section 7.3.2 below.
73 Korea also claims that as a consequence of the improper definition of the domestic industry, the
USITC's determination of serious injury and causation is equally flawed and was inconsistent with
Articles 4.2(a) and 4.2(b) of the Agreement on Safeguards. (Korea's first written submission, paras. 231-233).
Korea repeats these claims in the sections of its submissions challenging the USITC's findings on serious injury
and causation. (Korea's first written submission, paras. 321-327 and 457-461). We address these
consequential claims in sections 7.5.4 and 7.6.3 below, and do not find it necessary to separately address
them in this section of the Report.
74 The parties agree with this approach, which has been adopted in previous DSB reports. (See,
e.g. Appellate Body Report, US – Lamb, paras. 84 and 87; and Panel Report, Dominican Republic – Safeguard
Measures, para. 7.174; see also Korea's first written submission, para. 169; and United States' first written
submission, para. 124). We use the term "domestically produced good" to refer to "like or directly competitive"
goods.
75 This was the approach taken in Panel Report, Dominican Republic – Safeguard Measures,
paras. 7.191 and 7.199. The parties agree that an investigating authority may not exclude domestic goods that
are like or directly competitive with the PUC. (Korea's first written submission, paras. 172-174; second written
submission, para. 132; response to Panel question No. 2, para. 13; United States' first written submission,
paras. 127, 163, and 165; and second written submission, para. 34).

production, and under such conditions as to cause or threaten to cause serious injury
to the domestic industry that produces like or directly competitive products.76
7.43. Article 3.1 of the Agreement on Safeguards , set out in paragraph 7.9 above, requires that
investigating authorities publish a report setting forth their findings and reasoned conclusi ons
reached on all pertinent issues of fact and law.
7.44. Article 4.2(a) of the Agreement on Safeguards reads:
In the investigation to determine whether increased imports have caused or threatening
to cause serious injury to a domestic industry under the terms of this Agreement, the
competent authorities shall evaluate all relevant factors of an objective and quantifiable
nature having a bearing on the situation of that industry, in particular, the rate and
amount of the increase in imports of the product concerned in absolute and relative
terms, the share of the domestic market taken by increa sed imports, changes in the
level of sales, production, productivity, capacity utilization, profits and losses, and
employment.
7.45. Finally, Article 4.2(b) of the Agreement on Safeguards reads:
The determination referred to in subparagraph (a) shall not be mad e unless this
investigation demonstrates, on the basis of objective evidence, the existence of the
causal link between increased imports of the product concerned and serious injury or
threat thereof. When factors other than increased imports are causing in jury to the
domestic industry at the same time, such injury shall not be attributed to increased
imports.
7.3.1 Inclusion of belt-driven washers within the scope of the domestically produced
good
7.46. In the underlying investigation the USITC excluded belt-driven washers from the PUC. Korea
does not challenge the USITC's definition of the PUC. 77 The USITC determined that domestically
produced LRWs (including belt -driven washers) were "like" the LRWs included in the PUC. 78 Korea
also does not challenge the USITC's likeness determination in this regard. Having found belt-driven
washers to be "like" the PUC, the USITC included such washers within the scope of the
domestic industry.
7.47. While Korea does not challenge either the US ITC's PUC definition, or its determination that
belt-driven washers were "like" the LRWs included in the PUC, Korea claims that the USITC acted
inconsistently with Article 4.1(c) of the Agreement on Safeguards by including belt -driven washers
in the scope of the domestic industry, while expressly excluding them from the PUC without providing
a reasoned and adequate explanation in support of this decision .79 The United States rejects
Korea's arguments in this regard.80
7.48. The question that we must resolve is wh ether the USITC acted inconsistently with
Article 4.1(c) by including belt-driven washers within the scope of the domestic industry on the basis
of its finding that such washers were "like" LRWs included in the PUC, even though such washers
were expressly excluded from the PUC.

76 Fn omitted.
77 Korea acknowledges that the Agreement on Safeguards does not impose disciplines on how an
investigating authority may define the PUC. (Korea's response to Panel question No. 2, para. 12).
78 The USITC stated that domestically produced belt-driven washers were "like, or at least directly
competitive with" imported LRWs. (USITC report, (Exhibit KOR-1), p. 15). During these Panel proceedings, the
United States clarified that despite the reference to "like, or at least directly competitive", the USITC did not
evaluate whether belt-driven washers and imported LRWs were "directly competitive". (United States' response
79 Korea also makes an additional claim under Article 2.1. Considering that the factual basis of
Korea's claim under Article 2.1 is the same as its claims under Articles 3.1 and 4.1(c), we focus the present
analysis on Korea's claims under Articles 3.1 and 4.1(c).
80 United States' first written submission, paras. 159-169; second written submission, paras. 31-35.

7.49. Article 4.1(c) defines a "domestic industry" as "producers … of the like or directly competitive
products". As noted above, the starting point in defining the domestic industry is the identification
of products that are "like or directly competitive" with the PUC.81 Having identified the domestically
produced product that is "like or directly competitive" with the PUC, Article 4.1 then requires
investigating authorities to define the domestic industry as "producers as a whole" of that product,
or "those whose collective output of the like or directly competitive products constitutes a major
proportion of the total domestic production of those products".
7.50. In the underlying investigation, as noted above, having found domestically produced
belt-driven washers to be "like" the PUC, the USITC included them within the scope of the
domestically produced good. Korea contends that the USITC thereby acted inconsistently with
Article 4.1(c) because the USITC created a deliberate mismatch between th e PUC and the
domestically produced good by excluding belt -driven washers from the PUC and including them in
the domestically produced good.82 Korea also notes in this regard that the lack of parallelism between
the PUC and the domestically produced good created a material risk of distortion in the serious injury
and causation determinations.83 In response to our questions, where we sought to understand the
textual basis of Korea's claim under Article 4.1(c), Korea acknowledged that the domestic industry
must include all producers of products that are like or directly competitive with the PUC.84 However,
Korea maintains that where an investigating authority excludes certain models from the PUC and
includes producers of those models in the domestic industry, such investigation would not be
objective.85 This is because, according to Korea, each successive stage of a safeguard investigation
is related to, and often dependent on, the outcomes of preceding stages, which must inform the
interpretation of the provis ions relating to each stage. 86 Korea points to the requirement to
undertake an investigation that is not biased but "systematic" and "careful" under Article 3.1 to
support its assertion.87
7.51. We agree with Korea that the definition of the domestic industry affects subsequent stages of
an investigating authority's determination (such as the serious injury and causation determinations).
However, the Agreement on Safeguards provides a specific definition of the domestic industry in
Article 4.1(c), and requires that the subsequent stages of the investigation be conducted based on
a domestic industry defined in accordance with this provision. Neither Article 4.1(c) nor any other
provision of the Agreement on Safeguards (including the provisions governing the subsequ ent

81 See para. 7.41 above. See also Appellate Body Report, US – Lamb, paras. 84 and 87; and
Panel Report, Dominican Republic – Safeguard Measures, para. 7.174.
82 Korea's first written submission, paras. 197-201 (referring to Appellate Body Report, EC – Fasteners
(China), para. 416); response to Panel question No. 2, para. 15. In our view, the findings of the Appellate Body
report that Korea relies on do not apply to this case. The issue before the Appellate Body was whether
excluding otherwise eligible domestic producers from the scope of the domestic industry was inconsistent with
Article 4.1 of the Anti-Dumping Agreement. The Appellate Body found that such exclusion was inconsistent and
stated that an investigating authority bears the obligation to ensure the way in which it defines the
domestic industry does not introduce a material risk of skewing the economic data and consequently distorting
its analysis of the state of the industry. (Appellate Body Report, EC – Fasteners (China), paras. 414-416 and
427-430). However, the issue here is whether, having determined that belt-driven washers were "like"
imported LRWs, the USITC erred by including producers of belt-driven washers in the domestic industry,
having excluded them from the PUC. Further, Korea submits that the USITC failed to define the like domestic
product as that "identical" to the PUC. (Korea's second written submission, para. 133 (referring to
Panel Report, Korea – Certain Paper, paras. 7.219-7.220)). However, the Agreement on Safeguards does not
require that the domestic product be identical to the PUC; rather, the requirement is that the domestic product
be "like or directly competitive" with the PUC.
83 Korea's first written submission, paras. 202-205 (referring to Appellate Body Report, US – Steel
Safeguards, paras. 440-444 and 466-468). We note that the concept of "parallelism" as applied in the
Appellate Body reports that Korea cites was developed in the context of whether investigating authorities that
have conducted investigations considering imports from all sources may exclude imports from certain sources
from application of a safeguard measure. The Appellate Body found that investigating authorities would have to
establish that the imports covered by the safeguard measures satisfy, in and of themselves, conditions for
application of the measures (such as increased imports). (Appellate Body Reports, US – Steel Safeguards,
paras. 439-444; US – Wheat Gluten, paras. 95-96). The facts in this dispute, and indeed the issue at hand, are
different from that addressed in those Appellate Body reports.
84 Korea's response to Panel question No. 2, paras. 10 and 13 (referring to Panel Reports,
85 Korea's response to Panel question No. 2, para. 14.
86 Korea's response to Panel question No. 2, para. 5.
87 Korea's response to Panel question No. 2, para. 14 (referring to Appellate Body Report, US – Wheat
Gluten, paras. 53-54, in turn cited in Panel Report, Mexico – Anti-Dumping Measures on Rice, para. 7.185).

conduct of the investigation, such as Articles 4.2(b) and 4.2(c)), impose any additional requirements
precluding what Korea describes as a "mismatch" between the PUC and the domestically produced
good. Article 4.1(c) requires that the domestic industry be defined on the basis of producers of goods
that are "like or directly competitive" with the PUC. To the extent the domestic industry is defined
based on the producers of like or directly competitive products, there is no additional requirement
under Article 4.1(c) for a "match" between the PUC and the domestically produced good. Indeed,
accepting Korea's position would mean that the investigating authority would have to exclude a
producer of like or directly competitive goods from the scope of the domes tic industry because the
domestic product, while like or directly competitive, is essentially not the same as (or to use
Korea's words, does not "match") the goods included in the PUC. This is at odds with the text of
Article 4.1(c). We consider that if Ar ticle 4.1(c) were intended to preclude investigating authorities
from defining the domestic industry on the basis of goods that are like or directly competitive but
not a "match", the provision would have been drafted differently.
7.52. We also note Korea's reliance on Article 3.1 of the Agreement, which provides that authorities
shall publish a report setting forth their findings and reasoned conclusions reached on all pertinent
issues of fact and law. Korea argues that this provision requires an inv estigating authority to make
an objective examination and to provide reasoned and adequate explanations in support of its
determination.88 However, in our view, Article 3.1 does not provide any basis to impose substantive
obligations on Members that are not provided under the Agreement on Safeguards.89 Korea has not
shown how the USITC's inclusion of belt-driven washers, which the USITC found to be like or directly
competitive (a finding that Korea does not challenge) with the PUC, was inconsistent with
Article 4.1(c) or any other substantive provision of the Agreement on Safeguards.
7.53. Based on the foregoing, we reject Korea's claims alleging that the USITC acted inconsistently
with Articles 3.1 and 4.1(c) of the Agreement on Safeguards by including belt-driven washers in the
scope of the domestically produced good. Considering that the factual basis of Korea's claim under
Article 2.1 is the same as its claim under Articles 3.1 and 4.1(c), we also reject Korea's claim under
this provision.
7.3.2 Likeness of domestically produced parts and imported parts of LRWs
7.54. In the underlying investigation, the USITC defined the PUC to include LRWs as well as certain
covered parts of LRWs. The USITC defined the domestic industry based on producers of LRWs and
certain covered parts of LRWs. The USITC included such domestically produced parts in the scope
of the domestic industry based on its finding that such domestically produced parts of LRWs were
like imported parts. However, the USITC also noted that, as the domestic industry pet itioner
acknowledged, imported LRW parts did not compete with domestically produced parts because they
could only be installed in specific imported LRW models, for purposes of repairing them.90 The parties
disagree on whether the USITC properly found impor ted and domestically produced parts to be

88 Korea's response to Panel question No. 3, paras. 20 and 23.
89 Indeed, Korea appears to base its arguments on a general standard of "objectivity" that it seeks to
derive from Article 3.1 of the Agreement on Safeguards, rather than on the text of Article 4.1(c) of
the Agreement on Safeguards. In particular, Korea contends that it does not preclude that in certain situations
there could be a good reason for having a domestic industry that includes certain product types that are not
part of the covered imported product. However, per Korea when the mismatch is deliberate and when it is clear
that this mismatch affected both the analysis of increased imports and the analysis of injury and causation,
and when no plausible explanation of any kind is offered for this mismatch, a violation exists. (Korea's second
written submission, para. 133). Korea does not refer to anything in the text of Article 4.1(c) that would support
its view that even in scenarios where an investigating authority defines the domestic industry on the basis of
domestically produced goods that are like or directly competitive with the PUC, we can find a violation under
Article 4.1(c) because the mismatch between the PUC and the domestically produced good is "deliberate" and
the mismatch affects the injury analysis and causation. Indeed, considering that determinations regarding the
domestic industry obviously affect an investigating authority's injury and causation determinations, and that a
decision regarding the PUC and the domestic industry is part of an active and deliberate decision-making
process, the distinction drawn by Korea between a situation where there is a deliberate mismatch, which
affects the injury and causation determination, and another situation that does not, is unclear. If the drafters
of the Agreement on Safeguards intended WTO panels to distinguish between such situations, notwithstanding
the text of Article 4.1(c), one would have expected additional rules in the Agreement on Safeguards to this
effect.
90 USITC report, (Exhibit KOR-1), p. 16.

like products, notwithstanding its finding that imported parts and domestically produced parts did
not compete.
7.55. Korea contends that the USITC acted inconsistently with Articles 2.1 and 4.1(c) by finding
such domestically produced parts to be "like" imported parts, even though they did not compete.91
Korea notes in this regard that the USITC did not explain in its report how two groups of products
that are not in a competitive relationship could nonetheless be considered "like".92 In particular,
Korea asserts that the USITC failed to address the abund ant information on the record concerning
the lack of competition between imported parts and domestic parts.93 According to Korea, likeness
is a subset of the concept of directly competitive products, and the determination of whether
products are "like" is fundamentally "a determination about the nature and extent of a competitive
relationship between and among products".94 Korea argues that the conjunction "or" in the phrase
"like or directly competitive products" indicates that the domestic industry may consist of producers
of products in a "very close" or at least a "direct" competitive relationship with the PUC. 95 Thus,
according to Korea, whereas "likeness" implies close to perfect substitutability ("a degree of
competition that is higher than merely significant"), "directly competitive or substitutable" products
would be those that compete to a lesser degree.96
7.56. The United States rejects Korea's arguments. The United States contends that the text of
the Agreement on Safeguards makes clear that a domestic article "like" an imported article subject
to investigation need not be "directly competitive" with the imported article. The United States
observes in this regard that Articles 2.1 and 4.1(c ) of the Agreement on Safeguards define
"domestic industry" in th e disjunctive as the producers of like " or" directly competitive products.
Pointing to this use of the disjunctive "or", the United States maintains that investigating authorities
may define the domestic industry to include producers of like products, or p roducers of directly
competitive products. 97 For the United States, this means that not every domestically produced
product that is "like" an imported product subject to investigation will be "directly competitive" with
that imported product. According to the United States, Korea's construction of the word "like" to
mean "close to perfect a substitute", "perfectly competitive", or "in intense competition" would mean
that all domestic producers of "like" products would necessarily also produce "directly competitive"
products, which would read the term "like" out of Article 4.1(c) of the Agreement on Safeguards.98
7.57. The question we must resolve is whether the USITC provided a reasoned and adequate
explanation to support its determination that impor ted and domestically produced parts were like,
notwithstanding its finding that they did not compete. In doing so, we (a) first consider the legal
obligations imposed under Article 4.1(c), which requires an investigating authority to define the
domestic industry based on the producers of "like or directly competitive" products, and specifically
the nature of obligations imposed in relation to a likeness assessment; and (b) then evaluate, based
on the explanations provided by the USITC in its report, whether the USITC complied with such
obligations.
7.58. We note in this regard that Article 4.1 defines the domestic industry as producers of "like or
directly competitive" products. The parties disagree on the meaning of the conjunction "or" in this
phrase. In our view, it is possible that the use of the conjunction "or" in Article 4.1(c) indicates that

91 Korea's first written submission, paras. 217-230.
92 Korea's first written submission, para. 222.
93 Korea's first written submission, paras. 218-224 (referring to Large Residential Washers, Joint
Prehearing Brief on Behalf of Respondents Regarding Injury (30 August 2017) (excerpts) (Excerpt from LG and
Samsung's prehearing injury brief), (Exhibit KOR-11), pp. 32-36; and USITC report, (Exhibit KOR-1), p. 16).
94 Korea's first written submission, paras. 225-226 (quoting Appellate Body Reports, EC – Asbestos,
95 Korea's opening statement at the second meeting of the Panel, paras. 43-44; see also closing
statement at the first meeting of the Panel, para. 26.
96 Korea's second written submission, para. 139; response to Panel question No. 5, para. 30. See also
Korea's opening statement at the second meeting of the Panel, para. 37. Korea subsequently clarified that it is
challenging the USITC's definition of the domestic industry because "no competitive overlap whatsoever existed
between the imported and domestic parts", and not because the imported and domestic parts are not "close to
perfect substitutes". (Korea's opening statement at the second meeting of the Panel, para. 42).
97 United States' first written submission, paras. 176-178; response to Panel question No. 10, para. 8;
and second written submission, paras. 40 and 47.
98 United States' second written submission, paras. 47 and 50; opening statement at the second
meeting of the Panel, para. 11; closing statement at the second meeting of the Panel, para. 8; and
response to Panel question No. 67(b), para. 4.

the concept of likeness is distinct from the concept of direct competitiveness, as the United States
submits. However, that term might also indicate, as Korea argues, that an investigating authority is
permitted to include products (for the purpose of defining the domestic industry) that, even though
they are not like imported products (because for instance they have different physical
characteristics), are nevertheless directly competitive with imported products. Therefore, the use of
the conjunction "or" does not dispositively answer the question before us, which is whether
two products that have been found to not compete may nonetheless be considered "like". Instead,
the answer to that question depends on how the term "like" is to be understood in the context of
Article 4.1(c). Consistent with the rule of interpretation set out under Article 31 of the
Vienna Convention, we interpret Article 4.1(c) in accordance with the ordinary meaning to be given
to the terms of the treaty in their context and in the light of the treaty object and purpose.
7.59. The Agreement on Safeguards does not define the term "like". The Oxford English Dictionary
defines "like" as " [o]f similar or ident ical shape, size, colour, character, etc., to something else;
having the same or comparable characteristics or qualities as some other person or thing; similar;
resembling; analogous".99 The United States also refers to the Webster Dictionary definition of "like",
which is "the same or nearly the same (as in nature, appearance, or quantity)".100 We also note that
the Anti-Dumping Agreement and the SCM Agreement, which require investigating authorities in
anti-dumping and countervailing duty investigations re spectively to define the domestic industry
based on producers of like products, define like product as a product (a) which is identical, i.e. alike
in all respects to the PUC; or (b) in the absence of such a product, another product which, although
not alike in all respects, has characteristics closely resembling those of the PUC. These definitions
do not resolve the issue of whether, and if so how and to what extent, competitive relations between
imported and domestic products need to be considered as part of a likeness determination. 101
However, when we interpret Article 4.1(c) in the context of Article 4 of the Agreement on Safeguards
as a whole, and specifically Articles 4.2(a) and 4.2(b), the meaning of likeness in Article 4.1(c)
becomes clearer.
7.60. Article 4 of the Agreement on Safeguards is titled "[d]etermination of serious injury or threat
thereof", and sets out the negotiated rules governing such determination. In particular, Article 4.1(a)
defines "serious injury" as a significant overall impairment in the position of the domestic industry.
Article 4.2(a), in turn, provides that in "the investigation to determine whether increased imports
have caused or are threatening to cause serious injury to a domestic industry" the investigating
authorities shall evaluate relevant factors of an objective and quantifiable nature having a bearing
on the situation of the domestic industry. Article 4.2(b) then requires demonstration of a causal link
between increased imports and serious injury to the domestic industry. These provisions show that
the domestic industry must be defined in a manner that would allow the investigating authority to
subsequently determine whether there is a causal link between increased imports and serious injury
to the domestic industry. Indeed, it is clear from the text of Article 4.1(c) ("in determining injury or
threat thereof") that the domestic industry is defined for purposes of determining injury or threat to
it from increased imports.102
7.61. Korea argues in this regard that the demonst ration of a causal link required under
Article 4.2(b) between increased imports and serious injury to the domestic industry cannot be made
if imported and domestically produced goods are not in competition with one another.103 Japan and

99 Oxford English Dictionary online, definition of "like", meaning A.1.a
https://oed.com/view/Entry/108302?rskey=BJNhyu&result=3#eid (accessed 16 August 2021).
100 United States' first written submission, para. 126; second written submission, para. 39 (both quoting
Webster's Third New International Dictionary Unabridged (1981), p. 1310).
101 We note that the definition of "like" in Article 2.6 of the Anti-Dumping Agreement suggested to the
panel in Korea – Pneumatic Valves that it would be expected that allegedly dumped imports compete with the
domestic like product. In that panel's view, if they did not, it would be "difficult to imagine on what basis a
domestic industry could properly allege that dumped imports were causing injury to the domestic industry
producing the like product, so as to justify the initiation of an investigation". (Panel Report, Korea – Pneumatic
Valves (Japan), para. 7.275).
102 We also note that Article 2.1 requires a Member to determine that a product that is subject to a
safeguard measure is imported under such conditions as to cause or threaten to cause serious injury to the
domestic industry that produces like or directly competitive products. This provision links the increased imports
under consideration to their ability to cause or threaten to cause serious injury, an analysis undertaken under
Article 4. Article 2.1, read together with Article 4 as a whole, therefore supports our understanding that the
domestic industry must be defined in a manner that would permit the subsequent determination of serious
injury or threat.
103 Korea's response to Panel question No. 10, para. 51.

the European Union as third parties take the view that causation of injury requires that a competitive
relationship exist between the imported and the domestically produced goods.104
7.62. The United States contends in this regard that the Agreement on Safeguards requires a
determination of the effect of the imported product as a whole on the domestic producers as a whole,
and does not require separate analyses or determinations of each discernible subset of the imported
product and the domestically produced good.105 The United States also submits that where the PUC
comprises a range of products, an investigating authority could determine that increased imports
are causing serious injury even though a subset of imported products do not compete with a subset
of products produced by the domestic industry.106 In particular, per the United States, when certain
types of subject imports within the PUC increase while other types do not, an investigating authority
must consider the pertinent conditions of compet ition in assessing whether increased imports
seriously injured the domestic industry.107 In the United States' view, such conditions of competition
might include the degree of substitutability between each type of imported and domestically
produced good, the product mix of imported and domestically produced goods, and the effects of
any indirect competition between increased subject imports and domestically produced goods that
are not otherwise directly competitive with the imports. 108 The United States illustrates that such
type of indirect competition could exist where imports of LRW parts that do not directly compete
with either domestic parts or finished products may nevertheless have an indirect impact on
domestic producers of parts and finished products if they are assembled into finished products in
domestic screwdriver operations that do not change the fundamental character of the parts.109
7.63. In resolving Korea 's claim, we note that the USITC did not find LRW s and LRW parts to be
part of the same domestic like product. Instead, the USITC included LRW parts in the definition of
the domestic industry based on its finding that imported LRW parts were like domestically produced
parts. Therefore, we determine whether the USITC's finding that domestically produced parts were
"like" imported parts was consistent with Article 4.1(c) of the Agreement on Safeguards.110
7.64. In making that determination, we do not need to exhaustively define what "like" under
Article 4.1(c) could or could not mean, especially considering the drafters chose to not define the
term in the Agreement on Safeguards. Instead, we need to determine whe ther Article 4.1(c)
precluded the USITC from finding that imported and domestic parts were like products, given its
finding that the two did not compete. Interpreting Article 4.1(c) in the context of Article 4 as a whole
suggests to us that products that a re not in any type of competitive relation with each other could
not cause serious injury or threat thereof to one other. In particular, we note that Article 4.1(c)
opens with the phrase "in determining injury or threat thereof", which, along with overall context
provided by Article 4, specifically Articles 4.2(a) and 4.2(b), suggests that the domestic industry
must be defined in a manner that allows the investigating authority to determine whether increased
imports have caused or are threatening to cause s erious injury to that industry. To the extent an
investigating authority finds that two products are not in any competitive relation, we do not see
how a domestic industry that is defined in a manner that excludes the possibility of subsequently
determining that increased imports have caused or threatened to cause serious injury to that

104 Japan's third-party response to Panel question No. 1, paras. 1-3; European Union's third-party
response to Panel question No. 1, paras. 3-4.
105 United States' response to Panel question No. 10, para. 9.
106 United States' response to Panel question No. 11, para. 14.
107 United States' response to Panel question No. 11, para. 14.
108 United States' response to Panel question No. 11, para. 14.
109 United States' response to Panel question No. 11, para. 14.
110 We note that in its third-party statement, the European Union argued that because LRW parts are
used to repair the respective LRW units, the market for LRW parts may constitute an "aftermarket", while the
market for LRW units would be the "primary market". The European Union considered that it is possible that
the interaction between the primary market (LRW units) and the aftermarket (LRW parts) form one "system
market", so that competition would take place between LRW systems. In its view, if one single domestic
market exists for LRW units and parts, within that market, imported and domestic LRW parts would be "directly
competitive" with each other because competition would follow from the competition at the system level.
(European Union's third-party submission, paras. 34-40). We note that the USITC did not take such "system
market" approach in the underlying investigation. Therefore, whether such approach would be consistent with
Article 4.1(c) is not an issue in the matter before us.

domestic industry (defined on the basis of producers of the like product, which here is covered parts)
would be consistent with Article 4.1(c).111
7.65. That being said, we recognize that competition in a market can manifest itself in various ways.
Indeed, competition is not limited to situations where imported and domestic products are close to
perfectly substitutable. Thus, to the extent Korea takes the view that "like" under Article 4.1(c)
requires close to perfect substitutability between imported and domestic products, we disagree. We
see no textual basis for such a view. To the extent an imported product that is not perfectly
substitutable with the domestically produced good ha s the capacity to cause serious injury to that
good through some form of competitive impact, we do not see any basis to interpret "like" in
Article 4.1(c) to exclude such goods. Instead, an investigating authority is entitled as part of its
causation deter mination to examine whether that imported product did cause injury to the
domestic industry through that competitive effect. We do not consider that the drafters of
the Agreement on Safeguards would have intended the domestic industry to be defined in a wa y
that would preclude the investigating authority from making such a causation determination.
However, while we recognize that competition can manifest itself in various ways, we do not consider
that "like" under Article 4.1(c), interpreted in the context of Article 4 as a whole and Article 2.1,
covers products that have been found not to have any competitive relation with imported products.
7.66. In the underlying investigation, the USITC specifically found that imported and domestically
produced parts did not compete. We note that the United States alludes to different ways in which
conditions of competition could manifest in the market, including situations where imports of
LRW parts that do not directly compete with either domestic parts or finished products may
nevertheless have an indirect impact on domestic producers of parts and finished products if they
are assembled into finished products i n domestic screwdriver operations that do not change the
fundamental character of the parts. However, the USITC did not undertake any such analysis alluded
by the United States as part of its likeness analysis.112
7.67. Based on the foregoing, we find that the US ITC did not find imported covered parts to be
like domestically produced covered parts in a manner consistent with Article 4.1(c) of
the Agreement on Safeguards in defining the domestic industry. Having reached this finding, we do
not consider it necessary to make additional findings under Article 2.1 of the Agreement on
Safeguards.
7.3.3 Product line approach
7.68. Korea contends that the USITC's decision to include parts in its definition of the
domestic industry was partly based on the "product line approach". 113 Korea further contends that
the USITC's application of the product line approach to define the domestic industry was inconsistent

111 We also note as stated above, that in Korea – Pneumatic Valves, the panel considered that with
respect to Article 2.6 of the Anti-Dumping Agreement, if allegedly dumped imports did not compete with the
domestic like product, it would be "difficult to imagine on what basis a domestic industry could properly allege
that dumped imports were causing injury to the domestic industry producing the like product, so as to justify
the initiation of an investigation". (Panel Report, Korea – Pneumatic Valves (Japan), para. 7.275).
112 See e.g. United States' response to Panel question No. 67(a), paras. 1-2. The United States clarified
that the USITC did not undertake an analysis of any indirect competition between domestically produced and
imported parts as part of its likeness analysis because LG and Samsung, the two Korean producers, had not
yet commenced production of LRWs at their planned US LRW production facilities as of the date of the
USITC's vote on injury. The United States explains that the USITC reasonably considered the likelihood of
indirect competition from imports of covered parts in recommending safeguard remedy be imposed on parts.
We also note that the United States suggests that the USITC found that domestic and imported covered parts
competed as they "offer[ed] alternative ways of satisfying the same consumer demand in the marketplace".
(United States' comments on Korea's response to question No. 67, fn 12 (referring to USITC report,
(Exhibit KOR-1), p. 17)). However, we recall that the USITC stated that covered parts did not compete.
Moreover, at the cited section of the USITC report, the USITC stated that "[d]omestically produced and
imported covered parts share the same general functionality when installed in LRWs" (emphasis added). This
statement does not imply that covered parts competed in the market. As the USITC noted, covered parts may
only be installed in specific LRW models. (USITC report, (Exhibit KOR-1), p. 16).
113 Korea's first written submission, para. 213; second written submission, para. 144; and response to
Panel question No. 7, para. 44 (quoting USITC report, (Exhibit KOR-1), p. 19).

with Article 4.1(c).114 According to Korea, inputs may not be included in the definition of the
domestic industry unless they themselves constitute "like or directly competitive" products.115
7.69. The United States rejects Korea's contentions. First, the United States argues that the USITC
did not apply the product line approach to define the domestic industry. Instead, the USITC defined
the domestic industry based on producers of the like products alone, and only after doing so did the
USITC explain that the product line approach supported its definition of the domestic industry. 116
Second, the United States maintains that the product line approach was consistent with Article 4.1(c)
of the Agreement on Safeguards.117
7.70. In resolving this aspect of Korea 's claim, we first determine whether the USITC applied the
product line approach to define the domestic industry in the underlying investigation; and then,
consider whether the USITC's application of the product line approach in the underlying investigation
was consistent with the Agreement on Safeguards.
7.3.3.1 Whether the USITC applied the product line approach to define the
domestic industry
7.71. In determining whether the USITC applied the product line approach to define the
domestic industry in the underlying investigation , we note that the USITC found domestically
produced parts to b e like imported parts . The USITC then stated that "[e]ven if domestically
produced parts were not like imported parts within the scope of the investigation, [it] would still
define the domestic industry to include domestic production of such parts pursuant to the 'product
line' approach discussed in the following section". 118 The USITC described the "product line
approach" as the approach through which it included in the domestic industry all domestic facilities
and workers involved in the production of a pr oduct like or directly competitive with the imported
article, "including the various stages that might be involved in such production". 119 The USITC also
provided the following explanation in relation to the product line approach:
In addition to finding that domestic covered parts are like imported covered parts, we
include domestic covered parts production in our definition of the domestic industry
based on the vertically integrated nature of domestic parts and LRW production. … In
this investigation, virtually all domestically produced LRWs are assembled from covered
parts produced domestically in the same facilities as the LRWs. Accordingly, the
production facilities producing assembled LRWs necessarily include the facilities for
producing cover ed parts. For this reason also, we include all domestic producers of
covered parts in our definition of the domestic industry.120
7.72. From the excerpts from the USITC report quoted above, we note that: first, the USITC stated
that even if domestic and imported parts were not like, it would still define the domestic industry to
include domestic production of parts pursuant to the product line approach. 121 Second, the USITC
stated that "[i]n addition to finding that domestic covered parts are like imported covered parts,
[the USITC] include[d] domestic covered parts production in [the] definition of the domestic industry
based on the vertically integrated nature of domestic parts and LRW production".122 The USITC then
explained that in the LRW investigation, "virtually all domestically produced LRWs are assembled
from covered parts produced domestically in the same facilities as the LRWs", and that "production
facilities producing assembled LRWs necessarily include the facilities for producing covered parts".
It added that "[f]or this reason also", the USITC included all domestic producers of covered parts in
its definition of the domestic industry.123 These statements indicate, as Korea argues, that the USITC

114 Korea's first written submission, paras. 213-215; second written submission, paras. 145-146
(referring to Appellate Body Report, US – Lamb, paras. 77 and 90).
115 Korea's first written submission, para. 214 (referring to Appellate Body Report, US – Lamb, paras. 77
and 90).
116 United States' responses to Panel question No. 8, para. 3; No. 9(a), paras. 4-5; and No. 9(b),
para. 7.
117 United States' first written submission, paras. 182-183; response to Panel question No. 9(a), para. 6.
118 USITC report, (Exhibit KOR-1), p. 17.
119 USITC report, (Exhibit KOR-1), p. 19.
120 USITC report, (Exhibit KOR-1), p. 19. (fn omitted; emphasis added)
121 USITC report, (Exhibit KOR-1), p. 17.
122 USITC report, (Exhibit KOR-1), p. 19. (emphasis added)
123 USITC report, (Exhibit KOR-1), p. 19.

did indeed apply the product line approach as one of the bases for its decision to include domestically
produced parts in the scope of the domestic industry. Therefore, we now turn to examine whether
the USITC acted inconsistently with Article 4.1(c) in applying the product line approach in the
underlying investigation.
7.3.3.2 Whether the USITC acted inconsistently with Article 4.1(c) in applying the
product line approach
7.73. Korea argues that the USITC's application of the product line approach was inconsistent with
Article 4.1(c). Relying on previous DSB reports, Korea argues that inputs cannot be included in the
definition of the domestic industry unless they themselves constitute "like or directly compe titive
products".124 The United States argues that the USITC's product line analysis was justified under
Article 4.1(c) because in its view, Article 4.1(c) requires investigating authorities to define a
domestic industry as "producers as a whole of the like or directly competitive products".125 According
to the United States, where the domestic producers of a product manufactures various components
internally for assembly into the article, nothing in the Agreement on Safeguards requires
investigating authorities to limit their definition of the domestic industry to only the final assembly
operations of those producers.126
7.74. The question before us is whether the USITC's application of its product line approach in the
underlying investigation was inconsistent with the United States' obligations under Article 4.1(c),
which requires the domestic industry to be defined based on domestic producers of "like or directly
competitive" products.
7.75. We note in this regard that Article 4.1(c) states that the domestic industry shall be understood
to mean "producers as a whole" of such like or directly competitive products. However, unlike the
United States, we do not consider that the term "producers as a whole" permits investigating
authorities to define the domestic industry on t he basis of producers of intermediate products that
are not "like or directly competitive" with the PUC. The term "producers as a whole" is followed by
the phrase "or those whose collective output of the like or directly competitive products constitutes
a major proportion of the total domestic production of those products". Read together with that
subsequent phrase, we understand the term "producers as a whole" to address the number and the
representative nature of producers making up the domestic industry. That is, an investigating
authority may define the domestic industry based on, either (a) producers as a whole of the like or
directly competitive products, or (b ) producers whose collective output of the like or directly
competitive products constitutes a major proportion of the total domestic production of those
products. Our views in this regard are consistent with previous DSB reports that also considered that
the phrase "as a whole" does not imply that producers of other products, which are not themselves
like or directly competitive with the imported product, may be included in the definition of the
domestic industry.127 Unless the input products are "like or directly competitive" with the imported
PUC, we find no textual basis under Article 4.1(c) to include the producers of such inputs within the
scope of the domestic industry. This is because, as we have explained, according to Article 4.1(c),
the only textual basis for defining the domestic industry is on the basis of producers of like or directly
competitive products.
7.76. Based on the foregoing, we find that the USITC's application of the product line approach was
inconsistent with Article 4.1(c) of the Agreement on Safeguards.
7.3.4 Conclusion
7.77. In light of the above, with respect to Korea 's claims under Articles 2.1, 3.1, 4.1(c), 4.2(a),
and 4.2(b) of the Agreement on Safeguards challenging the USITC 's definition of the
domestic industry:

124 Korea's first written submission, paras. 214-215 (referring to Appellate Body Report, US – Lamb,
paras. 77 and 90).
125 United States' response to Panel question No. 9(a), para. 6 (emphasis added); second written
submission, para. 54.
126 United States' response to Panel question No. 9(a), para. 6.
127 Appellate Body Report, US – Lamb, paras. 90-91. See also ibid. paras. 86-87.

a. We find that the USITC acted inconsistently with Article 4.1(c) of the Agreement on
Safeguards because it included LRW parts in the definition of the domestic industry based
on (i) its finding of likeness between imported and domestically produced LRW parts, and
(ii) its application of the product line approach. We do not find it necessary to address
whether the USITC also acted inconsistently with Article 2.1 for these same reasons.
b. We reject Korea's claim under Article 4.1(c) of the Agreement on Safeguards, as w ell as
Articles 2.1 and 3.1 of the Agreement on Safeguards challenging the USITC's inclusion of
belt-driven washers in the definition of the domestic industry.
c. We do not find it necessary to address here Korea's claims that as a consequence of the
improper definition of the domestic industry, the USITC's determination of serious injury
and causation was also inconsistent with Articles 2.1, 3.1, 4.1(c), 4.2(a), and 4.2(b ) of
the Agreement on Safeguards.
7.4 The USITC's determination of increased imports
7.78. Korea claims that the USITC 's examination of the increase in imports is inconsistent with
Article 2.1 as well as Article 3.1 of the Agreement on Safeguards.128 Specifically, Korea submits129
that the USITC (a) erred in cumulatively assessing imports of LRWs and imports of LRW parts in its
increased imports analysis 130; (b) failed to consider the increase in imports relative to domestic
consumption ( i.e. the market share of subject imports ) as part of its increased imports
assessment131; and ( c) failed to provid e a reasoned and adequate explanation in support of its
determination of increased imports.132

128 In paragraph 164 of its first written submission, which summarizes Korea's claims challenging the
USITC's increased imports analysis, Korea contends that the USITC's increased imports analysis was
inconsistent with Article XIX:1(a) of the GATT 1994. However, Korea did not make a claim under Article XIX in
its panel request or the "request for findings" section of its first written submission. (Korea's panel request,
pp. 2-5). In response to our questions, Korea clarifies that is not making a separate claim under
Article XIX:1(a) of the GATT 1994 when it challenges the USITC's determination on increased imports.
(Korea's response to Panel question No. 13, para. 67).
129 Korea also submits that the USITC failed to account for the price- and non-price-based aspects of the
conditions of competition in the market into its increased imports analysis (although the United States rejects
that submission by noting that the USITC did, in fact, thoroughly examine how the conditions of competition
supported its conclusion regarding increased imports). (Korea's first written submission, para. 157;
United States' first written submission, paras. 216-220). We note that in support of its submission, Korea
makes the same type of arguments that it does in the context of causation. For instance, in support of its
submission, Korea contends that the USITC ignored the fact that imported LRWs included washers with
distinctive features for which there was no domestic competitor. Thus, according to Korea, increased imports
did not displace US domestic products, but only expanded demand in new product categories. (Korea's first
written submission, para. 157). Korea makes the same type of arguments while challenging the USITC's failure
to conduct a non-attribution analysis with respect to the deterioration of US brands, which we address below.
We also address Korea's arguments in relation to price-based aspects of competition when addressing
Korea's arguments challenging the price analysis that the USITC conducted as part of its causation
determination. However, Korea does not show how the alleged failure to incorporate the price and non-price
based aspects of competition into the increased imports analysis results in a violation of Article 2.1 or
Article 3.1 of the Agreement on Safeguards. Therefore, to the extent Korea contends that the USITC failed to
incorporate price and non-price-based aspects of the conditions of competition in its increased imports analysis
or to analyse the conditions of competition as part of its increased imports analysis, Korea has not made its
case under Articles 2.1 and 3.1.
131 Korea's first written submission, paras. 135-137.
132 Korea's first written submission, para. 150; second written submission, para. 118. We note a degree
of overlap in arguments made by Korea in sections V.3.2, V.3.3, and V.3.4 of its first written submission. For
example, V.3.3 of the first written submission is titled "[t]he USITC failed to evaluate the trends in imports
over the period of investigation". However, Korea also makes arguments in relation to the USITC's trends
analysis in section V.3.2 of its first written submission. (Korea's first written submission, para. 138). Similarly,
while section V.3.4. is specifically titled "[t]he USITC failed to provide a reasoned and adequate explanation in
support of its determination", Korea's argument in other sections also focus on the USITC's alleged failure to
provide a reasoned and adequate explanation in support of its determination. (See, e.g. Korea's first written
submission, paras. 138 and 141). We address Korea's arguments collectively as part of our assessment of
whether the USITC provided a reasoned and adequate explanation to support its increased imports
determination.

7.79. The United States asks us to reject Korea's claims.
7.80. In reviewing Korea's claims, we note that Article 2.1 of the Agreement on Safeguards reads
as follows:
A Membe r may apply a safeguard measure to a product only if that Member has
determined, pursuant to the provisions set out below, that such product is being
imported into its territory in such increased quantities, absolute or relative to domestic
production, and under such conditions as to cause or threaten to cause serious injury
to the domestic industry that produces like or directly competitive products.133
7.81. Article 2.1 of the Agreement on Safeguards thus sets out the conditions for the application of
safeguard measures. In particular, a Member applying a safeguard measure must determine that
the product "is being imported into its territory in such increased quantities, absolute or relative to
domestic production, and under such conditions" as to cause or threaten to cause serious injury to
the domestic industry. We also recall that pursuant to Article 3.1 of the Agreement on Safeguards
investigating authorities are required to publish a report that sets forth findings and reasoned
conclusions reached on all pertinent issues of fact and law. Accordingly, the investigating authorities
are required to set out their findings and reasoned conclusions on increased imports in their
published reports.
7.4.1 The USITC's cumulation of LRW parts and LRWs in its increased imports analysis
7.82. Korea contends that the USITC acted inconsistently with Article 2.1 by cumulating imports of
LRWs and LRW parts for the purpose of its increased imports analysis.134 Korea acknowledges that
the Agreement on Safeguards does not impose disciplines on the definition of the PUC.135 However,
Korea argues that the absence of such disciplines does not mean that an investigating authority may
group together different products without examining whether, given the co nditions of competition,
any increase in imports of these products can cause serious injury to the domestic like products.136
In particular, relying on the phrase "under such conditions" in Article 2.1, Korea contends that if an
imported product (i.e. LRW parts) does not compete directly with a domestic product (i.e. domestic
LRW parts or domestic LRWs) , any increase in imports m ay not be regarded as occurring "under
such conditions" as to cause or threaten to cause serious injury to the domestic industry. 137 For
Korea, "[i]t follows" from this understanding of the phrase "under such conditions" that investigating
authorities are not allowed to cumulate two different products in assessing the increase in imports,
if only one of these two different products is in a competitive relationship with the
domestic product.138 The United States agrees that the USITC relied on import data that included
both LRWs and covered LRW parts .139 However, the United States asserts that the USITC
appropriately considered LRWs and covered parts in the aggregate because the PUC included both
LRWs and covered parts.140
7.83. The question before us is whether the USITC acted inconsistently with Article 2.1 by
cumulatively assessing imports of LRWs and LRW parts. We note in this rega rd that the USITC
defined the PUC to cover LRWs and LRW parts. While Korea argues that the USITC was not permitted
to cumulate imports of LRWs and LRW parts in its increased imports analysis because imported
LRW parts did not compete with domestic LRWs and LRW parts, and thus could not have injured the
domestic industry, it does not challenge the USITC's definition of the PUC to cover LRWs and

133 Fn omitted.
134 Korea's first written submission, paras. 131-132.
135 Korea's second written submission, para. 117.
136 Korea's second written submission, para. 117.
137 Korea's first written submission, para. 117; opening statement at the first meeting of the Panel,
138 Korea's first written submission, para. 117; opening statement at the first meeting of the Panel,
139 United States' first written submission, para. 199 and fn 405; opening statement at the first meeting
of the Panel, para. 16.
140 United States' first written submission, para. 199. The United States relies on the text of Article 2.1
as well as the DSB report in Dominican Republic – Safeguard Measures in arguing that having defined the PUC
as LRWs and LRW parts, the USITC was entitled to use a data set for the PUC (overall), rather than for
separate products (such as LRWs and LRW parts) within the overall PUC. (United States' first written
submission, para. 199 (referring to Panel Report, Dominican Republic – Safeguard Measures, para. 7.236)).

LRW parts.141 Because the USITC defined the PUC to include LRWs and LRW parts, we do not consider
that the USITC was precluded under Article 2.1 of the Agreement on Safeguards from cumulatively
assessing imports of LRWs and LRW parts.
7.84. To the extent Korea's claim is premised on its view that imports of LRW parts did not occur
"under such conditions" to cause serious injury to the domestic industry because imported LRW parts
did not compete with domestic LRWs or LRW parts, and thus could not have caused injury to the
domestic industry, in our view Korea's argument goes to the question of causation, rather than of
increased imports. We note that previous DSB reports have understood the phrase "under such
conditions" to refer to the substance of the causation analysis, and specifically, to the type of analysis
an investigating authority would conduct under Article 4.2 of the Agreement on Safeguards. 142
Previous DSB reports have also considered that the conditions under which imports occur have no
bearing on whether there have been increased quantities of imports, and thus an analysis of the
conditions under which imports occur does not form an integral part of the analysis of the quantities
in which imports occur. 143 We agree with these reports, which reflect our own understanding of
Article 2.1.
7.85. Based on the foregoing, we reject Korea's claim that the USITC acted inconsistently with
Articles 2.1 and 3.1 by cumulating imports of LRWs and LRW parts as part of its increased imports
analysis.
7.4.2 The significance of the increase in imports relative to domestic consumption
7.86. Korea contends that the USITC failed to properly examine whether the increase in imports
was qualitatively significant because it did not assess the significance of the increase in imports
relative to domestic consumption, i.e. in terms of market share. 144 In response, the United States
argues that Article 2.1 re fers to an increase in the import volume absolute or relative to
domestic production, and does not require investigating authorities to also find an increase in the
market share of subject imports.145
7.87. We note that Article 2.1 provides that "a Member may apply a safeguard measure to a product
only if that Member has determined … that such product is being imported into its territory in such
increased quantities, absolute or relative to domestic production".146 Article 2.1 does not provide
that an investigating authority must assess the market share, i.e. the share of imports relative to
total domestic consumption, as part of an increased imports analysis. Thus, the requirement of
increased imports under Article 2.1 is satisfied if the increase is either in abso lute terms or relative
to domestic production.147
7.88. Based on the foregoing , we reject Korea 's claim that the USITC acted inconsistently with
Articles 2.1 and 3.1 by failing to examine the significance of the increase in imports relative to
domestic consumption, i.e. in terms of market share.

141 Indeed, Korea acknowledges that the Agreement on Safeguards does not impose specific disciplines
governing how an investigating authority should define the PUC. (Korea's second written submission,
para. 117).
142 Panel Report, Argentina – Footwear (EC), para. 8.250; Appellate Body Report, US – Wheat Gluten,
paras. 76-78. See also Panel Report, Ukraine – Passenger Cars, para. 7.190.
143 Panel Report, Ukraine – Passenger Cars, para. 7.190.
144 Korea's first written submission, paras. 135-137 and 150; opening statement at the first meeting of
the Panel, para. 28.
145 United States' first written submission, para. 204; second written submission, para. 66. The
United States also disputes Korea's assertions that the market share of the subject imports remained the same
throughout the POI as consumption increased, including in interim 2017 compared with interim 2016.
(United States' first written submission, paras. 205-206; response to Panel question No. 14(a), paras. 22-25).
146 Fn omitted; emphasis added.
147 We note that market share must be assessed as part of the investigating authority's analysis of
serious injury under Article 4.2(a), which explicitly lists "the share of the domestic market taken by increased
imports" (i.e. in terms of consumption) as one of the mandatory injury factors that investigating authorities
must evaluate. Indeed, in previous DSB reports, market share assessments have not been considered relevant
to an enquiry on whether a product is being imported in such increased quantities absolute or relative to
domestic production. (Appellate Body Report, US – Steel Safeguards, para. 382; Panel Report, Ukraine –
Passenger Cars, para. 7.190).

7.4.3 The USITC's explanation regarding its determination on increased imports
7.89. Korea contends, relying on previous DSB reports, that in determining whether imports
have increased in such increased quantities as to cause or threaten to cause serious injury to the
domestic industry within the meaning of Article 2.1, an investigating authority must consider
(a) whether the increase in imports was recent enough, sudden enough, sharp enough, and
significant enough; and (b) the trends in imports or changes in imports over the entire period of
investigation (POI).148 Korea asserts that it is not sufficient under Article 2.1 to compare the changes
in imports from the start point of the POI to the end point of the POI, and that an investigating
authority must consider the intervening trends over the POI.149 However, per Korea the USITC failed
to (a) evaluate and explain the trends in import volumes over the POI, including the rate and
significance of the increase 150; and (b) account for the most recent trends in imports, which
according to Korea included a deceleration of the rate of increase in imports since 2015 and decline
in imports in interim 2017 relative to interim 2016.151
7.90. The United States asserts that the USITC provided a reasoned and adequate explanation
consistent with Articles 2.1 and 3.1 of how the facts supported its finding that imports increased in
absolute terms and relative to domestic production. The United States submits in this regard that
the USITC examined trends in each year of the POI, as well as the rate and amount of increase in
imports over this period.152 In particular, the United States explains that the USITC considered the
year-on-year increase in the volume of subject imports (from 2012 -2013, 2013-2014, 2014-2015,
and 2015-2016), found that subject imports doubled during the POI, and characteri zed the rate of
increase in subject import volume as "steady".153 The United States does not dispute that there was
a deceleration of the rate of increase in imports since 2015 and a decline in imports in interim 2017
relative to interim 2016. 154 With respect to the deceleration of the rate of increase in imports
between 2015 and 2016, the United States responds that the USITC addressed this trend in the
serious injury section of its report. Specifically, the United States alleges that the USITC found that
the level of imports in 2016 was restrained by the imposition of provisional anti -dumping duties on
LRWs from China. 155 With respect to the decline in imports towards the end of the POI, the
United States responds that the USITC explained that the absolute volume of imports remained
substantial in interim 2017 and was only down from interim 2016 due to supply disruptions related
to LG's and Samsung's transfer of production from China to Thailand and Viet Nam and
Samsung's recall of 2.8 million units.156
7.91. In assessing whether the USITC's increased imports determination complied with the
obligation under Article 2.1 to determine that the product is being imported in "such increased
quantities", we note that Article 2.1 provides that a Member may apply a safeguard measure to a
product only if that Member has determined that such product is being imported into its territory in
such increased quantities (absolute or relative to domestic production ) and under such conditions
as to cause or threaten to cause serious injury to the domestic industry. Like previous DSB reports,
we understand the use of the present tense in the phrase "is being imported" in Article 2.1 to mean
that the increase in imports within the meaning of Article 2.1 must be sudden and recent .157
Interpreting Article 2.1 in the context of Article 4.2(a) of the Agreement on Safeguards suggests to

148 Korea's first written submission, paras. 125-126.
149 Korea's second written submission, para. 88.
150 Korea's first written submission, para. 144; second written submission, para. 90. See also,
Korea's opening statement at the first meeting of the Panel, para. 32; response to Panel question No. 73,
para. 37; and comments on the United States' response to Panel question No. 72(c), para. 59.
151 Korea's first written submission, paras. 138 and 141; second written submission, para. 90. See also,
Korea's opening statement at the first meeting of the Panel, para. 32; opening statement at the second
meeting of the Panel, para. 26; response to Panel question No. 73, paras. 38-39; and comments on the
United States' response to Panel question No. 72(c), para. 63.
152 United States' first written submission, paras. 193 and 207.
153 United States' first written submission, para. 207 and fn 435; second written submission, para. 68.
See also, United States' opening statement at the first meeting of the Panel, para. 17; and response to Panel
question No. 72(c), para. 17.
154 United States' first written submission, para. 201; second written submission, para. 58; and
responses to Panel question No. 72(a), para. 15; and No. 72(c), para. 19.
155 United States' response to Panel question No. 72(c), para. 19.
156 United States' first written submission, para. 193 (referring to USITC report, (Exhibit KOR-1), pp. 30
and 38); second written submission, para. 63. See also, United States' opening statement at the first meeting
of the Panel, para. 17.
157 Appellate Body Report, Argentina – Footwear (EC), para. 130.

us that an assessment of increased imports must evaluate the rate and amount of the increase in
imports based on intervening trends during the POI (as opposed to only comparing the end
points).158 However, the use of the phrase "is being imported" does not suggest to us that an
investigating authority cannot find increased imports within the meaning of Article 2.1 when imports
decline in the most recent p eriod.159 Instead, we agree with a previous DSB report that whether a
decrease in imports at the end of the POI prevents a finding of increased imports will depend on
whether, despite the later decrease, a previous increase results in the product (still) "being imported
in (such) increased quantities".160 Factors that an investigating authority must take into account are
the duration and the degree of the decrease at the end of the relevant POI, as well as the nature,
for instance the sharpness and the extent , of the increase that occurred beforehand. 161 However,
ultimately a determination of increased imports is not a mathematical or technical determination,
but rather a determination that must be made on a case -by-case basis. 162 In reviewing such
determination, we must, consistent with our standard of review, examine whether the
USITC's explanation was reasoned and adequate in light of the record evidence before the USITC.
7.92. We note in this regard that in the underlying investigation the USITC found as follows:
In absolute terms, imports of LRWs increased steadily from *** units in 2012 to ***
units in 2013, *** units in 2014, *** units in 2015, and *** units in 2016, a level ***
percent higher than in 2012. Imports of LRWs were *** units in interim 2 017, as
compared to *** units in interim 2016. At the same time, imports increased steadily
relative to the domestic industry's production from *** percent in 2012 to *** percent
in 2013, *** percent in 2014, *** percent in 2015, and *** percent in 2016. I mports
relative to the domestic industry's production were *** percent in interim 2017, as
compared to *** percent in interim 2016.163
7.93. The changes in the volume of imports as well as the percentage changes in imports have been
redacted from this extract. These redactions were made by the USITC. The United States declined
to provide to us, on the grounds of business confidentiality, an unredacted version of these findings
or an indexed version that at least identified the percentage changes in imports over the POI.164
7.94. From the redacted version of the USITC finding we note that the USITC found that imports
doubled during the POI, and that imports of LRWs "remained a substantial *** units in interim 2017,
though down from *** units in interim 2016 due to the afor ementioned supply disruptions related
to LG and Samsung's transfer of production from China to Thailand and Vietnam and
Samsung's recall".165 Thus, the USITC found that imports declined in interim 2017 relative to
interim 2016.
7.95. We begin our analysis by noti ng that it is Korea's burden as the complainant to make a
prima facie case of violation of Articles 2.1 and 3.1, although each party bears the burden of proving
their factual assertions. In our view, Korea has made a prima facie case in this regard. We not e
Korea's argument that the USITC did not evaluate and explain the trends in import volumes over
the POI, including the rate and significance of the increase. Indeed, while the USITC found that
imports doubled over the POI and characterized the year -on-year increase in imports over the POI
as "steady", the USITC does not indicate how the USITC evaluated the trends in imports over the

158 Appellate Body Report, Argentina – Footwear (EC), para. 129.
159 Appellate Body Report, US – Steel Safeguards, para. 367.
160 Panel Reports, US – Steel Safeguards, para. 10.163.
161 Panel Reports, US – Steel Safeguards, para. 10.163.
162 See, e.g. Appellate Body Report, Argentina – Footwear (EC), para. 131.
163 USITC report, (Exhibit KOR-1), p. 20. (fn omitted; redacted original)
164 In Panel question No. 70, we asked the United States to provide the percentage year-on-year
increase in imports over the entire POI. We informed the United States that in answering that question it could
treat import volumes in 2012 (the first year of the POI) as 100 (indexed) and map the percentage changes in
imports over the result of the POI. We also asked the United States to comment on what sort of additional
procedures, beyond the BCI procedures that we had already adopted in these proceedings, it considered
necessary to provide use with this information while safeguarding its confidentiality. The United States declined
to provide us with the information requested in question No. 70 on grounds of business confidentiality.
(United States' response to Panel question No. 70, para. 8). The United States also informed us that it was
unable to offer alternative procedures that would adequately preserve the USITC's institutional ability to collect
business confidential information in its investigations. (United States' response to Panel question No. 71,
para. 10).
165 USITC report, (Exhibit KOR-1), p. 38. (redacted original)

POI, including the rate and significance of the increase. In determining whether the United States
has rebutted Korea's prima facie case, we note the United States' assertion that the USITC provided
a reasoned and adequate explanation of the development of imports trends, including the rate and
amount of increase. 166 In particular, the United States submits that the percentage ye ar-on-year
changes were provided in table C-2 of the staff report and thus considered by the USITC. 167 The
United States also submits that the USITC considered the absolute volume of subject imports in each
year of the POI and found that imports of LRWs had increased steadily during the POI. 168 In our
view, however, the United States has not proved its factual assertions.
7.96. In particular, the United States did not provide us with an unredacted version of table C-2 or
point to specific parts of the unredacted version of the USITC report that explain how the USITC
considered the percentage year-on-year changes over the POI.169 Therefore, while the United States
asserts that the USITC found imports to increase steadily over the POI based on its consideration of
the absolute volume of subject imports in each year of the POI, the United States did not provide us
with the USITC's record evidence to support this assertion. 170 In addition, as we noted in
paragraph 7.91 above, an evaluation of whether a decrease in imports at the end of the POI prevents
a finding of increased imports will depend on whether, despite the later decrease, a previous increase
results in the product still being imported in such increased quantities. Factors that an investigating
authority must take into account in this evaluation are, inter alia, the degree of the decrease at the
end of the relevant POI, as well as the nature, for instance the sharpness and the extent, of the
increase that occurred beforehand. We do not see from the narrative description in the USITC report
how the USITC took into account the degree of the decrease at the end of the relevant POI
considering the increase beforehand. Consequently, we consider that the United States has not
proved its factual assertions and not rebutted a prima facie case of violation, which Korea has
established.
7.97. Based on the foregoing, we find that the USITC failed to provide a reasoned and adequate
explanation in support of its finding on increased imports and thus acted inconsistently with
Article 2.1 as well as Article 3.1 of the Agreement on Safeguards.
7.4.4 Conclusion
7.98. In light of the above:

166 United States' first written submission, section D.3.c and para. 207.
167 United States' first written submission, fn 435. See also United States' response to Panel question
No. 72(c), para. 17.
168 United States' response to Panel question No. 72(c), para. 17.
169 Instead, in response to our questions, the United States provided us with a "directional version" of
table C-2. That version of table C-2 does not contain any figures (percentage or absolute) but only shows
whether imports decreased or increases in a particular year of the POI. We do not consider that the
"directional version" of table C-2 proves the factual assertions made by the United States set out above.
(United States' response to Panel question No. 16, para. 27).
170 We note in this regard that Korea and the United States referred to two separate annexes
(annexes 2A and 2D) in the petition filed by Whirlpool. In response to Korea's reliance on the data set out in
annex 2D, the United States presents arguments on why we should not rely on that data.
(United States' second written submission, paras. 59-60). In response to the United States' statement that we
could consider the public data in annex 2A, which reflected Whirlpool's best estimate of subject import
volumes, and which showed similar trends to that used by the USITC, Korea contests the reliability of the data
in annex 2A. (Korea's comments to United States' response to Panel question No. 70, paras. 38-40; see also
United States' response to Panel question No. 70, para. 9). Therefore, the reliability of the data in annexes 2D
and 2A is contested. In any case, we do not consider it appropriate to rely on this data because the
United States confirms that the USITC did not rely on the data provided in annex 2A, and instead relied on
import data reported by LG, Samsung, and other importers. (United States' second written submission,
para. 61). We also note the United States' argument that because US importers LG and Samsung accounted
for the vast majority of US imports of LRWs, Korea is in a position to provide information regarding the imports
made by these two companies. (United States' comments on Korea's response to Panel question No. 69,
para. 11). However, we do not consider that it would be appropriate for us to rely on a data set provided by LG
and Samsung as a proxy for the import volume data considered by the USITC, especially because the USITC
relied on import volume data not just from LG and Samsung but also from other importers.
(United States' second written submission, para. 61).

a. We find that the USITC acted inconsistently with Articles 2.1 and 3.1 of the Agreement on
Safeguards because it failed to provide a reasoned and adequate explanation in support
of its finding on increased imports.
b. We reject Korea's claim that the USITC acted i nconsistently with Articles 2.1 and 3.1 of
the Agreement on Safeguards by ( i) cumulating imports of LRWs and LRW parts as part
of its increased imports analysis; (ii) failing to examine the significance of the increase in
imports relative to domestic consu mption; and (iii) failing to account for the price and
non-price based aspects of the conditions of competition in the market in its increased
imports analysis.
7.5 The USITC's serious injury determination
7.99. Korea challenges the USITC's determination regarding serious injury to the domestic industry
under Articles 2.1, 3.1, 4.1(a), 4.2(a), and 4.2(c), and, consequently, Article 11.1(a) of
the Agreement on Safeguards. In particular, Korea submits as follows:
a. The USITC failed to evaluate all the injury factors set out in Article 4.2(a) as part of its
serious injury finding, specifically171:
i. the rate and amount of increase in imports in absolute and relative terms; and
ii. the share of the domestic market taken by increased imports.
b. The USITC failed to make an objective assessment of profits.172
c. The USITC failed to make an objective assessment of the share of the domestic market
taken by increased imports.173
d. The USITC's serious injury finding was vitiated by its flawed definition of the
domestic industry on two grounds:
i. As a consequence of Korea's claims concerning the USITC's definition of the
domestic industry, the USITC's serious injury finding is also flawed.174
ii. When examining profitability, the USITC excluded financial data relating to a producer
whom it had included in its scope of the domestic industry.175
e. The USITC failed to undertake an objective examination of the significant overall
impairment of the domestic industry and based its serious injury determination on
declining profitability alone.176
7.100. The United States asks us to reject Korea's claims.
7.101. We note that Article 4.1(a) of the Agreement on Safeguards defines "serious injury" as
"a significant overall impairment in the position of a domestic industry". Article 4.2(a), in turn,
provides that in the investigation to determine whether increased imports have caused serious injury
to the domestic industry, the investigating authorities shall evaluate all relevant factors of an
objective and quantifiable nature having a bearing on the situation of that industry, in particular,

171 Korea's first written submission, paras. 260-269.
172 Korea's first written submission, paras. 278-298.
173 Korea's first written submission, paras. 307-319.
174 Korea's first written submission, paras. 321-327.
175 Korea's first written submission, paras. 328-330.
176 Korea's first written submission, paras. 270-277. See also ibid. paras. 299-306. In section VII.3.4 of
its first written submission, Korea claims that the USITC failed to provide a compelling explanation of how and
why the domestic industry suffered serious injury despite the positive trends. In that section, Korea presents
arguments similar to those in section VII.3.2 of the same submission, where Korea claims that the USITC failed
to undertake an objective examination of the "significant overall impairment" of the domestic industry and
based its serious injury finding on declining profitability alone. Therefore, we address both sets of arguments in
section 7.5.5 of this Report.

the rate and amount of the incre ase in imports of the product concerned in absolute and relative
terms, the share of the domestic market taken by increased imports, changes in the level of sales,
production, productivity, capacity utilization, profits and losses, and employment. The use of the
word "all" suggests therefore that an investigating authority must, at a minimum, evaluate each of
the factors listed in Article 4.2(a).177 Moreover, the use of the phrase "in particular" indicates that
an investigating authority must also evaluate factors not listed in Article 4.2(a) that are nonetheless
relevant to the state of the domestic industry.178
7.102. While an investigating authority must evaluate all relevant factors having a bearing on the
situation of the domestic industry, neither Article 4.2(a) nor any other provision of
the Agreement on Safeguards requires that all the relevant factors need to show negative trends.
Therefore, an authority may find that the domestic industry has been seriously injured where some,
or even the majority of the factors do not, by themselves, trend negatively. 179 Where some of the
factors trend positively while others trend negatively, it is for the investigating authority to assess
and weigh the evidence before it, and reasonably and adequately explain h ow the facts on record
support its determination.180
7.103. In reviewing the adequacy of such an explanation, we note that Article 4.2(c) of
the Agreement on Safeguards requires investigating authorities to publish promptly, and in
accordance with Article 3 of the Agreement on Safeguards, a detailed analysis of the case under
investigation as well as a demonstration of the relevance of the factors examined. Article 3.1, in
turn, requires authorities to publish a report setting forth their findings and reasoned conc lusions
reached on all pertinent issues of fact and law. We shall therefore base our evaluation of
Korea's claims on the report published by the USITC.
7.5.1 Evaluation of all the injury factors set out in Article 4.2(a) as part of the serious
injury finding
7.104. Korea contends that the USITC acted inconsistently with Articles 3.1, 4.1(a), 4.2(a), and
4.2(c), because it failed to evaluate the following two factors set out in Article 4.2(a) as part of its
injury analysis: (i) the rate and amount of the increase in imports, and (ii) the share of the domestic
market taken by increased imports.181
7.105. Korea acknowledges that the two factors were reflected in the USITC report. However,
Korea maintains that the USITC noted the developments in these factors in quantitative terms in the
context of its analysis of increased imports and causation, but did not "evaluate" them as part of the
serious injury analysis (i.e. in section IV.D of the USITC report).182 Korea maintains that the
USITC's failure to "evaluate" the two factors reflects a failure to examine the "explanatory force" of
the increased imports as part of the serious injury determination. Korea also asserts that the USITC
merely described the increase in imports as "steady", noted that imports nearly doubled over the
POI, and increased their penetration of the US market.183 According to Korea, by doing so, the USITC
failed to satisfy the required standard of evaluation. 184 Korea contends that an "evaluation" of the
relevant factors includes an examination of how imports interrelate with the various injury factors

177 The parties to this dispute agree with this understanding. (Korea's first written submission,
para. 243; United States' first written submission, para. 225). See also Appellate Body Report, Argentina –
Footwear (EC), para. 136.
178 We agree in this regard with Panel Report, US – Lamb, para. 7.139.
179 The parties agree with this understanding. (Korea's response to Panel question No. 22, para. 117;
United States' first written submission, para. 246). We note that this understanding is also consistent with
Appellate Body Report, Argentina – Footwear (EC), para. 139.
180 We agree in this regard with Panel Report, US – Wheat Gluten, para. 8.85.
181 Korea's first written submission, paras. 260, 262, and 269.
182 Korea's first written submission, paras. 260 and 262 (referring to USITC report, (Exhibit KOR-1),
pp. 38-40); opening statement at the first meeting of the Panel, paras. 53-54. See also Korea's response to
Panel question No. 24(a), paras. 134-135; and second written submission, paras. 154-156. Korea states that it
does not make a "formalistic complaint about the specific section of the USITC Report in which these factors
were examined". However, it also submits that contrary to the United States' assertion that the USITC
"incorporat[ed] its evaluation" of the two factors in its serious injury determination, "the page numbers
referred to do not concern the serious injury examination, but relate to the 'increased imports' and 'substantial
cause' sections. There was no 'incorporation' of these factors into the relevant serious injury examination".
(Korea's second written submission, paras. 155-156).
183 Korea's response to Panel question No. 24(a), para. 143.
184 Korea's response to Panel question No. 24(a), paras. 141 and 143.

so as to understand whether the imports have an "explanatory force" for the occurrence of the
serious injury.185 Further, Korea argues that as part of the "evaluation", an investigating authority
must assess the relevance and weight of each of the relevant factors with a view of assessing the
overall impairment in the position of the domestic industry.186, 187
7.106. The United States argues that Korea's submissions are incorrect. In the United States' view,
Korea assumes that an evaluation of all the factors listed in Article 4.2(a) must appear together in
a section of the investigating authority's report devoted to serious injury. 188 The United States
maintains that contrary to Korea's arguments, Articles 3.1 and 4.2(c) do not specify a particular
structure or order of analysis for the reports published by investigating authorities, and the USITC
satisfied its obligations by examining the two factors in the sections of its report addressing increased
imports and causation. 189 With regard to the rate and amount of increase in imports, the
United States maintains that the USITC considered the evolution of the absolute volume of
subject imports and found that imports of LRWs had increased steadily during the POI (in each year
of the 2012-2016 period), and overall, had nearly doubled during the POI.190 The United States also
argues that the USITC examined the share of the domestic market taken by increased imports during
the POI, and found that subject imports significantly increased their penetration of the US market
during the POI.191
7.107. The question before us is whether the USITC "evaluated" (a) the rate and amount of increase
in imports, and (b) the share of the domestic market taken by increased imports during the POI. We
note that Korea acknowledges that these two factors were reflected in the USITC report.192 However,
Korea contends that the USITC's discussion regarding these two factors did not amount to an
"evaluation" within the meaning of Article 4.2(a). Korea submits in this regard that when evaluating
the injury factors in Article 4.2(a), an investigating authority may not limit itself to setting out the
trends, but must also consider the relationship between imports and injury factors as well as show
that imports had explanatory force for the development of these factors. 193 In response to our
question on how such an analysis of explanatory force, which Korea argues is required as part of a
serious injury analysis under Article 4.2(a), differs from a causation analysis under Article 4.2(b),
Korea contends that an explanatory force analysis requi res investigating authorities to examine
whether there is a relationship between imports and serious injury, with a focus on the coincidence
in the trends between imports and the examined injury factors.194
7.108. As we discuss in the context of our analysis of Ko rea's causation claims, we note that the
USITC conducted its causation analysis in two stages. Under the first stage, the USITC conducted,
inter alia, an analysis of the coincidence in trends between subject imports and injury factors. Korea
challenges the USITC's coincidence in trends analysis as part of its causation claims. Since Korea
explains that its claim under Article 4.2(a) similarly concerns the alleged failure of the USITC to
consider the coincidence in trends between imports and the examined injury factors, we consider it

185 Korea's response to Panel question No. 24(a), paras. 138 and 145; second written submission,
para. 159.
186 Korea's first written submission, paras. 266-268; response to Panel question No. 24(a), para. 142.
187 We also note that in section VII.3.5 of its first written submission, Korea claims that the USITC failed
to objectively evaluate the "share of domestic market taken by increased imports" because in its view the
USITC failed to consider arguments the respondents made during the domestic proceedings. In this section of
the Report we address Korea's claim based on its argument that the USITC failed to evaluate the "explanatory
force" of the share of domestic market taken by increased imports alone. Thereafter, we address Korea's claim
that the USITC failed to objectively evaluate the "share of domestic market taken by increased imports" (as
presented in section VII.3.5 of its first written submission) at section 7.5.3 below.
188 United States' first written submission, para. 232.
189 United States' first written submission, paras. 232-235; opening statement at the first meeting of the
Panel, para. 21.
190 United States' first written submission, para. 229; opening statement at the first meeting of the
Panel, para. 21 (referring to USITC report, (Exhibit KOR-1), pp. 20 and 39).
191 United States' first written submission, para. 230; opening statement at the first meeting of the
Panel, para. 21 (referring to USITC report, (Exhibit KOR-1), pp. 38-39).
192 Korea's first written submission, para. 260. In particular, Korea states that "[w]hile [the] USITC
simply notes these developments in quantitative terms in the context of its analysis of increased imports and
causation – these factors were not examined at all as part of the serious injury analysis".
193 Korea's response to Panel question No. 24(b), para. 148. See also Korea's response to Panel
question No. 24(a), paras. 138 and 145.
194 Korea's response to Panel question No. 21(b), paras. 110-111; second written submission,
para. 159. The European Union agrees. (European Union third-party response to Panel question No. 3(b),
para. 15).

appropriate to review Korea's arguments in the context of its causation claim. It is not necessary for
us to review those same arguments in the context of Korea's Article 4.2(a) claim.
7.109. Based on the foregoing, we do not separately address Korea's claim under Article 4.2(a)
challenging the USITC's alleged failure to evaluate all injury factors set out in this provision. We also
do not address Korea's claim under Articles 3.1, 4.1(a), and 4.2(c) for the same reasons.
7.5.2 The USITC's alleged failure to objectively examine profits and losses
7.110. Korea contends that the USITC failed to undertake an objective examination of the factor
"profits and losses", and to support its finding by a reasoned and ad equate explanation, therefore
acting inconsistently with Articles 3.1, 4.1(a), 4.2(a), and 4.2(c).195 Korea alleges that the USITC
failed to : (i) account for record evidence of joint -selling practices over washers and dryers and
related overall profits in t he laundry segment 196; and ( ii) engage with evidence that
Whirlpool's reported operating losses were inconsistent with its profit margin for its overall
North American operations.197 We address these arguments separately.
Joint-pricing theory

7.111. Korea argues that the USITC had received evidence from Korean respondents that dryers
and LRWs collectively form the laundry segment of the US market, and that the US industry prices,
markets, a nd sells these two products jointly (a practice Korea refers to as "joint pricing").198
Korea submits that dryers cost less to make, and are therefore more profi table than LRWs.
Korea contends that because LRWs and dryers were priced at the same level, they were jointly
profitable, and therefore, to the extent the domestic industry's profitability of LRW sales were low,
the domestic industry obtained significant profits from its sales of dryers. 199 Korea argues that the
USITC dismissed the arguments made by Korean respondents (a) simply because dryers are not a
like or directly competitive product to the PUC , and (b) based on testimony by the petitioner. 200
Korea maintains that by doing so, the USITC did not adequately engage with the evidence presented
by the respondents, or provide a reasoned and adequate explanation addressing this "plausible
alternative" presented by the respondents.201
7.112. Rejecting Korea's arguments, the United States submits that the USITC explained that the
focus of its analysis was the domestic producers of the like or directly competitive product, and that
dryers were not "like or directly competitive" with the PUC.202 The United States argues that in
rejecting the respondents' arguments, the USITC evaluated all the record evidence concerning
whether Whirlpool and GE sold matching LRWs and dryers at the same net wholesale prices, and
found that the evidence did not support, as a factual matter, the Korean respondents ' view that
US producers offset losses on washers with profits on matching dryers. 203 The United States
maintains that there was evidence both for and against the Korean respondents' theory of
joint pricing, and the USITC found the evidence against that the ory more compelling. 204 The
United States also submits that the USITC found that even if the joint-pricing theory were true, the
greater profitability of dryers could not explain the domestic industry's worsening operating and net
losses on sales of LRWs during the POI.205
7.113. The parties' arguments raise two issues that we must consider in resolving this claim:
(a) whether the USITC was required to evaluate "profitability" with regard to products (dryers) that
were not "like or directly competitive" with the PUC; and, if so, (b) whether Korea has demonstrated

195 Korea's first written submission, paras. 278 and 298.
196 Korea's first written submission, paras. 279-291.
197 Korea's first written submission, para. 292.
198 Korea's first written submission, paras. 280-284.
199 Korea's second written submission, para. 178.
200 Korea's first written submission, paras. 287 and 290; second written submission, para. 176.
201 Korea's first written submission, paras. 287-291; opening statement at the first meeting of the
Panel, paras. 61-64; and second written submission, paras. 176-186.
202 United States' first written submission, para. 254.
203 United States' first written submission, para. 255; opening statement at the first meeting of the
Panel, para. 24.
204 United States' first written submission, para. 257.
205 United States' first written submission, para. 259.

that the USITC failed to provide a reasoned and adequate explanation for rejecting the arguments
and evidence presented by Korean respondents.
7.114. We note that Article 4.1(c) defines the domestic industry on the basis of producers as a
whole of the like or directly competitive products operating within the territory of a Member, or those
whose collective output of the like or directly competitive products constitutes a major proportion of
the total domestic production of those products. This definition of the domestic industry applies for
the purposes of the Agreement on Safeguards, including when the investigating authority
determines whether the domestic industry, as defined under Article 4.1(c), has suffered se rious
injury. It follows that, in undertaking that analysis, investigating authorities are required to evaluate
the injury factors having a bearing on the domestic industry by reviewing data relating specifically
to those "like or directly competitive products" that comprise the domestic industry.
7.115. Korea does not argue that dryers are like or directly competitive with the PUC (which
comprised LRWs and not dryers). We also note that the USITC did not define the domestic industry
to include producers of dryers. Therefore, in determining whether the domestic industry, comprising
producers of the like product at issue (i.e. LRWs), was suffering serious injury, the USITC was not
required to analyse performance indicators (including profitability) for the dryer segment, which was
not a like product within the meaning of Article 4.1(c) (or a "directly competitive" product). That the
producers forming part of the domestic industry also produced other products that were profitable
is irrelevant to the situation of the domestic industry. 206 Therefore, we are not persuaded by
Korea's argument that the USITC was required to consider profitability of the laundry segment as a
whole (including dryers).
The profit data relied upon by the USITC

7.116. Korea contends that the USITC failed to meaningfully assess the respondents' arguments
and evidence that Whirlpool's reported operating losses were inconsistent with the profit margin for
Whirlpool's overall North American operations, and therefore contradicted the USITC's finding that
the domestic industry suffered significant operating losses.207 According to Korea, the USITC did not
meaningfully explain how Whirlpool's geographically segmented data, including sales, general, and
administrative (SG&A) expenses, were appropriately allocated to the production of LRWs.208
7.117. The United States responds that the USITC provided a reasoned and adequate explanation
for rejecting the respondents' argument.209 In rejecting the respondents ' argument, the USITC
stated that the fo cus of its analysis was the producers of products that were like or directly
competitive with the PUC. Therefore, because Whirlpool's financial results for its North America
segment were primarily based on sales of products other than LRWs (with LRWs accounting for only
13.1% to 13.5% of the North America segment's total revenue during the 2012 ‐2016 period) the
USITC did not find those results informative. 210 Moreover, the United States notes that the USITC
verified, using appropriate methodologies from a pr evious investigation, that the financial data
reported by Whirlpool was reasonable and complied with applicable guidelines.211
7.118. The issue before us in this regard is whether the USITC properly assessed the evidence
submitted by the Korean respondents contest ing Whirlpool's profit data. In its report, the USITC
noted that the focus of its analysis was the domestic industry producing the domestic like product.
It is therefore reasonable that the USITC found Whirlpool 's financial results for North America
uninformative, given that LRWs (the like product at issue), only accounted for 13.1% to 13.5% of
the North America segment's total revenue. Korea does not explain why this explanation provided

206 In this regard, we note Korea does not argue that profits made on washers were allocated to dryers.
Instead, Korea's argument is that the USITC should have examined the profitability for dryers and washers as
a whole because they were complementary goods. (See e.g. Korea's first written submission, paras. 290-291).
207 Korea's first written submission, paras. 292-295 and 297 (referring to Excerpt from LG and
Samsung's prehearing injury brief, (Exhibit KOR-11), p. 71; and Large Residential Washers, Prehearing Brief of
the Government of the Republic of Korea (29 August 2017), (Exhibit KOR-9), p. 11).
208 Korea's first written submission, para. 294; second written submission, paras. 187-188.
209 United States' first written submission, para. 260.
210 United States' first written submission, paras. 260-261 (referring to USITC report, (Exhibit KOR-1),
fn 210).
211 United States' first written submission, para. 262; second written submission, fn 169 (referring to
USITC report, (Exhibit KOR-1), fn 210). See also United States' opening statement at the first meeting of the
Panel, para. 25.

by the USITC was not adequate. Korea also asserts that the USITC did not meaningfully explain how
Whirlpool's geographically segmented financial data, including its SG&A expenses, were
appropriately allocated to the production of LRWs. 212 Korea appears to take issue with the
USITC's explanation that it had verified Whirlpool's financial results, including SG&A expenses using
appropriate methodologies in a previous investigation, arguing that the USITC "merely applied 'the
same methodology'" in the underlying investigation. 213 However, Korea does not explain why,
specifically, the USITC's verification of Whirlpool's financial results and its explanation for rejecting
Korean respondents' arguments were inadequate.
7.119. Therefore, we reject Korea's argument that the USITC failed to account for record evidence
of joint-selling practices over washers and dryers and related overall profits in the laundry segment,
or to engage with evidence that Whirlpool's reported operating losses were inconsistent with its
profit margin for Whirlpool 's overall North American operations . Based on the foregoing , we reject
Korea's claims under Articles 3.1 and 4.2(a) of the Agreement on Safeguards that the
USITC allegedly failed to objectively examine "profit and loss". Considering that the factual basis of
Korea's claim under Articles 4.1(a) and 4.2(c) is the same as its claim under Articles 3.1 and 4.2(a),
we also reject Korea's claims under Articles 4.1(a) and 4.2(c) of the Agreement on Safeguards.
7.5.3 The USITC's alleged failure to objectively examine the share of domestic market
taken by increased imports
7.120. Korea submits that the USITC acted inconsistently with Article 4.2(a) because it failed to
objectively evaluate the factor "share of domestic market taken by increased imports" because it
failed to consider that the domestic industry was unable to serve a newly emerging market segment
due to its inferior innovation.214 According to Korea, the US LRW market is based on two types of
demand: (a) replacement demand, which accounted for two -thirds of total deman d; and
(b) non-replacement demand, which accounted for one-third of total demand, and that is triggered
by consumers' demand for new and more innovative LRWs. 215 Korea maintains that
Korean respondents' LRWs had unique brands, innovation, and design, which enabled them to serve
demands that the domestic LRWs could not serve effectively. 216 Korea argues that this issue was
particularly important because the domestic industry's overall market share did not shrink during
the POI. 217 Korea maint ains that the USITC should have done "more evaluation" to address
arguments made by the Korean respondents that the US LRW market was segregated based on
differences in consumer demand.218
7.121. The United States responds that the USITC considered and properly re jected the
respondents' arguments on innovation. Pointing to the USITC report, the United States asserts that
the USITC explained that other record evidence undermined the respondents' argument.219
7.122. We note that the USITC found that the record as whole did n ot support the
respondents' argument that consumers increasingly favoured imported LRWs over domestic LRWs
because of non -price factors.220 The USITC relied on certain data to conclude that there was a
moderate to high degree of substitutability between imported LRWs and domestic LRWs. The USITC
observed that (a) all responding purchasers (which accounted for nearly all of the purchases of LRWs
during the POI) reported that the subject imports were either always or usually interchangeable with
domestically produced LRWs221; and (b) most responding purchasers reported that domestic LRWs
were either comparable or superior to imported LRWs in terms of most non -price factors, including

212 Korea's second written submission, para. 188.
213 Korea's second written submission, para. 188; response to Panel question No. 29, para. 170.
214 Korea's first written submission, paras. 307 and 319.
215 Korea's first written submission, paras. 310 and 314; second written submission, para. 201.
216 Korea's first written submission, paras. 314-316 and 318.
217 Korea's first written submission, para. 317.
218 Korea's first written submission, para. 309.
219 United States' first written submission, paras. 264-265 (referring to USITC report, (Exhibit KOR-1),
pp. 27 and 29-30). See also United States' first written submission, para. 267 (referring to USITC report,
(Exhibit KOR-1), p. 42 and fn 261); and opening statement at the first meeting of the Panel, para. 26.
220 USITC report, (Exhibit KOR-1), pp. 29-30.
221 USITC report, (Exhibit KOR-1), pp. 27 and 29.

whether quality met or exceeded industry standards.222 The USITC also noted that both the domestic
producers (Whirlpool and GE) and Korean exporters (Samsung and LG) reported introducing
numerous innovative features in their LRWs during the POI, and that both domestic and imported
LRWs were rated highly in publications and surveys during this period.223 The USITC concluded that,
based on the evidence it evaluated, the US LRW market encompassed a broad range of brands and
models offering diverse features and innovations, with no LRW supplier possessing a clear edge over
other LRW supplie rs in terms of brand, design, performance, features, innovations, and other
non-price factors.224 The USITC also explained that the respondents' argument that sales of LRWs
were driven by features and innovations favoured by customers was undermined by the extent to
which imported LRWs were priced lower than domestically produced LRWs, and the declining prices
of the imported LRWs that respondents identified as innovative.225
7.123. Korea maintains that the USITC failed to examine whether there was a new market segment
stemming from different consumer demands, which could only be served by imported LRWs. 226
According to Korea, imported LRWs had specific attributes which distinguished those products from
other LRWs, and the USITC's only rationale for rejecti ng the respondents' arguments was that the
domestic industry also produced LRWs with innovations that were exclusive to those producers. 227
However, we note that Korean respondents had made arguments before the USITC based on such
distinctions between impor ted and domestically produced LRWs. The USITC, as we have noted in
paragraph 7.122 above, rejected these arguments based on its conclusion that imported and
domestic LRWs were substitutable. Moreover, while Korea asserts that "more evaluation was
required", it does not engag e with the USITC's explanation, or demonstrate that the
USITC's explanation was not reasoned and adequate in light of the evidence on its record. Therefore,
we reject Korea's argument that the USITC's finding was not one that an unbiased and objective
investigating authority could have reached on the basis of the record evidence.
7.124. Based on the foregoing, we reject Korea 's claim under Article 4.2(a) that the USITC failed
to objectively examine the share of the domestic market taken by increased imports.
7.5.4 The effect of the USITC's domestic industry definition on its serious injury findings
7.125. Korea claims that the USITC's definition of the domestic industry vitiated its serious injury
finding based on two grounds228:
a. First, Korea contends that because the USITC's serious injury finding was based on an
improperly defined domestic industry, this serious injury finding was inconsistent with
Articles 2.1, 3.1, 4.1(a), 4.2(a), and 4.2(c) of the Agreement on Safeguards.229
b. Second, Korea argues that the USITC's serious injury assessment was not objective
because, when examining the profitability of the domestic industry, the USITC excluded
the financial data of Alliance Laundry Systems (Alliance) , the only domestic producer of
belt-driven washers (which was part of the domestic industry), thereby relying on

222 USITC report, (Exhibit KOR-1), pp. 27 and 29-30. The USITC also observed that consumer reports
ranked domestic LRWs among three of the top five and four of the top ten recommended FL LRW models, and
six of the top ten recommended impeller-based TL LRW models. Reviewed.com ranked domestic LRWs among
six of the top ten TL LRW models and among four of the top ten FL LRW models. Further, the USITC found that
the respondents' own customer survey data showed that a higher percentage of consumers identified
domestically produced LRWs (Maytag and Whirlpool) as "good brand names" for washers than imported LRWs
(LG and Samsung) in 2016, and that a higher percentage of consumers also identified domestically produced
LRWs (Amana and GE) as "good brand names" for LRWs than LG that year. (USITC report, (Exhibit KOR-1),
p. 30 (referring to Excerpt from LG and Samsung's prehearing injury brief, (Exhibit KOR-11), p. 101).
223 USITC report, (Exhibit KOR-1), pp. 29-30.
224 USITC report, (Exhibit KOR-1), p. 30.
225 USITC report, (Exhibit KOR-1), p. 42. See also United States' first written submission, para. 267; and
opening statement at the first meeting of the Panel, para. 26.
226 Korea's first written submission, paras. 309-316; second written submission, paras. 202-203 and
208-209.
227 Korea's second written submission, para. 203 (referring to USITC report, (Exhibit KOR-1),
pp. 76-77).
228 Korea also invokes Article 4.1(b) of the Agreement on Safeguards in making its submissions here.
However, Korea does not specifically request a finding under Article 4.1(b). (Korea's first written submission,
para. 573; second written submission, para. 333). We thus do not make separate findings under Article 4.1(b).
229 Korea's first written submission, paras. 321-327.

unrepresentative financial data; while including data pertaining to producers of belt-driven
washers in examining other injury factors, such as the market share of the
domestic industry.230 Korea claims that by doi ng so, the USITC acted inconsistently with
Articles 2.1, 3.1, 4.1(a), 4.2(a), and 4.2(c) of the Agreement on Safeguards.231
7.126. With respect to the first set of Korea's claims, the United States contends that because in its
view the USITC properly defined the domestic industry, Korea's claims should fail.232 We recall that
in paragraph 7.77 above we have found that the USITC acted inconsistently with Article 4.1(c)
of the Agreement on Safeguards by including producers of domestic covered parts in the
domestic industry. Accordingly, we do not consider it necessary to make additional findings on
whether, because of the USITC's definition of the domestic industry, the serious injury determination
was also inconsistent with Articles 2.1, 3.1, 4.1(a), 4.2(a) , and 4.2(c ) of the Agreement on
Safeguards.
7.127. Regarding Korea 's second set of claims, the United States argues that the USITC was
justified in excluding financial data of t he US producer of belt -driven washers (Alliance ) when
examining the "profits and losses" of the domestic industry because (a) Alliance submitted its
questionnaire response late in the investigation, rendering the USITC unable to ensure its financial
data w ere reliable 233; and (b) the financial data used by the USITC covered almost all of the
domestic industry's operations and were therefore sufficiently representative. 234 The United States
submits that having defined the domestic industry to include domestic producers of belt -driven
washers, the USITC was required to consider data relating to these producers as part of its serious
injury analysis, to the extent that those data were found to be reliable. According to the
United States, an investigating authority that uses unreliable financial data to analyse serious injury
cannot make reasoned conclusions on pertinent issues of law and fact (as required under Article 3.1),
and unreliable data is not an objective measure of the industry's financial performance (as required
under Article 4.2(a)).235 The United States asserts that when a domestic producer reports unreliable
financial data, the investigating authority may make inferences based on the available information
on the domestic industry's financial performance, which in this case consisted of financial data
reported by other domestic producers, that accounted for the majority of domestic sales of the like
product.236, 237
7.128. We note that Article 4.2(a) requires an evaluation of all relevant factors of an objective and
quantifiable nature having a bearing on the situ ation of the domestic industry, which includes the
profits and losses by the domestic industry. Therefore, having defined the domestic industry to
include belt-driven washers, the USITC was required to consider the profit and loss data of producers
of belt -driven washers as part of its evaluation under Article 4.2(a). However, an investigating
authority must also satisfy itself that the data that form the basis for its findings are reliable.238

230 Korea's first written submission, para. 330; second written submission, para. 215; and response to
Panel question No. 74, paras. 51-52.
231 Korea's first written submission, para. 332.
232 United States' first written submission, para. 269.
233 United States' first written submission, para. 272; responses to Panel question No. 28(a),
paras. 43-45; and No. 75(a), paras. 22-25.
234 United States' first written submission, para. 273; responses to Panel question Nos. 27-28,
paras. 42-47; No. 75(a), para. 27; and No. 75(b), para. 31; and comments on Korea's response to Panel
question No. 74, paras. 18 and 22.
235 United States' response to Panel question No. 28(a), paras. 43-44.
236 United States' responses to Panel question No. 28(a), para. 45; and No. 75(a), para. 27.
237 In its third-party statement, the European Union takes the view that while, in principle, the USITC
was required to consider data pertaining to producers of belt-driven washers in its injury analysis (having
included them in the scope of the domestic industry), if an investigating authority does not have reliable data
from the producer of such washers, it can comply with the obligations of Articles 4.1(a) and 3.1 if the available
data are sufficiently representative of the domestic industry. According to the European Union, the
investigating authority would need to provide a reasoned and adequate explanation why it did not consider
data relating to those producers, and the Panel would have to consider whether the data without belt-driven
washers were sufficiently representative to give a true picture of the domestic industry.
(European Union's third-party response to Panel question No. 4, paras. 17-18).
238 We note that in US – Lamb, the Appellate Body considered that, while the text of Article 4.2(a) (that
investigating authorities evaluate all relevant factors of an objective and quantifiable nature) refers to the
factors to be evaluated and not the underlying data, those factors can only be of an "objective and quantifiable

7.129. In our view, when an investigating authority finds data provided by one of the
domestic producers with respect to one or more of the factors having a bearing on the situation of
the domestic industry is unreliable, the investigating authority may well make its evaluation based
on the available facts, which would include replacing the unreliable information with other verifiable
information available. The investigation is not paralysed simply because certain information proves
unreliable. However, as part of its obligation to provide reasoned conclusions on pertinent issues of
law and fact (including the evaluation of the factors set out in Article 4.2(a)), the investigating
authority would be required to explain in its published report (a) the reason why the data in relation
to those factors was considered unreliable (and thus unusable); (b) how the investigating authority
conducted its evaluation under Article 4.2(a) despite the unreliability of the data (for instance,
whether it replaced the missing information, and if yes, with what); and (c) whether the available
data based on which the investigating authority made its examination under Article 4.2(a) was
sufficiently representative (and thus provided the investigating authority with a sufficient factual
basis) to draw reasoned conclusions concerning the situation of the "domestic industry". In reviewing
Korea's claim, consistent with our standard of review, we examine whether the USITC provided
reasoned and adequate explanations with respect to the parameters set out in points (a)-(c) above.
7.130. We note that the USITC stated that it excluded Alliance's financial data because Alliance "was
unable to provide usable financial results". 239 The United States submits that the USITC provided
the specific reasons why it was unable to use Alliance's financial data in footnote 12 to page III-8 of
the USITC report.240 However, we note that those reasons are redacted from the USITC report, and
that the United States has failed to provide an unredacted version.241 The United States also asserts
that the USITC was not able to ensure that Alliance's data were reliable because Alliance submitted
its questionnaire response late in the investigation. 242 However, the United States does not
substantiate its factual assertions by pointing to relevant parts of the USITC report and thus does
not show the USITC's reasoning for excluding Alliance's financial data from its profitability analysis.
Therefore, we find that the USITC failed to provide a reasoned and adequate explanation for not
using Alliance's financial data in evaluating the profitability of the domestic industry. Having reached
this finding, we do not consider it necessary to evaluate whether the USITC based its findings on
data that were representative of the "domestic industry".
7.131. Based on the foregoing, we find that the USITC acted inconsistently with Article s 4.2(a)
and 3.1 of the Agreement on Safeguards by excluding the profit and loss data of the producer of
belt-driven washers from the profit data used to determine the profitability of the domestic industry.
Having reached this finding, we do not consider it necessary to make additional findings under
Articles 2.1, 4.1 (a), and 4.2(c) of the Agreement on Safeguards.

nature" if they allow a determination to be made on the basis of "objective evidence", as required by
Article 4.2(b). Therefore, per the Appellate Body, the words "factors of an objective and quantifiable nature"
imply an evaluation of objective data that enables the measurement and quantification of those factors.
(Appellate Body Report, US – Lamb, para. 130).
239 United States' response to Panel question No. 75(b), para. 29; USITC report, (Exhibit KOR-1), fn 205
to p. 33.
240 United States' response to Panel question No. 75(b), para. 30; USITC report, (Exhibit KOR-1), fn 12
to p. III-8.
241 We note in this regard that we specifically asked the United States to "provide the unredacted
version of the USITC's report where the USITC provides all of its reasons regarding why it did not use the
financial data in this regard, including that set out in footnote 205 of page 33 of the USITC's report,
(Exhibit KOR-1)". (Panel question No. 27). We also asked the United States to point to the relevant parts of the
USITC report where the USITC found Alliance's financial to be flawed and therefore unusable. (Panel question
No. 75(a)). However, the United States declined to provide the requested information, on the ground that the
specific reasons why the USITC found this data to be unusable are confidential. The United States maintains
that disclosing the specific reasons is not permitted under its domestic law. (United States' response to
Panel question No. 75(b), para. 30). We recall that we adopted rules for protection of BCI in these
proceedings. We also asked the United States what additional procedures, beyond those we adopted, it
considered necessary to provide the information we sought, while safeguarding the confidentiality of that
information. (Panel question Nos. 71 and 75(b)). The United States did not propose any such alternative
procedures. (United States' response to Panel question No. 71, para. 10).
242 United States' response to Panel question No. 75(a), paras. 22-26.

7.5.5 The USITC's alleged failure to undertake an objective examination of the significant
overall impairment of the domestic industry and its decision to base its serious injury
determination on declining profitability alone
7.132. Korea contends that the USITC acted inconsistently with Articles 3.1, 4.1(a), 4.2(a), and
4.2(c) because it failed to undertake an objective examination of the significant overall impairment
of the domestic industry and based its serious injury determination on declining profitability alone.243
According to Korea, the USITC determined that the domestic industry had suffered serious injury
based on only one of the eight factors listed in Article 4.2(a), namely profits and losses. 244 Korea
does not exclude the possibility that there could be situat ions where one injury factor trends
negatively and supports a determination of serious injury. 245 However, Korea contends that in the
underlying investigation the USITC accorded decisive importance to the factor profits and losses and
failed to provide any reasoned and adequate explanation of why, despite the overwhelming majority
of factors trending positively, the position of the domestic industry was nonetheless impaired as a
whole.246
7.133. The United States rejects Korea's contention that the USITC based its serious injury finding
on only one negatively trending factor, i.e. profits and losses. Rather, the United States maintains
that the USITC found that six factors exhibited trends indicative of injury, including three of the
eight factors listed in Article 4.2(a).247 The United States also argues that the USITC explained how
its evaluation of all relevant factors supported its determination, including why the relevant factors
showing seemingly positive or neutral trends did not detract from its determination t hat the
domestic industry had suffered serious injury.248
7.134. We recall that at paragraph 7.131 above, we have found that the USITC 's exclusion of the
financial data of t he producers of belt -driven washers when evaluating the profit and loss of the
domestic industry was inconsistent with Article 4.2(a). Consequently, in making its overall finding
of serious injury, the USITC relied on an intermediate finding (of profitability), which was inconsistent
with Article 4.2(a). We therefore do not consider it necessary to address Korea 's claim that the
USITC failed to undertake an objective examination of the significant overall impairment of the
domestic industry.
7.135. Based on the fo regoing, we do not find it necessary to evaluate Korea 's claim under
Article 4.2(a) that the USITC failed to undertake an objective examination of the significant overall
impairment of the domestic industry and based its overall finding of serious injury on one factor
alone. We also do not address Korea's claim under Articles 3.1, 4.1(a), and 4.2(c ) for the same
reasons.
7.5.6 Conclusion
7.136. With respect to Korea 's claims under Articles 2.1, 3.1, 4.1(a), 4.2(a), and 4.2(c) of
the Agreement on Safeguards chall enging the USITC 's findings on serious injury suffered by the
domestic industry:
a. We find that the USITC acted inconsistently with Articles 4.2(a) and 3.1 of
the Agreement on Safeguards by excluding the profit and loss data of the producer of
belt-driven wa shers from the profit data used to determine the profitability of the
domestic industry. We do not find it necessary to separately address whether the USITC
also acted inconsistently with Articles 2.1, 4.1(a), and 4.2(c) for these same reasons.

243 Korea's first written submission, paras. 270 and 306.
244 Korea's first written submission, paras. 270 and 273.
245 Korea's response to Panel question No. 22, para. 117.
246 Korea's first written submission, para. 273.
247 The United States argues that the following six factors were indicative of injury: (a) import volume
doubled during the POI; (b) the penetration of subject imports in the US market significantly increased; (c) the
financial performance of the domestic industry "precipitously" declined; (d) the domestic industry's sales prices
declined; (e) the cost of goods sold (COGS) to net sales ratio increased; and (f) the capital and R&D
expenditures of the domestic industry declined. (United States' first written submission, para. 247 (referring to
USITC report, (Exhibit KOR-1), pp. 33, 36-37, 39, 42-43, and V-28)).
248 United States' first written submission, paras. 237, 241-243, 246, and 249-251.

b. We reject, for the reasons set out in paragraph 7.119 above, Korea 's claims under
Article 4.2(a), as well as Articles 3.1, 4.1(a), and 4.2(c) of the Agreement on Safeguards
that the USITC allegedly failed to objectively examine "profit and loss".
c. We reject Korea 's claims under Article 4.2(a) of the Agreement on Safeguards that the
USITC allegedly failed to objectively examine the share of the domestic market taken by
increased imports.
d. We do not find it necessary to address Korea 's claims under Article 4.2(a), as well as
Articles 3.1, 4.1(a), and 4.2(c) of the Agreement on Safeguards that the USITC failed to
evaluate all injury factors set out in Article 4.2(a).
e. We do not find it necessary to address Korea 's claims under Article 4.2(a), as well as
Articles 2.1, 3.1, 4.1(a), and 4.2(c) of the Agreement on Safeguards that are
consequential to Korea 's claims challenging the USITC 's definition of the
domestic industry.
f. We do not find it necessary to address Korea's claims under Article 4.2(a), as well as
Articles 3.1, 4.1(a), and 4.2(c) of the Agreement on Safeguards that the USITC failed to
undertake an objective examination of the significant overall impairment of the
domestic industry and based its overall finding of serious injury on one factor alone.
7.6 The USITC's causation determination
7.137. In the underlying i nvestigation the USITC conducted a two-stage analysis as part of its
causation determination. 249 Under the first stage, the USITC assessed whether there was a
causal link between the increased imports and the serious injury suffered by the
domestic industry.250 Under the second stage, the USITC examined whether factors other than
increased imports might have explained that serious injury.251 Korea makes arguments challenging
both stages of the USITC's determination under Articles 2.1, 3.1, 4.2( b), and 4.2( c) of
the Agreement on Safeguards . In addition, Korea makes consequential claims contending that
because the USITC's analysis of increased imports and its definition of the domestic industry were
inconsistent with the Agreement on Safeguards, the USITC's causation determination, which relied
on these two separate analyses, was also inconsistent with the Agreement on Safeguards.252
7.138. We review Korea's causation claims under Article 4.2(b) of the Agreement on Safeguards.253
We note in this regard that Ar ticle 4.2(a) of the Agreement on Safeguards provides that in an
investigation to determine whether increased imports have caused or are threatening to cause
serious injury to a domestic industry under the terms of this agreement, investigating authorities
shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the
situation of that industry, including in particular those set out in Article 4.2(a). Article 4.2(b), in turn,
provides that the determination referred to in Article 4.2(a) shall not be made unless the
investigation demonstrates, on the basis of objective evidence, the existence of the causal link
between increased imports of the product concerned and serious injury or threat thereof.
Article 4.2(b) also states that when factors other than increased imports are causing injury to the
domestic industry at the same time, such injury shall not be attributed to increased imports. To
ensure that injury caused by such factors is not attributed to increased imports, investigating
authorities conduct what is commonly referred to as the non-attribution analysis.

249 Korea's first written submission, paras. 356-357; United States' first written submission,
paras. 275-276.
250 USITC report, (Exhibit KOR-1), pp. 38-44. United States' first written submission, para. 275;
Korea's first written submission, paras. 352-356.
251 USITC report, (Exhibit KOR-1), pp. 45-51. United States' first written submission, para. 276;
Korea's first written submission, paras. 357-361.
252 Korea's first written submission, paras. 455-461.
253 In reviewing Korea's claims with respect to causation, we examine whether the USITC acted
inconsistently with Articles 3.1 and 4.2(b) of the Agreement on Safeguards. If we find a violation under these
provisions, we will not separately address Korea's claims under Articles 2.1 and 4.2(c) because Korea has not
presented a separate factual basis for these claims. For the same reasons, if we find no violation under
Articles 3.1 and 4.2(b), we will reject the claims under Articles 2.1 and 4.2(c).

7.139. In reviewing Korea's claims, we shall examine whether the USITC examined all pertinent
facts and provided a reasoned and adequate explana tion of how those facts supported its
determination. If we find that the USITC did not do so, we will find that the USITC acted
inconsistently with Article 4.2(b). However, in making that determination we will not review the
evidence de novo, nor substitute our judgement for that of the USITC.
7.140. In section 7.6.1, we discuss the first stage of the USITC's causation determination. In
section 7.6.2, we discuss the second stage of the USITC's causation determination.
7.6.1 First stage of the USITC's causation determination
7.141. Under the first stage, the USITC concluded that subject imports caused serious injury to the
domestic industry. In reaching this conclusion, the USITC conducted a coincidence in trends analysis,
wherein it noted the correspondence between the increased volume of imports and the decreasing
performance of the domestic industry .254 The USITC also conducted a price analysis and assessed
the competitive relation between subject imports and domestically produced goods. Korea
challenges the following aspects of the USITC's determination under the first stage:
a. the USITC's finding on price effects, which Korea considers to be flawed and incomplete;
b. the USITC's findings on coincidence in trends between imports and injury factors, which,
for the reasons set out below, we find are interlinked with the USITC's price analysis; and
c. the USITC's failure to address certain conditions of competition in the domestic market,
which per Korea negated the USITC's finding on causation.
7.142. The United States rejects Korea's arguments in this regard.
7.6.1.1 The USITC's price effects analysis
7.143. In the underlying investigation, the USITC made the following finding regarding the adverse
price effects of subject imports255:
We find that the significant and growing quantity of low‐priced imports depressed and
suppressed prices for the domestic like product. Given the moderate to high degree of
substitutability between subject imports and the domestic like product, and the
importance of price to purchasing decisions, the pervasively lower prices on imported
LRWs would have forced domestic producers to either r educe their own prices or lose
retailer floor spots and sales. Between the first and last quarters for which pricing data
are available, the domestic industry's prices declined *** percent on sales of product 1,
*** percent in sales of product 2, *** perce nt on sales of product 3, *** percent on
sales of product 4, *** percent on sales of product 5, and *** percent on sales of
product 6. Demand trends cannot explain these price declines because apparent U.S.
consumption of LRWs increased throughout the period of investigation, by *** percent
between 2012 and 2016 and another *** percent between the interim periods. Nor can
trends in the domestic industry 's production costs explain declining domestic like
product prices. The industry's average unit COGS and i ts ratio of COGS to net sales
generally increased during the period of investigation, placing the industry in a cost ‐
price squeeze. Given this, we find that the large and increasing volume of low‐priced
imported LRWs, at prices that undercut domestic like product prices to a significant
degree, depressed and suppressed prices for the domestic like product during the period
of investigation.
Our finding that imported LRWs depressed and suppressed domestic like product prices
is also supported by evidence that low‐priced import competition forced Whirlpool to cut

254 United States' first written submission, para. 275 (referring to USITC report, (Exhibit KOR-1),
pp. 38-39); Korea's first written submission, para. 352.
255 USITC report, (Exhibit KOR-1), pp. 42-43. (fns omitted; emphasis added; redacted original)

prices on *** sales to *** in 2014 and to retract announced price increases in 201 2
and 2014, despite strong demand growth and rising costs.
7.144. The USITC relied on these findings to conclude as follows256:
We find that imports are a substantial cause of serious injury to the domestic industry.
The domestic industry 's operating and net losse s increased during the period of
investigation as a direct consequence of the declining prices on sales of domestically
produced LRWs. Between the first and last quarters for which data are available, the
domestic industry 's average prices on sales of all six pricing products declined by
between *** and *** percent, or a weighted -average of *** percent. These price
declines, coupled with increasing costs, caused the domestic industry 's ratio of cost of
goods sold ("COGS") to net sales to increase from *** percent in 2012 to *** percent
in 2016, placing the industry in a cost price squeeze. Given strong demand growth,
rising costs, and the competitiveness of the domestic industry's LRWs, we find that the
only explanation for the domestic industry's declining prices and increasing COGS to net
sales ratio is the significant increase in low priced imports of LRWs during the period of
investigation.
…
In sum, despite strong demand growth and the competitiveness of domestically
produced LRWs, the domestic industry experienced increasing operating and net losses
during the period of investigation as its sales prices declined while its costs generally
increased. The record shows that the domestic industry's declining sales prices during
the period of investigation res ulted from low ‐priced import competition, as increasing
quantities of low‐priced imports depressed and suppressed prices for the domestic like
product. We therefore conclude that imports were a substantial cause of serious injury
to the domestic industry.
7.145. We note in this regard that the price data that the USITC used to make its finding on
price suppression and depression were based on six product categories that covered various types
of LRWs, but not agitator-based TL LRWs, which accounted for half of domestic sales but relatively
few imports. 257 The United States confirms in this regard that the USITC did not ask
domestic producers to provide price data on agitator-based TL LRWs.258 In the section of its report
where the USITC exami ned the degree of substitutability between imports and domestically
produced LRWs, the USITC acknowledged that agitator -based TL LRWs accounted for half of
domestic shipments and few import shipments , but stated that differences in the product mix of
imports did not attenuate import competition to a significant degree. 259 In particular, the
USITC stated as follows260:
We also find that imported LRWs competed with domestically produced LRWs in all
segments of the U.S. market. In making this finding, we recogni ze that FL LRWs
accounted for a higher proportion of import shipments (*** percent in 2016 ) than
domestic industry shipments (*** percent in 2016 ) and that agitator‐based TL LRWs
accounted for around half of domestic industry shipments (*** percent in 2016 ) but
few import shipments (*** percent in 2016). These differences in product mix did not
attenuate import competition to a significant degree for several reasons. First, imports
of FL LRWs and impeller‐based TL LRWs , which accounted for nearly all import s,
competed directly with domestically produced FL LRWs and impeller‐based LRWs ,
respectively, which accounted for around half of domestic industry shipments in 2016.

256 USITC report, (Exhibit KOR-1), pp. 38 and 44. (redacted original)
257 United States' response to Panel question No. 32, para. 49. We note that in the underlying
investigation Korean respondents requested the USITC to collect model-specific price information, and, if the
USITC were to reject that request, to make two changes in the product category definition. First, to revise the
definition of two of the product categories that were defined on the basis of "impeller or infusors" TL LRWs to
"impeller" TL LRWs. Second, to collect price data for at least one TL LRW with agitator. (Korea's second written
submission, para. 256 (referring to LG's comments on draft questionnaires (12 June 2017), (Exhibit KOR-35),
pp. 24-25)).
258 United States' response to Panel question No. 76(e), para. 45.
259 USITC report, (Exhibit KOR-1), p. 32.
260 USITC report, (Exhibit KOR-1), p. 32. (redacted original)

Imports of FL LRWs also competed with domestically produced TL LRWs to the extent
that consumers cross ‐shopped FL and TL LRW models, and all responding purchasers
reported that consumers are sometimes or frequently willing to switch between TL and
FL LRWs based on relative pricing. Finally, pricing product data show that imported
LRWs competed at nearly all price points in the U.S. market, including those of
domestically produced agitator‐based TL LRWs.
7.146. Korea challenges under Article 4.2(b) the USITC 's price effects findings on which the
USITC based its causation determination. In this regard, Korea makes arguments challenging the
USITC's findings regarding the increase in costs incurred by the domestic industry , as well as the
adverse effect of subject imports on domestic prices. In addressing these arguments, we note that
the Agreement on Safeguards does not specifically require a price analysis. However, where, as in
the case of the underlying investigation, the investigating authority 's finding on causation is based
on a finding of adverse price effects, we must examine , as part of our review of the causation
determination, whether the investigating authority examined all pertinent facts, and provided a
reasoned and adequate explanation as to how those fac ts supported its finding of
adverse price effects.
7.6.1.1.1 The USITC's findings regarding the costs incurred by the domestic industry
7.147. In the underlying investigation, as we noted above, the USITC found that the
domestic industry's average cost of goods sold (COGS) and its ratio of COGS to net sales generally
increased during the POI, placing the industry in a cost-price squeeze.261 Regarding average COGS,
the USITC noted that the average COGS increased between 2012 -2013 and 2013 -2014 before
declining in 2015 and 2016 to a level certain percentage higher than in 2012. 262 The USITC noted
that this average COGS was higher in interim 2017 than in interim 2016. 263 The USITC found that
the ratio of COGS to net sales increased steadily from 2012-2013, 2013-2014, 2015-2016, and again
from interim 2016 to interim 2017.264
7.148. Korea contends that the USITC's findings that "costs generally increased", and that the ratio
of COGS to net sales was increasing over the POI, were either not supported by, or actually
contradicted by, the record.265 In particular, Korea states that rising costs of the domestic industry
and the alleged cost-price squeeze was not supported by the facts on the record.266 In support of its
statement, Korea notes the following:
a. costs were actually declining in 2015 and 2016267;
b. average unit COGS declined in 2014-2015 and 2015-2016268; and
c. the domestic industry's raw material costs were at their lowest at the end of the POI,
and there was no overall substantial change in the cost share of essential inputs during
the examined period.269
7.149. In response, the United States clarified that the COGS -to-net-sales ratio was increasing in
every year of the 2012-2016 period as well as in interim 2017 (compared to interim 2016). 270 The
United States acknowledged that costs were decre asing in 2015 and 2016, but noted that the
USITC found that the average unit COGS remained higher in 2016 than in 2012, and increased in
most of the periods examined by the USITC. 271 The United States also explained that the fact that
raw material costs did not increase as a share of total COGS does not contradict the USITC's finding
that raw material costs increased on a per unit basis.272 Instead, per the United States, it only shows

261 USITC report, (Exhibit KOR-1), p. 43.
262 USITC report, (Exhibit KOR-1), fn 264.
263 USITC report, (Exhibit KOR-1), fn 264.
264 USITC report, (Exhibit KOR-1), fn 264.
265 Korea's first written submission, paras. 377-378; response to Panel question No. 31, para. 182.
266 Korea's first written submission, para. 378.
267 Korea's first written submission, para. 378.
268 Korea's first written submission, para. 378.
269 Korea's first written submission, para. 378.
270 United States' first written submission, para. 290.
271 United States' first written submission, para. 288.
272 United States' first written submission, para. 289.

that the increase in raw material costs coincided with an increase in other costs making up the
total COGS.273
7.150. We note that the degree of cost -price squeeze (or the ratio of COGS to net sales) may
increase even in scenarios (a) where the cost goes down, su ch as when the decrease in costs is
accompanied by a more significant decrease in price; or (b) where the price goes up, such as where
the increase in price is accompanied by a more significant increase in costs. Thus, a decline in costs
does not necessarily exclude the possibility of a cost -price squeeze. Moreover, the cost of raw
materials as a percentage of overall costs of goods sold may remain constant even when the costs
of raw materials increase, such as when the raw material costs increase, but increase as much as,
or less than, increase in other elements that make up the overall COGS.
7.151. Therefore, to clarify Korea's position on this matter, we asked Korea whether it disputed the
USITC's finding that the domestic industry's ratio of COGS to net sales was increasing over the POI
(Panel question No. 31). In its response, Korea repeated its arguments on why a finding of cost-price
squeeze was contradicted by (a) decline in costs and COGS in 2015 and 2016 , and (b) cost of raw
materials an d essential inputs at the end of the POI. 274 Korea did not engage with the
United States' arguments on why these other findings did not contradict a finding on cost -price
squeeze. Therefore, taking into account the explanations provided by the United States set out in
paragraph 7.149 above and the arguments made by Korea, we reject Korea's argument that the
USITC's finding that the domestic industry's ratio of COGS to net sales increased over the POI was
not supported by the record evidence.
7.6.1.1.2 The USITC's finding regarding the depressive and suppressive effects of
imports on prices of domestically produced goods
7.152. Korea's arguments challenging the USITC 's finding regarding t he depressive and
suppressive effect of subject imports on domestic like product prices raise issues regarding the
six product categories that the USITC used to compare the prices of subject imports and the
domestic like product, as well as the asserted exclusion of agitator -based TL LRWs from the
USITC's price analysis.
Issues raised by Korea regarding the six product categories

7.153. Korea raises the following issues regarding the six product categories used by the USITC275:
a. The six product categories included multiple models with different price ranges.
b. The price data were unrepresentative because they were adopted from an earlier
anti-dumping investigation on LRWs from China and not updated:
i. Many large-capacity options were not included in the LRW price data.
ii. Product category 1 covered models that were no longer being sold by the
domestic industry during the end of the POI, and neither were they among
LG's top-volume FL LRWs.
c. The USITC did not provide information on how it made its price comparisons, including
whether it made adjustments for any differences between products in the same product
category.
7.154. With regard to the six product categor ies adopted by the USITC, which according to Korea
included multiple models with a range of features and consequent wide variations in price in any
specific quarter, Korea submits that the price data was too broad and that the USITC should have
required price data for each model within each product category.276 The United States submits that
by obtaining sales prices on six strictly defined pricing products, the USITC ensured that it compared

273 United States' first written submission, para. 289.
274 Korea's response to Panel question No. 31, paras. 180-182; second written submission,
paras. 240-241.
275 Korea's first written submission, paras. 399-404.
276 Korea's first written submission, para. 399.

prices of domestic and imported LRWs possessing similar capacities and the same configuration,
lid material, and colour.277
7.155. We note that the USITC specifically considered and rejected the
Korean respondents' argument on this point as follows278:
We are unpersuaded by respondents' argument that the pricing product definitions are
overbroad because each definition encompasses many different models with different
features at different points in their life cycles, resulting in pricing data that is all egedly
unrepresentative of the model-specific prices considered by purchasers. … In defining
pricing products, the Commission must strike a balance between product definitions
that are narrow enough to permit apples-to-apples comparisons of directly competitive
products but broad enough to yield reasonable coverage of domestic producer and
importer shipments. Even if the factors cited by respondents served to reduce somewhat
the similarity of the domestically produced and subject imported LRWs on which pricing
data were reported, they also increased pricing product coverage without reducing the
similarity of the compared LRWs to an unacceptable level.
7.156. Korea recalls the arguments made by the Korean respondents in the USITC's investigation
regarding the use of broad comparison baskets (reflected in the six product categories). However,
Korea does not adequately engage with the reasons that the USITC gave for rejecting those
arguments. In particular, Korea does not show (as it would be expected to as the complainant) why
the USITC's reasoning set out above was flawed. Because Korea fails to do so, it h as failed to
establish a basis for this aspect of its claim.279
7.157. With regard to the representativeness of the product categories, Korea contends that these
product categories were adopted from an earlier anti-dumping investigation on LRWs from China,
and not updated to reflect the scope of products in the marketplace for the safeguard investigation.
Korea contends in particular that (a) product category 1 comprises a type of FL LRWs that was no
longer offered by Whirlpool or GE, and were not among LG's top volume FL LRWs; and (b) many
popular large-capacity options were not included in the price data.280 The United States submits that
the USITC collected sufficient price data from domestic producers and importers in nine quarters of
the POI, and that these data showed subject imports underselling domestic goods in seven of the
nine comparisons.281 Regarding LRWs with large -capacity options, the United States submits that
the USITC addressed in footnote 255 of its report the respondents' argument that many
large-capacity options were not included in the LRW price data. 282 The United States also notes in
this regard that the appropriate time for the respondents to propose product categories based on
large capacities would have been in their comments on draft question naires.283 However, the
United States notes that the respondents did not do so.284
7.158. To the extent Korea submits that models covered in product category 1 were no longer being
sold by domestic industry by the end of the POI, Korea does not demonstrate how that distorted the
USITC's price effects finding. We note that while the United States does not dispute that price data
was not necessarily collected for models covered in this product category for the last quarter of the
POI, the United States submits (and Ko rea does not dispute ) that the USITC collected sufficient

277 United States' first written submission, para. 304.
278 USITC report, (Exhibit KOR-1), fn 255.
279 In addition, in the absence of any specific rules in the Agreement on Safeguards determining how an
investigating authority should make price comparisons, investigating authorities have a certain degree of
discretion in determining how they make such price comparisons, provided such comparisons provide a
sufficient factual basis to make objective findings. Nothing in the Agreement on Safeguards prohibits an
investigating authority from making price comparisons based on product categories that group products based
on characteristics such as capacity or configuration, or requires price comparisons on a more granular,
model-specific basis. While an investigating authority is free to make price comparisons on such a
model-specific basis, absent any showing that the methodology that the USITC chose (i.e. the adoption of the
six product categories) did not allow the USITC to make a proper determination of price effects with respect to
the products covered by those product categories, Korea has not established that the USITC acted
inconsistently with Article 4.2(b) or any other provision of the Agreement on Safeguards.
280 Korea's first written submission, para. 400.
281 United States' response to Panel question No. 37(a), para. 68.
282 United States' response to Panel question No. 37(b), para. 69.
283 United States' response to Panel question No. 37(b), paras. 70-71.
284 United States' response to Panel question No. 37(b), paras. 70-71.

price data for this category, which allowed it to make price comparisons in nine quarters of the
POI.285 Having defined the PUC and the domestic like product to include models of LRWs covered in
product category 1, in our view the USITC was entitled to make its price comparisons based on the
price data available for this product category.286
7.159. With regard to popular large-capacity options allegedly not being included in the price data,
Korea has not expl ained how the non -inclusion of such large -capacity options distorted the
price effects finding, or otherwise made the price data before the USITC unrepresentative. In this
regard, we also note the United States' submission that the Korean respondents did not propose any
additional product category to the USITC that corresponded to models with larger capacity options.
The record from the underlying investigation supports the United States' explanation. In particular,
the record shows that LG (supported by Sa msung) strongly recommended that the USITC collect
data on a model-specific basis, and submitted that if the USITC were to reject that recommendation
it should make two changes to the pricing product definition (with none of the two changes relating
to lar ger capacity options). 287 To the extent that Korea's arguments here challenge the alleged
failure to consider models with larger capacity (as opposed to challenging the USITC's decision to
not make model-specific comparisons), we consider that the Korean respondents' failure during the
USITC's investigation to propose a pricing category with larger capacity further undermines
Korea's arguments in this dispute.
7.160. Finally, we turn to Korea's argument that the USITC did not provide information on how it
made its price comparisons, including whether it made any adjustments for any differences between
products in the same pricing product category.288 In this regard, we note that the USITC explained
in the underlying investigation that it made its comparisons across six pricing product categories.
We are not persuaded that this explanation was not reasoned and adequate in light of the record
evidence. We note that Korea states that the evid ence on the USITC's record included "extensive
and reliable information" demonstrating that sales prices of imported washers were not frequently
or consistently lower than the sales prices of US produced washers.289 But in making this statement,
Korea does not cite any evidence on the USITC's record. Instead, Korea gives an "example" of the
pricing analysis in the Ashenfelter report that Korean respondents filed before the USITC, which per
Korea demonstrated the inadequacy of relying on the six pricing product categories for price trends
or comparisons.290 In particular, in its submission, Korea cites pages 87-91 of Exhibit KOR-11, which
refer to the Ashenfelter report, but does not explain what exactly in those pages supports its
argument.291 We note that as a complainant it is incumbent on Korea to show how relevant parts of
the record of the USITC's investigation support its arguments. It is not our task to review any given
exhibit, identify what could be potentially relevant to the complainant's claim, and then make the
case for the complainant by assessing whether the potentially relevant parts in the exhibit support
its claim. We therefore reject Korea's arguments in this regard.
Representativeness of the USITC's price analysis – treatment of agitator-based TL LRWs

7.161. Korea contends that the USITC's price analysis was not representative of the price effects of
imports in the US market as a whole. Korea asserts that due to the exclusion from the
price comparison analysis of agitator -based TL LRWs which, in addition to constituting half of
domestic sales, were sold at lower price points than other models, the USITC's price analysis did not
reflect the actual picture of the US LRWs market.292 Korea asserts that having found agitator-based
TL LRWs to be like pro ducts, which competed with imported LRWs, the USITC erred in excluding
such type of TL LRWs from the price analysis.293 Therefore, per Korea, because the USITC excluded
agitator-based TL LRWs from its price comparison analysis, its findings regarding the depressive and

285 United States' response to Panel question No. 37(a), para. 68.
286 Indeed, the alternative would have been to simply ignore any imports or domestic sales of this
product type and forego collection of price data with respect to this product category.
287 LG's comments on draft questionnaires (12 June 2017), (Exhibit KOR-35), pp. 19 and 24.
288 Korea's first written submission, paras. 402-403.
289 Korea's first written submission, para. 403.
290 Korea's first written submission, para. 403.
291 Korea's first written submission, para. 403. See also Korea's second written submission, para. 245.
292 Korea's first written submission, para. 396; response to Panel question No. 77, para. 85.
293 Korea's response to Panel question No. 33, para. 184; second written submission, para. 238.

suppressive effect of subject imports on domestic like product prices were not reasoned or
adequate.294
7.162. The United States contends that the USITC based its analysis regarding the effects of subject
imports on representative price data. 295 In par ticular, the United States contends that the
non-inclusion of agitator -based TL LRWs did not render the USITC 's price data unrepresentative
given that half of domestic shipments and nearly all of subject imports comprised LRWs other than
agitator-based TL LRWs.296 The United States also asserts that as part of its findings on price effects,
the USITC reasonably concluded, relying on a wide array of objective evidence, that subject imports
competed with domestically produced agitator-based TL LRWs, and that they adversely affected the
sales of agitator-based TL LRWs.297
7.163. The question before us is whether the USITC provided a reasoned and adequate explanation
in support of its finding that subject imports depressed and suppressed prices of the domestic like
product as a whole (including agitator-based TL LRWs).
7.164. We note that it remains undisputed that half of all sales made by the domestic industry were
those of agitator-based TL LRWs, while the price analysis based on the six product categories covered
other types of LRWs . Given that the agitator-based models accounted for one -half of domestic
shipments and virtually no imports, we consider that the USITC was required to analyse the
price effects of imports on this part of the US market and the domestic like product. In this regard,
we note the United States' submission that imported LRWs were sold at nearly all price points in the
US market "including the lower price points covering most agitator -based TL LRWs", meaning that
agitator-based TL LRWs competed in the "lower -priced" segment of the market. 298 Given the fact
that agitator-based TL LRWs accounted for half of domestic sales but virtually no imports, and that
the domestic models of this type competed at the lower end of the price spectrum for LRWs in the
US market, we consider the other evidence that the USITC relied on to support its findings of adverse
price effects with respect to domestically produced agitator -based TL LRWs. In this regard, we
consider (a) what constituted the "wide array of evidence" on which the USITC based its conclusion,
as part of its price effects analysis, that subject imports competed with domestically produced
agitator-based TL LRWs; and (b) what was the nature of the analysis conducted by the USITC of the
effects of such competition on the domestic industry. Answers to these questions will be informative
as to the representativeness of the USITC's price analysis concerning the depressive and suppressive
effect of imported LRWs on the domestic industry as a whole, including agitator-based TL LRWs.
7.165. With respect to the "wide array" of evidence that, per the United States, the USITC relied
on to conclude that subject imports competed with domestically produced agitator-based TL LRWs,
and adversely affected the sales of agitator-based TL LRWs, we do not find in the USITC report, for
the reasons set out below, a reasoned and adequate explanation of how such evidence supported
the USITC's finding that subject imports depressed and the suppressed the prices of agitator-based
TL LRWs.
7.166. We note that the "wide array of evidence" the United States refers to are evidence contained
in footnotes 201 and 202 of the USITC report. The USITC cited this evidence to support its findings,
set out in paragraph 7.145 above, that "[i]mports of FL LRWs [] competed with domestically
produced TL LRWs to the extent that consumers cross ‐shopped FL and TL LRW models, and all
responding purchasers reported that consumers are sometimes or frequ ently willing to switch
between TL and FL LRWs based on relative pricing", and that "pricing product data show that
imported LRWs competed at nearly all price points in the U.S. market, including those of domestically
produced agitator ‐based TL LRWs". However, we do not see an adequate explanation in the
USITC report as to how such findings or evidence could have supported the USITC 's finding
regarding the depressive and suppressive effect of subject imports on prices of agitator -based

294 See e.g. Korea's first written submission, paras. 376, 381, and 394-396; response to Panel question
No. 77, para. 85.
295 United States' second written submission, para. 100.
296 United States' first written submission, para. 301.
297 United States' second written submission, paras. 102-104 (referring to USITC report,
(Exhibit KOR-1), p. 32 and fns 201-202).
298 United States' first written submission, para. 81.

TL LRWs.299 Indeed, we specifically asked the United States whether the USITC's findings regarding
the depression and suppression of domestic like product prices included agitator -based TL LRWs
(and if so, to point us to the evidence on the USITC 's record that showed that low-priced imports
depressed and suppressed prices of domestically produced agitator -based TL LRWs). The
United States said "no".300
7.167. In addition, to the extent the types of evidence set out in these footnotes refer to the
price data that the USITC collected in the anti -dumping investigation on LRWs from China , we do
not consider that this price data provided the USITC with a proper basis in the context of the
safeguard investigation to find t hat imported LRWs suppressed or depressed the prices of
agitator-based TL LRWs.301 First, the POI in LRWs from China ended several months before the end
of the POI in the underlying safeguard investigation. Second, while LRWs from China was focused
on injury caused by imports from one source, this was not the case in the underlying safeguard
investigation. Data from LRWs from China thus would not have been informative on the potential
price effects of the much broader category of imports covered by the underlying safeguard
investigation. Nor do we find other evidence cited in these footnotes that could have supported the
USITC's finding regarding the depressive and suppressive effect of subject imports on agitator-based
TL LRWs.302

299 For instance, in finding that subject imports depressed and suppressed prices of domestic like
products, the USITC stated that "given the moderate to high degree of substitutability between subject imports
and the domestic like product, and the importance of price to purchasing decisions, the pervasively lower
prices on imported LRWs would have forced domestic producers to either reduce their own prices or lose
retailer floor spots and sales". (USITC report, (Exhibit KOR-1), pp. 42-43). To the extent the USITC's finding of
price depression and suppression was based on pervasively lower prices of subject imports, we note that the
price data that showed "imported LRWs were priced lower than domestically produced LRWs in most quarterly
comparisons" did not include agitator-based TL LRWs, and thus, the USITC could not have concluded based on
that evidence that prices of subject imports were pervasively lower than agitator-based TL LRWs.
(USITC report, (Exhibit KOR-1), p. 42; United States' comments on Korea's response to Panel question
No. 76(a), para. 25). In addition, while the USITC stated that its finding regarding the depressive and
suppressive effect of subject imports was "also supported" by evidence that low-priced import competition
forced Whirlpool to cut prices, we do not see from the USITC report how this finding pertained to
agitator-based TL LRWs. In particular, we recall, as set out above, that when we specifically asked the
United States whether the USITC's findings regarding the depression and suppression of domestic like product
prices included agitator-based TL LRWs, the United States said no. (United States' response to Panel question
No. 35(a), para. 59).
300 United States' response to Panel question No. 35(a), para. 59.
301 United States' responses to Panel question No. 76(b), para. 32; and No. 34(a), paras. 51-56. In
particular, the United States notes that in LRWs from China, the USITC found that subject imports of pricing
product 9, an impeller-based TL LRW, undersold domestically produced agitator-based top load LRWs with a
capacity of 3.6 cubic feet even though the subject imported model was more fully featured and should have
therefore commanded a higher price, that the USITC relied on a confidential exhibit that the petitioner provided
to it (and that has not been provided to us in these panel proceedings) that the petitioner described as based
on proprietary information collected in LRWs from China and the safeguard investigation.
(United States' response to Panel question No. 76(b), paras. 33-34 (referring to USITC report, (Exhibit KOR-1),
p. 32 and fn 202; and USITC hearing transcripts, (Exhibit USA-12), p. 142)).
302 In particular, the United States submits that the USITC supported its finding that subject imports
competed at nearly all price points with "some evidence that that lower prices on more fully featured subject
imports adversely affected the sales volumes and prices of less fully featured domestically produced LRWs"
including agitator-based TL LRWs. (United States' response to Panel question No. 34(a), para. 55 (referring to
USITC report, (Exhibit KOR-1), fn 202)). The evidence appears to refer to responses from purchaser surveys
that price reduction on imported highly featured-TL impeller LRWs, or FL LRWs affected the price of
US-produced TL LRWs always, usually, or sometimes. (United States' response to Panel question No. 34(a),
para. 55 and fns 93-94 (referring to USITC report, (Exhibit KOR-1), pp. 32-33, fn 202, and p. V-14-15)).
However, while we would agree as a general matter that lower prices on more fully featured subject imports
could shift sales away from less full featured domestically produced agitator-based TL LRWs absent price cuts
on the less fully featured model, the USITC report does not point to any specific data or analysis to support this
proposition. Indeed, we note that the USITC did not ask domestic producers to provide price data on
agitator-based TL LRWs. In addition, while the United States initially submitted that the USITC compared the
average unit values (AUVs) of domestic industry shipments for different types of LRWs, including
agitator-based TL LRWs, to importer sales prices based on the six product categories, the USITC declined to
provide us the results of any such price comparisons. (United States' response to Panel question No. 76(c),
para. 37). Instead, the United States later clarified that the USITC had not used the AUV data to make price
comparisons, or to conduct a full-fledged price effects analysis. (United States' comments on Korea's response
to Panel question No. 76(a), para. 25).

7.168. Based on the foregoing, we do not see from the USITC report sufficient evidence and
explanation supporting its conclusion that subject imports depressed and suppressed the prices of
the domestic like product as a whole, including agitator-based TL LRWs.303 We thus do not consider
that the USITC provided a reasoned and adequate basis fo r finding that subject imports depressed
and suppressed prices of the domestic like product as a whole, specifically in relation to
agitator-based TL LRWs.304
7.6.1.2 The USITC's analysis on coincidence in trends
7.169. We recall that, as part of its coincidence in trends analysis, the USITC noted the
correspondence between increased volume of imports and the decreasing performance of the
domestic industry (as reflected in the injury factors, including those set out in Article 4.2(a) of
the Agreement on Safeguards).
7.170. Korea asserts that the domestic industry showed negative trends only with respect to "profit
and loss" (suffering operating losses), and that the USITC failed to provide a reasoned and adequate
explanation supporting its causation determination in light of positive developments with respect to
many of the injury factors set out in Article 4.2(a).305 The United States submits that negative
developments in any one, or any combination, of the relevant factors set out in Article 4.2(a)
may establish causation between increased imports and serious injury under the Agreement on
Safeguards.306 Noting the importance of profitability as an indicator of the domestic industry's overall
situation, the United States contends that a focus on prices and profitability does not by i tself
establish an inconsistency with Article 4.2(a) of the Agreement on Safeguards.307 The United States
also denies that the USITC ignored alleged positive trends, in particular relating to market share.308
With respect to market share, the United States n otes that the USITC found that the
domestic industry defended its market share by reducing prices to compete with significant and
increased volumes of low -priced imports.309 Therefore, per the United States, the relative stability
of the domestic industry's market share did not detract from the coincidence of increased imports
and the declining financial performance of the domestic industry. 310 In addition, the United States
submits that the USITC explained why other factors showing neutral or positive trends did not detract
from its causal link analysis and that Korea does not explain why in its view the USITC failed to
address those trends.311
7.171. We find the USITC's finding on coincidence in trends to be directly linked to its findings on
price effects. In this regard, we note that the USITC found coincidence in trends between increased

303 See, e.g. Panel Report, China – GOES (Article 21.5 – US), para. 7.111. In the context of reviewing
the investigating authority's price effects finding under Article 3.2 of the Anti-Dumping Agreement and
Article 15.2 of the SCM Agreement, the panel expressed the view that if subject imports and domestically
produced goods did not compete, it was unlikely that subject imports would suppress or depress domestic
prices. However, the panel considered that it did not necessarily follow that just because subject imports and
domestic products did compete on price, increases in subject import volume would necessarily have a
suppressive or depressive effect on the prices of the domestic product. Instead, according to this panel, it
would be incumbent on an investigating authority to show how its factual findings concerning price competition
supported its conclusions regarding the suppressive or depressive effect of subject imports on the prices of the
domestic like product.
304 In reaching this conclusion, we note Korea's argument that having found agitator-based TL LRWs to
be like products, which competed with imported LRWs, the USITC erred in excluding such type of TL LRWs
from the price analysis. (Korea's second written submission, para. 238). We also note in this regard that while
the United States argues that price data should be collected on product definitions that are narrow enough to
permit apples-to-apples price comparisons, it also recognizes that in some cases it may be possible for an
investigating authority to make representative price comparisons involving a product type that is produced
domestically to the sales price of the imported product that competes most directly with the domestic product,
despite physical differences that would prevent them from satisfying the same product definition.
(United States' response to Panel question No. 35 (c), para. 62). In our view, to the extent an investigating
authority finds prices of an imported product to be lower than the price of a domestically produced good, the
authority must support such a finding with evidence showing that this is indeed the case, even if there are
physical dissimilarities between them.
305 Korea's first written submission, paras. 365-366.
306 United States' first written submission, para. 281.
307 United States' first written submission, para. 281.
308 United States' first written submission, para. 282.
309 United States' first written submission, para. 282.
310 United States' first written submission, para. 282.
311 United States' first written submission, paras. 283-284.

imports and losses suffered by the domestic industry. The USITC's finding on profit and loss, in turn,
was linked to its price effects finding, wherein the USITC found that significant and growing quantity
of low-priced imports depressed and suppressed prices of the domestic like product.312 In particular,
with respect to losses suffered by the domes tic industry, the USITC noted that (a) the
domestic industry's operating and net losses increased during the POI as a direct consequence of
the declining prices on sales of domestically produced LRWs; and (b) the domestic industry defended
its market share, in part, by reducing its sales prices in response to competition from the increasing
volume of low -priced imports of LRWs. 313 With respect to the USITC's explanations concerning
market share, we again note that the explanation relies on the USITC's conclusion that the
domestic industry defended its market share by reducing prices to compete with significant and
increased volumes of low-priced imports.
7.172. We have already found that the USITC acted inconsistently with Article 4.2(b) in relation to
its finding regarding the depressive and suppressive effect of low -priced imports on prices of the
domestic industry. The WTO -inconsistency of the price effects analysis vitiates the basis for the
USITC's finding on coincidence in trends.
7.173. Based on the foregoing, we find that the USITC did not make its finding on coincidence in
trends in a manner consistent with Article 4.2(b) of the Agreement on Safeguards.
7.6.1.3 The USITC's analysis of non-price related aspects of competition
7.174. Korea makes arguments challenging (a) the differences in the product mix between imported
and domestic LRWs in the underlying investigation, and (b ) the USITC's analysis of the conditions
of competition between domestic and imported LRW parts.
7.6.1.3.1 Differences in the product mix between imported and domestic LRWs
7.175. On product mix, Korea contends that the USITC failed to acknowledge that there were
differences in the product mix between imported and domestic LRWs during the POI.314 Korea states
that domestic sales were comprised largely of agitator -based TL LRWs, for which demand was
declining, whereas imported LRWs comprised more distinctive and innovative FL and impeller-based
TL LRWs, for which demand was rising.315 Per Korea, given the significance of these agitator-based
TL LRWs in domestic sales, and their obvious decline in terms of demand during the POI, the USITC
should have examined the impact that the difference in product mix would have on the
domestic industry's profitability, which it failed to do .316 The United States responds that (a) the
USITC thoroughly explained that differences in product mix did not attenuate import competition to
a significant degree; and (b) the USITC provided a thorough explanation for rejecting the
respondents' argument that US LRW brands suffered in the eyes of consumers due to
domestic producers' reliance on sales of agitator-based TL LRWs.317
7.176. We note in this regard that Korea's arguments on the differences in product mix between
imported and domestic LRWs focus on how competition was affected by the domestic industry relying
on sales of what Korea considers to be under-performing agitator-based TL LRWs, whereas imported
LRWs included other types of washers with distinctive and innovative features. Korea makes
essentially the same points when presenting its arguments on the second stage of the
USITC's causation determination with regard to the al leged deterioration of US brands. Thus, we
address the issues raised by Korea when reviewing the parties' submissions in respect of that second
stage of the USITC's causation determination . In this section, we focus on Korea's arguments
regarding competition between imported and domestically produced parts of LRWs.
7.6.1.3.2 Competition between imported and domestic parts
7.177. In the underlying investigation, the USITC did not make any specific finding that imported
parts of LRWs caused injury to the domestic industry pro ducing parts of LRWs. Instead, per the

312 USITC report, (Exhibit KOR-1), pp. 42-44.
313 USITC report, (Exhibit KOR-1), pp. 38 and 40.
314 Korea's first written submission, para. 412.
315 Korea's first written submission, paras. 413-414.
316 Korea's first written submission, para. 413.
317 United States' first written submission, paras. 308-309.

United States, the USITC made its causation findings with respect to LRWs and LRW parts in the
aggregate.318
7.178. Korea contends that the USITC failed to demonstrate that the conditions of competition were
such that increased imports of parts caused serious injury, considering that the USITC's causal link
analysis focused on the substitutability between imported and domestic LRWs, and it omitted any
analysis in respect of the fact that imported LRW parts did not compete with domestic LRW parts.319
The United States submits that the USITC was required to consider the impact of increased imports
of LRWs on producers as a whole of the like product, including parts, and not the impact of imported
parts on producers of domestic par ts.320 The United States takes the view that it would not have
made any sense for the USITC to consider the impact of imports of covered parts on
domestic producers of covered parts in light of the USITC's recognition that imports of covered parts
did not c ompete with domestically produced covered parts. 321 Thus, per the United States, in
establishing a causal link between subject imports and the domestic industry's serious injury, the
USITC focused its analysis on the locus of competition between subject imp orts and the
domestic industry, which was the US market for LRWs.322
7.179. We note that the USITC found domestically produced parts to be "like" imported parts. 323
We have already concluded in paragraphs 7.67 above that the USITC acted inconsistently with
Article 4.1(c) in finding domestically produced parts to be "like" imported parts. Considering we have
upheld Korea's claim under Article 4.1(c) that the USITC acted inconsistently with this provision by
finding domestic parts to be like imported parts notwithstanding its finding that they did not
compete, we do not need to separately address Korea's claim challenging the USITC's alleged failure
to conduct a causation determination in relation to such parts.
7.180. Based on the foregoing, we do not separately address this aspect of Korea's claim under
Article 4.2(b).
7.6.1.4 Conclusion regarding the first stage of the USITC's causation determination
7.181. In light of the above, we find that the USITC acted inconsistently with Articles 4.2(b) and 3.1
of the Agreement on Safeguards because it (a) did not provide a reasoned and adequate explanation
in support of its finding that subject imports depressed and s uppressed prices of the domestic like
product as a whole; and (b) did not make a finding on coincidence in trends in a manner consistent
with Article 4.2(b). We do not find it necessary to separately address whether the USITC also acted
inconsistently with Articles 2.1 and 4.2(c) for these same reasons.
7.182. We also do not find it necessary to address Korea 's claims under Article 4.2(b), as well as
Articles 2.1, 3.1, and 4.2(c) of the Agreement on Safeguards regarding the USITC 's analysis of
non-price related aspects of competition.
7.6.2 Second stage of the USITC's causation determination
7.183. Having found a causal link between subject imports and the serious injury to the
domestic industry under the first stage of its causation determination, the USITC examined under
the second stage whether factors other than subject imports explained the serious injury to the
domestic industry. The respondents argued before the USITC that (a ) joint pricing of dryers and
washers by the domestic industry; and (b ) deterioration of US brands were other factors causing
injury to the domestic industry. In addressing the respondents' argument, the USITC applied what
the parties refer as the substantial cause test under US law.
7.184. The substantial cause test, set out in US law 19 USC S 225 2(b)(1)(A) and (B ),
(Exhibit KOR-24), provides that , when certain conditions set out in US law are met, the USITC is

318 United States' response to Panel question No. 38, para. 72.
319 Korea's first written submission, para. 409.
320 United States' first written submission, para. 307.
321 United States' first written submission, para. 307.
322 United States' first written submission, para. 307.
323 USITC report, (Exhibit KOR-1), p. 17. The United States confirms that the USITC's finding was based
on likeness between imported parts and domestic parts. (United States' first written submission, paras. 149
and 178).

required to conduct an investigation to determine whether an article is being imported into the
United States in such increased quantities as to be a substantial cause of serious injury, or the threat
thereof, to the domestic industry producing an article like or directly competitive with the imported
article (19 USC S 2252(b)(1)(A)). Substantial cause, in turn, is defined by 19 USC S 2252(b)(1)(B)
as a cause which is important and not less than any other cause. In the underlying investigation,
applying these provisions of US law, the USITC found that neither (a ) the domestic industry's joint
pricing of LRWs and dryers, nor (b) the deterioration of US brands was an important cause of injury
to the domestic industry.
7.185. Korea challenges the USITC's application of the substantial cause test in the
underlying investigation, arguing that the substantial cause test is flawed and inadequate i n terms
of ensuring that the injurious effect of all known factors is properly separated and distinguished from
the injurious effects of subject imports.324 In addition, Korea challenges the USITC's rejection of the
respondents' arguments concerning the inj urious effect of (a ) joint pricing of dryers and washers
and (b ) deterioration of US brands. In doing so, Korea contends that (i ) considering the
USITC explained that these two factors were not "important causes of injury to the
domestic industry", the USITC acknowledged that these factors were responsible for some injury to
the domestic industry and thus should have separated and distinguished the injurious effect of these
factors, which it did not; and (ii) in any case, to the extent the USITC found that these factors had
no injurious effect, the USITC's relevant analysis and findings were flawed.325
7.186. The United States rejects Korea's claims. The United States submits that while the
USITC stated that neither joint pricing nor deterioration of US brands was a n important cause of
injury to the domestic industry, the USITC effectively found that these factors were not causing any
injury to the domestic industry.326 The United States refers to different parts of the USITC report in
support of its view. The United States also submits that the USITC reasonably and adequately
explained that these two factors did not cause any injury to the domestic industry.
7.187. In reviewing Korea's claim, we note that the second sentence of Article 4.2(b) provides that
"[w]hen factors other than increased imports are causing injury to the domestic industry at the same
time [as increased imports], such injury shall not be attributed to incre ased imports".
Investigating authorities are thus required, through a non -attribution analysis, to ensure that the
injurious effects of other factors are not attributed to increased imports. However, Article 4.2(b)
only requires a non -attribution analysis "when" factors other than increased imports are causing
injury to the domestic industry at the same time. Accordingly, investigating authorities are not
required to conduct a non-attribution analysis when other factors are not causing injury at the same
time as increased imports. We agree with previous DSB reports that when investigating authorities
determine that there are no other factors causing injury at the same time as increased imports, they
must provide a reasoned and adequate explanation supporting that determination.327 Therefore, we
proceed as follows:
a. First, we will review Korea's claim challenging the USITC's rejection of the
Korean respondents' argument that joint pricing and deterioration of US brands were
"other factors" causing injury to the domestic industry. In doing so, we will:
i. examine whether, as Korea contends, the USITC acknowledged that these two factors
were causing injury to the domestic industry; and
ii. if we find that the USITC's finding was that these factors were not causing any injury
to the domestic industry, whether the USITC provided a reasoned and adequate
explanation in support of that finding.
b. Second, we will review Korea's claim challenging the USITC's application of the substantial
cause test.

324 Korea's first written submission, section VIII.3.3.1 and para. 425.
325 Korea's opening statement at the first meeting of the Panel, para. 80; second written submission,
326 United States' first written submission, para. 316.
327 See, e.g. Panel Report, Ukraine – Passenger Cars, para. 7.334.

7.6.2.1 The USITC's rejection of the Korean respondents' joint-pricing theory
7.6.2.1.1 Whether the USITC found joint pricing to be a factor causing injury to the
domestic industry
7.188. Korea notes the USITC's finding that the domestic industry's joint pricing of LRWs and dryers
was not an important cause of injury to the domestic industry, much less a more important cause
than imports.328 This statement suggests to Korea that the USITC acknowledged that joint pricing
contributed to the injury suffered by the domestic industry, albeit in a manner not more important
than imports. The United States submits that the USITC used the language of this test to comply
with US statutory requirements . However, according to the United States, when providing its
detailed analysis of this factor the USITC explained that joint pricing could not explain any of the
serious injury sustained by the domestic industry.329
7.189. In assessing whether the USITC found that joint pricing was a factor causing injury to the
domestic industry, we review the USITC's analysis on joint pricing as a whole, rather than focus ing
just on those parts of the USITC 's report where it was referring to the substantial cause test. Our
review of the USITC report shows that while the USITC framed its enquiry in terms of US statutory
language by noting that joint pricing was not a factor that was an important cause of injury to the
domestic industry, the USITC found joint pricing to not be a factor causing injury to the
domestic industry. For instance, the USITC stated that (a) the record did not support the
respondents' assertion that Whirlpool and GE purposely priced their LRWs to sell at a loss on the
expectation that profitable sales of matching dryers would compensate 330; and (b ) the
respondents' "joint pricing" theory could not explain the domestic industry's dramatically worsening
operating and net losses during the POI. 331 We conclude on the basis of our review of the
USITC report that the USITC found that joint pricing was not a fa ctor causing injury to the
domestic industry, such that the USITC was not required to undertake any non -attribution analysis
in respect of this alleged factor.
7.6.2.1.2 Whether the USITC provided a reasoned and adequate explanation that joint
pricing was not causing any injury to the domestic industry
7.190. Korea argue s that the domestic industry sold matching LRWs and dryers at the same
minimum advertised price, but because dryers cost less than LRWs to produce, the practice of selling
both at the same price allowe d the domestic industry to compensate lower profits on LRWs with
higher profits on dryers. 332 Korea contends that the USITC improperly rejected the
respondents' argument on joint pricing, and ignored compelling evidence presented by them, while
relying largely on statements by the domestic industry that they did not, or could not, use profits
on sales of dryers to compensate for losses on LRWs. 333 Korea contends in this regard that in
rejecting the Korean respondents' arguments on joint pricing, the USITC largely relied on statements
by the petitioners while ignoring the evidence presented by the Korean respondents.334 Korea also
challenges the USITC's explanation on the following two grounds:
a. an alleged disconnect between Whirlpool 's record profits from its No rth American
operations and its losses on US sales of LRWs335; and
b. an alleged failure by the USITC to provide any support for its explanation that, if the
respondents' joint-pricing theory was true , Whirlpool should have been able to maintain
at least a modest level of profitability of LRWs.336
7.191. The United States notes that the USITC made its determination after considering the
evidence, which included sworn testimonies from representatives of the US domestic industry, and

328 Korea's first written submission, para. 422.
329 See, e.g. United States' first written submission, fn 693.
330 USITC report, (Exhibit KOR-1), p. 45.
331 USITC report, (Exhibit KOR-1), p. 51.
332 Korea's first written submission, para. 429.
333 Korea's first written submission, para. 430.
334 See, e.g. Korea's response to Panel question No. 78, para. 97.
335 Korea's first written submission, para. 435.
336 Korea's first written submission, para. 431.

rejecting arguments made by the re spondents in the underlying investigation. In this regard, the
United States refers to extracts from the USITC report that show that the USITC considered th e
evidence presented by respondents in the underlying investigation, which Korea mistakenly asserts
the USITC ignored or did not address. 337 With regard to Korea 's argument based on the supposed
disconnect between Whirlpool's record profits from its North American operations and losses on sales
of LRWs in the US market, the United States notes that Whirlpool's products other than LRWs could
have contributed towards the profitability of Whirlpool's North American operations.338
7.192. The question before us is whether Korea has demonstrated that the USITC did not provide
a reasoned and adequate explanation in suppo rt of its finding that joint pricing was not a cause of
any injury to the domestic industry.
7.193. We note that in finding that the record did not support Korean respondents ' assertion that
Whirlpool and GE purposely priced their LRWs to sell at a loss on the expectation that profitable sales
of matching dryers would compensate for it, the USITC relied on testimony by officials of Whirlpool
that it expected to make profits from the washers sector itself, and not to subsidize LRWs with profits
from other products.339 The USITC also noted the GE's statement that it did not and could not use
profits on sales of dryers to compensate for losses on sales of LRWs because GE did not produce
dryers domestically, but rather imported them pursuant to a contract manufacturing agreement that
precluded outsized profits on sales of dryers. 340 The USITC stated that the record did not
unambiguously support the respondents' claim that Whirlpool and GE sold matching pairs of LRWs
and dryers for the same net wholesale pr ice. The USITC supported this statement by noting that
both companies maintained that LRWs and matching dryers were seldom sold together at wholesale,
and never at the same net wholesale price.
7.194. With respect to the USITC's rejection of the Korean respondents' arguments on joint pricing,
Korea asserts that the testimony of the petitioner was the beginning and end of the USITC's analysis
on joint pricing.341 Korea refers in this regard to evidence that was presented by Korean respondents
to the USITC, and asserts that the USITC did not address the evidence.342 The United States rejects
this argument. The United States asserts, by referring to footnote 277 of the USITC report, that the
USITC expressly referred to the evidence cited by the Korean respondents. 343 Review of the
USITC's report, specifically footnote 277 of that report, shows that the USITC did refer to the
evidence but questioned its probative value. 344 Thus, the USITC report, specifically footnote 277,
contradicts Korea's view that the USITC did not add ress the evidence presented by the
Korean respondents.345 We note that in footnote 277 the USITC balanced and weighed the evidence
provided by the Korean respondents with the testimony provided by the domestic industry
petitioners. We do not see, and Korea does not show, why the USITC could not have reached the

337 United States' first written submission, paras. 319-323.
338 United States' first written submission, para. 327.
339 USITC report, (Exhibit KOR-1), pp. 45-46.
340 USITC report, (Exhibit KOR-1), p. 46.
341 Korea's second written submission, para. 271.
342 Korea's first written submission, paras. 432-434.
343 United States' first written submission, para. 322.
344 For instance, the USITC noted that documents filed by Samsung did not show "net wholesale pricing"
for matching LRWs and dryers, as respondents claimed, because the prices listed were not for actual sales, and
the extent to which the wholesale prices listed in the document may be subject to further negotiation was
unclear. (USITC report, (Exhibit KOR-1), fn 277).
345 Korea refers to the expert report of an economist that Korean respondents provided to the USITC,
which noted why joint pricing was in line with economic theory, Whirlpool's reference to the laundry segment in
its filing with the US Security and Exchange Commission, and to evidence that per Korea demonstrated that
relative higher margins on dryers were capable of offsetting lower margins on washers. (Korea's response to
Panel question No. 78, para. 99). Korea asserts that the USITC refused to consider the highly plausible
alternative explanations regarding joint pricing by the domestic industry based on statements made by the
CEO of the petitioner and because under the US statute the focus must be on losses to LRWs. However, we are
not persuaded that these undermine the USITC's finding that joint pricing did not explain any injury to the
domestic industry. In particular, we have already stated above that the investigating authority needs to
determine the serious injury to the domestic industry producing the like or directly competitive product. The
USITC found LRWs, not dryers, to be the like product. If a domestic producer suffers losses with respect to the
like product at issue, i.e. LRWs, and there is serious injury to the producer on account of losses suffered on the
like product, we do not see why higher margins on a product that is not like or directly competitive with the
PUC (here, dryers) would undermine that finding. In this regard, we note that the USITC found that the record
did not support the respondents' assertion that Whirlpool and GE purposely priced their LRWs to sell at a loss
with the expectation that profits from dryers would compensate. (USITC report, (Exhibit KOR-1), p. 45).

conclusions that it did based on balancing and weighing the evidence before it. In our view, provided
an investigating authority acts objectively, it is free to balance and weigh the evidence before it in
a manner that it deems appropriate, and nothing in the Agreement precludes an investigating
authority from relying on (sworn) testimonies provided by the petitioner. Our task is not to
second-guess that explanation based on a de novo review of the evidence before the USITC, but
instead to consider whether its explanation was reasoned and adequate in light of the record
evidence. Korea has not persuaded us that it was not.
7.195. Regarding the supposed disconnect between Whirlpool 's record pr ofits from its
North American operations and its losses on US sales of LRWs, Korea contends that these results
would not have been possible unless Whirlpool generated reasonable profits from its laundry
segment (which included dryers and LRWs), and asserts that the USITC did not respond to this
evidence.346 While Korea submits that the USITC did not respond to this evidence, the record shows
that the USITC did in fact respond to this evidence as follows347:
We are also unpersuaded by respondents' argument that Whirlpool's growing operating
losses on sales of LRWs are somehow inconsistent with the increase in Whirlpool's profit
margin for its overall North American operations from 4.8 percent in 2012 to 6.5 percent
in 2016, as reported in public filings. … Under the statute, 19 U.S.C. § 2252(c)(6)(A)(i),
the focus of our analysis is the domestic industry producing LRWs, PSC/belt drive
TL LRWs, CIM/belt drive FL LRWs, and covered parts, as the producers as a whole of
the like or directly competitive article. Beca use Whirlpool's financial results for its
North America segment are based primarily on sales of products other than LRWs, with
LRWs accounting for only 13.1 to 13.5 percent of the North America segment's total
revenue during the 2012-16 period, we do not find those results informative.
7.196. This excerpt shows that the USITC explained why Whirlpool's profits from its North American
operations, where LRWs accounted for only 13.1 -13.5% of total revenue, was not at odds
(mathematically speaking) with Whirlpool's losses in the US market on sales of LRWs. Korea has not
challenged the explanation provided by the USITC in this regard. Thus, the record does not support
Korea's argument that the USITC did not respond to this evidence.
7.197. As regards Korea's argument that the USITC did not provide any support for its statement
that if the respondents' joint-pricing theory was true, Whirlpool should have been able to maintain
at least a modest level of profitability of LRWs, Korea contends that because the USITC did not
provide such support, its rejection was not based on objective evidence. 348 Korea submits in this
regard that the essence of its claim is that the USITC's determination on joint pricing was not
supported by objective evidence or a reasoned and adequate explanation.349 We note that the USITC
provided the following explanation in its report350:
Respondents' "joint pricing" theory, if true, could at most explain profit margins on sales
of LRWs that are consistently lower than profit margins on sales of matching d ryers.
Under respondents' theory, Whirlpool, the only major domestic producer of matching
LRWs and dryers, should have been able to maintain at least a modest level of
profitability on its sales of LRWs during the period of investigation, given its operati ng
profit margin of *** percent in 2012, strong demand growth, and the competitiveness
of its LRWs. Instead, Whirlpool suffered dramatically worsening operating losses, which
widened as a share of net sales from negative *** percent in 2013 to negative ***
percent in 2014, narrowed to negative *** percent in 2015, and then widened *** to
negative *** percent in 2016, the largest loss of the period. Respondents do not claim
that Whirlpool compensated for these increasing losses with increasing profits on sales
of matching dryers, nor explain how Whirlpool could have earned increasing profits on
sales of dryers when dryer prices would have declined with matching LRW prices during
the period of investigation under their "joint pricing" theory.

346 Korea's second written submission, para. 271.
347 USITC report, (Exhibit KOR-1), fn 210.
348 Korea's response to Panel question No. 42, para. 199.
349 Korea's response to Panel question No. 42, para. 201.
350 USITC report, (Exhibit KOR-1), pp. 46-47. (fns omitted; redacted original)

7.198. Taking into account the explanation provided above, we are not persuaded that the USITC
failed to provide a reasoned and adequate explanation to support its determination. In particular,
Korea does not dispute the USITC's explanation that the respondents did not claim that Whirlpool
compensated losses on LRWs with profits on sales of matching dryers. The USITC also noted the
respondents' failure to explain how Whirlpool could have earned increased profits on dryer sales
because if dryers and washers were jointly priced, dry er prices would have reduced with reduction
in washer prices. We thus consider that the USITC provided a reasoned and adequate explanation
to support its determination.
7.199. Based on the foregoing, we reject Korea's claim that the USITC failed to provide a reasoned
and adequate explanation for rejecting the respondents' argument that joint pricing was a cause of
injury to the domestic industry.
7.6.2.2 The USITC's rejection of the "deterioration of US brands" theory
7.6.2.2.1 Whether the USITC found deterioration of US brands to be a factor causing
injury to the domestic industry
7.200. In the underlying investigation, similar to its analysis on joint pricing, the USITC framed its
enquiry in terms of US statutory language by noting that deterioration of US brands was not a factor
that wa s an important cause of injury to the domestic industry. Again, we consider that the
USITC's issue-specific analysis shows that the USITC found that the deterioration of US brands was
not a factor causing injury to the domestic industry.
7.201. In particular, the USITC stated that the respondents' "brand deterioration" theory did not
explain the domestic industry 's declining sales prices during the POI, "or any of the resulting
injury".351 This shows that the USITC found that "brand deterioration" did not cause any injury to
the domestic industry. Other parts of the USITC report support this understanding.352 Therefore, we
find that the USITC's finding was that deterioration of US brands did not cause any injury to the
domestic industry.
7.6.2.2.2 Whether the USITC provided a reasoned and adequate explanation that
deterioration of US brands was not a factor causing any injury to the domestic industry
7.202. Korea contends that the combined effect of failing to innovate and the resultant effect of
brand deterioration were factors that injured the domestic industry in the POI.353 Noting that the
USITC found that consumer perception of brands is an important factor affecting purchasing
decisions of LRWs, Korea submits that there was a shift in consumer demand in the US market over
the POI, creating a market segment over which there was no meaningful competition between
domestic and imported LRWs.354 Korea asserts that the respondents wer e able to serve this newly
emerging demand due to their brand, innovation , and design whereas the domestic industry was
not, due to their lack of appropriate innovation as well as the deterioration of their brands.355 In this
regard, Korea also notes that t he US producers remained highly dependent on sales of
agitator-based TL LRWs, which were declining in popularity in the US market. Korea argues that
such dependence led to the deterioration of US brands, which in turn contributed to the injury to the
domestic industry.356 However, per Korea, the USITC failed to examine the impact caused by the
deterioration of US brands, or to provide an explanation regarding the impact on US brands due to
the decline in demand of agitator-based TL LRWs, which formed half of domestic shipments.357
7.203. The United States notes Korea's submission that consumer perception of brands is an
important factor affecting purchaser decisions of LRWs, but states that the USITC concluded that

351 USITC report, (Exhibit KOR-1), p. 48.
352 USITC report, (Exhibit KOR-1), p. 51. The USITC found that the respondents' alleged alternative
cause of injury, which included deterioration of US brands was not supported by the record evidence and also
that the brand deterioration theory "could explain none of the injury sustained by the [domestic] industry".
353 Korea's response to Panel question No. 43, para. 206.
354 Korea's first written submission, paras. 439-441.
355 Korea's first written submission, paras. 441-442.
356 Korea's first written submission, para. 444.
357 Korea's first written submission, paras. 444-445.

purchasers did not find imported LRWs to be superior to domestic ones in te rms of brand based on
the evidence submitted to it.358 In this regard, the United States notes that the USITC explained:
a. that its record did not support the respondents' argument that subject imports were
superior to domestic LRWs in terms of non -price fact ors like brand, innovation , and
design359; and
b. that this argument was also undermined by:
i. the price data before the USITC that showed that prices of those imported LRW models
that respondents considered to be innovative, and thus should have commanded a
price premium, were declining; and
ii. the extent to which imported LRWs were found to be priced below domestic LRWs.360
7.204. With regard to Korea's argument concerning the domestic industry's dependence on
agitator-based TL LRWs, the United States notes that in addition to finding that this dependence did
not prevent the domestic industry from providing high ly-rated FL and impeller-based TL LRWs, the
USITC also found that the popularity of agitator -based TL LRWs rebounded post 2015 (thereby
undermining the respondents ' argument that this model 's demand was on the decline in the
US market).361 In addition, the United States notes that (a ) the USITC rejected the
Korean respondents' argument that consumers preferred imported LRWs because they were
innovative; and also (b) that the Korean respondents did not argue that the alleged deterioration of
US brands contributed towards the decline in the domestic industry 's selling price.362 Instead, the
Korean respondents only relied on arguments of brand deterioration to explain the
domestic industry's loss of market share during the POI, which in any case the USITC found did not
occur considering the domestic industry's market share remained stable throughout the POI.363
7.205. The question before us is whether the USITC provided a reasoned and adequate explanation
why deterioration of US brands was not a factor causing any injury to the domestic industry.
7.206. In the underlying investigation, the USITC specifically considered and rejected the
Korean respondents' argument regarding the injurious effect of the deterioration of US brands on
the domestic industry. We find it useful to reiterate that in resolving Korea's claim, our task is not
to substitute our judg ement for that of the USITC, nor review the evidence de novo. Instead, our
task is to determine whether the USITC examined all pertinent facts and provided a reasoned and
adequate explanation in rejecting the Korean respondents' argument that the alleged deterioration
of US brands caused injury to the domestic industry. It is Korea's burden as the complainant to show
that the USITC did not do so.
7.207. We note in this regard that in rejecting the respondents' argument on the injurious effect of
deterioration of US brands, the USITC stated that (a) the USITC's finding on serious injury was based
on the adverse impact of low -priced imports on the domestic industry's prices, as opposed to loss
of market share, and the respondents did not argue that deterioration of US brands contributed to
declining sales prices; and (b ) the record did not support the respondents' contention that
consumers increasingly favoured imported over domestically produced LRWs for non -price
reasons.364 In particular, the USITC concluded that the record did not support the respondents' claim
that brand deterioration occurred for non -price reasons, and even if it did, the deterioration could
explain only a decline in the domestic industry's market share (not the decline in the
domestic industry's prices).365
7.208. Korea does not disput e the USITC's explanation regarding the absence of arguments from
respondents on how deterioration of US brands contributed to declining sales prices. It is also not in

358 United States' first written submission, para. 331.
359 United States' first written submission, paras. 331 and 333.
360 United States' first written submission, para. 334.
361 United States' first written submission, para. 335.
362 United States' first written submission, paras. 336-337.
363 United States' first written submission, paras. 330 and 337.
364 United States' second written submission, paras. 112-113; USITC report, (Exhibit KOR-1), p. 48.
365 USITC report, (Exhibit KOR-1), p. 51.

dispute that the USITC found serious injury to the domestic industry resulted from adve rse impact
of low-priced imports on the domestic industry's sales. Thus, we note that the USITC's explanation
in this regard remains unchallenged.
7.209. With regard to whether US consumers increasingly favoured imported over
domestically produced LRWs for non -price reasons, the USITC referred to evidence in terms of
purchaser surveys, including surveys where most responding purchasers found domestic LRWs to
be comparable or superior to imported ones in terms of non -price factors; noted that the record
indicated that domestic LRWs were comparable to imported ones in terms of innovation; as well as
the favourable ratings of domestically produced LRWs in publications. 366 In this regard, the USITC
found based on the evidence before it that the domestic market encompass ed a broad range of
brands and models offering diverse features and innovations, with no LRW supplier possessing a
clear edge over other LRW suppliers in terms of brand, design, performance, features, innovation ,
and other non-price factors.367 The USITC also rejected the respondents' argument that US brands
suffered in the eyes of the consumers, including because of the domestic industry's reliance on
agitator-based TL LRWs.368 Instead, the USITC noted that the domestic industry's production of
agitator-based TL LRWs did not prevent the industry from offering a full range of FL and
impeller-based TL LRWs, and that the popularity of agitator -based TL LRWs rebounded after 2015
with US consumption of this product in 2017 approaching 2012 levels.369 The USITC concluded that
the evidence did not support the respondents' arguments that there were significant
non-price differences that favoured imported LRWs over domestic ones.370
7.210. We are not persuaded that the USITC's explanations in this regard were not reasoned and
adequate in light of the record evidence. While Korea makes several arguments in support of its
claim, Korea repeats arguments made by respondents before the USITC instead of demonstrating
why the USITC's rejection of those arguments was not based on a reas oned and adequate
explanation. For instance, Korea focuses on how there was a shift in consumer demand in the
US market over the POI, creating a market segment driven by innovation demand that the
domestic industry was unable to serve due to their lack of appropriate innovation and the
deterioration of their brand. 371 However, as noted above, the USITC specifically addressed and
rejected this argument based on, inter alia, its finding that the evidence did not support the
respondents' arguments that there were significant non -price differences that favoured imported
LRWs over domestic ones. Similarly, Korea contends that the fact that half of domestic sales were
that of agitator-based TL LRWs "must have meant" that the domestic industry was unable to offer
innovative products, and the fact that respondents had no sale of such type of TL LRWs or belt-driven
LRWs should " ipso facto demonstrate" that they shifted from those market segments to more
innovative LRWs.372 However, our task is not to make such kind of inferences but to assess whether
the explanation provided by the USITC was reasoned and adequate. We note that the
USITC explained that the domestic industry was capable of offering the full range of FL and
impeller-based TL LRWs , and therefore rejected the Korean respondents ' arguments that the
domestic industry was unable to offer innovative products .373 While repeating arguments made by
Korean respondents, Korea fails to show that the USITC 's responses to those arguments were not
reasoned and adequate in light of the record evidence.374

366 USITC report, (Exhibit KOR-1), pp. 48-49.
367 USITC report, (Exhibit KOR-1), p. 30. See also USITC report, (Exhibit KOR-1), p. 48. The USITC
referred back to its explanations in section IV.C.4 of its report regarding the comparability of domestic and
imported LRWs in terms of non-price factors.
368 USITC report, (Exhibit KOR-1), p. 50.
369 USITC report, (Exhibit KOR-1), p. 50.
370 USITC report, (Exhibit KOR-1), pp. 49-51. The USITC addressed and rejected arguments made by
respondents regarding increase in repairs needed by domestically produced LRWs, mold issues in such
domestically produced LRWs, and effect on US brands due to Whirlpool failing to differentiate its LRWs from
that of Maytag as well as the domestic producer's reliance on agitator-based TL LRWs.
371 Korea's first written submission, paras. 441-442. See also Korea's response to Panel question No. 44,
paras. 207-213.
372 Korea's second written submission, para. 276.
373 Instead, Korea asserts that "this is hardly an explanation" to address the impact on brands that
results from having half of all sales of a LRW model that is in decline. (Korea's first written submission,
para. 445).
374 Korea also states that the respondents requested the USITC to exclude what it describes as two
"exceptionally innovative products" produced by the respondents i.e. Flexwash and Sidekick, from the PUC.

7.211. Based on the foregoing, we reject Korea's claim that the USITC failed to provide a reasoned
and adequate explanation rejecting the respondents' argument that deterioration of US brands was
a cause of injury to the domestic industry.
7.6.2.3 Substantial cause test
7.212. We note that Korea relied on the language of the substantial cause test to argue that the
USITC acknowledged that joint pricing and deterioration of US brands caused some injury to the
domestic industry. In paragraphs 7.189 and 7.201 above we have rejected that argument and
concluded that the USITC's finding was that joint pricing and deterioration of US brands did not
cause any injury to the domestic industry. However, Korea also asks us to make a separate finding
that the substantial cause test, as applied in the underlying investigation, did not comply with
the Agreement on Safeguards.375
7.213. We reject Korea's claim in this regard because Korea has not made a prima facie case that
the USITC's application of the substantial cause test in the underlying investigation was inconsistent
with Article 4.2(b) of the Agreement on Safeguards. In particular, Korea does not present sufficient
arguments showing how exactly the substantial cause test violates Article 4.2(b).
7.214. We note that Korea contends that the substantial cause test is inadequate in terms of
complying with the non-attribution requirement of Article 4.2(b).376 However, Korea's argument that
the substantial cause test is "inadequate" in ensuring that the injurious effect s of all known factors
are not attributed to subject imports presupposes a finding by the investigating authority that such
other factors cause some injury to the do mestic industry. If the investigating authority finds that
such other factors do not cause any injury to the domestic industry, the need to conduct a
non-attribution analysis does not arise. We have concluded that the USITC found that joint pricing
and deterioration of US brands did not explain any of the injury to the domestic industry, and thus
the USITC was not required to conduct a non -attribution analysis. Thus, to the extent Korea
challenges the substantial cause test on the premise that the USITC found these two factors were
causing injury to the domestic industry, that premise is unfounded. In the absence of sufficient
arguments showing how exactly the substantial cause test violates Article 4.2(b) of
the Agreement on Safeguards, we conclude that Korea has not made a prima facie case in this
regard.377

Korea states that the respondents specifically noted that if these two products were excluded the
domestic industry's share in the overall US market would have increased since 2012. (Korea's second written
submission, para. 275). We note that Korea does not challenge the inclusion of Flexwash and Sidekick in the
PUC. In addition, as the United States notes, the USITC found these two products to be like domestically
produced LRWs. (United States' second written submission, para. 63 (referring to USITC report,
(Exhibit KOR-1), pp. 13-15)). Korea also does not challenge the USITC's findings in this regard. Thus, we do
not see, and Korea does not show, how the inclusion or exclusion of Flexwash and Sidekick from the PUC
affects Korea's claim challenging the USITC's finding regarding the injurious effect of US brand deterioration.
We also note in this regard the United States' submission that Samsung introduced Flexwash LRWs in
March 2017 and LG's Sidekick LRWs were new as of the USITC's injury hearing in September 2017.
(United States' second written submission, para. 63).
375 Korea's response to Panel question No. 78, para. 88.
376 Korea's first written submission, para. 425.
377 In this regard, Korea relies on the Appellate Body report in US – Lamb to support its view.
Korea states that in that case the Appellate Body responded to a claim that the application of the substantial
cause test in that case violated Article 4.2(b) of the Agreement on Safeguards. (Korea's first written
submission, para. 426). However, we note that the Appellate Body found that the USITC in that case did not
adequately explain "in its Report" how it ensured that injury caused to the domestic industry by factors other
than increased imports was not attributed to increased imports. (Appellate Body Report, US – Lamb,
para. 188). The Appellate Body did not find the substantial cause to be itself inconsistent with Article 4.2(b). In
contrast, in the case before us, we have concluded that the USITC found that joint pricing and deterioration of
US brands did not cause any injury, and that the USITC provided a reasoned and adequate explanation to
support this finding. Therefore, the question of ensuring that injury caused by other factors are not attributed
to increased imports does not arise in the case before us.

7.6.2.4 Conclusion regarding the second stage of the USITC's causation determination
7.215. We reject Korea's claims under Articles 3.1 and 4.2(b), as well as Articles 2.1 and 4.2(c) of
the Agreement on Safeguards challenging the USITC 's finding that ( a) joint pricing of dryers and
LRWs and (b) deterioration of US brands, were not factors causing injury to the domestic industry.
7.216. We also reject Korea's claims under Articles 3.1 and 4.2(b), as well as Articles 2.1 and 4.2(c)
of the Agreement on Safeguards challenging the USITC's application of the substantial cause test in
the underlying investigation.
7.6.3 Consequential claims on causation
7.217. Korea contends that because the USITC's definition of the domestic industry and its
determination on increased imports were flawed, the USITC's causation determination, which relied
on those flawed findings w as also inconsistent with Article 4.2(b), as well as Articles 2.1, 3.1, and
4.2(c). We have already found that certain aspects of the USITC's definition of the domestic industry
and its determination on increased imports were inconsistent with its obligations under
the Agreement on Safeguards. Therefore, we do not consider any finding of consequential violation
under Article 4.2(b), or Articles 2.1, 3.1, and 4.2(c ) would assist in resolving the dispute between
the parties.
7.218. Based on the foregoing, we do not find it necessary to address Korea's consequential claims
under Articles 4.2(b), 2.1, 3.1, and 4.2(c) of the Agreement on Safeguards.
7.7 Claims under Articles 5.1 and 7.1 of the Agreement on Safeguards
7.219. The first sentence of Article 5.1 of the Agreement of Safeguards provides, inter alia, that a
Member shall apply safeguard measures only to the extent necessary to prevent or remedy
serious injury and to facilitate adjustment. The first sentence of Article 7.1 of this agreement
provides that a Member shall apply safeguard measures only for such period of time as may be
necessary to prevent or remedy serious injury and to facilitate adjustment. Korea makes the
following sets of claims under Articles 5.1 and 7.1 of the Agreement on Safeguards378:
a. The United States failed to limit the applicati on of the safeguard measure to the alleged
serious injury caused by increased imports and not by other known factors379:
i. The United States acted inconsistently with Article 5.1 because it failed to establish
that increased imports caused serious injury to the domestic industry, as required by
Article XIX:1(a) of the GATT 1994 and Article 4.2(b) of the Agreement on Safeguards,
and therefore the resultant safeguard measure was necessary under Article 5.1.
ii. The United States acted inconsistently with Article 5.1 because it failed to apply the
measure only to prevent or remedy injury caused by increased imports and not that
caused by other factors.
b. The United States failed to provide a reasoned and adequate explanation to support the
form and level of the safeguard measure.380
i. The United States acted inconsistently with Article 5.1 because its imposition of the
safeguard measure on LRW parts was not necessary given the absence of competition
between imported and domestic LRW parts.381

378 We note that Korea only invokes Article 7.1 of the Agreement on Safeguards when claiming that the
United States acted inconsistently with Articles 5.1 and 7.1 because the safeguard measure went beyond what
was necessary to facilitate adjustment of the domestic industry. (Korea's first written submission, paras. 509
and 511). With respect to other claims, it only invokes Article 5.1. (See, e.g. Korea's first written submission,
paras. 481, 489, 494-495, and 503-504).
379 Korea's first written submission, section IX.3.1.
380 Korea's first written submission, section IX.3.3.
381 Korea's first written submission, paras. 496-497.

ii. The United States acted inconsistently with Article 5.1 because t he level of the
safeguard measure exceeded what was necessary to remedy serious injury.382
c. The United States acted inconsistently with Article 5.1 because it failed to take into
account existing import restrictions from anti-dumping and countervailing duties.383
d. The United States acted inconsistently with Article s 5.1 and 7.1 because the underlying
safeguard measure went beyond what was necessary to facilitate adjustment of the
domestic industry.384
7.220. The United States asks us to reject Korea's claims.
7.7.1 Korea's claims regarding the United States' alleged failure to limit the application
of the safeguard measure to the alleged serious injury caused by increased imports
7.221. Korea claims that the United States acted inconsistently with Article 5.1 because the
USITC's causation determination was inconsistent with Article XIX:1(a) of the GATT 1994 and
Article 4.2(b) of the Agreement on Safeguards.385 We note that Korea's claim under Article 5.1 here
is essentially a consequential claim and dependent on a finding that the USITC's causation
determination was inconsistent with Article XIX:1(a) of the GATT 1994 and Article 4.2(b) of
the Agreement on Safeguards. We have found the USITC's causation determination to be
inconsistent with Article 4.2(b) of the Agreement on Safeguards. Given those findings under
Article 4.2(b), we do not find it necessary to address Korea's claim under Article 5.1 to the extent it
is consequential to a finding under Article 4.2(b).
7.222. Korea also claims that the United States acted inconsistently with Article 5.1 because
through the application of the USITC's substantial cause test, the USITC attributed to increa sed
imports injury that was caused by other factors, specifically (a) joint pricing of dryers and washers,
and (b) deterioration of US brands.386 We note that this claim under Article 5.1 is premised on its
view that the USITC found (a) joint pricing of dryers and washers and (b) deterioration of US brands
to be other factors causing injury to the domestic industry. In addressing Korea's non-attribution
claims under Article 4.2(b), we have concluded that the USITC's finding was that these factors did
not cause any injury to the domestic industry. Given these findings, Korea has not established the
premise of its claim under Article 5.1.
7.223. Based on the foregoing, we do not find it necessary to address Korea's claim under
Article 5.1 to the extent it is consequen tial to Korea's claim challenging the USITC 's causation
determination under Article 4.2(b), which we have upheld. We reject Korea's claim under Article 5.1
to the extent it is premised on its view, which we have rejected, that the USITC found factors other
than increased imports were causing injury to the domestic industry.
7.7.2 Korea's claims concerning the form and level of the safeguard measure
7.224. Korea claims, as noted above, that (a) the United States' safeguard measure on LRW parts
was not "necessary" under Article 5.1; and (b) the level of the measure on LRWs exceeded what
was necessary to remedy serious injury suffered by the domestic industry. The United States asks
us to reject both claims.
7.7.2.1 Safeguard measure on LRW parts
7.225. Regarding the safeguard measure on LRW parts, Korea contends that the duty on
out-of-quota LRW parts was not necessary to remedy serious injury and facilitate adjustment
because there was no competition between domestic and imported LRW parts, or between imported
LRW parts and domestically produced LRWs.387 Korea asserts that a measure can only be "necessary"
if it at least contributes in a material way to remedying the serious injury and facilitating adjustment,

382 Korea's first written submission, paras. 498-504.
383 Korea's first written submission, paras. 490-494.
384 Korea's first written submission, paras. 505-511.
385 Korea's first written submission, para. 481.
386 Korea's first written submission, para. 486.
387 Korea's first written submission, paras. 496-497 and 514.

which cannot be the case for non -competing products.388 The United States submits that allowing
limitless imports of low-priced parts would create the risk that Samsung and LG would convert their
US production facilities into kit assembly operations of LRWs, which would be in direct competition
with LRWs that are produced domestically from domestic pa rts.389 Thus, per the United States,
inclusion of covered parts in the safeguard measure was necessary to prevent serious injury and
facilitate the domestic industry's adjustment to import competition, and did not result in application
of the safeguard measure beyond the extent necessary under Article 5.1.390
7.226. We note that we have found that the USITC acted inconsistently with Article 4.1(c) in
defining the domestic industry to include LRW parts. Based on the foregoing , we do not find it
necessary to separatel y address Korea's claim under Article 5.1 of the Agreement on Safeguards
that the duty on out -of-quota LRW parts was not necessary under Article 5.1 to remedy serious
injury and facilitate adjustment because there was no competition between domestic and im ported
LRW parts, or between imported LRW parts and domestically produced LRWs.
7.7.2.2 Level of the safeguard measure
7.227. Korea claims that the level of the measure on LRWs exceeded what was necessary to remedy
the alleged serious injury based on the following arguments:
a. Korea challenges the level of the in -quota rate (20%) and out -of-quota rate (50%)
maintained by the United States, noting that such rates were introduced even though the
facts showed weak, non -existent serious injury and average price underselling of only
14.2%.391 Korea asserts in this regard that since the USITC found lower domestic prices
to be directly responsible for the losses to the domestic industry, limiting the safeguard
remedy to the price difference between subject imports and domestic like products would
have addressed the domestic industry's serious injury.392
b. Korea refers to the statements by two of the four commissioners that in-quota tariff rates
would exceed the amount necessary to address serious injury to the domestic industry.393
7.228. The United States responds to Korea's arguments as follows:
a. Noting Korea's comparison of the 20% in -quota tariff with the 14.2% weighted-average
margin of underselling, the United States submits that such a comparison cannot
accurately reflect the likely effect of the tariff on import prices.394
b. Regarding Korea's argument that two of the four USITC commissioners recommended
against an in -quota tariff, the United States notes that the USITC did not reach an
institutional recommendation on this point.395
7.229. We note that while Article 5.1 provides that a Member shall apply safeguard measures only
to the extent necessary to prevent or remedy serious injury, it does not provide any rules requiring
the authority to ensure that the safeguard remedy matches the degree of price underselling found,
which here is the difference between prices of subject imports and domestic like products. Indeed,
such a requirement would be at odds with the fact that the Agreement on Safeguards (a) does not
even specifically require a price underselling analysis; and (b) permits the imposition of quantitative
restrictions (it is unclear to us how exactly as a mathematical matter a quantitative restriction could
be designed to match the degree of price underselling, and in any case, the Agreement on
Safeguards does not provide rules on this matter). In this regard, the provisions of
the Agreement on Safeguards stand in contrast to, for example, the provisions of the
Anti-Dumping Agreement, which require authorities to calibrate their remedy by ensuring that the

388 Korea's first written submission, para. 496.
389 United States' first written submission, para. 364.
390 United States' first written submission, paras. 364-365 (referring to USITC report, (Exhibit KOR-1),
p. 74).
391 Korea's first written submission, paras. 499-500.
392 Korea's response to Panel question No. 55, para. 234.
393 Korea's first written submission, paras. 502-503.
394 United States' first written submission, para. 366.
395 United States' first written submission, para. 367 (quoting USITC report, (Exhibit KOR-1), p. 75).

anti-dumping duty not exceed the margin of dumping established under Article 2 of that agreement
(see Article 9.3 of the Anti-Dumping Agreement). Therefore, we do not find any basis in Article 5.1
to require investigating authorities to calibrate their safeguard measures to reflect the degree of
price underselling.
7.230. Insofar as Korea relies on the views of the two U SITC commissioners who considered that
the in -quota tariff rates exceed ed the amount necessary to address serious injury to the
domestic industry, we note under the internal decision -making process of the USITC,
four commissioners of the USITC make their r ecommendations. We do not consider that the views
of two of the four USITC commissioners are instructive on whether the United States' safeguard
measure is inconsistent with Article 5.1 of the Agreement on Safeguards.
7.231. Based on the foregoing, we reject Korea's claim under Article 5.1 of the Agreement on
Safeguards challenging the form and level of the United States' safeguard measure.
7.7.3 Korea's claim regarding the United States' alleged failure to take into account
existing import restrictions from anti-dumping and countervailing duty measures
7.232. Korea contends that the United States' safeguard measure was excessive because it did not
account for the protection already afforded to the domestic industry through the imposition of
anti-dumping and countervailing measures on LRWs. 396 Korea asserts that although the existing
anti-dumping and countervailing measures had the effect of significantly decreasing imports from
the covered countries, including Korea, the US President made no attempt to calibrate the measures
to take account of those existing measures.397
7.233. The United States contends that the Agreement on Safeguards does not obligate a Member
to take any particular approach when applying a safeguard measure on products already covered by
an anti-dumping or countervailing measure.398 Nonetheless, the United States submits that the
USITC took into account and discussed the impact of existing US anti-dumping and countervailing
orders in its report, and contends, inter alia, as follows:
a. Referring to the USITC's finding that due to such orders the domestic industry was able to
temporarily increase its market share, but not its prices, the United States submits that
the depression and suppression of domestic like product prices led to the worsening
financial losses of the domestic industry.399
b. In addition, contending that Samsung and LG moved production of LRWs to countries not
affected by the anti-dumping and countervailing measures, the United States points to
data showing that imports of LRWs from countries affected by the anti-dumping and
countervailing measures, such as China, declined, whereas imports from other countries
such as Thailand and Viet Nam increased.400
7.234. We are not persuaded by Korea's arguments in this regard. We note that
the Agreement on Safeguards imposes conditions for the imposition of safeguards, including a need
for increased imports, and the existence of serious injury caused by those imports. Existing trade
remedy measures may affect the level of imports (they could decrease it, particularly from sources
affected by the o rder) and the injury situation of the domestic industry (they could improve the
domestic industry's situation). Therefore, to the extent existing trade remedy measures affect those
parameters, that effect would be reflected in the relevant data examined by the investigating
authority (be it increased imports, or data pertaining to the injury situation of the domestic industry).
If the data shows that imports have been declining instead of increasing, or if it shows that the
domestic industry is not injured (irrespective of whether this is because of existing trade remedy
measures), the substantive conditions for the imposition of safeguard measures would not be met.
If, however, an investigating authority finds that the substantive conditions for the
safeguard measures are met, despite existing trade remedy measures, nothing in

396 Korea's first written submission, paras. 490 and 494.
397 Korea's second written submission, para. 288.
398 United States' first written submission, paras. 356-357.
399 United States' first written submission, para. 361.
400 United States' first written submission, para. 360.

the Agreement on Safeguards require s any calibration of the measures with those existing
trade remedy measures.
7.235. We also note in this regard that Article 5.1 refers to the application of safeguard measures
only to the extent necessary to prevent or remedy serious injury. Once serious injury is established
pursuant to a safeguard investigation, the Member has the right to impose safeguard measures to
the full extent necessary to remedy that serious injury. It follows that if the serious injury has been
found despite the existing trade remedy measures, nothing in the Agreement on Safeguards would
require Members to adjust the safeguard measures to account for existing trade remedy measures.
Indeed, if they were to do so, they may not be able to apply safeguard measures to the extent
necessary to prevent or remedy the serious injury found. To the extent a complainant considers that
the substantive conditions for imposition of such a safeguard measure are not met, the complainant
would be expected to make its case under the substantive provisions of
the Agreement on Safeguards.
7.236. Based on the foregoing, we reject Korea's claim that the United States acted inconsistently
with Article 5.1 of the Agreement on Safeguards in failing to take into account existing import
restrictions from anti-dumping and countervailing measures.
7.7.4 Korea's claim that the safeguard measure went beyond what was necessary to
facilitate adjustment of the domestic industry
7.237. Korea claims that the United States acted inconsistently with Article s 5.1 and 7.1 of
the Agreement on Safeguards because it failed to ensure that the underlying safeguard measure
was not more restrictive than necessary to facilitate adjustment. 401 Korea makes two main
arguments with respect to its claims. Korea argues that (a) the US Presidential P roclamation
(Exhibit KOR-3) imposing the safeguard measure did not explain why the nature and level of the
safeguard measure was necessary to facilitate adjustment; and (b) the adjustment plans submitted
by the US domestic industry were weak. 402 The United States submits, relying on previous
DSB reports, that (a) Article 5.1 does not require a Member applying a safeguard measure to justify
that it is appli ed only to the extent necessary; and (b) Article 5.1 does not require Members to
request or consider any adjustment plans from the domestic industry. 403 To resolve Korea's claim,
we focus on Korea's arguments regarding the alleged inadequacies of the
US Presidential Proclamation and the US domestic industry's adjustment plan.
7.238. Regarding the US Presidential Proclamation, and specifically Korea's argument that this
proclamation did not explain why the nature and level of the safeguard measure was necessary to
facilitate adjustment, we agree with previous DSB reports that Article 5.1 does not oblige a Member
to justify at the time of application that the safeguard measure at issue is applied "only to the extent
necessary".404 Korea acknowledges that no such justi fication is necessary, but takes the position
that this "does not mean that total silence suffices". 405 We do not see any basis in Article 5.1 to
impose a standard that is short of a "clear justification" but more than total silence. Indeed, if
Article 5.1 does not oblige a Member to justify at the time of application that the safeguard measure
at issue is applied "only to the extent necessary" (as we have found it does not), we see no basis to
find that the United States acted inconsistently with Article 5.1 because the

401 Korea's first written submission, paras. 509 and 511.
402 See, e.g. Korea's first written submission, paras. 506 and 510.
403 United States' first written submission, paras. 370 and 372 (referring to Appellate Body Report, US –
404 Appellate Body Report, US – Line Pipe, para. 233.
405 Korea's first written submission, para. 508. In this regard, we asked Korea to clarify its position by
explaining what obligation less than "clear justification" but more that "total silence" is imposed by Article 5.1.
(Panel question No. 56(a) to Korea after the first substantive meeting). In response to our question, Korea
submits that the fact that (i) the USITC report explained that imported and domestic parts were not in
competition; and (ii) two USITC commissioners recommended that no in-quota tariffs were necessary,
suggests that the United States' safeguard measure was not necessary. Thus, per Korea, a compelling
alternative explanation was required to support the adopted measure. (Korea's response to Panel question
No. 56(a), para. 237). We note that we have addressed these two issues in (i) and (ii) when dealing with
Korea's claim concerning the form and level of the measure. In addition, we note that Korea does not explain
whether the compelling explanation that it expects is to be provided by the investigating authority in its report,
or by the authority imposing the safeguard duty, or by the respondent in WTO panel proceedings. In any case,
we see no basis in Article 5.1 to require such a "compelling explanation" either from the investigating
authority, the authority imposing the safeguard duty, or from the respondent in panel proceedings.

US Presidential Proclamation did not explain why the nature and level of the safeguard measure was
necessary to facilitate adjustment.
7.239. Regarding the inadequacies of the domestic industry's adjustment plan, which per Korea the
USITC failed to properly examine, we agree with a previous DSB report that Article 5.1 does not
impose any obligation on an authority to consider an adjustment plan by the domestic industry. 406
We also note in this regard that during the later stages of these panel proceedings Korea took the
view that "[w]hile adjustment plans do not have to be provided in each case per se, submissions
and considerations of such plans may be desirable as a means of substantiating that a Member
complies with Article 5.1".407 To the extent Article 5.1 imposes no obligation on an investigating
authority to consider an adjustment plan, we see no basis for finding that the USITC acted
inconsistently with Article 5.1 by not considering such a plan.
7.240. Based on the foregoing, we are not persuaded that the United States failed to ensure that
the underlying safeguard measure was not more restrictive than necessary to facilitate adjustment.
We accordingly reject Korea's claim under Articles 5.1 and 7.1 of the Agreement on Safeguards that
the United States failed to limit the safeguard measure to what was necessary to remedy injury and
facilitate adjustment.
7.7.5 Conclusion
7.241. In light of the above:
a. We reject Korea's claim under Article 5.1 of the Agreement on Safeguards that is premised
on Korea 's view, which we have rejected, that the USITC found factors other than
increased imports were causing injury to the domestic industry.
b. We reject Korea's claim under Article 5.1 of the Agreement on Safeguards challenging the
form and level of the United States' safeguard measure. To the extent Korea 's claim is
premised on its view that the duty on out -of-quota LRW parts was not necessary under
Article 5.1, for the reasons set out in paragraph 7.226 above, we do not find it necessary
to address this aspect of Korea's claim.
c. We reject Korea's claim under Article 5.1 of the Agreement on Safeguards that the
United States acted inconsistently with this provision in failing to take into account existing
import restrictions from anti-dumping and countervailing measures.
d. We reject Korea's claim under Articles 5.1 and 7.1 of the Agreement on Safeguards that
the United States failed to limit the safeguard measure to what was necessary to remedy
injury and facilitate adjustment.
e. We do not find it necessary to address Korea 's claim under Article 5.1 of the Agreement
on Safeguards that is consequential to Korea 's claim under Article 4.2(b) challenging the
USITC's determination on causation.
7.8 Claims under Articles 12.1 and 12.2 of the Agreement on Safeguards
7.242. Korea makes the following claims under Articles 12.1 and 12.2 of the Agreement on
Safeguards:
a. Korea claims that the United States acted inconsistently with Articles 12.1(a), 12.1(b),
and 12.1(c) of the Agreement on Safeguards because it failed to make its notifications
under these provisions "immediately".
b. Korea claims that the United States acted inconsistently with Article 12.2 of
the Agreement on Safeguards because its notifications under Articles 12.1(b) and 12.1(c)
failed to provide "all pertinent information" within the meaning of Article 12.2.

407 Korea's second written submission, para. 302. (emphasis added)

7.243. Article 12.1 of the Agreement on Safeguards provides as follows:
A Member shall immediately notify the Committee on Safeguards upon:
(a) initiating an investigatory process relating to serious injury or threat thereof and the
reasons for it;
(b) making a finding of serious injury or threat thereof caused by increased imports;
and
(c) taking a decision to apply or extend a safeguard measure.
7.244. Article 12.2 provides, in relevant part:
In making the notifications referred to in paragraphs 1(b) and 1(c), the Member
proposing to apply or extend a safeguard measure shall provide the Committee on
Safeguards with all pertinent information, which shall include evidence of serious injury
or threat thereof caused by increased imports, precise descript ion of the product
involved and the proposed measure, proposed date of introduction, expected duration
and timetable for progressive liberalization.
7.245. Thus, Article 12.1 requires a Member to "immediately" notify the Committee on Safeguards
(Committee) when it:
a. initiates a safeguard investigation within the meaning of Article 12.1(a) (initiation
notification);
b. makes a finding of serious injury or threat thereof within the meaning of Article 12.1(b)
(serious injury notification); and
c. takes a decision to apply or extend a safeguard measure within the meaning of
Article 12.1(c) (decision notification).
7.246. We note that Article 12.1 uses the term "immediately" but does not prescribe a specific
timeframe within which a Member needs to make the required notifications. We agree in this regard
with previous DSB reports that the word "immediately" impl ies a certain urgency, and that the
degree of urgency required depend s on a case -by-case assessment, account being take n of the
administrative difficulty involved in preparing the notification at issue and the character of the
information supplied.408 Nonetheless, like previous DSB reports, we consider that the amount of time
taken to notify must be kept to a minimum.409
7.247. In addition, we note that Article 12.2 requires that the serious injury and decision
notifications provide the Committee with "all pertinent information", which shall include evidence of
serious injury or threat thereof caused by increased imports, a precise description of the product
involved and the proposed measure, the proposed date of introduction, and the expected duration
and timetable for progressive liberalization.
7.8.1 Initiation notification
7.248. With respect to the United States' initiation notification, the question before us is whether
this notification was made immediately, in the sense of Article 12.1(a). To answer this question, we
will consider the duration between the date when the USITC initiated the underlying safeguard
investigation and the date the United States notified that initiation to the Committee on Safeguards.
We will also take into account any administrative burden involved in preparing the notification at
issue and the character of the information supplied.
7.249. Regarding the time taken between initiation and notification under Article 12.1(a), we note
Korea's contention that the date of initiation was 5 June 2017. Korea relies in this regard on the

408 Appellate Body Report, US – Wheat Gluten, para. 105.
409 Appellate Body Report, US – Wheat Gluten, para. 105.

United States' notification to the Committee on Safeguards (Exhibit KOR-15), which states that the
USITC "initiated the investigation on 5 June 2017".410 The United States contends that the relevant
date of initiation for the purpose of Article 12.1(a) was 8 June 2017, which was the date the USITC
publicly announced the institution of the investigation.411 Therefore, the parties disagree on the date
of initiation of the safeguard investigation. However, both parties agree that the United States
notified its initiation to the Committee on 12 June 2017.
7.250. We note that even if we consider the date of initiation of the underlying sa feguard
investigation to be 5 June 2017, as contended by Korea, this would mean that the United States
only took seven days to notify the initiation notification. Taking into account the
United States' explanation regarding the internal administrative proc ess associated with the
preparation of the initiation notification412 as well as the associated administrative burden413, we do
not consider that the United States' notification of its initiation of the underlying safeguard
investigation was not "immediate" under Article 12.1(a).414
7.251. Based on the foregoing, we reject Korea's claim that the United States acted inconsistently
with Article 12.1(a) of the Agreement on Safeguards.
7.8.2 Serious injury notification
7.252. Korea claims that the United States' serious injury notifications (a) were not immediate
under Article 12.1(b) of the Agreement on Safeguards; and (b) did not contain pertinent information
within the meaning of Article 12.2 of the Agreement on Safeguards. Therefore, per Korea, the
United States acted inconsistently with Article s 12.1(b) and 12.2 of the Agreement on Safeguards.
The United States asks us to reject both claims.
7.253. We note in this regard the following timelines, which are relevant in addressing
Korea's claims:
a. On 5 October 2017, the USITC commissioners held a public vote on serious injury in which
they determined that increased imports caused serious injury to the domestic industry:
i. On 12 October 2017, the United States notified the Committee on Safeguards under
Article 12.1(b) of the WTO Agreement on Safeguards that "there has been a finding of
serious injury or threat thereof caused by increased imports". 415 We refer to this

410 Korea's second written submission, para. 317.
411 United States' response to Panel question No. 81, para. 51.
412 The United States explains that the US petitioners filed an amended petition on 5 June 2017
requesting initiation of the underlying safeguard investigation. Upon receiving the amended petition, the USITC
commenced its internal process of considering whether the petition was properly filed. It concluded on
7 June 2017 that the petition was properly filed and initiated the investigation effective 5 June 2017. Thus, as
of 5 June 2017, the United States Trade Representative (USTR), the agency responsible for filing
US notifications was uncertain whether the USITC would consider the amended petition to be properly filed and
initiate an investigation on this basis. The USTR was informed on 8 June, through the USITC's letter to USTR,
that the investigation had been initiated. (United States' second written submission, paras. 132-133).
413 With respect to the administrative burden involved in preparing the notification at issue and the
character of the information supplied, the United States notes that (a) the USITC and Executive Branch officials
needed to coordinate with respect to the notification process; (b) the notification did not just reproduce the
text of a previously published notice; (c) the USITC investigation team was required to review the notification,
and the process entailed exchanges between different US agencies; and (d) the Executive Branch officials
responsible for the safeguard proceedings were involved in two concurrent proceedings (solar and washers).
(United States' response to Panel question No. 80, para. 49). Korea contends that the administrative difficulties
cited by the United States may offer some insight into why the notification was late, but does not justify it.
Korea also contends that the administrative burden cited by the United States is not credible as the
United States is an experienced Member and it does not provide evidence of the genuine nature of the alleged
concerns. (Korea's comments on the United States' response to Panel question No. 80, para. 111). We have no
reason to doubt the genuineness of the burden alluded by the United States and do not consider that such
burdens are diminished by a Member's experience with safeguard investigations.
414 We accordingly do not need to resolve the factual dispute between the parties on whether the
safeguard investigation was initiated on 5 June 2017 or 8 June 2017.
415 Notification under Article 12.1(b) of the Agreement on Safeguards on Finding a Serious Injury or
Threat Thereof Caused by Increased Imports: United States of 12 October 2017, G/SG/N/8/USA/10
(13 October 2017) (Original injury notification), (Exhibit KOR-6).

notification as the "original injury notification". The original injury notification stated
as follows:
1. Provide evidence, citing relevant data and the applicable period
of investigation of serious injury or threat thereof caused by
increased imports
On 5 October 2017, the U.S. International Trade Commission
(Commission) determined that large residential washers are being
imported in such increased quantities as to be a substantial cause of
serious injury to the domestic industry.
The initiation that led to this determination was notified to the Committee
on Safeguards in G/SG/N/6/USA/12 (dated 12 June 2017).
The Commission is now considering the appropriate remedy to
recommend to the President, and will forward its injury findings and
remedy recommendations to the President by 4 December 2017. This
report will include the Commission's injury de termination, remedy
recommendations, certain additional findings, and the basis for its injury
determination, remedy recommendations, and findings as well as the
factual information compiled in the Commission's posthearing injury
report. The United States will provide a copy of this report, excluding
confidential business information, to the Committee on Safeguards
shortly after it is submitted to the President.416
b. On 4 December 2017, the USITC transmitted its report to the US President, while also
issuing at this time a public version of the report:
i. On 9 December 2017, the United States submitted a notification under Article 12.1(b)
to the Committee, which supplemented the notification of 12 October 2017
("supplemental injury notification").
7.8.2.1 Providing all pertinent information
7.254. Korea's claim under Article 12.2 concerns the original injury notification, and not the
supplemental injury notification. Korea argues that the United States' original injury notification was
inconsistent with Article 12.2 because it did not contain the following "pertinent information" :
(a) information about increased imports or evidence for finding serious injury caused by increased
imports; (b) discussion on the injury factors listed in Article 4.2(a) of the Agreement on Safeguards;
and (c) explanation on the causal relation.417
7.255. The United States does not dispute that the original injury notification did not contain this
information. However, the United States notes that the original injury notification was made with
respect to the public vote by the USITC commissioners.418 The United States explains that when the
USITC commissioners held a public vote on serious injury on 5 October 2017, the
USITC commissioners had not completed the process of consolidating their individual reasoning, and
drafting and finalizing the views of the USITC on serious injury. 419 Thus, the original
injury notification on 12 October 2017 notified "all pertinent" information that was available at that
time.420 The United States notes that its supplemental injury n otification on 9 December 2017
supplemented the original injury notification with the public version of the USITC report , which
contained this information, and observes that it is common practice for Members to supplement

416 Original injury notification, (Exhibit KOR-6), p. 1. (fns omitted; emphasis added)
417 Korea's first written submission, para. 562.
418 United States' first written submission, para. 388.
419 United States' first written submission, para. 396.
420 United States' first written submission, para. 396.

notifications under Articles 12.1(b) and 12.1(c) as new information becomes available or they take
additional procedural steps.421
7.256. In addressing Korea's claim, we note that it remains undisputed that the USITC had not
issued its report at the time the United States notified its original injury notification under
Article 12.1(b) to the Committee on Safeguards. Since Korea does not challenge the
United States' supplemental notification under Article 12.2, it is also undisputed that the
United States' supplemental notification contained the pertinent information required under
Article 12.2. Thus, the question before us is whether the United States acted inconsistently with
Article 12.2 because its first notification under Article 12.1(b) (i.e. the original injury no tification)
did not contain the pertinent information under Article 12.2, even though the supplementa l injury
notification under Article 12.2 did present that information.
7.257. In addressing this question, we note that that Article 12.2 refers to "notifications referred to
in paragraphs 1(b) and 1(c)" (in the collective ) and identifies the pertinent information that such
notifications should contain, without necessarily distinguishing between information contained in an
Article 12.1(b) notification and that cont ained in an Article 12.1(c) notification.422 Some of the
information, such as the "proposed date of introduction" of the measure, that is otherwise pertinent
under Article 12.2, may not be available at the time a Member makes its serious injury notification
under Article 12.1(b), and may only become available when a Member subsequently decides to apply
the safeguard measure. The fact that Article 12.2 does not require Members to provide all pertinent
information in notifications under Article 12.1(b) alone suggests that Article 12.2 permits Members
to provide the pertinent information identified in Article 12.2 in a staggered manner. Therefore, we
do not consider that Article 12.2 precludes a Member from supplementing an initial notification under
Article 12.1(b) with additional information. When a Member does make such a
supplemental notification under Article 12.1(b), and the initial and supplemental notification
collectively identify the pertinent information under Article 12.2, we do not consider that the Member
could be said to have acted inconsistently with Article 12.2 because its initial notification, taken
alone, does not set out all the pertinent information under Article 12.2.423 We accordingly are not
persuaded by Korea's claim that the United States acted inconsistently with Article 12.2 because its
original injury notification did not contain the information identified by Korea.
7.258. Based on the foregoing, we reject Korea's claim that the United States acted inconsistently
with Article 12.2 of the Agreement on Safeguards.
7.8.2.2 Immediacy of notification
7.259. Korea contends as follows:
a. The original injury notification of 12 October 2017 was not immediate under
Article 12.1(b) because it was made seven days after the USITC had made a finding of
serious injury through the public vote of the USITC commissioners on 5 October 2017.424
b. The supplemental injury notification of 9 December 2017 was not immediate under
Article 12.1(b) because425:
i. It was made two months after the public vote of the USITC commissioners.
ii. Even if the publication of the USITC report on 4 December 2017 was the triggering
event for assessing whether the United States made an immediate notification under

421 United States' first written submission, paras. 398-399; response to Panel question No. 86(a),
para. 56.
422 Emphasis added.
423 Indeed, the requirement of "immediate" notification under Article 12.1 and the requirement to
provide "all pertinent information" under Article 12.2, show that Article 12 seeks to strike a balance between
requiring a Member to provide the pertinent information under Article 12.2 to the Members, through the
Committee on Safeguards, and doing so in a timely manner. Our understanding of Article 12 preserves this
balance because it does not disincentivize a Member from notifying the pertinent information as soon as it is
notifiable.
424 Korea's first written submission, para. 554.
425 Korea's first written submission, para. 563.

Article 12.1(b), the supplemental injury notification was not immediate as it was
notified on 9 December 2017, five days after the publication of the report.
7.260. The United States argues that it "immediately" notified its original injury notification as well
as its supplemental injury notification. The United States submits that in determining whether the
United States' notifications were immediate, we should take the following factors into account:
a. The administrative task of preparing the notification was not pro forma but had to be
tailored.426 The supplemental notification did not just enclose the public version of the
USITC report, but also pinpointed to findings of potential relevance to Members.427
b. The original notification had to be reviewed by the USITC investigating team and required
exchanges between two separate US agencies (the USITC and the United States Trade
Representative (USTR)).428
c. The original and supplemental notifications were made at a time when government officials
responsible for the safeguard measures were extremely busy, including with the
LRW investigation and the solar products investigation.429
7.261. With respect to the original injury notification, taking into account the
United States' explanation regarding the process involved in preparation of the notification, we are
not persuaded that the United States' notification within seven days of the
USITC commissioner's public vote was not "immediate" under Article 12.1(b). With respect to the
supplemental injury notification, we note that this notification was based on the USITC report that
was transmitted to the US President on 4 December 2017. In determining whether this notification
was immediate, we consider the time taken from the date the USITC report was transmitted to the
US President.430 We note that the United States took five days to notify the supplemental
notification. Taking into account the United States' explanations regarding the administrative
process associated with preparing this notification, we are not persuaded that the notification within
five days was not immediate for the purpose of Article 12.1(b).
7.262. Based on the foregoing, we reject Korea's claim that the United States acted inconsistently
with Article 12.1(b) of the Agreement on Safeguards with respect to the original injury notification
and the supplemental injury notification.
7.8.3 Decision notification
7.263. Korea claims that the United States' decision notification (a) was not immediate under
Article 12.1(b) of the Agreement on Safeguards; and (b) did not contain pertinent information within
the meaning of Article 12.2 of the Agreement on Safeguards. Therefore, per Korea, the United States
acted inconsistently with Article s 12.1(b) and 12.2 of the Agreement on Safeguards.
The United States asks us to reject both claims.
7.8.3.1 Providing all pertinent information
7.264. Korea contends that the United States' decision notification was inconsistent with
Article 12.1(c) because it did not contain all pertinent information , including the evidence on
serious injury caused by increased imports. 431 Korea submits in this regard that while the
United States' decision notification referred to the public version of the USITC report, that report
redacted information without providing sufficient non -confidential summaries. Specifically,
Korea points to redactions in the sections (a) on increased imports where statistics on the
development of imports over the POI had been redacted; and (b) on serious injury.432 Korea asserts

426 United States' first written submission, para. 393.
427 United States' first written submission, para. 400.
428 United States' first written submission, paras. 393 and 400.
429 United States' first written submission, para. 393.
430 Indeed, considering the USITC report had not been issued when the USITC commissioners held their
public vote on serious injury on 5 October 2017, the United States could not be expected to notify any
information based on that report.
431 Korea's first written submission, para. 564.
432 Korea's first written submission, para. 565.

in this regard that the obligation to protect confidential information does not mean that Members
can redact such information without providing "non-confidential summaries" or the "reasons why a
summary cannot be provided" as required by Article 3.2 of the Agreement on Safeguards .433
Korea states that the United States failed t o provide such summaries or reasons as to why not
"all pertinent information" was provided in the Article 12.1(c) notification.
7.265. The United States notes that Korea does not explain why the information that the USITC did
provide was insufficient under Article 12.2.434 The United States also asserts that Article 12.2 does
not supersede the USITC's obligation under Article 3.2 to not disclose confidential information
without permission of the party submitting it.435
7.266. We note that while Article 12.2 requires Members to provide all pertinent information in their
notifications under Articles 12.1(b) and 12.1(c), we agree with previous DSB reports that such
information does not need to cover all details of the recommendations and reasoning set out in the
report of the investigating authorities.436 In addition, we note , as Korea agrees, that Article 12.2
does not require Members to disclose confidential information in their notifications. 437 However, at
the same time, considering that notifications under Article 12.1(c) serve as a basis for consultations
under Article 12.3, the information must be provided in a manner that would allow exporting
Members to have meaningful consultations. Therefore, if a complainant is to assert that a notification
does not contain pertinent i nformation, such as the evidence of serious injury or threat thereof
caused by increased imports, it must do more than merely assert that the notification redacts
confidential information. Instead, the complainant must show why the information that has bee n
conveyed in the notification is not sufficient under Article 12.2, such that the notifying Member could
not be said to have "provid[ed]" all pertinent information.
7.267. In our view, Korea has not made such a showing. Korea focuses on the redactions in the
increased imports and serious injury sections of the USITC report, and the alleged absence of
non-confidential summaries in those reports. 438 In particular, Korea argues that ( a) the increased
imports section of the USITC report failed to provide all relevant information, as the relevant
statistics on the development of imports over the POI was redacted, and no non -confidential
summaries were provided in this regard; and (b) the discussion on serious injury in the USITC report
was highly redacted, and thus left Members at a loss as to crucial aspects of the findings made. 439
However, we note that the relevant question under Article 12.2 is not whether the public version of
the USITC report cited in the notification redacted confidential information, or did not cover all details
of the reasoning set out in that report, but whether the United States provided all pertinent
information through its Article 12.1(c) notification. Korea has not established through the arguments
set out above that the United States failed to do so.
7.268. Based on the foregoing, we reject Korea's claim that the United States acted inconsistently
with Article 12.2 of the Agreement on Safeguards.
7.8.3.2 Immediacy of notification
7.269. The parties agree that the United States took the decision to apply a safeguard measure on
23 January 2018, when the US President signed the proclamation detailing the proposed measure.440
They also agree that the United States notified this decision to the Committee on 26 January 2018,
i.e. three days later.441
7.270. Korea contends that because the United States took three days to notify the Committee on
Safeguards about the decision to apply a safeguard measure, it failed to "immediately" notify the
Committee under Article 12.1(c).442 In this regard, Korea contends that there was n o lack of
resources that would justify such a delay; the decision to be notified comprised only three pages;

433 Korea's second written submission, para. 326.
434 United States' first written submission, para. 406.
435 United States' first written submission, paras. 405 and 407.
436 Appellate Body Report, Korea – Dairy, para. 109.
437 Korea's second written submission, para. 326.
438 Korea's first written submission, para. 565.
439 Korea's first written submission, para. 565.
440 Korea's first written submission, para. 548; United States' first written submission, para. 404.
441 Korea's first written submission, para. 548; United States' first written submission, para. 404.
442 Korea's first written submission, para. 556.

and the decision did not need to be translated. 443 The United States submits that it complied with
Article 12.1(c), and refers to the administrative process relating to the preparation of the decision
notification to explain the time taken to notify444:
a. Burden on USITC staff:
i. The US Presidential Proclamation in the underlying LRW safeguard measure was signed
on the same day as the proclamation in a parallel case on solar products, putting an
extraordinary burden on US officials.
ii. US officials needed to inform agencies charged with a dministering the safeguard
measure, and respond to questions from the public, including affected governments
and foreign producers.
iii. The United States considered it critical to obtain a formal copy of the
US Presidential Proclamation, but the process has se veral formalities that slowed
receipt of the copies.
b. Notification preparation:
i. To prepare the notification, responsible officials had to extract information from the
documents, distil it to ensure maximum comprehensibility, seek comments from
relevant officials, and execute necessary changes made by those officials.
c. Time difference between Washington DC and Geneva:
i. The US Presidential Proclamation was signed after close of business, Geneva time (on
23 January 2018) and the notification was transmitted to Ge neva in the evening of
25 January 2018. Once the time zone difference is taken into account, the gap
between signature of the US Presidential Proclamation and the notification was actually
just two days.
7.271. Taking into account the United States' explanations regarding the administrative process
associated with preparing this notification, we are not persuaded that notification within three days
was not immediate for the purpose of Article 12.1(c).
7.272. Based on the foregoing, we reject Korea's claim that the United States acted inconsistently
with Article 12.1(c) of the Agreement on Safeguards.
7.8.4 Conclusion
7.273. In light of the above we reject Korea 's claims under Articles 12.1(a), 12.1(b), and 12.1(c)
of the Agreement on Safeguards that the United States allegedly failed to "immediately" notify its
initiation notification, serious injury notification and decision notification to the
Committee on Safeguards.
7.274. We also reject Korea 's claims under Article 12.2 of the Agreement on Safeguards that the
United States allegedly failed to provide "all pertinent information" in its serious injury notification
and its decision notification.
7.9 Claims under Articles 8.1 and 12.3 of the Agreement on Safeguards
7.275. We note that Article 8.1 of the Agreement on Safeguards provides, inter alia, that a Member
applying a safeguard measure shall endeavour to maintain a substantially equivalent level of
concessions and other obligations to that existing under GATT 1994 between it and the exporting
Members which would be affected by such a measure, in accordance with paragraph 3 of Article 12.
Article 12.3, in turn, provides as follows:

443 Korea's first written submission, para. 557.
444 United States' response to Panel question No. 62, paras. 104-106.

A Member proposing to apply or extend a safeguard measure shall provide adequate
opportunity for prior consultations with those Members having a substantial interest as
exporters of the product concerned, with a view to, inter alia, reviewing the information
provided under [Article 12.2], exchanging views on the measure, and reaching an
understanding on ways to achieve the objective set out in [Article 8.1].
7.276. Thus, as is evident from the text of Article 8.1, and as also recognized in previous
DSB reports, a WTO Member cannot endeavour to maintain an adequate balance of concessions
under Article 8.1 unless it provides, as a first step, a n adequate opportunity for prior consultations
on a proposed measure under Article 12.3.445
7.277. Korea argues that the United States failed to provide an adequate opportunity for prior
consultations under Article 12.3, and therefore did not endeavour to maintain substantially
equivalent level of concessions and other obligations under Article 8.1 of the Agreement on
Safeguards. Korea's claim under Article 8.1 is thus directly linked to the question of whether the
United States provided adequate opportunity for consultations under Article 12.3. Korea contends in
this regard that the United States did not provide it with an adequate opportunity for prior
consultations because Korea learnt of the scope and effective date of the safeguard measure on
26 January 2018, which is the date the United States notified the decision to apply a safeguard
measure under Article 12.1(c), and the safeguard measure went into effect 12 days later,
i.e. 7 February 2018.446 Korea acknowledges in this regard that the Unit ed States and Korea held
consultations on 1 February 2018.447 However, Korea contends that it did not have sufficient time
to analyse the measure, consider its likely consequence, conduct appropriate domestic consultations,
and prepare for consultations with the United States.448 Therefore, per Korea, the United States did
not provide sufficient opportunity for prior consultations.
7.278. The United States considers that it provided Korea with sufficient opportunity for prior
consultations. In particular, the United States disagrees that Korea had only 12 days to prepare for
consultations. The United States asserts in this regard that t he opportunity for prior consultation s
arose on 11 December 2017 (not 26 January 2018, as Korea contends), which is when the
United States issued a supplemental notification under Article 12.1(b) of the Agreement on
Safeguards and announced its readiness for consultations. 449 The United States notes that this
notification set out a description of the product, evidence of serious injury c aused by increased
imports, a proposed measure, the proposed dat e of introduction, the expected duration , and a
timetable for progressive liberalization. 450 The United States submits that Members had received
most of the relevant information on 11 December 2017, and the decision notification provided
limited additional information, making it relatively simple to evaluate how the effects of the
final safeguard measure would dif fer from expectations based on the proposed measure. 451 The
United States also submits that the opportunity for consultations continued beyond 7 February 2018
because the US Presidential Proclamation explicitly provided further time for consultations, and a n
opportunity to modify the safeguard measure in response to the results of those consultations.452
7.279. The question before us is whether the United States provided Korea with adequate
opportunity for prior consultations under Article 12.3. In addressing this question, we note from the
text of Article 12.3, set out above, that the provision asks Members proposing to apply a safeguard
measure to provide adequate opportunity for prior consultations to Members with substantial interest
as exporters of the product c oncerned with a view to, inter alia, (a) reviewing the information
provided under Article 12.3, (b) exchanging views on the measures, and (c) reaching an
understanding on ways to achieve the objectives set out in Article 8.1. Like previous DSB reports,
we consider that Article 12.3 requires a Member proposing to apply a safeguard measure to provide
exporting Members with sufficient information and time to allow for the possibility, through
consultations, for a meaningful exchange on the issues identified in Article 12.3.453 We also agree in
this regard with previous DSB reports that the obligation to provide adequate opportunity for "prior"

445 Appellate Body Report, US – Wheat Gluten, para. 146.
446 Korea's first written submission, para. 530.
447 Korea's response to Panel question No. 84, para. 111.
448 Korea's response to Panel question No. 84, para. 112; first written submission, para. 530.
449 United States' first written submission, para. 411.
450 United States' first written submission, para. 411.
451 United States' first written submission, para. 416.
452 United States' first written submission, para. 417.
453 Appellate Body Report, US – Wheat Gluten, paras. 136-137.

consultations cannot be met if there is insufficient time prior to the application of the measure to
have a meaningful exchange.454 Instead, a Member having a substantial interest as exporter of the
product concerned must have sufficient time prior to the application of the measure to have
consultations with the imposing Member with a view to, inter alia, achieving the objectives set out
in Article 12.3.
7.280. We note that the parties disagree on whether Korea had sufficient time prior to the
application of the safeguard measure for a meaningful exchange. The parties' disagreement in this
regard arises from t heir differing views on whether the opportunity to consult arose on
11 December 2017, when the United States notified its supplemental injury notification and
announced its readiness for consultations (as the United States contends), or 26 January 2018,
when the United States notified its decision notification (as Korea contends). We note in this regard
Korea's argument that it could not have had meaningful consultations on the basis of the
United States' supplemental injury notification because, inter alia:
a. There was disagreement among the USITC's four commissioners on the necessity for
in-quota tariffs for LRW units. Thus, Korea could not have known what remedy the
US President would apply unless he made a decision in this regard (he ultimately applied
in-quota tariffs).455
b. The USITC recommended that the LRW measure not apply to Korea, but the US President
decided to apply the measure to Korea.456
7.281. Korea notes that as of 11 December 2017, it only knew of the USITC's recommendation
reflected in the United States' Article 12.1(b) notification, and did not know what the US President
would do in terms of ( a) imposition of in -quota tariffs on LRW units, and ( b) inclusion of Korea in
the scope of the safeguard measure. The United States does not dispute that its supplemental injury
notification did not provide this information.
7.282. In our view, to have an adequate opportunity for prior consultations pursuant to Article 12.3,
Korea would have required this information. We note in this regard that one of the objectives of
Article 12.3 consultations is to review the pertinent information identified in Article 12.2 and
provided to Members through Article s 12.1(b) and 12.1(c) notifications. Pertinent information
includes a "precise description of the product involved and the pr oposed measure". We note in this
regard that, as Korea argues, the USITC stated in its report that the safeguard measures would not
apply to Korea.457 Considering that Korea did not have the information regarding the application of
the safeguard measure to its exports or the nature of the remedy as of 11 December 2017,
consultations under Article 12.3 could not have covered this information. Moreover, t he purpose of
an Article 12.3 consultation is also to exchange views on the measure, and to reach an understanding
on ways to achieve the objective set out in Article 8.1 of the Agreement on Safeguards. The objective
of Article 8.1 is that a Member proposing to apply a safeguard measure shall endeavour to maintain
a "substantially equivalent level of concessions" and other obligations to that existing
under GATT between it and "the exporting Members which would be affected by such a measure" in
accordance with Article 12.3. We do not consider that Korea could have had an adequate opportunity
for prior consultations under Article 12.3, in the sense of exchanging views on the measure and
achieving the objective of Article 8.1, in the absence of this information.458
7.283. Instead, the opportunity to review this information would have arisen on 26 January 2018,
when the United States notified the decision notification, which provided the information set out in

454 Appellate Body Report, US – Line Pipe, para. 112.
455 Korea's response to Panel question No. 66, para. 264.
456 Korea's response to Panel question No. 66, para. 265.
457 Korea's response to Panel question No. 66, para. 265; USITC report, (Exhibit KOR-1), pp. 65-66.
458 We note in this regard that previous DSB reports, with which we agree, have found when the report
of the investigating authorities, notified under Article 12.1(b), did not contain precise recommendations on the
nature of the measure to be imposed so as to allow the complainant to accurately assess the likely impact of
the measure contemplated, or adequately consult with the imposing Member on the overall equivalent
concessions, the exporting Members could not have meaningful consultations based on the Article 12.1(b)
notification. (Appellate Body Report, US – Wheat Gluten, paras. 141-142).

paragraph 7.280(a)-(b) above.459 In addition, we note the United States' submission that the
opportunity for consultation continued beyond 7 February 2018, when the safeguard measure came
into effect, because the US Presidential Proclamation explicitly provided further time for
consultations and an opportunity to modify the safeguard measure in response to the results.
However, we disagree with this submission because, as we noted above, the obligation to provide
adequate opportunity for "prior" consultations cannot be met if there is insufficient time prior to the
application of the measure to have a meaningful exchange. It remains undisputed that the safeguard
measure went into effect on 7 February 2018.460 Therefore, in examini ng whether Korea had
adequate opportunity for prior consultations, we must consider whether Korea had sufficient time
prior to the application of the measure on 7 February 2018 to have a meaningful exchange pursuant
to Article 12.3.
7.284. We accordingly consider whether the United States provided Korea with sufficient time to
allow for the possibility, through consultations, for a meaningful exchange based on the information
set out in paragraph 7.280(a)-(b) above. Taking into account the time available to Korea prior to
the application of the safeguard measure on LRWs and the nature of the information set out in
paragraph 7.280(a)-(b) above that would inform those consultations, we do not consider that Korea
had adequate opportunity for prior consultations under Article 12.3. Therefore, we also find that the
United States did not endeavour to maintain a substantially equivalent level of concessions and other
obligations under Article 8.1 between it and Korea, in accordance with Article 12.3.
7.285. Based on the foregoing, we find that the United States acted inconsistently with Articles 12.3
and 8.1 of the Agreement on Safeguards.
7.10 Claim under Article 11.1(a) of the Agreement on Safeguards
7.286. In its request for findings, Korea claim s that the United States acted inconsistently with
Article 11.1(a) of the Agreement on Safeguards because of violations under other provisions of
the Agreement on Safeguards and Article XIX:1(a) of the GATT 1994.461 Therefore, Korea's claim
under Article 11.1(a) is purely consequential and is dependent on a finding of violation with respect
to Korea's claims under Article XIX:1(a) and different provisions of the Agreement on Safeguards.
We have upheld certain claims made by Korea under Article XIX:1(a) of the GATT 1994 as well as
under the Agreement on Safeguards.
7.287. Based on the foregoing, we do not find it necessary to address Korea's claim under
Article 11.1(a) of the Agreement on Safeguards.
7.11 Claim under Article II:1 of the GATT 1994
7.288. Korea contends that as long as a Member takes safeguard measures consistent ly with
Article XIX of the GATT 1994 and the Agreement on Safeguards, it may levy tariffs above its bound
level.462 However, per Korea, the United States imposed a safeguard measure on imports of LRWs
even though the prerequisites set forth in Article XIX:1(a) of the GATT 1994 and the Agreement on
Safeguards were not shown to exist. 463 Therefore, according to Korea, by imposing an unlawful
safeguard measure the United States imposed duties that were in excess of those set forth in its
Schedule of Concessions, thereby violating Article II:1 of the GATT 1994.464 The United States notes
that Korea's claim is purely consequen tial and it should fail because the United States' safeguard
measures are consistent with Article XIX:1(a) of the GATT 1994 and with the Agreement on
Safeguards.465 In addition, the United States submits that even if we were to find violations under

459 We note Korea's confirmation that it had access to, and was aware of, the contents of the
US Presidential Proclamation on 24 January 2018. (Korea's response to Panel question No. 85, para. 115).
However, Korea's confirmation does not affect our findings above considering consultations under Article 12.3
are based on the notifications made pursuant to Articles 12.1 and 12.2, and in any case Korea became aware
of the contents only two days prior to 26 January 2018, when the United States notified its decision
notification.
460 United States' response to Panel question No. 65(a), para. 110; Korea's second written submission,
para. 312.
461 Korea's first written submission, para. 573.
462 Korea's first written submission, para. 570.
463 Korea's first written submission, para. 571.
464 Korea's first written submission, para. 571.
465 United States' first written submission, para. 418.

Article XIX:1(a) of the GATT 1994 and under the Agreement on Safeguards, a finding under
Article II:1 would be superfluous.466
7.289. We note that Korea's claim under Article II:1 is purely consequential and is dependent on a
finding of violation with respect to Korea's claims under Article XIX:1(a) and different provisions of
the Agreement on Safeguards. We have upheld certain claims made by Korea under Article XIX:1(a)
of the GATT 1994 as well as under the Agreement on Safeguards.
7.290. Based on the foregoing, we do not find it necessary to address Korea's claim under
Article II:1 of the GATT 1994.
8 CONCLUSIONS AND RECOMMENDATION
8.1. For the reasons set forth in this Report, we conclude as follows:
a. With respect to Korea's claims under Article XIX:1(a) of the GATT 1994 and Articles 1 and
3.1 of the Agreement on Safeguards challenging the absence of a reasoned and adequate
explanation on "unforeseen developments" and the "obligations incurred" by the
United States, which would have resulted in the alleged increased imports of LRWs causing
serious injury:
i. We find that the USITC acted inconsistently with Article XIX:1(a) of the GATT 1994
and Article 3.1 of the Agreement on Safeguards because its report does not contain a
reasoned and adequate explanation on "unforeseen developments" and the
"obligations incurred" by the United States, within the meaning of Article XIX:1(a) of
the GATT 1994. We do not find it necessary to address whether the USITC also acted
inconsistently with Article 1 of the Agreement on Safeguards for these same reasons.
b. With respect to Korea 's claims under Articles 2.1, 3.1, 4.1(c), 4.2(a), and 4.2(b) of
the Agreement on Safeguards challenging the USITC's definition of the domestic industry:
i. We find that the USITC acted inconsistently with Article 4.1(c) of the Agreement on
Safeguards because it included LRW parts in the definition of the domestic industry
based on (1) its finding of likeness between imported and domestically produced LRW
parts; and (2) its application of the product line approach. We do not find it necessary
to address whether the USITC also acted inconsistently with Article 2.1 for these same
reasons.
ii. We reject Korea's claim under Articles 3.1 and 4.1(c) of the Agreement on Safeguards,
as well as Article 2.1 of the Agreement on Safegu ards challenging the
USITC's inclusion of belt-driven washers in the definition of the domestic industry.
iii. We do not find it necessary to address Korea 's consequential claims that as a
consequence of the improper definition of the domestic industry, the
USITC's determination of serious injury and causation was also inconsistent with
Articles 2.1, 3.1, 4.1(c), 4.2(a), and 4.2(b) of the Agreement on Safeguards.
c. With respect to Korea's claims under Articles 2.1 and 3.1 of the Agreement on Safeguards
challenging the USITC's findings on imports in such increased quantities:
i. We find that the USITC acted inconsistently with Articles 2.1 and 3.1 of the Agreement
on Safeguards because it failed to provide a reasoned and adequate explanation i n
support of its finding on increased imports.
ii. We reject Korea's claim that the USITC acted inconsistently with Articles 2.1 and 3.1
of the Agreement on Safeguards by (1) cumulating imports of LRWs and LRW parts as
part of its increased imports analysis ; (2) failing to examine the significance of the
increase in imports relative to domestic consumption ; and (3) failing to account for

466 United States' first written submission, para. 419.

the price and non-price based aspects of the conditions of competition in the market
in its increased imports analysis.
d. With respect to Korea 's claims under Articles 2.1, 3.1, 4.1(a), 4.2(a), and 4.2(c) of
the Agreement on Safeguards challenging the USITC's findings on serious injury suffered
by the domestic industry:
i. We find that the USITC acted inconsistently with Articles 4.2(a) and 3.1 of
the Agreement on Safeguards by excluding the profit and loss data of the producer of
belt-driven washers from the profit data used to determine the profitability of the
domestic industry. We do not find it necessary to separately address whe ther the
USITC also acted inconsistently with Articles 2.1, 4.1(a), and 4.2(c) for these same
reasons.
ii. We reject, for the reasons set out in paragraph 7.119 above, Korea's claims under
Article 4.2(a), as well as Articles 3.1, 4.1(a), and 4.2(c ) of the Agreement on
Safeguards that the USITC allegedly failed to objectively examine "profit and loss".
iii. We reject Korea's claims under Article 4.2(a) of the Agreement on Safeguards that the
USITC allegedly failed to objectively examine the share of the domestic market taken
by increased imports.
iv. We do not find it necessary to address Korea 's claims under Article 4.2(a), as well as
Articles 3.1, 4.1(a), and 4.2(c) of the Agreement on Safeguards that the USITC failed
to evaluate all injury factors set out in Article 4.2(a).
v. We do not find it necessary to address Korea 's claims under Article 4.2(a), as well as
Articles 2.1, 3.1, 4.1(a), and 4.2(c) of the Agreement on Safeguards that are
consequential to Korea 's claims challenging the USITC 's definition of the
domestic industry.
vi. We do not find it necessary to address Korea's claims under Article 4.2(a), as well as
Articles 3.1, 4.1(a), and 4.2(c) of the Agreement on Safeguards that the USITC failed
to undertake an objective examination of the significant overall impairment of the
domestic industry and based its overall finding of serious injury on one factor alone.
e. With respect to Korea's claims under Articles 2.1, 3.1, 4.2(b), and 4.2(c) of the Agreement
on Safeguards challenging the USITC's findings on causation between subject imports and
the serious injury to the domestic industry:
i. We find that the USITC acted inconsistently with Articles 3.1 and 4.2(b) the Agreement
on Safeguards because it (1) did not provide a reasoned and adequate explanation in
support of its finding that subject imports depressed and suppressed prices of t he
domestic like product as a whole; and (2 ) did not make a finding on coincidence in
trends in a manner consistent with Article 4.2(b). We do not find it necessary to
separately address whether the USITC also acted inconsistently with Articles 2.1 and
4.2(c) for these same reasons.
ii. We reject Korea 's claims under Articles 3.1 and 4.2(b), as well as Articles 2.1, and
4.2(c) of the Agreement on Safeguards challenging the USITC's finding that (1) joint
pricing of dryers and LRWs and (2 ) deterioration of US brands, were not factors
causing injury to the domestic industry.
iii. We reject Korea 's claims under Articles 3.1 and 4.2(b), as well as Articles 2.1 and
4.2(c) of the Agreement on Safeguards challenging the USITC 's application of the
substantial cause test in the underlying investigation.
iv. We do not find it necessary to address Korea 's claims under Articles 3.1 and 4.2(b),
as well as Articles 2.1 and 4.2(c ) of the Agreement on Safeguards regarding the
USITC's analysis of non-price related aspects of competition.

v. We do not find it necessary to address Korea 's claims under Article 4.2(b), as well as
Articles 2.1, 3.1, and 4.2(c) of the Agreement on Safeguards that are consequential
to Korea's claims challenging the USITC 's definition of the domestic industry and it s
determination on increased imports.
f. With respect to Korea's claims under Articles 5.1 and 7.1 of the Agreement on Safeguards:
i. We reject Korea 's claim under Article 5.1 of the Agreement on Safeguards that is
premised on Korea's view, which we have rejected, that the USITC found factors other
than increased imports were causing injury to the domestic industry.
ii. We reject Korea's claim under Article 5.1 of the Agreement on Safeguards challenging
the form and level of the United States' safeguard measure. To t he extent
Korea's claim is premised on its view that the duty on out-of-quota LRW parts was not
necessary under Article 5.1, for the reasons set out in paragraph 7.226 above, we do
not find it necessary to address this aspect of Korea's claim.
iii. We reject Korea 's claim under Article 5.1 of the Agreement on Safeguards that the
United States acted inconsistently with this provision in failing to take into account
existing import restrictions from anti-dumping and countervailing measures.
iv. We reject Korea 's claim under Articles 5.1 and 7.1 of the Agreement on Safeguards
that the United States failed to limit the safeguard measure to what was necessary to
remedy injury and facilitate adjustment.
v. We do not find it necessary to address Korea 's claim under Article 5.1 of
the Agreement on Safeguards that is consequential to Korea 's claim challenging the
USITC's determination on causation.
g. With respect to Korea 's claims under Articles 12.1 and 12.2 of the Agreement on
Safeguards:
i. We reject Korea 's claims under Articles 12.1(a), 12.1(b ), and 12.1(c ) of
the Agreement on Safeguards that the United States allegedly failed to "immediately"
notify its initiation notification, serious injury notification , and decision notification to
the Committee on Safeguards.
ii. We reject Korea's claims under Article 12.2 of the Agreement on Safeguards that the
United States allegedly failed to provide "all pertinent information" in its serious injury
notification and its decision notification.
h. With respect to Korea 's claims under Articles 8.1 and 12.3 of the Agreement on
Safeguards, we find that the United States acted inconsistently with Article 12.3 because
it failed to provide Korea with adequate opportunity for prior consultations under
Article 12.3 of the Agreement on Safeguards. We find that as a consequence of this
violation under Article 12.3, the United States also acted inconsistently with Article 8.1 of
the Agreement on Safeguards.
i. With respect to Korea 's claim under Article 11.1(a) of the Agreement on Safeguards, we
do not find it necessary to address this claim.
j. With respect to Korea 's claim under Article II.1 of the GATT 1994, we do not find it
necessary to address this claim.
8.2. Under Article 3.8 of the DSU, in cases where there is an infringement o f the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment. We conclude that, to the extent that the measure at issue is inconsistent
with Article XIX:1(a) of the GATT 1994 and several provisions of the Agreement on Safeguards, it
has nullified or impaired benefits accruing to Korea under these agreements.

8.3. Pursuant to Article 19.1 of the DSU, we recommend that the United States bring its measure
into conformity with its obligations under Article XIX:1(a) of the GATT 1994 and the Agreement on
Safeguards.