CHINA  ANTI-DUMPING AND COUNTERVAILING DUTY MEASURES ON BROILER PRODUCTS FROM THE UNITED STATES REPORT OF THE PANEL
Document: REPORT OF THE PANEL
Date: 2 August 2013
Document codes: WT/DS427/R
Complainant: U.S.
Respondent: China
Third parties: EU, Japan, Norway, Thailand, Saudi Arabia, Chile, Mexico
Dispute stage: Panel
Agreements cited: Art. 2.2, 2.2.1.1, 2.4, 6.8, 12.2.1, 12.2, 6.9, 12.7  Anti-dumpingArt. 12.7  Subsidies and Countervailing Measures (SCM)Art. VI:3  GATT 1994Art. 19.4, 22.3, 22.4, 22.5, 12.8  Subsidies and Countervailing Measures (SCM)Art. 3.1, 3.2, 3.5, 6.4  Anti-dumpingArt. 15.5, 12.3  Subsidies and Countervailing Measures (SCM)Art. 3.4  Anti-dumpingArt. 15.1, 15.2, 12.4.1  Subsidies and Countervailing Measures (SCM)Art. 6.2  Anti-dumpingArt. VI  GATT 1994Art. 1  Anti-dumpingArt. 10  Subsidies and Countervailing Measures (SCM)

CHINA  ANTI-DUMPING AND COUNTERVAILING DUTY
MEASURES ON BROILER PRODUCTS FROM
THE UNITED STATES
REPORT OF THE PANEL

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LIST OF ANNEXES
ANNEX A
INTEGRATED SUMMARIES OF THE PARTIES' FIRST AND SECOND WRITTEN SUBMISSIONS,
RESPONSES TO QUESTIONS AND ORAL STATEMENTS AT THE
SUBSTANTIVE MEETINGS OF THE PANEL
Contents Page
Annex A-1 Integrated Executive Summary Submitted by the United States A-2
Annex A-2 Integrated Executive Summary Submitted by China (BCI redacted) A-49
ANNEX B
WRITTEN SUBMISSIONS, RESPONSES TO QUESTIONS AND ORAL STATEMENTS OF THE
THIRD PARTIES OR INTEGRATED SUMMARIES THEREOF
Contents Page
Annex B-1 Third-Party Statement of Chile B-2
Annex B-2 Integrated Executive Summary Submitted by the European Union B-4
Annex B-3 Integrated Executive Summary Submitted by Japan B-9
Annex B-4 Integrated Executive Summary Submitted by Mexico B-12
Annex B-5 Integrated Executive Su mmary Submitted by Norway B-18
Annex B-6 Integrated Executive Summary Submitted by the Kingdom of Saudi Arabia B-21
Annex B-7 Thailand's Responses to Panel Questions B-24
ANNEX C
WORKING PROCEDURES FOR THE PANEL
Contents Page
Annex C-1 Working Procedures for the Panel C-2
Annex C-2 Additional Working Procedures of the Panel Concerning Business Confidential
Information
C-7

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CASES CITED IN THIS REPORT
Short title Full case title and citation
Argentina – Ceramic Tiles Panel Report, Argentina – Definitive Anti-Dumping Measures on Imports of
Ceramic Floor Tiles from Italy, , adopted 5 November 2001,
DSR 2001:XII, 6241
Argentina – Footwear (EC) Appellate Body Report, Argentina – Safeguard Measures on Imports of
Footwear, , adopted 12 January 2000, DSR 2000:I, 515
Brazil – Aircraft Appellate Body Report, Brazil – Export Financing Programme for Aircraft,
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161
Canada – Aircraft Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft,
WT/DS70/R, adopted 20 August 1999, upheld by Appellate Body Report
WT/DS70/AB/R, DSR 1999:IV, 1443
Chile – Price Band System Appellate Body Report, Chile – Price Band System and Safeguard Measures
Relating to Certain Agricultural Products, WT/DS207/AB/R, adopted
23 October 2002, DSR 2002:VIII, p. 3045 (Corr.1, DSR 2006:XII, p. 5473)
China – GOES Appellate Body Report, China – Countervailing and Anti-Dumping Duties on
Grain Oriented Flat-Rolled Electrical Steel from the United States,
WT/DS414/AB/R, adopted 16 November 2012
China – GOES Panel Report, China – Countervailing and Anti-Dumping Duties on Grain
Oriented Flat-Rolled Electrical Steel from the United States, WT/DS414/R,
adopted 16 November 2012, upheld by Appellate Body Report

China – Publications and
Audiovisual Products
Panel Report, China – Measures Affecting Trading Rights and Distribution
Services for Certain Publications and Audiovisual Entertainment Products,
WT/DS363/R and Corr.1, adopted 19 January 2010, as modified by Appellate
Body Report WT/DS363/AB/R, DSR 2010:II, 261
China – Raw Materials Appellate Body Reports, China – Measures Related to the Exportation of
Various Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R /
WT/DS398/AB/R, adopted 22 February 2012
China – X-Ray Equipment Panel Report, China – Definitive Anti-Dumping Duties on X-Ray Security
Inspection Equipment from the European Union, WT/DS425/R, circulated to
WTO Members 26 February 2013 [adoption/appeal pending]
EC – Bananas III Appellate Body Report, European Communities – Regime for the
Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted
25 September 1997, DSR 1997:II, p. 591
EC – Bed Linen Panel Report, European Communities – Anti-Dumping Duties on Imports of
Cotton-Type Bed Linen from India, WT/DS141/R, adopted 12 March 2001, as
modified by Appellate Body Report WT/DS141/AB/R, DSR 2001:VI, 2077
EC – Bed Linen
(Article 21.5 – India)
Appellate Body Report, European Communities – Anti-Dumping Duties on
Imports of Cotton-Type Bed Linen from India – Recourse to Article 21.5 of
the DSU by India, WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III,
965
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
EC – Fasteners (China) Panel Report, European Communities – Definitive Anti-Dumping Measures on
Certain Iron or Steel Fasteners from China, WT/DS397/R and Corr.1,
adopted 28 July 2011, as modified by Appellate Body Report

EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products
(Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998,
DSR 1998:I, 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

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Short title Full case title and citation
EC – Tube or Pipe Fittings Panel Report, European Communities – Anti-Dumping Duties on Malleable
Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/R, adopted 18 August
2003, as modified by Appellate Body Report WT/DS219/AB/R, DSR 2003:VII,
2701
EC and certain member States
– Large Civil Aircraft
Appellate Body Report, European Communities and Certain Member States –
Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R, adopted
1 June 2011
Egypt – Steel Rebar Panel Report, Egypt – Definitive Anti-Dumping Measures on Steel Rebar from
Turkey, WT/DS211/R, adopted 1 October 2002, DSR 2002:VII, 2667
EU – Footwear (China) Panel Report, European Union – Anti-Dumping Measures on Certain Footwear
from China, WT/DS405/R, adopted 22 February 2012
Guatemala – Cement II Panel Report, Guatemala – Definitive Anti-Dumping Measures on Grey
Portland Cement from Mexico, WT/DS156/R, adopted 17 November 2000,
DSR 2000:XI, 5295
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical and
Agricultural Chemical Products, WT/DS50/AB/R, adopted 16 January 1998,
DSR 1998:I, 9
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,
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, 3
Mexico – Anti-Dumping
Measures on Rice
Appellate Body Report, Mexico – Definitive Anti-Dumping Measures on Beef
and Rice, Complaint with Respect to Rice, WT/DS295/AB/R, adopted
20 December 2005, DSR 2005:XXII, 10853
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,
11007
Mexico – Corn Syrup
(Article 21.5 – US)
Appellate Body Report, Mexico – Anti-Dumping Investigation of High
Fructose Corn Syrup (HFCS) from the United States – Recourse to
Article 21.5 of the DSU by the United States, WT/DS132/AB/RW, adopted
21 November 2001, DSR 2001:XIII, 6675
Mexico – Olive Oil Panel Report, Mexico – Definitive Countervailing Measures on Olive Oil from
the European Communities, WT/DS341/R, adopted 21 October 2008,
DSR 2008:IX, 3179
Mexico – Steel Pipes and Tubes Panel Report, Mexico – Anti-Dumping Duties on Steel Pipes and Tubes from
Guatemala, WT/DS331/R, adopted 24 July 2007, DSR 2007:IV, 1207
Thailand – H-Beams Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes
and Sections of Iron or Non-Alloy Steel and H-Beams from Poland,
WT/DS122/AB/R, adopted 5 April 2001, DSR 2001:VII, 2701
Thailand – H-Beams Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and
Sections of Iron or Non-Alloy Steel and H-Beams from Poland, WT/DS122/R,
adopted 5 April 2001, as modified by Appellate Body Report
WT/DS122/AB/R, DSR 2001:VII, 2741
US – 1916 Act Appellate Body Report, United States – Anti-Dumping Act of 1916,
WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September 2000,
DSR 2000:X, 4793
US – Anti-Dumping and
Countervailing Duties (China)
Appellate Body Report, United States – Definitive Anti-Dumping and
Countervailing Duties on Certain Products from China, WT/DS379/AB/R,
adopted 25 March 2011
US – Anti-Dumping and
Countervailing Duties (China)
Panel Report, United States – Definitive Anti-Dumping and Countervailing
Duties on Certain Products from China, WT/DS379/R, adopted 25 March 2011,
as modified by Appellate Body Report WT/DS379/AB/R

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Short title Full case title and citation
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain
Corrosion-Resistant Carbon Steel Flat Products from Germany,
WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX,
3779
US – Clove Cigarettes Appellate Body Report, United States – Measures Affecting the Production
and Sale of Clove Cigarettes, WT/DS406/AB/R, adopted 24 April 2012
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and Application
of Zeroing Methodology, WT/DS350/AB/R, adopted 19 February 2009,
DSR 2009:III, 1291
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, 6027
US – Countervailing Duty
Investigation on DRAMS
Appellate Body Report, United States – Countervailing Duty Investigation on
Dynamic Random Access Memory Semiconductors (DRAMS) from Korea,
WT/DS296/AB/R, adopted 20 July 2005, DSR 2005:XVI, 8131
US – Countervailing Measures
on Certain EC Products
Appellate Body Report, United States – Countervailing Measures Concerning
Certain Products from the European Communities, WT/DS212/AB/R, adopted
8 January 2003, DSR 2003:I, 5
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain
Hot-Rolled Steel Products from Japan, WT/DS184/AB/R, adopted 23 August
2001, DSR 2001:X, 4697
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,
4051
US – Large Civil Aircraft (2nd
complaint)
Appellate Body Report, United States – Measures Affecting Trade in Large
Civil Aircraft (Second Complaint), WT/DS353/AB/R, adopted 23 March 2012
US – Lead and Bismuth II Panel Report, United States – Imposition of Countervailing Duties on Certain
Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the United
Kingdom, WT/DS138/R and Corr.2, adopted 7 June 2000, upheld by
Appellate Body Report WT/DS138/AB/R, DSR 2000:VI, 2623
US – Oil Country Tubular
Goods Sunset Reviews
Appellate Body Report, United States – Sunset Reviews of Anti-Dumping
Measures on Oil Country Tubular Goods from Argentina, WT/DS268/AB/R,
adopted 17 December 2004, DSR 2004:VII, 3257
US – Oil Country Tubular
Goods Sunset Reviews
(Article 21.5 – Argentina)
Panel Report, United States – Sunset Reviews of Anti-Dumping Measures on
Oil Country Tubular Goods from Argentina – Recourse to Article 21.5 of the
DSU by Argentina, WT/DS268/RW, adopted 11 May 2007, as modified by
Appellate Body Report WT/DS268/AB/RW, DSR 2007:IX-X, 3609
US – Shrimp (Viet Nam) Panel Report, United States – Anti-Dumping Measures on Certain Shrimp from
Viet Nam, WT/DS404/R, adopted 2 September 2011
US – Softwood Lumber IV Appellate Body Report, United States – Final Countervailing Duty
Determination with Respect to Certain Softwood Lumber from Canada,
WT/DS257/AB/R, adopted 17 February 2004, DSR 2004:II, 571
US – Softwood Lumber IV
(Article 21.5 – Canada)
Appellate Body Report, United States – Final Countervailing Duty
Determination with Respect to Certain Softwood Lumber from Canada –
Recourse by Canada to Article 21.5 of the DSU, WT/DS257/AB/RW, adopted
20 December 2005, DSR 2005:XXIII, 11357
US – Softwood Lumber V Appellate Body Report, United States – Final Dumping Determination on
Softwood Lumber from Canada, WT/DS264/AB/R, adopted 31 August 2004,
DSR 2004:V, 1875
US – Softwood Lumber V Panel Report, United States – Final Dumping Determination on Softwood
Lumber from Canada, WT/DS264/R, adopted 31 August 2004, as modified
by Appellate Body Report WT/DS264/AB/R, DSR 2004:V, 1937
US – Softwood Lumber VI
(Article 21.5 – Canada)
Appellate Body Report, United States – Investigation of the International
Trade Commission in Softwood Lumber from Canada – Recourse to
Article 21.5 of the DSU by Canada, WT/DS277/AB/RW, adopted 9 May 2006,
and Corr.1, DSR 2006:XI, 4865

BCI deleted, as indicated [***]

Short title Full case title and citation
US – Softwood Lumber VI
(Article 21.5 – Canada)
Panel Report, United States – Investigation of the International Trade
Commission in Softwood Lumber from Canada – Recourse to Article 21.5 of
the DSU by Canada, WT/DS277/RW, adopted 9 May 2006, as modified by
Appellate Body Report WT/DS277/AB/RW, DSR 2006:XI, 4935
US – Tyres (China) Appellate Body Report, United States – Measures Affecting Imports of Certain
Passenger Vehicle and Light Truck Tyres from China, WT/DS399/AB/R,
adopted 5 October 2011
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton,
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, 3
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, 717
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, 323

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EXHIBITS REFERRED TO IN THIS REPORT
Exhibit Title and short title used in the Report
USA-1 China Animal Agricultural Association, Petition for Anti-Dumping and Anti-Subsidy
Investigation of Broiler Products (14 August 2009) ("Petition")
USA-2 MOFCOM, Preliminary Anti-Dumping Determination, Notice No. 8 [2010] (5 February 2010)
("Preliminary Anti-Dumping Determination")
USA-3 MOFCOM, Preliminary Countervailing Duty Determination, Notice No. 26 [2010]
(28 April 2010) ("Preliminary Countervailing Duty Determination")
USA-4 MOFCOM, Final Anti-Dumping Determination, Notice No. 51 [2010] (26 September 2010)
("Final Anti-Dumping Determination")
USA-5 MOFCOM, Final Countervailing Duty Determination, Notice No. 52 [2010] (29 August 2010)
("Final Countervailing Duty Determination")
USA-6 MOFCOM, Notice of Initiation of the Anti-Dumping Investigation, Notice No. 74 [2009]
(27 September 2009) ("Notice of Initiation of the Anti-Dumping Investigation")
USA-7 MOFCOM, Notice of Initiation of the Countervailing Duty Investigation, Notice No. 75 [2009]
(27 September 2009) (Notice of Initiation of the Countervailing Duty Investigation")
USA-8 MOFCOM, Letter to Tyson Regarding Basic Fact s Relied Upon for the Purpose of the Degree
of Dumping Calculation in the Antidumping Preliminary Determination Against Broiler
Products and Chicken Products ("Preliminary Anti-Dumping Disclosure to Tyson")
USA-9 MOFCOM, Letter to Pilgrim's Pride Corporat ion Regarding Basic Facts Relied Upon for the
Purpose of Dumping Margin Calculation in the Antidumping Preliminary Determination
Against Broiler Products and Chicken Products ("Preliminary Anti-Dumping Disclosure to
Pilgrim's Pride")
USA-10 MOFCOM, Letter to Keystone Food LLC Regarding Basic Facts Relied Upon for the Purpose of
Dumping Margin Calculation in the Antidumping Preliminary Determination Against Broiler
Products and Chicken Products ("Preliminary Anti-Dumping Disclosure to Keystone")
USA-11 MOFCOM, Letter to US Commercial Service Regarding the Disclosure of the Basic Facts on
which the Dumping Margins are Based in the Final Determination of the Broiler Products and
Chicken Products Antidumping Case, No. 141 [2010] (16 July 2010) ("Anti-Dumping
Disclosure to the US Government")
USA-12 MOFCOM, Letter to Tyson Regarding the Disclo sure of Basic Facts on which the Dumping
Margins are Based in the Final Determination of the Broiler Products and Chicken Products
Antidumping Case, No. 137 [2010] (16 July 2010) ("Final Anti-Dumping Disclosure to
Tyson")
USA-13 MOFCOM, Letter to Pilgrim's Pride Corporation Regarding the Disclosure of Basic Facts on
which the Dumping Margins are Based in the Final Determination of the Broiler Products and
Chicken Products Antidumping Case, No. 136 [ 2010] ("Final Anti-Dumping Disclosure to
Pilgrim's Pride")
USA-14 MOFCOM, Letter to Keystone Food LLC Regarding Basic Facts Relied Upon for the Purpose of
Dumping Margin Calculation in the Antidu mping Final Determination Against Broiler
Products, No. 138 [2010] ("Final Anti-Dumping Disclosure to Keystone")
USA-15 MOFCOM, Letter to Tyson Regarding Basic Facts Relied Upon for the Purpose Regarding the
Basis of Basic Factual Disclosure Document of Ad Valorem Subsidy Rate Determination in
the Preliminary Ruling of Countervailing Inve stigation ("Preliminary Countervailing Duty
Disclosure to Tyson")
USA-16 MOFCOM, Letter to Pilgrim's Pride Corporat ion Regarding the Basis of Basic Factual
Disclosure Document of Ad Valorem Subsidy Rate Determination in the Preliminary Ruling of
Countervailing Investigation of Broiler Products ("Preliminary Countervailing Duty Disclosure
to Pilgrim's Pride")
USA-17 MOFCOM, Letter to Keystone Food LLC Rega rding Basic Facts Relied Upon for the Purpose of
Ad Valorem Subsidy Rate Calculation in the Countervailing Duty Preliminary Determination
Against Broiler Products and Chicken Products ("Preliminary Countervailing Duty Disclosure
to Keystone")
USA-18 MOFCOM, Letter to Tyson Regarding Basic Facts Relied Upon for the Purpose of Ad Valorem
Subsidy Rate Calculation in the Countervailing Duty Final Determination Against Broiler
Products and Chicken Products, No. 144 [2010] (16 July 2010) ("Final Countervailing Duty
Disclosure to Tyson")

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Exhibit Title and short title used in the Report
USA-19 MOFCOM, Letter to Pilgrim's Pride Corp. Regarding the Basis of Basic Factual Disclosure
Document of Relied Upon for the Purpose of Ad Valorem Subsidy Rate Calculation in the
Countervailing Duty Final Determination Agai nst Broiler Products and Chicken Products,
No. 143 [2010] (16 July 2010) ("Final Countervailing Duty Disclosure to Pilgrim's Pride")
USA-20 MOFCOM, Letter to Keystone Food LLC Regarding Basic Facts Relied Upon for the Purpose of
Ad Valorem Subsidy Rate Calculation in the Countervailing Duty Final Determination Against
Broiler Products and Chicken Products, No. 145 [2010] (16 July 2010) ("Final Countervailing
Duty Disclosure to Keystone")
USA-21 USAPEEC, Opinions Regardin g Industry Injury in the Antidumping and Countervailing Duty
Investigations of Broiler Products and Chicken Products from the United States, Public
Version (7 January 2010) ("USAPEEC's Injury Brief")
USA-22 U n i t e d S t a t e s , L e t t e r f r o m L . W a n g t o G . P e n g & L . W e i p i n g R e : Antidumping and
Countervailing Duty Investigations on Import ed Broiler Productions or Chicken Products
Originating in the United States/Request for Public Hearing (12 July 2010) ("Hearing
Request")
USA-24 MOFCOM Reply to the Hearing Request [2010] No. 131 (14 July 2010)
USA-25 Tyson's Comments on the Preliminary Anti-Dumping Disclosure (20 February 2010)
USA-26 Tyson's Further Comments on the Preliminary Anti-Dumping Determination (9 April 2010)
USA-27 Pilgrim’s Comments on the Preliminary Anti-Dumping Determination (5 March 2010)
USA-28 Pilgrim's Pride Response to the First Supplemental Anti-Dumping Questionnaire
(18 December 2009)
USA-29 Keystone's Comments on the Final Anti-Dumping Disclosure (26 July 2010)
USA-30 Keystone's Comments on the Preliminary Anti-Dumping Determination (9 April 2010)
USA-32 Pilgrim's Pride Anti-Dumping Questionnaire Response (3 December 2009)
USA-34 Keystone Anti-Dumping Questionnaire Response (3 December 2009)
USA-35 Keystone Supplemental Anti-Dumping Questionnaire Response (18 December 2009)
USA-36 Tyson Anti-Dumping Questionnaire Response (3 December 2009)
USA-37 MOFCOM, Response to the US Government 's Comments on the Final Anti-Dumping
Disclosure, [2010] No. 170 (13 August 2010)
USA-38 MOFCOM, Second Supplemental Countervailing Duty Questionnaire (29 January 2010)
USA-39 MOFCOM, Notice on Registration for Participatin g in Industrial Injury Investigation in the
Anti-Dumping Investigation of Broiler Products and Chicken Products, [2009] No. 277
(27 September 2009) ("Notice of Registration for the Anti-Dumping Injury Investigation")
USA-40 Tyson Comments on the Final Anti-Dumping Disclosure (26 July 2010)
USA-41 US Government's Comments on the Final Disclosure (2 August 2010)
USA-42 MOFCOM, Reply to the US Government's Comments on the Final Disclosure, [2010] No. 170
(13 August 2010)
USA-43 Pilgrim's Pride Comments on the Preliminary Countervailing Duty Determination
(18 May 2010)
USA-44 Tyson's Comments on the Preliminary Co untervailing Duty Determination (18 May 2010)
USA-45 Pilgrim's Pride Comments on the Basic Facts Re lied Upon for the Subsidy Rate Calculation
(24 July 2010) "Pilgrim's Pride's Comments on the Countervailing Duty Disclosure")
USA-46 USAPEEC, Comments on the Preliminary Injury Determination (24 February 2010)
("USAPEEC's Comments on Preliminary Anti-Dumping Determination")
USA-48 Tyson's Comments Regarding the Disclosure of the Basic Facts for the Final Countervailing
Duty Determination (26 July 2010) ("Tyson's Comments on the Countervailing Duty
Disclosure")
USA-49 MOFCOM, Letter to US Commercial Service Regarding the Disclosure of the Basic Facts on
which the Determination of the Ad Valorem Subsidy Rates are Based in the Final
Determination of the Broiler Products and Ch icken Products Countervailing Duty Case,
No. 142 [2010] (16 July 2010) ("Countervailing Duty Disclosure to the US Government")
USA-52 United States, Letter from S. Sindelar to L. Yu, J. Chengsen, Y. Lijun, and L. Chunsheng Re:
Countervailing Duty Investigation on Imported Broiler Products or Chicken Products
Originating in the United States / Certain Subsidy Calculation Error (4 August 2010)
("Subsidy Calculation Letter")
USA-54 Keystone's Anti-Dumping Questionnaire Response, Form 6-3 ("Keystone’s Form 6-3")

BCI deleted, as indicated [***]

Exhibit Title and short title used in the Report
USA-55 Keystone's Anti-Dumping Questionnaire Response, Form 6-5 ("Keystone’s Form 6-5")
USA-57 Keystone's Anti-Dumping Questionnaire Response, Form 6-7 ("Keystone’s Form 6-7")
USA-58 MOFCOM, Verification Report for Keystone
USA-60 Keystone's Table 6-4.
USA-62 Table Produced in Response to Panel Question No. 38 (Pilgrim's Pride)
USA-74 Pilgrim's Pride Response to the Seco nd Supplemental Anti-Dumping Questionnaire
(28 December 2009)
USA-79 Tyson Clarksville Plant Cost Flowchart
CHN-2 China Animal Agricultural Association, Petition for Anti-Dumping and Anti-Subsidy
Investigation of Broiler Products (14 August 2009) ("Petition")
CHN-3 MOFCOM, Final Anti-Dumping Determination, Notice No. 51 [2010] (26 September 2010)
("Final Anti-Dumping Determination")
CHN-12 Tyson's First Supplemental Counter vailing Duty Questionnaire Response
CHN-13 Tyson's Second Supplemental Countervailing Duty Questionnaire Response
CHN-16 Pilgrim's Second Suppl emental Countervailing Duty Questionnaire Response
CHN-20 USDA, China – Poultry and Products Annual (2011)
CHN-25 Reports on Diverging Consumer Preferences
CHN-27 United States Talking Points on Injury Issues (20 July 2010)
CHN-31 Summary of Invoice Data and Copies of Invoices
CHN-32 Exhibit 2 from Petition
CHN-33 Exhibit 6 from Petition
CHN-34 Exhibit 9 from Petition
CHN-37 Tyson's Annex CS2-I-3
CHN-38 Pilgrim's Pride Annex II-S1-2
CHN-41 USAPEEC Injury Questionnaire Response (December 2009)
CHN-43 Summary of 21 Invoices with both Breast and Claw Prices
CHN-44 Excerpt from Fujian Su mner Financial Statement
CHN-45 USAPEEC Foreign Producer Response, Annex III-6
CHN-46 Tyson Cost Tables from Form 6-3 Submitted as Part of Initial Anti-Dumping Response and
Again as Exhibit S2-5 of Seco nd Supplemental Response Work sheets, Revised Underselling
Margins ("Tyson Cost Comparison Tables")
CHN-47 MOFCOM, Notice of Initiation of the Anti-Dumping Investigation, Notice No. 74 [2009]
(27 September 2009) (Chinese version)
CHN-48 MOFCOM, Notice of Initiation of the Countervailing Duty Investigation, Notice No. 75 [2009]
(27 September 2009) (Chinese version)
CHN-49 Anti-Dumping Investigation Registration Form
CHN-50 Countervailing Duty Investigation Registration Form
CHN-51 Notification on Registration to Participate in the Injury Investigation for the Countervailing
Duty Investigation on Broiler Product, [2009] No. 278 (27 September 2009) ("Notice of
Registration for the Countervailing Duty Injury Investigation")
CHN-63 MOFCOM, Letter to the US Embassy on Initiation
CHN-64 Tyson Per Unit Cost Calculation from Form S2-5 (Revised) (Form 6-3)
CHN-66 Corrected Exhibit CS2-I-3
CHN-67 Tyson's Verification Exhibit 34 and Comparison Table
CHN-68 Pilgrim's Pride Verification Exhibit and Comparison Table
CHN-69 Pilgrim's Pride Revised Annex II-S1-2
CHN-70 Tyson's Verification Disclosure
CHN-71 Pilgrim's Pride Verification Disclosure
CHN-74 DaChan Injury Questionnaire Excerpts
CHN-75 Shandong Liuhe Injury Questionnaire Excerpts

BCI deleted, as indicated [***]

ABBREVIATIONS USED IN THIS REPORT
Abbreviation Description
Anti-Dumping Agreement Agreement on Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994
BCI Business Confidential Information
CAAA China Animal Agriculture Association
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
GAAP Generally Accepted Accounting Principles
GATT 1994 General Agreement on Tariffs and Trade 1994
MOFCOM Ministry of Commerce of the People's Republic of China
POI Period of Investigation
RMB Renminbi
SCM Agreement Agreement on Subsid ies and Countervailing Measures
USAPEEC United States Poultry & Egg Export Council
USD US dollar
Vienna Convention on the
Law of Treaties
Vienna Convention on the Law of Treaties, done at Vienna, 23 May 1969, 1155
UNTS 331; 8 International Legal Materials 679
WTO World Trade Organization

BCI deleted, as indicated [***]

1 INTRODUCTION
1.1. On 20 September 2011, the United States requested consultations with China pursuant to
Articles 1 and 4 of the Understanding on Rule s and Procedures Governing the Settlement of
Disputes ("DSU"), Article XXIII:1 of the Genera l Agreement on Tariffs and Trade of 1994 (the
"GATT 1994"), Article 30 of the Agreement on Subsidies and Countervailing Measures (the
"SCM Agreement") (to the extent that Article 30 incorporates Article XXIII of the GATT 1994), and
Article 17.3 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994 (the "Anti-Dumping Agreement") with respect to China's measures imposing
anti-dumping duties and countervailing duties on broiler products from the United States, as set
forth in Ministry of Commerce of the People's Re public of China ("MOFCOM") Notice No. 8 [2010],
Notice No. 26 [2010], Notice No. 51 [2010], and Notice No. 52 [2010], including any and all
annexes.
1 Pursuant to this request, the United States and China held consultations on
28 October 2011. The consultations failed to resolve the dispute.
1.2. On 8 December 2011, the United States requested, pursuant to Article 6 of the DSU,
Article 17.4 of the Anti-Dumping Agreement, an d Article 30 of the SCM Agreement, that the
Dispute Settlement Body ("DSB") establish a panel to examine this matter.2
1.3. At its meeting on 20 January 2012, the DSB established a panel pursuant to the request of
the United States in document WT/DS427/2, in accordance with Article 6 of the DSU.
1.4. The Panel's terms of reference are the following:
To examine, in the light of the relevant pr ovisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by the United States in
document WT/DS427/2 and to make such findings as will assist the DSB in making
the recommendations or in giving the rulings provided for in those agreements.
1.5. On 14 May 2012, the United States requested the Director-General to compose the Panel,
pursuant to paragraph 7 of Article 8 of the DSU. On 24 May 2012, the Director-General composed
the Panel as follows:
 Chairman: Mr Faizullah Khilji

 Members: Mr Serge Fréchette
 Ms Claudia Orozco
3

1.6. Chile, the European Union, Japan, Mexico, Norway, the Kingdom of Saudi Arabia and Thailand
reserved their rights to participate in the Panel proceedings as third parties.
1.7. The Panel met with the parties on 27-28 September and 4-5 December 2012. The Panel met
with the third parties on 28 September 2012. The Panel issued its interim report to the parties on
8 May 2013. The Panel issued its final report to the parties on 25 June 2013.
2 FACTUAL ASPECTS
2.1. The United States' claims concern various aspects of the anti-dumping and countervailing
duty measures imposed by China on broiler products from the United States, set forth in MOFCOM
Notice No. 8 [2010]
4 (Preliminary Anti-Dumping Determination), Notice No. 26 [2010] 5
(Preliminary Countervailing Duty Determination), Notice No. 51 [2010] 6 (Final Anti-Dumping
Determination) and Notice No. 52 [2010] 7 (Final Countervailing Duty Determination) including
their annexes, as well as various aspects of the investigations leading to the imposition of these
measures.

1 WT/DS427/1.
2 WT/DS427/2.
3 WT/DS427/3.
4 Preliminary Anti-Dumping Determination, Exhibit USA-2.
5 Preliminary Countervailing Duty Determination, Exhibit USA-3.
6 Final Anti-Dumping Determination, Exhibit USA-4.
7 Final Countervailing Duty Determination, Exhibit USA-5.

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2.2. MOFCOM initiated the investigations on 27 September 2009 8, following the filing of a Petition
by the China Animal Agriculture Association ("CAAA" or the "Petitioner") on 14 August 2009. 9
MOFCOM set the period of investigation ("POI" ) for the anti-dumping and countervailing duty
investigations from 1 July 2008 to 30 June 2009, and the POI for injury to the domestic industry
(in both investigations) from 1 January 2006 to 30 June 2009.10
2.3. On 13 October 2009, the Petitioner filed a supplemental petition alleging additional subsidy
programmes. On 5 November 2009, MOFCOM announced that it would investigate these additional
programmes in the countervailing duty investigation.11
2.4. MOFCOM published its Preliminary Anti-Dumping Determination on 5 February 2010.
MOFCOM found that dumping had occurred with regard to broiler products from the United States
during the POI and that these products had caused material injury to the domestic industry.
12
MOFCOM published its Preliminary Countervailing Duty Determination on 28 April 2010. It found
that imported broiler products from the United States were subsidized and had caused material
injury to the Chinese domestic broiler industry.
13 MOFCOM determined the following anti-dumping
and countervailing duty rates in the Preliminary Determinations14:
Table 1: Preliminary Duty Rates
Respondent Anti-Dumping Duty Rate Countervailing Duty Rate
Pilgrim's Pride 80.5 % 4.9%
Tyson 43.1 % 11.2%
Keystone 44.0 % 3.8%
Firms that registered for the investigation but
were not selected for individual examination
64.5 % 6.1%
"All others"15 105.4% 31.4%

8 Notice of Initiation of the Anti-Dumping Investigation, Exhibit USA-6; Notice of Initiation of the
Countervailing Duty Investigation, Exhibit USA-7. The scope of the investigation as set forth in the Notice of
Initiation of the Countervailing Duty Investigation is as follows:
Scope of investigation: broiler products or chicken products originating in the US
Name of the subject merchandise: broiler products or chicken products
Specific description of the subject merchandise: chicken products into which alive broiler is
slaughtered and processed, including whole chicken without cutting into pieces, cuts and offal,
side product of chicken products, fresh, chilled or frozen. The product scope does not include live
chicken, chicken products in can or other kinds of packages or preservations, the chicken
sausage and like products, and cooked chicken products.
Major usage: Broiler products or chicken products are used in the domestic market of China for
human food directly through markets and supermarkets by retail or wholesale and indirectly
through catering.
HTS code in the Import and Export Tariff Code of the People's Republic of China:
02071100,02071200,02071311,02071319,02071321,02071329,02071411,02071419,02071421,
02071422,02071429,05040021.
Throughout the proceedings, where there were separate translations of the same document, parties, in
accordance with para. 9 of the Panel's Working Procedures, could object to a translation. In the absence of an
objection, the Panel has used the translation submitted first in time and not objected, which generally was the
translation submitted by the United States. With respect to the scope of the investigation, despite making no
specific objection under the Working Procedures, in its Comments on the Draft Descriptive Part, China took
issue with the Panel using the version of the scope from the United States' translation of the Final
Anti-Dumping Determination and cited to its own translation of the Final Anti-Dumping Determination in
Exhibit CHN-3. In this instance, as the United States has provided a translation of the scope in the Notice of
Initiation of the Countervailing Duty Investigation that is not materially different from the one China prefers,
we utilize that version of the scope.
9 Petition, Exhibit USA-1, pp. 1-2.
10 Notice of Initiation of the Anti-Dumping Investigation, Exhibit USA-6, p. 2; Notice of Initiation of the
Countervailing Duty Investigation, Exhibit USA-7, p. 2.
11 Final Countervailing Duty Determination, Exhibit USA-5, p. 5.
12 Preliminary Anti-Dumping Determination, Exhibit USA-2, p. 36.
13 Preliminary Countervailing Duty Determination, Exhibit USA-3, p. 77.
14 Preliminary Anti-Dumping Determination, Exhibit USA-2, Appendix II, pp. 37-38; Preliminary
Countervailing Duty Determination, Exhibit USA-3, Annex II, pp. 78-79.
15 In each investigation, MOFCOM applied an "all others" rate to the US companies that failed to make
an entry of appearance or failed to submit a questionnaire response. MOFCOM calculated these rates using
facts available. Preliminary Anti-Dumping Determination, Exhibit USA-2, p. 22; Preliminary Countervailing Duty
Determination, Exhibit USA-3, p. 62.

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2.5. On 30 August 2010, MOFCOM published its Final Countervailing Duty Determination finding
that imported broiler products from the United States were subsidized and had caused injury to
the Chinese domestic broiler industry.
16 On 26 September 2010, MOFCOM published its Final
Anti-Dumping Determination confirming the findings in the Preliminary Anti-Dumping
Determination that US exporters were dumping and that this dumping caused injury to the
domestic industry.17 The final anti-dumping and countervailing duty rates determined by MOFCOM
are as follows18:
Table 2: Final Duty Rates
Respondent Anti-Dumping Duty Rate Countervailing Duty Rate
Pilgrim's Pride 53.4% 5.1%
Tyson 50.3% 12.5%
Keystone 50.3% 4.0%
Firms that registered for the investigation
but were not select ed for individual
examination
51.8% 7.4%
"All others" 105.4% 30.3%

3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1 United States
3.1. The United States requests that the Panel find as follows
19:
a. With respect to alleged procedural violations, that:
i. MOFCOM acted inconsistently with Article 6.2 of the Anti-Dumping Agreement by
denying a request by the United States Government for a hearing to present its
concerns about the investigation and exchange views with parties with adverse
interests;
ii. MOFCOM acted inconsistently with Article 6.9 of the Anti-Dumping Agreement by
withholding essential facts from the respondents, particularly the calculations and
data used to determine their respective dumping margins;
iii. MOFCOM acted inconsistently with Article 6.5.1 of the Anti-Dumping Agreement and
Article 12.4.1 of the SCM Agreement by allo wing the Petitioner to put confidential
information on the record without providing non-confidential summaries.
b. With respect to MOFCOM's reasoning and conclusions for its Anti-Dumping
Determinations, that:
i. MOFCOM acted inconsistently with Articl e 2.2.1.1 of the Anti-Dumping Agreement
by: (i) rejecting, without any consideratio n and explanation, the costs kept in the
books and records of US producers to calculate their normal values, even though
those costs were in accordance with generally accepted accounting principles
("GAAP") and reasonably reflected the costs associated with the production and sale
of the products subject to the investigation; (ii) applying a methodology which did
not reasonably reflect the costs associated with the production and sale of the
products subject to the investigation and failing to consider evidence that its
allocation was not proper; and (iii) with respect to Tyson, including in its allocation
methodology costs for products not subject to the investigation;

16 Final Countervailing Duty Determination, Exhibit USA-5, p. 105.
17 Final Anti-Dumping Determination, Exhibit USA-4, p. 60.
18 Final Anti-Dumping Determination, Exhibit USA-4, Appendix II; Final Countervailing Duty
Determination, Exhibit USA-5, Appendix II.
19 United States' first written submission, paras. 2-5, 174, 243 and 320; and responses to Panel
question Nos. 73 and 117.

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ii. MOFCOM acted inconsistently with Article 2.4 of the Anti-Dumping Agreement by
failing to conduct a fair comparison of normal value and export price for Keystone, a
US respondent, because MOFCOM applied certain freezer storage fees in a manner
that artificially inflated the dumping margin for Keystone;
iii. MOFCOM acted inconsistently with Articles 6.8, 6.9, 12.2, 12.2.1, 12.2.2, and
Annex II of the Anti-Dumping Agreement by: (i) imposing an adverse "all others"
rate based on facts available to producers that MOFCOM did not notify of the
information required of them and that did not refuse to provide necessary
information or otherwise impede the dumping investigation; (ii) failing to inform the
United States and other interested parties of the essential facts under consideration
that formed the basis for MOFCOM's calculation of the "all others" rate; and
(iii) failing to disclose in sufficient detail the findings and conclusions reached on all
issues of fact, or all relevant information on matters of fact in relation to this
calculation.
c. With respect to MOFCOM's reasoning and conclusions for its Countervailing Duty
Determinations, that:
i. MOFCOM acted inconsistently with Articles 12.7, 12.8, 22.3, 22.4, and 22.5 of the
SCM Agreement by: (i) imposing an adverse "all others" rate based on facts available
to producers that MOFCOM did not notify of the information required of them and
that did not refuse to provide necessary information or otherwise impede the subsidy
investigation; (ii) failing to inform the United States and other interested parties of
the essential facts under consideration that formed the basis for MOFCOM's
calculation of the "all others" rate; (iii) failing to disclose in sufficient detail the
findings and conclusions reached on all issues of fact, or all relevant information on
matters of fact in relation to this calculation
20;
ii. MOFCOM acted inconsistently with Article 19.4 of the SCM Agreement and
Article VI:3 of the GATT 1994 by failing to properly allocate the alleged subsidy in
relation to subject merchandise.
d. With respect to MOFCOM's reasoning and conclusions for its injury determinations, that:
i. MOFCOM acted inconsistently with Arti cles 3.1 and 4.1 of the Anti-Dumping
Agreement and Articles 15.1 and 16.1 of th e SCM Agreement by improperly limiting
the definition of the domestic industry to domestic enterprises supporting the
anti-dumping and countervailing duty investigations rather than identifying domestic
producers as a whole, thereby rendering its analysis of volume, price, and impact
inconsistent with Articles 3.2, 3.4, an d 3.5 of the Anti-Dumping Agreement and
Articles 15.2, 15.4, and 15.5 of the SCM Agreement;
ii. MOFCOM acted inconsistently with Articles 3.1, 3.2, 6.4, 12.2 and 12.2.2 of the
Anti-Dumping Agreement and Articles 15.1, 15.2, 12.3, 22.3, and 22.5 of the
SCM Agreement because its price effects analyses were based upon flawed price
comparisons, which failed to account for differences in level of trade and product
mix, and because MOFCOM did not disclose its methodology for adjusting subject
import price data with respect to different levels of trade and/or failed to provide the
reasons for its rejection of US interested parties' arguments concerning level of
trade;
iii. MOFCOM acted inconsistently with Arti cles 3.1 and 3.4 of the Anti-Dumping
Agreement and Articles 15.1 and 15.4 of the SCM Agreement because its findings
that the allegedly dumped and subsidized subject imports had an adverse impact on
the domestic industry were not based on an objective examination of "all relevant
economic factors and indices having a bearing on the state of the industry" as they

20 Although para. 4 of the United States' first written submission set forth a broader claim under
Articles 22.4 and 22.5 of the SCM Agreement with respect to MOFCOM's reasoning and conclusions in its
Countervailing Duty Determinations, in the remainder of its submissions to the Panel the United States only
presented arguments under these provisions with respect to the "all others" rate.

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were based on a faulty analysis of domestic industry capacity utilization and
inventories and cannot be reconciled with evidence attesting to the overall health of
the domestic industry during the period in which most of the increase in subject
import volumes occurred.
iv. MOFCOM acted inconsistently with Articles 3.1, 3.5, 12.2, and 12.2.2 of the
Anti-Dumping Agreement and Articles 15.1, 15.5, 22.3, and 22.5 of the
SCM Agreement because it: (i) based its causation analyses on its defective price
effects analyses; (ii) ignored evidence that any increase in the market share did not
come at the expense of the domestic indust ry; (iii) ignored evidence that industry
performance improved during the bulk of the increase in subject imports; and
(iv) failed to explain in its Final Determinations why it rejected the arguments
respondents put forward regarding a lack of causation.
e. And, as a consequence of these violations, that:
i. MOFCOM's conduct in the anti-dumping investigation violated Article 1 the
Anti-Dumping Agreement;
ii. MOFCOM's conduct in the countervailing duty investigation violated Article 10 of the
SCM Agreement.
3.2. The United States further requests that, pursuant to Article 19.1 of the DSU, the Panel
recommend that China bring its measures into conformity with the GATT 1994, the Anti-Dumping
Agreement, and the SCM Agreement.
21
3.2 China
3.3. China requests that the Panel reject all of the United States' claims, finding instead that
MOFCOM's Determinations in these investigations were fully consistent with China's WTO
obligations.
22 In addition, China requests that the Panel determine that the United States' claim
under Article 2.4 of the Anti-Dumping Agreement with respect to Keystone's dumping margin
calculation falls outside the Panel's terms of reference. 23 China also considers that the
United States' claims under Articles 12.2.2 of the Anti-Dumping Agreement and 22.5 of the
SCM Agreement with respect to MOFCOM's price effects analyses are outside the Panel's terms of
reference.24
4 ARGUMENTS OF THE PARTIES
4.1. The arguments of the parties are set out in their written submissions, oral statements to the
Panel and responses to questions. The parties submitted integrated executive summaries of their
arguments in two parts which are appended as ad denda to this Report in Annexes A-1 and A-2
(see List of Annexes, page 8).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The third parties' written submissions, oral statements, and responses to questions or
integrated executive summaries thereof are appended as addenda to this Report in Annexes B-1 –
B-7 (see List of Annexes, page 8).
6 INTERIM REVIEW
6.1. On 8 May 2013, the Panel submitted its Interim Report to the parties. On 22 May 2013, the
United States and China each submitted written re quests for the review of precise aspects of the
Interim Report. On 29 May 2013, each party submitted comments on the other's requests for
review. Neither party requested an interim review meeting.

21 United States' first written submission, para. 367.
22 China's first written submission, para. 438.
23 China's first written submission, para. 142.
24 China's comments on the United States' response to Panel question No. 117.

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6.2. In accordance with Article 15.3 of the DSU, this section of the Report sets out the Panel's
response to the parties' requests made at the interim review stage. The Panel modified aspects of
its Report in the light of the parties' comments where it considered it appropriate, as explained
below. References to sections, paragraph numbers and footnotes in this section relate to this
Report, except as otherwise noted.
Paragraphs 7.66-7.107
6.3. China expresses a general concern regarding the findings of the Panel on MOFCOM's failure to
comply with Article 6.9 of the Anti-Dumping Agreement in respect of the calculation of the margins
of dumping for the three mandatory respondents. China considers that while the United States'
claim under Article 6.9 was extremely broad and generalized, the Panel engaged in an extremely
particularized examination of the disclosures and made findings on specific facts and
circumstances that had not been raised by the United States. China argues that this raises
two concerns. First, because not all of the specific issues addressed by the Panel were raised
during the panel proceeding, either by the Pane l or by the United States, it never became
necessary for China to explain and present eviden ce to the Panel that the level of disclosure
provided by MOFCOM was sufficient for these three respondents to defend their interests. Second,
in many respects the Panel tried to put itself in the place of the respondents to ascertain the
possibility of understanding the level of disclosure when the Panel did not have the complete
record that the respondents possessed during the investigation.
6.4. The United States argues that China mischaracterizes the United States' claim under
Article 6.9 as overly broad. The United States submits that it explained in its first written
submission that its claim was quite limited and that it had defined the issue in very specific terms.
Thus the United States considers that there is no disconnect between the scope of its claim and
the Panel's examination of that claim and that, ther efore, the two concerns raised by China do not
arise. With respect to the first of these conc erns, the United States submits that China's
suggestion that it never became necessary for Chin a to explain and present evidence to the Panel
that the level of disclosure was sufficient for th e respondents to defend their interests is plainly
contradicted by China's own submissions to the Panel. The United States argues that China's
second concern – that the Panel tried to put itself in the place of the respondents to assess the
level of disclosure without the complete record – is equally misplaced. The United States notes
that China's specific comments on the interim report fail to identify any allegedly missing record
evidence and if there were something the United States and the Panel were not made aware of,
China had every opportunity to introduce that evidence during these proceedings.
6.5. The Panel considers that the record of this panel proceeding does not support China's
assertions that there exists a discrepancy be tween the broad and generalized nature of the
United States' claim, on the one hand, and the Panel's "particularized" examination of that claim,
on the other, and that the Panel made findings on issues that had not been raised during the panel
proceeding.
6.6. The Panel recalls that in its first writte n submission, the United States argued that the
summary table of model-specific dumping margins in the disclosures "does not show how the
product-specific export prices and normal values were determined" and that the disclosures
precluded the interested parties from adequately defending their interests.
25 Throughout its
submissions the United States contends that the essential facts include the data and calculations
used to derive normal value and export price.
26
6.7. The United States also addressed the exhibi ts presented by China that allegedly showed how
the respondents would have been able to recons truct the dumping margins from the disclosure
documents. In particular, the United States pointed out that the exhibits were generated for the
purposes of the panel proceedings and not provided to the respondents during the investigation,
and, even if they had been provided during the in vestigation, the United States argued that they
would still not satisfy the requirement in Article 6.9. 27 The United States went on to argue that

25 United States' first written submission, para. 65.
26 United States' opening statement at the first meeting of the Panel, paras. 15-18; response to Panel
question No. 8; second written submission, paras. 13-20; and opening statement at the second meeting of the
Panel, para. 12.
27 United States' opening statement at the first meeting of the Panel, para. 17.

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" [ t ] h e U S e x p o r t e r s w e r e l e f t u n a w a r e b y M O F C O M a s t o t h e d a t a a c t u a l l y u s e d i n M O F C O M ' s
antidumping calculations, and despite MOFCOM's claims to the contrary, the US respondents did
not have enough information from MOFCOM to derive those facts on their own."
28 Moreover, the
United States repeatedly stated that the summary figures in the disclosure documents "do not
allow the respondents to defend their interests – for example, they could not 'comment on the
completeness or correctness of the facts' or 'correct perceived errors.'"29
6.8. The Panel recalls that China – in its first written submission and Exhibits CHN-4, 5, and 6 –
divided the determinations of normal value, ex port price, and constructed export price into
particular elements and explained how the disclosures allegedly allowed the respondents to
understand how each of these elements was determined.
30 China's exhibits contained three
columns: (i) the element at issue; (ii) the descrip tion, from the disclosure, of MOFCOM's actions;
and (iii) the "source document" from which the actual information used was derived. China argued
that "based on the explanations in the first two columns, each respondent could go to the source
information and reconstruct the exact calculation performed by MOFCOM to determine the margin
if it so desired."31
6.9. In light of China's argume nts, at the first meeting the Panel posed questions to China as to
how the disclosure documents would enable the respondents to understand the essential facts
regarding which sales had been eliminated from consideration for normal value because they had
failed the below-cost test. The Panel pursued the same line of questioning in the written questions
following that meeting.
32 The Panel also asked whether sales disregarded or excluded and the
elements of constructed value were "essential facts" within the meaning of Article 6.9. 33 Thus,
China was aware that the Panel was examining the disclosure documents to determine whether
they disclosed the essential facts on the key elements of normal value, export price and the
weighted-average dumping margin. Indeed, in co nducting its evaluation the Panel essentially
adopted China's analytical framework by examin ing each disclosure to determine whether it
provided the essential facts for each of the key elements. Contrary to China's claim, the Panel is of
the view that it did raise these issues with the parties.
6.10. As regards China's proposition that the Panel improperly placed itself in the position of the
respondents without having the complete record, we recall that the Appellate Body explained that
the crucial context for understanding the obligation in Article 6.9 is the purpose that it serves.
Article 6.9 enables interested parties to defend their interests. Therefore, the crucial question in
assessing compliance with Article 6.9 is whether a party could understand the basis for the
decision whether or not to apply definitive measures from what was disclosed.
34 A panel must,
therefore, examine the disclosure from the perspect ive of its intended audience, in this case the
US respondents. China has not pointed to any specific evidence that the Panel was unaware of;
rather China simply asserts that the respondents must have known which of their submissions
MOFCOM was referring to in the disclosure documents. We also note that China had ample
opportunity to present record evidence to the Panel on this issue and did not do so.
6.11. In light of the above, we consider that China's general comment on the Panel's findings
under Article 6.9 does not call for changes to the Interim Report.
Paragraph 7.93
6.12. The United States requests that the Panel change its conclusion that the investigating
authority must disclose "what data was used" in the determination of the various elements that
make up the margin of dumping as well as the formulas that were applied to the data, to read that
the investigating authority must disclose "the data used".

28 United States' second written submission, para. 20.
29 United States' first written submission, paras. 61-62 (citing Panel Report, EC – Salmon (Norway),
para. 7.805); opening statement at the first meeting of the Panel, paras. 14-15; second written submission,
paras. 15-17; opening statement at the second meeting of the Panel, paras. 11-12.
30 China's first written submission, para. 34 (citing Exhibits CHN-4, 5, and 6).
31 China's first written submission, para. 34.
32 Panel question No. 8.
33 Panel question No. 8 (c).
34 Appellate Body Report, China – GOES, para. 240.

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6.13. China opposes the United States' request. China notes that the Panel concluded in
paragraph 7.95 that "where the essential facts the investigating authority is referring to are in the
possession of the respondent in the form of their own questionnaire responses, a narrative
description of what data was used from which sources cannot ipso facto be considered insufficient
disclosure." According to China, the United States' proposal implies that the data must always be
provided.
6.14. The Panel considers that using the term "the data used" could imply that an investigating
authority was required to provide the actual print-outs of the data that it used in conducting its
calculations. While the Panel recognized that this would be an efficient way to effectuate
disclosure, the Panel concluded that Article 6.9 does not require disclosure in a specific form and
that a narrative description of what data was used from which sources could suffice to comply with
Article 6.9. The change requested by the United States is not necessary.
Paragraphs 7.97-7.100
6.15. China raises three specific points with respect to the Panel's evaluation of the disclosure
documents provided to Pilgrim's Pride. First, China argues that the Panel's conclusion with respect
to Pilgrim's Pride's knowledge of what expenses were included in constructed normal value is
incorrect because the disclosure made Pilgrim's Pride aware that the "expenses" used were taken
from the total production costs claimed in Table 6- 3, Tab 3 of its first supplemental questionnaire.
Second, China argues that the Panel incorrectly found that Pilgrim's Pride would not know how
affiliated sales were adjusted, because Pilgrim's Pride only made sales to unaffiliated parties during
the POI. Finally, China argues that the Panel a ssumes too much about the reference to "formula
setup mistakes" that MOFCOM corrected. China maintains that because Pilgrim's Pride submitted a
correction of the formula errors after the verification, there is no real dispute between MOFCOM
and Pilgrim's Pride about what the formula mistakes were and the correction applied.
6.16. The United States does not address the first two of China's arguments with respect to the
Panel's evaluation of the Pilgrim's Pride Disclosures. However, with respect to the formula setup
mistakes, the United States argues that the Panel should disregard China's comments because
China's reference to paragraph 7 of the Final Anti-Dumping Disclosure to Pilgrim's Pride does not
support China's assertion that Pilgrim's Pride was aware of the formula setup mistakes and of the
correction applied. The Disclosure does not refer to a correction submitted by Pilgrim's Pride or
that the actual correction made by MOFCOM was the one allegedly suggested by Pilgrim's Pride.
Furthermore, the United States argues that the statement that MOFCOM "took the initiative and
adjusted the mistakes" suggests that contrary to China's assertion, MOFCOM made the adjustment
on its own.
6.17. In light of China's comments, the Pane l has reviewed the disclosure documents and its
findings. The Panel has amended these paragraphs to reflect that the Final Anti-Dumping
Disclosure to Pilgrim's Pride indicates that the total cost of production derived from the First
Supplemental Questionnaire Response included "expenses". Furthermore, the Panel has also
removed references to non-disclosure of treatment of sales to affiliated parties, as Pilgrim's Pride
made all its sales to unaffiliated parties during the POI.
6.18. With respect to the "formula setup mistakes" the Panel's conclusions stand. The Final
Anti-Dumping Disclosure to Pilgrim's Pride refers to the mistakes being discovered "after further
review and on-site verification". Therefore, it is not apparent that Pilgrim's Pride would know that
these were the same mistakes, if any, discussed during verification. The disclosure also refers to
the investigating authority "taking the initiative" to adjust the formulas rather than accepting
correction documents from Pilgrim's Pride after verification. Therefore, the Panel is of the view that
the references to "formula setup mistakes" and MOFCOM taking the initiative to adjust them would
not have been sufficient to disclose to Pilgrim's Pride the exact mistakes being referred to and that
whatever action taken to correct them was ba sed on what Pilgrim's Pride submitted after
verification.
6.19. The United States requests that the Panel add to paragraph 7.100 the last sentence of
paragraph 7.103 which refers to the fact that MOFCOM did not disclose to Tyson the formulas used
to calculate normal value, export price, the dumping margins for each model, or the final total

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weighted-average dumping margin. The United States notes that this conclusion is equally
applicable to Pilgrim's Pride.
6.20. China argues that in light of its broader comments on the Panel's analysis, the proposed
clarification is unnecessary.
6.21. As it is undisputed that MOFCOM did not disclose the formulas used to any of the
respondents, the Panel has made the addition requested by the United States.
Paragraphs 7.101-7.104
6.22. China raises three points with respect to the Panel's evaluation of the disclosure documents
provided to Tyson. First, China argues that th e Panel erred in concluding that Tyson would be
unable to determine what adjustments were made to normal value, because Tyson knew the
substance of the documentation delivered to MOFCOM at verification as well as its revised
Table 4-2 and thus knew exactly what the adjustments were and to which sales the adjustments
were applied. Second, China argues that the Panel's suggestion that there was confusion over the
source of the cost data is belied by the Disclosure, which clearly stated that the data came from
Tyson's Second Supplemental Questionnaire Respon se. Finally, China argues that the Panel was
incorrect that there was any uncertainty on Tyson's part with respect to adjustments to export
price, because MOFCOM indicated in the Disclosure that it was accepting adjusted data submitted
by Tyson after verification. Similarly, for other expenses, China submits that the Panel was wrong
to conclude that Tyson would not know the substance of the information applied by MOFCOM,
because MOFCOM made it clear that the expenses were sourced from what Tyson had itself
reported and were fully accepted.
6.23. The United States submits that although the Disclosure does indicate an adjustment was
made "based on" documents MOFCOM gained during verification, this does not contradict the
Panel's finding that MOFCOM did not disclose th e nature of the adjustment. According to the
United States, China is urging the Panel to pr esuppose Tyson's knowledge of the details of
MOFCOM's calculations absent evidence that MOFC OM disclosed those details. The United States
maintains that MOFCOM's disclosure of the weight-based production cost is unclear and that even
if MOFCOM used the data Tyson submitted in its Second Supplemental Questionnaire Response,
MOFCOM failed to disclose the formulas and the underlying data. Finally, with respect to the
adjustments to export price, the United States argues that China's assertion is incorrect and based
on a passage of the Final Anti-Dumping Disclosure taken out of context. In the United States view,
the language of the Panel is addressing the ad justments to normal value (namely expenses) and
not export price.
6.24. The Panel's findings acknowledge that the Disclosure refers to the document the data was
derived from to make the adjustments. Therefor e, the Panel was not under any misapprehension
that Tyson was aware that the source of the data was Table 4-2. Rather, the issue is that MOFCOM
did not indicate that it was accepting the adjust ments as presented by Tyson. Therefore, Tyson
could not be certain as to how they were applied or to which sales. The Panel also notes that
despite MOFCOM's explanation that it made adjustments to direct sales expenses, the per unit cost
of production did not change from the Preliminary Determination to the Final Determination. This
would cause Tyson uncertainty as to what adjustments had actually been made. With respect to
the cost data coming from the Second Supplem ental Questionnaire, the Panel has amended the
language of its findings to clarify that this was the basis for the cost of production, other than
expenses. Finally, the Panel has adjusted the language in paragraph 7.103 to note that MOFCOM
indicated it was accepting Tyson's corrected export price data.
Paragraphs 7.105-7.106
6.25. China objects to the Panel's conclusion that Keystone would not have known what data
MOFCOM used to calculate the cost of production used in constructed normal value. China argues
that MOFCOM explained in the Disclosure that it us ed the weighted average cost of all models to
calculate production cost and accepted the expenses as reported by Keystone. According to China,
as Keystone only made one cost submission it was clear to which costs and expense data MOFCOM
referred. China also notes that there were no factual changes between the Preliminary
Determination and the Final Determination.

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6.26. The United States submits that Keystone submitted two alternative cost calculations after
the Preliminary Determination. The United States also argues that MOFCOM made various
adjustments to Keystone's data after the Prelim inary Determination, including to Keystone's
reported freezer storage expenses and thus, the argument that there was no change from the
Preliminary Determination to the Final Determination is misplaced.
6.27. The Panel disagrees with China. The Panel has made appropriate changes to
paragraph 7.105 to clarify the basis for its conclusion that Keystone would have been unaware of
the exact data used to calculate its cost of production.
6.28. The United States requests that the Panel add to paragraph 7.106 the last sentence of
paragraph 7.103 which refers to the fact that MOFCOM did not disclose to Tyson the formulas used
to calculate normal value, export price, the "dumping margins" for each model, or the final total
weighted-average dumping margin. The United States notes that this conclusion is equally
applicable to Keystone.
6.29. China argues that in light of its broader comments on the Panel's analysis the proposed
clarification is unnecessary.
6.30. The Panel agrees with the United States th at it is undisputed that MOFCOM did not disclose
the formulas used to any of the respondents. Therefore, the Panel has made the addition.
Paragraph 7.118
6.31. The United States suggests a modification which it argues will better reflect the language in
the cited exhibit. In particular the United States requests that the Panel clarify that there were
two prior submissions of cost data. Further, the United States argues that the issue is not whether
MOFCOM could understand Pilgrim's Pride's data, but whether it could be "read or accessed".
Furthermore, the United States asks the Panel to add an additional sentence which indicates
Pilgrim's Prides willingness to answer any further questions from MOFCOM.
6.32. China objects to the proposed modifications. China argues that the issue was not whether
the information could be "read or accessed" as all versions had been submitted in Microsoft Excel,
but that the data was not submitted in the st andard format utilized by MOFCOM such that
MOFCOM could not understand the data. China also objects to any addition to the paragraph to
refer to Pilgrim's Pride's willingness to answer further questions as, in China's view, this will only
confuse the relevant facts.
6.33. The Panel has clarified the sequence of submissions as requested by the United States.
However, the Panel declines to make the other requested modifications to the paragraph. The
Panel agrees with China that MOFCOM did not refer to being unable to access or read the data,
i.e., if it was in a computer language MOFCOM could not read, but rather that it was unable to
understand the data. The Panel does not find Pilgrim's Pride's statement of its willingness to
answer additional questions from MOFCOM on the data already submitted to be relevant to the
issue of whether it submitted data in an understandable format and thus declines to make the
requested change.
Paragraph 7.156
6.34. The United States requests that the Panel add references to the arguments of the
European Union with respect to whether the differe nce in value of products in the domestic and
export markets is relevant to the question of sa les in the domestic market and the allocation of
costs to waste products.
6.35. China believes the additional sentences ar e unnecessary. However, if the Panel were to add
them, China requests that the word "notes" not be used as this implies recognition of a fact rather
than an argument.
6.36. The Panel has added the language reques ted to the summary of the European Union's
arguments in order to fully reflect the position of the European Union. The Panel has refrained

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from using the word "notes" to ensure that it is clear that these are the arguments of the
European Union.
Paragraph 7.165
6.37. The United States requests that the Panel add language to the beginning of
paragraph 7.165 to reflect its argument that the respondents put evidence on the record of the
investigation that their reported costs were reasonable. The United States asks the Panel to delete
references and reasoning relating to its argument s on whether consistency with GAAP is evidence
of reasonableness under Article 2.2.1.1.
6.38. China objects to the deletion of the refere nce to the United States' arguments. According to
China, the language of the interim report properly reflects the United States' arguments.
6.39. The Panel notes that the additional language the United States requests demonstrates that
the Panel's understanding of the United States' argument is correct. The United States refers to
evidence that the respondents' costs were calculated in a manner considered appropriate under
international accounting standards as evidence in support of the respondents' arguments that their
reported costs were reasonable. Therefore, while the Panel has added the requested language to
the beginning of paragraph 7.165 the Panel has not deleted the reference to the arguments that
were made by the United States with respect to GAAP.
Paragraph 7.167
6.40. The United States seeks three overall changes to paragraph 7.167. According to the
United States the paragraph as drafted may give the impression that only two methodologies were
at issue, whereas the record of the investigatio n demonstrates that additional permutations of
these methodologies were possible. The United St ates also suggests additional description of
MOFCOM's weight-based methodology. The United States also notes that the paragraph does not
reflect that the respondents requested the use of their historically utilized value-based allocations
while MOFCOM adopted a weight-based methodology.
6.41. The United States also seeks deletion of the sentence "Neither method is inherently
unreasonable". The United States argues that it did not concede that a weight-based allocation
was reasonable in the present situation, but rather that outside the context of non-homogeneous
joint-products, it is a common cost methodology. The United States submits that it actually argued
that a weight-based methodology could be an unreasonable method of calculating costs when it
comes to joint products. Furthermore, in the view of the United States, as the Panel's finding is
based on MOFCOM's failure to justify its determination, the language adds no value to any party to
this dispute or to any WTO Members more generally. As a consequence of its suggestions, the
United States also recommends moving footnote 292.
6.42. China, for its part, argues that the amen dment proposed by the United States would add
confusion to the facts surrounding the issue. China proposes its own amendments to the
paragraph, which in its view reflect its submissions during the dispute that MOFCOM found severe
discrepancies in the respondents' submissions of cost data and therefore MOFCOM had no choice
but to reject that data and adopt a weight-based allocation.
6.43. The Panel notes that the first three sentences of the paragraph were referring to accounting
methodologies generally rather than the specific methodologies used in the broiler products
investigation. The Panel also notes that the third sentence of the paragraph was a conclusion of
the Panel and not intended to be a reflection of the United States' arguments. The Panel has
modified the language in the paragraph to clarify these issues. The Panel has also noted, as the
United States requests, that the respondents adopted a value-based methodology while MOFCOM
utilized a weight-based one. The Panel has not a dded further detail on MOFCOM's methodology as
this is discussed in the ensuing paragraphs. Fu rthermore the Panel has not made the additions
requested by China. China's proposed modifications to the text pre-suppose a conclusion about the
reasonableness of the respondents' cost alloca tions and the necessity of MOFCOM's use of a
weight-based methodology that the Panel did not reach, precisely because the findings referred to
by China could not be demonstrated on the record of the investigation.

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Paragraphs 7.171-7.172
6.44. The United States requests that the Panel consolidate the two paragraphs by moving one
sentence from paragraph 7.172 to paragraph 7.171 and then deleting the second sentence of
paragraph 7.172. In particular, the United States requests that the Panel delete its observation
that it would not be unreasonable for an investigating authority, after considering the evidence,
explanations, and possible alternatives, to determine to depart from using a producer or exporter's
books and records based on the types of concerns China has expressed. The United States argues
that it is unclear which concerns the Panel is referring to. The United States also seeks to ensure
that there is no misunderstanding that the Panel is opining hypothetically on what an investigating
authority should conclude with respect to particular types of cost allocations.
6.45. China argues that both parties made considerable efforts in presenting arguments and
assessments on this issue and it is reasonable that the Panel decided to look into the factual
aspect of this key issue in order to ensure the conclusion is objective. In China's view there is no
need to alter the language in the Interim Report and the purpose of the amendments proposed by
the United States is to conceal the respondents' deficiencies and contradictions in the course of the
underlying investigation.
6.46. The Panel modified the text of the second sentence of paragraph 7.172 to reflect the fact
that the statement made does not in any way opine on the consistency of an eventual conclusion
of an investigating authority with the relevant obligations under the Agreement. The statement
simply acknowledges that the types of concerns expressed by China during the Panel proceedings
are concerns that an investigating authority may analyse when assessing the reasonableness of
the cost allocation of respondents under Article 2.2.1.1.
Paragraph 7.174
6.47. The United States seeks a modification of paragraph 7.174 to avoid the implication that the
United States affirmatively sought a finding under Article 6.8 of the Anti-Dumping Agreement. The
United States argues that its position was that there was nothing in MOFCOM's Determinations to
indicate that MOFCOM was applying facts available and that China cannot defend compliance under
Article 2.2.1.1 by claiming the application of Ar ticle 6.8 absent any evidence that China applied
facts available in the investigation.
6.48. China contends that the referenced paragraph fairly represent the facts of the case and the
arguments of the parties with respect to Pilgrim's Pride. According to China, the United States did
advance arguments in relation Article 6.8 of the Anti-Dumping Agreement for which no claim had
been made and the Panel properly rejected thes e arguments. Further, China argues that the
United States' characterization that the question of facts available arose late in the proceeding is
simply incorrect. China refers to arguments in its first written submission which refer to MOFCOM's
rejection of data provided by Pilgrim's Pride after the disclosure on the Preliminary Determination
and that "in light of Pilgrim's failure to address its serious data problems in multiple supplemental
responses and corrections, and its need to continue the investigation in a timely manner, it had to
resort to an alternative basis for allocating costs." In China's view the underlying record is
completely consistent with the Panel's findings.
6.49. The Panel has made some modifications to paragraph 7.174 to reflect the particular nuance
of the United States' position. However, as China notes, its argument with respect to Pilgrim's
Pride did not arise simply in response to a question from the Panel, but was consistent throughout
its submissions. Therefore, we did not use the particular language suggested by the United States.
Paragraph 7.175
6.50. The United States notes that the Panel uses the word "explain" in paragraph 7.175 to refer
to the obligation in Article 2.2.1.1 whereas the Pane l uses the word "justify" in a similar context in
paragraph 7.161. The United States suggests that the Panel modify paragraph 7.175 to be
consistent with paragraph 7.161 by changing "explain" to "justify".

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6.51. China submits that the two paragraphs are provided in different contexts, but that if the
terms are harmonized, the word "explain" should be used as it better reflects the obligation of the
authority in the context presented.
6.52. The Panel does not consider it necessary to make the modification requested by the
United States.
Paragraph 7.192
6.53. The United States suggests revising the text of the first sentence of this paragraph so that
the summary of the criteria set forth in the Appellate Body Report in US – Softwood Lumber V
better tracks the language of the Appellate Body Report. The United States believes such a change
would improve clarity.
6.54. China disagrees with the United States' proposal of replacing "any" with "sufficient".
According to China, whether the evidence of consideration is sufficient or not is a case-by-case
issue. The United States' proposal in fact requests the Panel to establish a standard of review
which should be left for the specific panel in the specific dispute to decide.
6.55. The Panel recognizes that the use of either "any" or "sufficient" implies a standard of review
that may not be appropriate in a situation where a case-by-case determination must be made.
Therefore, the Panel has deleted "any", but has not added "sufficient".
Paragraphs 7.196-7.197
6.56. With respect to the Panel's finding that MOFCOM improperly allocated all processing costs to
all products, China argues that the Panel's discussion of what processing costs should be
associated with certain products implies a firm understanding of where costs should be assigned
even though there is no explicit rule on wher e costs associated with breast meat should be
allocated. China also maintains that the Panel did not engage in an inquiry of product-specific costs
and whether the company's allocations were reasonable and thus it would be imprudent for the
Panel to provide examples that could be mistaken for the Panel endorsing a particular approach.
6.57. With respect to the Panel's conclusion that MOFCOM did not allocate costs to all products
associated with the production of a chicken as implied by the chosen methodology, China argues
that the Panel re-interprets a US argument to address a point not raised by the United States.
Additionally, China argues that the Panel does not fairly address China's response to these
arguments by focusing on Exhibit CHN-64, whic h was a summary of Table 6-3 rather than on
Table 6-3 itself. According to China, Table 6-3 sought costs for production of subject merchandise
so there could be no over-allocation of costs absent a failure by the respondents to report the
correct data as requested.
6.58. The United States submits that China's comments, rather than requesting review regarding
a specific aspect of the Interim Report, are asking that the Panel completely remove
two significant findings: (i) the finding in paragraph 7.196 that MOFCOM breached its obligations
under Article 2.2.1.1 through the "straight allocation of total processing costs to all products"; and
(ii) the finding in paragraph 7.197 that MOFCOM breached its obligations with respect to the
specific allocation of Tyson's costs. The United States considers that China's arguments in both
respects are incorrect. According to the United States, the record of these proceedings
demonstrates that the United States raised these issues; that the Panel inquired about them,
including from China; and that the only party that did not properly address the issues was China.
The United States argues that the Panel engaged China directly on these issues by asking it to
explain how it accounted for processing costs and its treatment of Tyson.
6.59. With respect to processing costs, the Unit ed States argues that China's submissions do not
support its current claim and that its current und erstanding (that Article 2.2.1.1 does not even
operate to issue a finding that costs of production should only include costs that go into the
production of a product) would render the provision of a nullity. With respect to the issue of
Tyson's allocation, the United States contends that China does not say precisely how its argument
is anything other than what the Panel has already noted: that China asserted that MOFCOM must

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be right because it used Tyson's own data from Form 6-3 and that the summary table of Form 6-3
does not rebut the United States' prima facie case.
6.60. The Panel's conclusion about allocation of processing costs across all products is not a
conclusion that the product-specific costs used by the respondents were or were not reasonable.
As the Panel has stated, it is not its role to conduct a de novo review of MOFCOM's determination.
Moreover, the Panel has noted that MOFCOM did not make any determinations with respect to the
quality of the product-specific processing costs on the record of the investigation for the Panel to
review. The Panel specifically asked China how MOFCOM had allocated processing costs and
whether this meant that product-specific costs were allocated across all products.
35 I t i s t h e
Panel's view that where there are product-specific processing costs such a straight allocation will
inevitably result in the allocation of costs to one product that were specific to another. The
reference to breast meat was merely to provide an example in the context of the present dispute
rather than to imply a conclusion that the respondents' product-specific processing costs for breast
meat in their books and records reasonably reflected the costs associated with production within
the meaning of Article 2.2.1.1. The Panel has alte red the language to clarify the nature of its
finding and move the reference to product-specific costs for breast meat into a footnote and clarify
that the reference is by way of an example of the problems that can arise when an investigating
authority allocates all processing costs to all products.
6.61. The United States' claim with respect to this issue was that MOFCOM in allocating the costs
of producing a whole broiler chicken across all products derived from that chicken should have
allocated costs to products such as blood and feathers. However, the United States contended that
the record of the investigation did not demonstrate that MOFCOM had done so. The United States
referred to these products as "non-subject merchandise". The Panel, in evaluating the
United States' claim, noted in a footnote that under the definition of the scope of the investigation
set forth in MOFCOM's Determinations, by-products of broiler products, such as blood and
feathers, are included within the scope. The fact that the Panel noted that the United States used
incorrect terminology when referring to those products does not mean that the Panel
re-interpreted the United States' argument to address a claim that had not been made. Regardless
of whether the products at issue are "subject products" the United States' claim is that MOFCOM
acted inconsistently with Article 2.2.1.1 because it allocated costs associated with the production
and sale of certain products (namely costs for the production of blood and feathers) to other
products Tyson produced. However, to avoid conf usion, the Panel has modified the footnote to
clarify this point.
6.62. The Panel disagrees with China that it did not fairly address China's response to these
arguments by focusing on Exhibit CHN-64, whic h was a summary of Table 6-3 rather than on
Table 6-3 itself. In its arguments, China averred that Exhibit CHN-64 demonstrated how MOFCOM
had used the information from Table 6-3 to calculate total cost of production. Furthermore, other
than two pages of excerpts in Exhibit CHN-46, China did not provide the actual Table 6-3.
Therefore, the Panel stands by its conclusion th at based on the evidence provided, China has not
rebutted the United States' prima facie case on this issue. The Panel has added a footnote to the
paragraph to indicate that China did not provide the complete Table 6-3.
6.63. The United States requests that the Panel modify paragraph 7.196 to remove any indication
that it is of the view that a weight-based methodology is not inherently unreasonable. According to
the United States its arguments did not concede a weight-based allocation was reasonable in the
present situation, but rather that outside the context of non-homogeneous joint-products, it is a
common cost methodology. In the United States' view a weight-based methodology could be an
unreasonable method of calculating costs when it comes to joint products, particularly in scenarios
such as the present one. Thus the United States requests that the first and third sentences of the
paragraph be consolidated and the second sentence deleted.
6.64. China objects to the proposed deletion of the first sentence of paragraph 7.196 because the
context surrounding the first sentence is not limited to the underlying investigation. In China's
view the sentence describes a general scenario and the United States has submitted that a
weight-based allocation is not inherently unreasonable outside the context of a joint-product
scenario.

35 China's response to Panel question Nos. 35 and 96.

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6.65. As the issue of whether the parties agree whether a weight-based methodology is inherently
unreasonable is not necessary for its analysis and findings under Article 2.2.1.1, the Panel made
the deletion requested by the United States.
Paragraph 7.244
6.66. The United States requests modifying the first two sentences of paragraph 7.244 in a
manner which it argues will improve clarity and track closer the language in its submissions.
6.67. China notes that the language concerned was summarized from the second written
submission of the United States, and is repeated nearly verbatim. China asserts that the
United States has kept silent on the respondents' failures to provide full responses to multiple
questionnaires issued and why the respondents tried to excuse their failure to respond properly by
claiming that MOFCOM asked wrong questions with an ambiguous definition of the subject product.
Thus, China views the proposed amendments as an attempt by the United States to defend its
silence on this issue. Therefore, China sees no need to alter the language as suggested by the
United States.
6.68. The summary contained in paragraph 7.244 accurately reflects the arguments made by the
United States in paragraph 90 of its second written submission. Therefore, the Panel declines to
make the changes requested by the United States.
Paragraph 7.250
6.69. China seeks to clarify that it is not arguing that the term "broiler products" is per se
ambiguous, but that in the context of the und erlying investigation "broiler products" became
unambiguous when the definition and the scope of the subject products are read together. China
argues that in this context the term "broiler products" is synonymous with "subject products".
6.70. The United States argues that China's comments on paragraph 7.250 do not state what
precisely in the paragraph is to be reviewed. The United States argues that China's request has
not met the requirements of Article 15.2 of the DS U and can be rejected on that basis. Moreover,
the United States notes that the Panel's statement is a nearly verbatim recitation of China's
response to Panel question No. 100.
6.71. The Panel sees no need to change the paragraph as paragraph 7.250 is taken verbatim from
China's response to Panel question No. 100 and therefore accurately reflects China's argument.
Paragraphs 7.308 and 7.313
6.72. China asks that the Panel reconsider whether it should make any findings concerning the
second aspect of the United States' claim under Article 6.8 and Annex II of the Anti-Dumping
Agreement, pertaining to the manner in which MO FCOM determined the "all others" rate. China
questions whether the United States articulated a specific claim in this respect until its second
written submission. This, in China's view, raises due process concerns. China argues that under
paragraph 6 of the Panel's Working Procedures, the first written submission was the proper time
for the United States to establish both its facts and arguments concerning the manner in which
MOFCOM determined the "all others" rate.
6.73. The United States opposes China's request. The United States submits that its argument in
its first written submission concerned not only MOFCOM's resort to facts available, but also its
adverse application of such facts. The United States submits that MOFCOM's Determinations
contained no explanations of the manner in which MOFCOM applied facts available and that such
explanations were first provided, albeit post hoc , in China's submissions in this dispute. The
United States also submits that China addressed this aspect of its claim at the first meeting of the
Panel and in its responses to the first set of questions from the Panel, which is inconsistent with
China's assertion that the issue was not raised until the United States' second written submission.
The United States also notes that China waited until its comments on the interim report to raise
this challenge.

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6.74. The Panel first observes that China did not object to what it now argues is a procedural
defect during the argumentation phase of the Pa nel proceedings, and only did so at the interim
review stage. The Panel further notes that in support of its claim that MOFCOM acted inconsistently
with Article 6.8 and Annex II of the Anti-Dumping Agreement, the United States argued in its first
written submission not only that MOFCOM resorted to facts available in a situation in which
unknown producers/exporters were not notified of the information required of them, but also that
MOFCOM resorted to facts apparently adverse to these producers/exporters' interests. China had
ample opportunity to respond to this argument du ring the course of the Panel proceedings such
that its due process rights were respected. In addition, the DSU does not establish a general rule
that a complainant must assert all relevant claims or present all relevant arguments in its first
written submission
36 and paragraph 6 of the Panel's Working Procedures does not, as China
suggests, establish a rule that each party must put forward all the facts and arguments pertaining
to its claims in its first written submission (see, by contrast, paragraph 8 of the Panel's Working
Procedures, establishing a general rule that factual evidence be submitted to the Panel no later
than during the first substantive meeting). For the foregoing reasons, the Panel considers that the
concerns expressed by China do no warrant reconsideration of its finding with respect to the
manner in which MOFCOM determined the "all others" rate applied in the anti-dumping
investigation.
Paragraph 7.359
6.75. China submits that the statement in paragraph 7.359 that MOFCOM "used a different
approach in calculating the benefit for determining the 'all others' rate from the approach it used
for individually-examined producers/exporters" mi scharacterizes the facts before the Panel. China
explains that for individually-examined producers/exporters, MOFCOM's methodology was to use
the lesser of the "competitive benefit" and "pass through" amounts, which resulted in Pilgrim's
Pride margin for the upstream subsidy program also being based on the "competitive benefit"
approach. This being the case, China considers that it cannot be said that MOFCOM's use of the
calculated "competitive benefit" amount from one of the respondents was a "different approach".
6.76. The United States objects this request. Th e United States notes that China itself explained
before the Panel that MOFCOM followed one approach with respect to the individually-examined
producers/exporters (using the lesser of the pass-through or competitive benefit amounts) and a
different approach with respect to the "all other" producers/exporters (deriving only a competitive
benefit amount). The United States suggests to retain the term "approach" to distinguish between
the different methodologies MOFCOM followed with respect to the individually-examined producers
and the "all others" producers/exporters, but suggests in the interest of clarity that the Panel refer
to the "competitive benefit" and "pass-through" "analyses" rather than "approaches" in
paragraph 7.358.
6.77. The Panel sees no need to revisit the statement in paragraph 7.359 that MOFCOM applied a
different approach for the calculation of the countervailing duty for the "all others" compared to
the approach it applied to calculate the countervailing duty margin of individually-examined
producers/exporters. In the Panel's view, this statement accurately reflects the facts before the
Panel and China's own explanations concerning the manner in which MOFCOM calculated the "all
others" countervailing duty rate. The Panel has however made certain changes to paragraph 7.358
to improve clarity and to avoid confusion in the terminology used by the Panel.
Paragraph 7.378
6.78. China argues that paragraph 7.378 inadvertently implies that no domestic companies
registered to take part in the injury investigation when in fact most of the largest producers had
registered indirectly through CAAA as the industry association.
37
6.79. The United States disagrees with China's comment and argues that China is seeking to
introduce a new concept of "indirect registration" for a domestic producer. Regardless of the legal
ramifications of such a characterization, the United States argues that it does not comport with the

36 See, e.g. Appellate Body Reports, EC – Bananas III, paras. 145-147; Chile – Price Band System,
37 China's request for interim review, para. 26.

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facts and that the Panel's current description accurately captures what occurred during the
investigation and should not be altered.
6.80. The Panel notes that at no time prior to its comments on the Interim Report did China refer
to these companies as being indirectly registered for the injury investigation. In its response to
Panel question No. 84, submitted as Exhibit CHN-62, China indicated that the companies that were
members of the CAAA were deemed registered. The Panel has added additional language to the
relevant footnote to clarify this point.
Paragraph 7.466
6.81. China requests that the Panel specifically note the evidence it submitted to contradict the
United States' assertion that the importer mark-up was positive.
6.82. The United States opposes China's request. The United States submits that the document
contained in Exhibit CHN-40 was not on the record of the investigation and therefore could not
have been considered by MOFCOM. In the event that the Panel includes a reference to
Exhibit CHN-40, the United States suggests that it make clear China's acknowledgement that
Exhibit CHN-40 was not on the record of the investigation and that it was therefore irrelevant to
the Panel's analysis of the United States' claim.
6.83. The Panel has added a reference to Exhibit CHN-40 and to China's submissions citing to this
Exhibit in the footnote to paragraph 7.466.
Paragraph 7.493
6.84. China submits that the Panel's logic in paragraph 7.492 is that since MOFCOM stated that it
"does not need to consider" the extent of pric e comparability, MOFCOM could not justify its
determination before the Panel by explaining how MOFCOM could have considered the issue. China
submits that given this logic, the Panel need no t address how MOFCOM needed to "consider" this
issue. In addition, China argues that the language in the last sentence of paragraph 7.493 goes
beyond the actual requirements of Articles 3. 2 and 15.2 as interpreted in prior decisions (in
particular the Appellate Body report in China – GOES), and is not an appropriate statement of the
conclusion the Panel seems to be reaching. For these reasons, China suggests either deleting the
entire paragraph, or rewording its last sentence.
6.85. The United States opposes China's request to delete the paragraph. In the United States'
view, the paragraph provides the logical conclusion of the Panel's analysis of the product mix issue
and contains an accurate statement of China's obligations. Moreover, the United States argues, the
paragraph contains the Panel's resolution of China's primary argument, i.e. that record evidence
revealed that any price differences favoured US producers/exporters and underestimated the
extent of price undercutting. The United States suggests alternative language for the last sentence
of the paragraph should the Panel wish to mirror the language of the Appellate Body in China –
GOES.
6.86. The Panel has decided to maintain paragraph 7.493, but has modified it in light of the
concerns expressed by China.
6.87. In addition to the specific requests discussed above, the parties have asked the Panel to
make changes of an editorial nature to improve clarity and accuracy or better reflect the language
used in their submissions. The Panel has considered these requests and made the changes that it
considered appropriate. After considering these requests, the Panel made changes to
paragraphs 7.2, 7.20, footnote 75 to paragraph 7.24, 7.59, 7.66, 7.68, 7.69, 7.70, 7.71, 7.72,
7.73, 7.110, 7.111, 7.115 and footnote 192 to the same paragraph, 7.120, 7.144, 7.163, 7.166,
7.171, 7.224, 7.242, 7.257, 7.282, 7.324, 7.371, 7.397, and 7.425. In addition, the Panel also
corrected typographical errors and made changes to other paragraphs to improve the clarity of the
text and better express its reasoning.

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7 FINDINGS
7.1 General principles regarding treaty in terpretation, the applicable standard of
review, and burden of proof
7.1.1 Treaty interpretation
7.1. Article 3.2 of the DSU provides that the WT O dispute settlement system serves to clarify the
existing provisions of the covered agreements "in accordance with customary rules of
interpretation of public international law". Likewise, Article 17.6(ii) of the Anti-Dumping Agreement
requires panels to interpret that agreement's provisions in accordance with the customary rules of
interpretation of public international law. It is generally accepted that the principles codified in
Articles 31 and 32 of the Vienna Convention on the Law of Treaties are such customary rules.
7.2. Article 17.6(ii) of the Anti-Dumping Agreem ent also provides that if a panel finds that a
provision of the Anti-Dumping Agreement admits of more than one permissible interpretation, it
shall uphold a measure that rests upon one of those interpretations.
7.1.2 Standard of review
7.3. Panels generally are bound by the standard of review set forth in Article 11 of the DSU, which
provides, in relevant part, that:
[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.
7.4. The Appellate Body has explained that where a Panel is reviewing an investigating authority's
determination, the "objective assessment" standard in Article 11 of the DSU requires a panel to
review whether the authorities have provided a reasoned and adequate explanation as to (i) how
the evidence on the record supported its factual findings; and (ii) how those factual findings
support the overall determination.
38 Furthermore, in addition to the obligation to conduct an
objective assessment under Article 11 of the DSU, in anti-dumping disputes, Article 17.6(i) of the
Anti-Dumping Agreement provides that:
in its assessment of the facts of the matter, the panel shall determine whether the
authorities' establishment of the facts wa s proper and whether their evaluation of
those facts was unbiased and objective. If the establishment of the facts was proper
and the evaluation was unbiased and objective, even though the panel might have
reached a different conclusion, the evaluation shall not be overturned.
7.5. The Appellate Body has clarified that a panel should not conduct a de novo review of the
evidence, nor substitute its judgment for that of the authority. A panel must limit its examination
to the evidence that was before the agency during the course of the investigation and must take
into account all such evidence submitted by the parties to the dispute.
39 At the same time, a panel
must not simply defer to the conclusions of the investigating authority; a panel's examination of
those conclusions must be "in-depth" and "critical and searching".
40
7.1.3 Burden of proof
7.6. The general principles applicable to the al location of the burden of proof in WTO dispute
settlement require that a party claiming a violation of a provision of a WTO Agreement must assert
and prove its claim.
41 Therefore, as the complaining party, the United States bears the burden of
demonstrating that certain aspects of the anti-dumping and countervailing duty measures at issue
are inconsistent with the Anti-Dumping Agreem ent, the SCM Agreement and the GATT 1994. The
Appellate Body has stated that a complaining party will satisfy its burden when it establishes a

38 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, para. 186; see also
Appellate Body Report, US – Lamb, para. 103.
39 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, paras. 187-188.
40 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 93.
41 Appellate Body Report, US – Wool Shirts and Blouses, p. 14.

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prima facie case, namely a case which, in the absenc e of effective refutation by the defending
party, requires a panel, as a matter of law, to rule in favour of the complaining party. 42 Finally, it
is generally for each party asserting a fact to provide proof thereof.43
7.2 Procedural claims
7.2.1 Whether MOFCOM provided an opportunity for interested parties with adverse
interests to meet as required under Article 6.2 of the Anti-Dumping Agreement
7.2.1.1 Introduction
7.7. The United States claims that China acted inconsistently with Article 6.2 of the Anti-Dumping
Agreement when MOFCOM denied a request by the United States Government for a public
hearing
44 to present its views regarding the investigation in the presence of parties with adverse
interests.45
7.2.1.2 Relevant provisions
7.8. Article 6.2 of the Anti-Dumping Agreement provides that:
Throughout the anti-dumping investigation all interested parties shall have a full
opportunity for the defence of their interests. To this end, the authorities shall, on
request, provide opportunities for all interested parties to meet those parties with
adverse interests, so that opposing views may be presented and rebuttal arguments
offered. Provision of such opportunities mu st take account of the need to preserve
confidentiality and of the convenience to th e parties. There shall be no obligation on
any party to attend a meeting, and failure to do so shall not be prejudicial to that
party's case. Interested parties shall also have the right, on justification, to present
other information orally.
7.2.1.3 Factual background
7.9. The United States Government sent MOFCOM a letter on 12 July 2010 requesting a public
hearing to discuss issues raised in the anti-dumping and countervailing duty investigations, in
particular: (i) the procedures followed by MOFCOM in the investigations, including the time allowed
for comments on MOFCOM's Preliminary Determinations and the lack of transparency in explaining
legal conclusions; (ii) MOFCOM's domestic industry definition; (iii) MOFCOM's analysis of the price
effects of the subject imports; and (iv) MOFCOM's analysis of the causal link between the subject
imports and any injury to the domestic industry.
46
7.10. MOFCOM responded to the United States Government in a letter of 14 July 2010, which
reads in relevant part:
The investigating authority has undertaken the investigations in a public, just and
transparent manner in accordance with Chinese laws and regulations by providing the
USG and respondents sufficient time to submit responses (supplemental responses)
and comments. All the public versions of th e submissions are accessible in the public
reading room. In addition, after the preliminary determination and verification, the
investigating authority disclosed the sufficient and timely information to the interested
parties, including the USG.

42 Appellate Body Report, EC – Hormones, paras. 98 and 104.
43 Appellate Body Report, US – Wool Shirts and Blouses, p. 14.
44 The parties use the term "public hearing" in their submissions but clarify that their use of this term
does not imply anything different from, or greater than, the obligations set out in Article 6.2 of the
Anti-Dumping Agreement. The United States in particular explains that it uses this term: (i) as a shorthand for
the "opportunity" required under Article 6.2; (ii) because that is how MOFCOM titles its rules for hearings; and
(iii) because the US request for a hearing in the underlying investigation was framed as such. (United States'
response to Panel question No. 5; China's response to Panel question No. 5).
45 United States' first written submission, para. 2.
46 Hearing Request, Exhibit USA-22.

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Since the issues mentioned in the hearing request by the USG are not relevant to the
interested parties directly, the investigating authority decides to hear the USG’s
opinions by a way of opinion presentation meeting. The opinion presentation meeting
is expected to be held on July 20. Please provide an attendant list by July 16.
47
7.11. The Final Determinations refer to the request by the United States Government, indicating
that MOFCOM "accepted the application and held the hearing on July 20 of 2010", and noting that
after the hearing, the US Embassy in China submitted materials relating to the hearing.48
7.12. It is not in dispute that the "hearing" referred to in the Final Determination is the "opinion
presentation meeting" alluded to in MOFCOM's letter, which took place on 20 July 2010, and was
attended by MOFCOM and United States Government officials, without the presence of Petitioner or
other interested parties.49
7.2.1.4 Main arguments of the parties
7.2.1.4.1 United States
7.13. The United States argues that MOFCOM denied the US request for a hearing by deciding
ab initio, without any further inquiry, that the issues id entified in the request had no relevance for
any of the other interested parties to the investigation and instead offering a closed forum where
the United States Government could present its views to MOFCOM alone.
50 In the United States'
view, Article 6.2 requires the authorities to provide interested parties with the opportunity to meet
parties with adverse interests and exchange views, and the "opinion presentation meeting" held by
MOFCOM does not satisfy these requirements.51
7.14. The United States disputes China's contention that MOFCOM contacted the Petitioner and all
other interested parties having adverse interests via telephone and they indicated no interest in
meeting with the US respondents, and that MOFCOM thus complied with the obligation in
Article 6.2. First, the United States notes that China does not point to any evidence on the record
showing that MOFCOM actually contacted those parties; the only document on the record
addressing the US request, the letter from MO FCOM to the US Embassy of 14 July 2010, says
nothing about this alleged communication.
52 Second, with respect to China's assertion that
MOFCOM contacted all interested parties with adverse interests; the United States contends that
China failed to identify who those parties we re and explain the manner in which they were
contacted.53 The United States argues that while Article 6.2 does not compel parties with adverse
interests to attend the meeting, this provision does not allow one party, such as the Petitioner, to
decide whether the meeting will or will not take place.54
7.2.1.4.2 China
7.15. China submits that nothing in Article 6.2 mandates that a public hearing be held under any
circumstances.
55 China argues that an investigating authority's obligation under Article 6.2 goes
only so far as the obligation to provide the opportunity of a meeting between parties with interests
adverse to one another. Thus, China argues, the investigating authority merely has to create the
conditions necessary to facilitate such a meeting.
56 In China's view, an interested party's
entitlement to a meeting where opposing views and rebuttals are offered is necessarily contingent
upon the presence of adverse parties at the meet ing – a circumstance which is not compelled by
Article 6.2. In China's view, this interpretation is further reinforced by the express caveat in

47 MOFCOM Reply to the Hearing Request, Exhibit USA-24.
48 Final Anti-Dumping Determination, Exhibit USA-5, p. 10; Final Countervailing Duty Determination,
Exhibit USA-4, p. 9.
49 United States' first written submission, para. 40; China's first written submission, paras. 9-10.
50 United States' first written submission, paras. 40, 43 and 50; response to Panel question No. 6.
51 United States' first written submission, paras. 45-51.
52 United States' opening statement at the first meeting of the Panel, paras. 4-9; second written
submission, paras. 4-6 (citing MOFCOM Reply to the Hearing Request, Exhibit USA-24); opening statement at
the second meeting of the Panel, para. 7.
53 United States' comments on China's response to Panel question No. 87.
54 United States' opening statement at the second meeting of the Panel, paras. 7-8.
55 China's first written submission, paras. 7 and 12-13.
56 China's first written submission, paras. 8 and 12-13; second written submission, para. 17.

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Article 6.2 that "there shall be no obligation on an y party to attend a meeting, and failure to do so
shall not be prejudicial to that party's case".57
7.16. China states that in light of the requirements in Article 6.2, a day after receiving the
United States' request for a public hearing, MOFCOM contacted, by telephone, the Petitioner as
well as all other interested parties it understood to have interests adverse to the United States
Government to notify them of the request and to inquire as to whether they would attend the
hearing.
58 China further states that these parties indicated no interest in attending the hearing,
given that the issues raised by the United States Government in its hearing request had already
been thoroughly addressed throughout the investigation and therefore had no relevance to them.59
China argues that as there was no opposing party to receive the United States' presentation at a
public hearing, MOFCOM rejected the United States' request and instead organized an "opinion
presentation meeting" with the United States Government.
60 In light of these circumstances, China
contends that the "opinion presentation meeting" did not limit the United States' opportunity to
present its views, since parties with adverse interests would not be present in any event. 61
Consequently, China considers that MOFCOM provided an opportunity for adverse parties to meet,
consistent with Article 6.2.62
7.2.1.5 Arguments of the third parties
7.17. The European Union submits that the key point in China's position is the factual assertion
that MOFCOM contacted the Petitioner and the latter indicated no interest in meeting with the
United States Government. In the European Union's view, if this assertion is legally relevant or
even determinative, then consistent with the ge neral principles allocating the burden of proof,
China should adduce evidence in support of it. In the event that the contact and response are not
recorded in the file, the European Union argues, China's key factual assertion is not supported by
evidence.
63
7.18. Norway submits that Article 6.2 guarantees due process requirements and that under this
provision, the authorities are obliged to "provide opportunities" for interested parties, upon their
request, to meet those parties with opposing inte rests. In Norway's view, this obligation entails
contacting the parties with adverse interests and asking them to take part in a meeting. Norway
submits that the only viable reason not to provide such opportunities for a meeting is if all parties
with opposing interests are contacted and decline the invitation.
64
7.19. Thailand considers that when an interested party requests a hearing under Article 6.2, an
authority should accept the request, provided that the request is raised within a reasonable period
of time and does not cause a disruption of the proceedings.65
7.2.1.6 Evaluation by the Panel
7.20. Article 6.2 of the Anti-Dumping Agreement, second sentence, establishes an obligation for
the authorities, on request, to provide opportunities for all interested parties to meet those parties
with adverse interests so that opposing views may be presented and rebuttal arguments offered.
As the introductory terms "[t]o this end" in the second sentence of Article 6.2 indicate, this
obligation is informed by the overarching obligation in the first sentence of Article 6.2 that all
interested parties have a full opportunity for the defence of their interests throughout an
anti-dumping investigation. In this respect, in US – Oil Country Tubular Goods Sunset Reviews, the
Appellate Body clarified that Article 6.2 "set[s] out the fundamental due process rights to which
interested parties are entitled in anti-dumping investigations and reviews".
66 However, in the same
report, the Appellate Body expressed the view that Article 6.2 does not provide for "indefinite"

57 China's first written submission, paras. 8, 13 and 20; second written submission, para. 18.
58 China's response to Panel question Nos. 7(a), (b) and 87; second written submission, para. 19.
59 China's first written submission, para. 9; opening statement at the first meeting of the Panel, para. 2;
second written submission, para. 19.
60 China's first written submission, paras. 9-10 and 18-19.
61 China's opening statement at the second meeting of the Panel, para. 7.
63 European Union's third-party response to Panel question No. 1.
64 Norway's third-party submission, paras. 7-8; third-party response to Panel question No. 1.
65 Thailand's third-party response to Panel question No. 1.
66 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, para. 241.

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rights and indicated that the "opportunities" prov ided for under this provision must be balanced
against other considerations such as the investigating authority's ability to complete the
investigation in an expeditious manner.
67 Hence, we understand that the obligation to provide
opportunities is not absolute. This is further supported by the fourth sentence of Article 6.2, which
explicitly states that there is "no obligation on any party to attend a meeting, and failure to do so
shall not be prejudicial to that party's case."
7.21. There is no disagreement between the partie s as to whether the United States Government
requested an opportunity to meet those parties with adverse interests as contemplated in
Article 6.2.68 There is also no disagreement that neither the Petitioner nor other interested parties
having interests adverse to the United States Government were present at the "opinion
presentation meeting" MOFCOM arranged.
69 Therefore, the issue is not whether a meeting took
place, but whether MOFCOM provided an opportunity for it to occur, consistent with Article 6.2.
7.22. China asserts that, a day after receiving the US request for a public hearing, MOFCOM
informed the Petitioner as well as all other in terested parties with interests adverse to the
United States Government of the request via telephone. 70 According to China, these parties
indicated no interest in attending the hearing and declined MOFCOM's invitation. 71 According to
China, in light of the right of interested part ies to refuse to attend any meeting, MOFCOM's
communications with the interested parties were sufficient to satisfy China's obligations under
Article 6.2.
7.23. China does not point to any evidence on the record 72 that supports its assertion. The only
record evidence the Panel has before it is MOFCOM's letter to the United States Government,
which contains no indication that MOFCOM contacted the Petitioner or other interested parties. 73
The letter states that "since the issues mentioned in the hearing request by the USG are not
relevant to the interested parties directly, the investigating authority decides to hear the USG’s
opinions by way of opinion presentation meeting".
74
7.24. We recall that we must conduct our review of MOFCOM's actions in the investigations at
issue on the basis of the record MOFCOM de veloped in the course of its investigation. 75 In these
circumstances where there is no record evidence that other interested parties with interests
adverse to those of the United States Government declined to attend the meeting, we conclude
that MOFCOM failed to satisfy the requirements of Article 6.2 of the Anti-Dumping Agreement due
to its failure to provide opportunities for interested parties with adverse interests to meet and
present opposing views and offer rebuttal arguments.
7.25. The Panel therefore finds that China acted inconsistently with Article 6.2 of the
Anti-Dumping Agreement.
7.2.2 Whether MOFCOM required the Petition er to provide non-confidential summaries
as required under Articles 6.5.1 of the Anti-Dumping Agreement and 12.4.1 of the
SCM Agreement
7.2.2.1 Introduction
7.26. The United States claims that MOFCOM fail ed to require the Petitioner to provide adequate
non-confidential summaries in the anti-dumping and countervailing duty investigations, contrary to

67 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, paras. 241-242.
68 Hearing Request, Exhibit USA-22.
69 United States' first written submission, para. 40; China's first written submission, paras. 9-10.
70 China's response to Panel question Nos. 7(a), (b) and 87.
71 China's second written submission, para. 19.
72 Such as contemporaneous memoranda summarising the calls, e-mails, or letters. China admits that
MOFCOM has no official records of the alleged communication (China's response to Panel question No. 7(c)).
73 MOFCOM Reply to the Hearing Request, Exhibit USA-24.
74 MOFCOM Reply to the Hearing Request, Exhibit USA-24.
75 See above, paras. 7.4-7.5. Given the absence of evidence on record to support China's contention
that the reason no meeting was held is that the Petitioner and other interested parties with interests adverse
to the United States Government declined to attend, we do not need to resolve the interpretative question as
to whether communications with such interested parties, as described by China, could have satisfied China's
obligations under Article 6.2.

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the requirements of Articles 6.5.1 of th e Anti-Dumping Agreement and 12.4.1 of the
SCM Agreement. The United States focuses on th e alleged failure to provide non-confidential
summaries of information with respect to six specific issues: (i) production and standing,
(ii) production capacity, (iii) domestic inventory levels, (iv) cash flow, (v) wages and employment,
and (vi) labour productivity.
76
7.2.2.2 Relevant provisions
7.27. Articles 6.5.1 of the Anti-Dumping Agreement and 12.4.1 of the SCM Agreement provide:
The authorities shall require [interested Members or] interested parties providing
confidential information to furnish non- confidential summaries thereof. These
summaries shall be in sufficient detail to permit a reasonable understanding of the
substance of the information submitted in confidence. In exceptional circumstances,
such [Members or] parties may indicate that such information is not susceptible of
summary. In such exceptional circumstances, a statement of the reasons why
summarization is not possible must be provided.
77
7.2.2.3 Factual background
7.28. The CAAA (the Petitioner) filed a single Petition on behalf of the domestic industry
requesting the initiation of both the anti-dumping and countervailing duty investigations. The
Petitioner submitted two versions of the Petition to MOFCOM: a confidential version and a non-
confidential version. The non-confidential version includes a section entitled "Confidentiality
Application", which contains the following stat ement under the heading "Non-confidentiality
summary":
In order to help interested parties learn about the Petitioner and its exhibits, the
petitioner hereby prepares the non-confidential version of the Petitioner and its
exhibits, and particularly explains the data and information applied for confidentiality
or provides a non-confidentiality summary in such non-confidential version.
78
7.29. The non-confidential version redacts information pertaining to various issues, including the
issues identified by the United States. 79 Where information is redacted, the non-confidential
version of the Petition states that: "Confidentiality is applied as the trade secrets of the petitioner
are involved if disclosing relevant data, which may have seriously adverse effect on the
petitioner".
80
7.2.2.4 Main arguments of the parties
7.2.2.4.1 United States
7.30. The United States argues that MOFCOM failed to require the Petitioner to furnish
non-confidential summaries of the information it had submitted in confidence even though the
Petitioner did not present to MOFCOM any particular circumstances, let alone exceptional ones,
that justified why the information in question was not susceptible to non-confidential
summarisation.
81 The United States argues that the obligat ion to either provide a non-confidential

76 The United States' claim is limited to the non-confidential summaries of information pertaining to
these six issues. (United States' response to Panel question No. 13).
77 Article 12.4.1 of the SCM Agreement includes the bracketed text, Article 6.5.1 of the Anti-Dumping
Agreement does not.
78 Petition, Exhibit CHN-2, Part 2, p. 98. The United States' translation of the Petition (Exhibit USA-1)
omits this Part 2, as well as a Part 3 to the Petition, containing the list of the 19 exhibits attached to the
Petition. In addition, the version submitted by the United States to the Panel is incomplete in other parts (some
tables run over the margin of pages such that part of the information is missing). For this reason, we refer to
both China's and the United States' versions in this section of our findings.
79 Petition, Exhibit CHN-2, pp. 9-10, 70-72, 74-75 and 82-84; Petition, Exhibit USA-1, pp. 4-5, 68-70,
72-73 and 80-83.
80 Petition, Exhibit CHN-2, pp. 9-10, 70-72, 74-75 and 82-84; see also Petition, Exhibit USA-1, pp. 4-5,
68-70, 72-73 and 80-83.
81 United States' first written submission, para. 69-80; opening statement at the first meeting of the

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summary or an explanation of why summarisation is not possible rests on the interested party
submitting the information, and not on the investigating authority. Thus, MOFCOM's own
summaries cannot remedy its failure to require the Petitioner to provide the summaries.
82
7.31. The United States considers that even accepting China's suggestion that the
non-confidential version of the Petition contained summaries of the information submitted in
confidence, such summaries are inadequate. The United States contends that the manner in which
the purported summaries are presented in the non- confidential version of the Petition, without
explaining which particular information should serve as non-confidential summary, is inconsistent
with Articles 6.5.1 and 12.4.1. The United States argues that even though there is no obligation to
label summaries in Articles 6.5.1 and 12.4.1, the reader must nevertheless be given an indication
of which information is meant to provide an understanding of the substance of the confidential
information so that interested parties are not required to guess what the redacted information
might be.
83 The non-confidential version of the Petition contains no indicia that would let an
interested party know what information was intended to serve as non-confidential summary. 84 The
United States adds that the panel in Mexico – Olive Oil rejected a similar attempt to present the
public versions of documents as "summaries".85
7.32. The United States disagrees with China's suggestion that the obligation to provide adequate
non-confidential summaries should be assessed in light of particular substantive provisions, and
notes that the relevant substantive provisions contain no cross-reference to Article 6.5.1 and
vice-versa. In the United States' view, the obligation to provide adequate non-confidential
summaries is an independent one.
86
7.33. As regards confidential information concerning the Petition's data on total production and
standing, the United States contends that the mere factual assertion that the production
accounted for by the Petitioner represents more than 50% of total domestic production does not
provide interested parties with an opportunity to challenge the validity of the confidential
information underlying this assertion; in particular, the purported summary fails to disclose which
Chinese producers the Petitioner represented, as well as their total output. In addition, the
purported summary does not provide information about the source or data underlying the
assertion of standing, which, the United States argues, could assist interested parties in defending
their interests.
87 The United States recalls that the panel in China – GOES rejected the notion that
the mere inclusion of conclusory statements meets the requirements of Articles 6.5.1 and 12.4.1.88
7.34. In relation to production capacity , the United States submits that it is impossible to
discern from the information provided either whether there were any specific trends, or the
magnitude of any such trends, given that the graphs provided in the Petition lack scales, and the
year-over-year percentage changes purporting to supplement the graphs do not reveal the
significance in the absolute changes. The United States contends that China's suggestion that by
matching the unlabelled graphs with total production figures from a different section of the Petition
one could infer both minimum and maximum capacity figures is precisely the same approach to
summarisation that was rejected in China – GOES.
89
7.35. The United States presents similar arguments with respect to domestic inventory levels
and wages and employment , stating that the year-over-year percentage changes cited in the

82 United States' first written submission, para. 73; opening statement at the first meeting of the Panel,
para. 26; second written submission, paras. 23-24 (citing Panel Report, China – GOES, para. 7.190).
83 United States' response to Panel question No. 14 (citing Panel Report, China – GOES,
paras. 7.202, 7.213); opening statement at the second meeting of the Panel, paras. 14, 16.
84 United States' response to Panel question No. 15; opening statement at the second meeting of the
Panel, para. 17.
85 United States' opening statement at the second meeting of the Panel, para. 17 (citing Panel Report,
Mexico – Olive Oil, paras. 7.97-7.98).
86 United States' second written submission, para. 25.
87 United States' first written submission, para. 79; opening statement at the second meeting of the
Panel, para. 19.
88 United States' opening statement at the first meeting of the Panel, para. 22; second written
submission, paras. 27-28 (citing Panel Report, China – GOES, para. 7.205); opening statement at the second
meeting of the Panel, paras. 18-19.
89 United States' second written submission, paras. 29-30 (citing Panel Report, China – GOES,
para. 7.202).

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Petition do not reveal the significance of the absolute changes. 90 Similarly, regarding cash flow,
the United States argues that the graphs presented in the Petition lack scales, and that the
narrative explanation in the same section of the Petition does not provide any percentage changes,
apart from merely stating that during particular periods there was net cash outflow or inflow.
91
7.36. Concerning labour productivity, the United States argues that the information is simply
redacted, and that the only information provid ed in the Petition is that "since 2006, the
employment figures related to like products in China have been [ sic] fluctuated dramatically, but
the labour productivity has remained stable as whole".92
7.2.2.4.2 China
7.37. China maintains that the Petitioner in fa ct provided adequate non-confidential summaries.
93
China argues that neither Article 6.5.1 nor Article 12.4.1 specify that the required non-confidential
summaries must take a particular form or be labelled in a particular manner, provided that due
process is served based on the non-confidential summaries presented. 94 China argues that the
panel report in China – GOES does not provide a definite answer to the question whether the two
provisions impose any specific labelling requirement. China observes that one of the concerns in
China – GOES, the need to rely on different discussions interspersed throughout the body of the
Petition to derive a reasonable understanding of the substance of the redacted information, is not
present in the case before this Panel. 95 In addition, China argues, the non-confidential summaries
provided in the Petition were later supplemente d by non-confidential analysis provided by
MOFCOM in its Preliminary and Final Determinations. In this regard, China disagrees with the
reasoning of the panel in China – GOES that supplemental summarisation by an investigating
authority cannot fulfil the requirements of Articles 6.5.1 and 12.4.1.
96
7.38. China notes that the very document the United States cites as lacking any indication of
non-confidential summaries is in fact identified as "the non-confidential version of the Petition". 97
China argues that the Petitioner's discussion of the information submitted in confidence is provided
in the precise location where that information was redacted or omitted, either in the immediately
surrounding text or embodied in the graphs and tables included in the text.
98 China argues that
the summaries provided by the Petitioner permitted a reasonable understanding of the information
submitted in confidence, consistent with Articles 6.5.1 of the Anti–Dumping Agreement and 12.4.1
of the SCM Agreement.99
7.39. With respect to production and standing , China argues that the only issue this
information is relevant to is whether the Petitioner had standing – i.e. that the Petition was made
by or on behalf of the domestic industry within the meaning of Article 5.4 of the Anti-Dumping
Agreement. In China's view, the summary permits a reasonable understanding of this issue since
it: (i) shows that the yield represented by the Petitioner accounted for more than 50% of the gross
yield in China throughout the POI; and (ii) presents a table containing, inter alia, the actual data
on the gross industry yield.100
7.40. Concerning production capacity , China submits that the graphs provided in the
non-confidential version of the Petition are to scale and that the initial scale line is labelled "zero".
China notes that the graph presents two data bars for each period: (i) a bar representing
production (yield), and (ii) a bar representing pr oduction capacity. China explains that since the
Petition reports total production figures in relation to standing, and given Petitioners' statement
that they represented more th an 50% of total production, one may deduce the minimum and

90 United States' second written submission, paras. 31 and 33.
91 United States' second written submission, para. 32.
92 United States' second written submission, para. 34.
93 China's first written submission, para. 44.
94 China's second written submission, paras. 37 and 46 (citing Appellate Body Report, EC – Fasteners
(China), para. 542); response to Panel question No. 14; opening statement at the second meeting of the
Panel, para. 18.
95 China's response to Panel question No. 14.
96 China's first written submission, para. 44 (citing Panel Report, China – GOES, para. 7.190).
97 China's response to Panel question No. 14; second written submission, para. 38.
98 China's response to Panel question No. 14.
99 China's first written submission, paras. 59-60; second written submission, para. 49.
100 China's first written submission, paras. 47-48; response to Panel question No. 15.

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maximum capacity figures for each time period using the estimates on utilization. Given the points
of reference provided by the zero line and the simultaneous representation of production and
capacity, both trends and the magnitude of those trends could be easily discerned. 101 China adds
that the resulting estimates are sufficient to understand any "actual or potential negative decline"
in capacity utilization within the meaning of Article 3.4 of the Anti-Dumping Agreement.102
7.41. In China's view, the section of the Petition on domestic inventory levels provided an
adequate explanation of relevant confidential information by indicating the year-over-year
percentage of increase in domestic inventory levels – an issue directly relating to "actual or
potential declines" in various factors discussed in Article 3.4 of the Anti-Dumping Agreement.103
7.42. Similarly, with regard to wages and employment, China argues that the public summary
contained in the Petition provided the operative facts sufficient to understand the key issue under
Article 3.4, i.e. "actual or potential negative effe cts" on employment or wages: the year-over-year
rise and decline in employment figures and an explanation of the steady rise in average salary.104
7.43. Finally, China submits that the Petition adequately explained the actual and potential
negative effects of imports on the net cash flow from operating activities of like products in China
(the relevant factor under Article 3.4), showing its magnitude. China also argues that the Petition
indicated that during the POI the labour productivity of employees remained stable on the
whole.
105
7.2.2.5 Arguments of the third parties
7.44. Chile submits that the importance of complying with Articles 6.5.1 and 12.4.1 lies in
allowing interested parties to access the information contained in non-confidential summaries, thus
securing them the right to properly defend thei r interests and ensuring the legitimacy of the
investigation.
106
7.45. In the European Union 's view, MOFCOM does not seem to have either requested
non-confidential summaries of confidential information received, or an explanation as to why the
confidential information was not capable of summarisation. 107 The European Union agrees with the
reasoning of the panel in China – GOES and considers that investigating authorities are bound to
require the interested parties submitting confidential information to avoid mismatches in the
non-confidential summaries.108
7.46. Japan notes the finding of the panel in China – GOES that Articles 6.5.1 and 12.4.1 impose
an obligation on an interested party submitting confidential information to furnish a summary of it,
and that it is not for other interested parties to derive their own summary based on the context
from which the information is redacted. Japan also agrees with the finding of the panel in the same
case that a non-confidential summary must be explicit so that other interested parties are aware
that the redacted information has in fact been summarised.
109
7.47. Saudi Arabia submits that Articles 6.5 and 12.4 strike a balance between, on the one
hand, respect for confidential information and, on the other hand, the need for transparency and a
proper opportunity for other interested parties to review and comment on the information received
in confidence. Saudi Arabia argues that the re quirement of due process embodied into these
provisions implies that interested parties have a meaningful right to see the evidence submitted or

101 China's first written submission, paras. 49-50 (citing Petition, Exhibit CHN-2, pp. 71-72); response to
Panel question No. 15.
102 China's first written submission, para. 50.
103 China's first written submission, paras. 51-52 (citing Petition, Exhibit CHN-2, p. 74).
104 China's first written submission, paras. 55-56 (citing Petition, Exhibit CHN-2, p. 83); opening
statement at the first meeting of the Panel, para. 5; second written submission, paras. 42-44.
105 China's first written submission, paras. 53-54 and 57-58 (citing the Petition, Exhibit CHN-2,
pp. 83-84).
106 Chile's third-party statement, paras. 6-8.
107 European Union's third-party submission, paras. 21-23.
108 European Union's third-party response to Panel question No. 4 (citing Panel Report, China – GOES,
paras. 7.202 and 7.213).
109 Japan's third-party submission, para. 26 (citing Panel Report, China – GOES, paras. 7.213
and 7.224).

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gathered in an investigation, and have an adequate opportunity for the defence of their
interests.110
7.48. Thailand considers that the authority need not require the interested party to label a
non-confidential summary; the means to comply with Article 6.5.1 is at the discretion of the
investigating authority, provided that the non-confidential summary permits a reasonable
understanding of the substance of information submitted in confidence.111
7.2.2.6 Evaluation by the Panel
7.49. The question before the Panel is whethe r MOFCOM required the Petitioner to provide
non-confidential summaries of the confidential information redacted from the Petition consistent
with the requirements of Articles 6.5.1 and 12.4.1 . The United States argues that non-confidential
summaries were not furnished by the Petitioner or that if they were, they do not meet the
requirements of Articles 6.5.1 and 12.4.1. China's position is that the non-confidential version of
the Petition does contain summaries in the form of graphs and explanations adjoining the redacted
information, permitting a reasonable understanding of that information. There is no disagreement
between the parties that the Petitioner did not invoke "exceptional circumstances" making
summarisation impossible under Articles 6.5.1 and 12.4.1.
7.50. The Appellate Body has clarified the standard for assessing whether a non-confidential
summary complies with Articles 6.5.1 and 12.4.1. In EC – Fasteners (China) , the Appellate Body
stated that although the sufficiency of the summary will depend on the confidential information at
issue, the summary must permit a reasonable und erstanding of the substance of the information
withheld, and allow the other parties to the investigation a meaningful opportunity to respond and
defend their interests.
112
7.51. The United States contends that the purported summaries in the non-confidential version of
the Petition were not properly identified as such and, therefore, entailed the type of "guess-work"
for other interested parties that the panel in China – GOES found inconsistent with Articles 6.5.1
and 12.4.1. China responds that "[t]he very document the United States cites as lacking any
indication of non-confidential summaries is in fact identified as the non-confidential version of the
petition" and that the information surrounding the redacted information serves as the
non-confidential summaries.
113
7.52. We now turn to examine whether the non-co nfidential version of the Petition suffices as
non-confidential summaries of the information pe rtaining to the six areas identified by the
United States: (i) production and standing, (ii) production capacity, (iii) domestic inventory levels,
(iv) cash flow, (v) wages and employment, and (vi) labour productivity.
7.53. Before we do so, we note China's argument that the non-confidential summaries included in
the Petition were later supplemented by non-conf idential analysis provided by MOFCOM in its
Preliminary and Final Determinations. 114 In this respect, a number of previous panels have found
that Articles 6.5.1 and 12.4.1 require that a non-confidential summary be furnished by the
"interested parties providing confidential information", and not by the investigating authority. 115

110 Saudi Arabia's third-party submission, paras. 46-48 (citing Appellate Body Report, EC – Fasteners
(China), para. 542).
111 Thailand's third-party response to Panel question No. 4.
112 Appellate Body Report, EC – Fasteners (China), paras. 541-542. See also Panel Reports, China –
GOES, para. 7.188; Mexico – Steel Pipes and Tubes, paras. 7.379-7.380; US – Oil Country Tubular Goods
113 United States' response to Panel question No. 14; China's response to Panel question No. 14.
114 China's first written submission, para. 44.
115 Panel Reports, China – GOES, paras. 7.189-7.190; EU – Footwear (China), para. 7.708. In China –
GOES, the Panel linked this question to the due process objective underlying Articles 6.5.1 and 12.4.1:
Given the Appellate Body's statement that Article 6.5.1 of the Anti-Dumping Agreement affords
"due process" to interested parties in an investigation, China's argument that non-confidential
information submitted in the application can be summarized in the investigating authority's
determination is problematic. In order to allow an interested party the opportunity to defend its
interests, the summary of the confidential information needs to be provided before the
investigating authority has reached its determination. (Panel Report, China – GOES, para. 7.190,
citing Appellate Body Report, EC – Fasteners (China), para. 542).

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We concur with these panels that information, summary or analysis provided by the investigating
authority cannot remedy the absence of, or shortcomings in, a summary provided by the
interested party submitting the confidential inform ation. This being the case, there is no need for
us to take into consideration or address MOFCOM's own summarisation of the confidential
information submitted by the Petitioner.
7.2.2.6.1 Production and standing
7.54. The information concerning production and standing is contained in Section I(I)4 of the
Petition.
116 A table provides the figures for the gross yield in China in 2006, 2007, 2008, the first
half of 2008, and the first half of 2009, but re dacts out the data concerning the Petitioner's
production yield as well as the Petitioner's share of the gross yield in China of broiler products
during the same years. The table is followed by two notes indicating that the yield of broiler
products represented by the Petitioner is detailed in Exhibit 2 to the Petition and that the gross
yield of broiler products in China is detailed in Exhibit 6 to the Petition, both of which were
provided as confidential information.
117 A narrative description explains that the yield represented
by the Petitioner accounted for more than 50% of the gross yield during each of the reported
years, and consequently, that the Petitioner has th e right to submit the Petition on behalf of the
broiler chicken industry of China.
7.55. In considering whether this information permits a reasonable understanding of the
substance of the confidential information, such that it constitutes a "non-confidential summary" we
note that the information provided is limited to an assertion that the companies composing the
Petitioner represented somewhere between 50% and 100% of Chinese domestic production in
each year and therefore produced between 50% and 100% of the "gross yield". In our view, a
range between 50% and 100% does not permit a reasonable understanding of the redacted
information about standing, particularly when the list of producers (in Exhibit 2) and the data
concerning total yield in China (in Exhibit 6) were provided in confidence and not summarized.
7.56. We note China's argument that the redacted information is only relevant to the issue of
whether the Petitioner had standing within th e meaning of Article 5.4 of the Anti-Dumping
Agreement, and thus an indication that it repres ents over 50% of total domestic production is
sufficient to permit a reasonable understanding of the redacted information. We recall that the text
of Articles 6.5.1 and 12.4.1 establishes the standard for a non-confidential summary in relation to
the information which was redacted, without reference to the purpose for which that information
will be used in the subsequent investigation, and does not refer to particular substantive
obligations. Additionally, much of the informatio n submitted in the Petition is relevant to
determinations made under more than one provision or obligation. For instance, as discussed
below, production yields are also relevant to understand trends in capacity utilization for the injury
determination. Thus, the Panel assesses compliance with Articles 6.5.1 and 12.4.1 based on
whether the non-confidential version of the Petition enabled interested parties to understand the
substance of the redacted information, rather than whether the non-confidential version permitted
the interested parties to understand that the Petitioner was asserting that it had standing under
Article 5.4.

7.57. As discussed above, nothing in the non- confidential version summarises the redacted
information pertaining to the production yields of the various companies that comprised the
industry association that acted as the "Petitioner", their share of total domestic production, or the
sources underlying that information. Moreover, a conclusory statement that the information was
sufficient to demonstrate standing cannot replace the summary of the confidential information,
particularly if such a statement does not provide interested parties with the means to challenge
whether the confidential information in fact provided a basis for that conclusion.
118 Therefore, we
consider that MOFCOM did not require the Peti tioner to provide non-confidential summaries
consistent with Articles 6.5.1 and 12.4.1 with respect to the information on production and
standing.

116 Petition, Exhibit CHN-2, pp. 9-10; Petition, Exhibit USA-1, pp. 4-5.
117 China confirmed in its response to Panel question No. 88 that Exhibits 2 and 6 from the Petition were
not made available to other interested parties. China submitted Exhibits 2 and 6 to the Panel as Exhibits
CHN-32 and CHN-33.

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7.2.2.6.2 Production capacity
7.58. The information concerning production capa city of the domestic industry is contained in
Section VI(II)3.2 of the Petition. 119 Three tables are included in this section, which provide
information concerning production capacity, yield, and capacity utilisation in 2006, 2007, 2008, the
first half of 2008, and the first half of 2009. All the yearly figures concerning production capacity,
yield and capacity utilization are redacted from the non-confidential version. Only the numerical
figures for the year-on-year change in capacity utilization are provided. The tables are followed by
two graphs depicting the same information on prod uction capacity, yield and capacity utilization
side-by-side. The graphs contain lines but no figure s. They are followed by a narrative description
of the information therein from which relevant figures are redacted.
7.59. China's position is that because the Petition in other relevant sections reports total
production figures, and given the Petitioner's statement that it represented more than 50% of total
production in China, one may deduce both minimum and maximum production capacity figures for
each time period using the estimates on utilization provided in this section of the Petition.
120 China
argues that the resulting estimates suffice to identify "actual or potential" decline in capacity
utilization for purposes of Article 3.4 of the Anti-Dumping Agreement. 121 In addition, China asserts
that the graphs included in this section are to scale. 122 The United States notes that there is no
indication that these graphs are intended to be to scale or what the units on the scale should
be.123
7.60. We are of the view that the graphs and explanations included in the non-confidential version
do not provide the summaries required under Articles 6.5.1 and 12.4.1. First, we have already
rejected China's argument that compliance with Articles 6.5.1 and 12.4.1 must be assessed in the
light of the substantive provision the informatio n may be used to address. Second, the graphs
included in this section of the Petition provide neither figures nor a range of figures of production
capacity or capacity utilization in relevant years; rather the graphs are set to unmarked scale
lines.124 A partial estimation of redacted information on yearly capacity and capacity utilization
could be constructed by connecting information from different parts of the Petition and then
applying it to the graphs. The outcome of such an exercise, however, remains insufficient to
provide an understanding of the redacted information and consequently does not fulfil the due
process objective underlying the requirement to pr ovide non-confidential summaries. Finally, the
very exercise of calculating an approximate figu re of production capacity through a series of
operations requires interested parties to derive and piece together their own summary of the
redacted information. Such an obligation is not contained in the text of Articles 6.5.1 and 12.4.1,
which place the burden of providing an adeq uate non-confidential summary on the party
submitting the confidential information.
125
7.61. Therefore, we consider that MOFCOM did not require the Petitioner to provide a
non-confidential summary consistent with Articles 6.5.1 and 12.4.1 with respect to the information
on production capacity.
7.2.2.6.3 Inventories, wages and employment, cash flow and labour productivity126
7.62. The sections of the Petition concerning inventories, wages and employment, cash flow and
labour productivity all follow a similar pattern. The sections on inventories and on wages and
employment contain tables where the information on yearly amounts, as well as year-on-year
changes during the years 2006, 2007, 2008, the first half of 2008 and the first half of 2009 is
redacted. The percentages for year-on-year changes are provided. The sections on cash flow and
labour productivity contain tables of yearly figures, which are redacted. Year-on-year changes are
not provided. For every section except for labo ur productivity, graphs and explanations are

119 Petition, Exhibit CHN-2, pp. 70-72; Petition, Exhibit USA-1, pp. 68-70.
120 China's first written submission, paras. 49-50.
121 China's first written submission, para. 50.
122 China's response to Panel question No. 16.
123 United States' response to Panel question No. 16.
124 While we accept China's explanation that the graphs are to scale, there is no indication of this in the
text of the Petition.
125 See a similar finding in Panel Reports, China – GOES, para. 7.202; and China – X-Ray Equipment,
para. 7.332.
126 Petition, Exhibit CHN-2, pp. 74-75 and 82-84; Petition, Exhibit USA-1, pp. 72-73 and 80-83.

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provided after the table. The graphs provide a line ar depiction of the yearly trends, but no scale.
Where information on year-on-year percentage changes is provided in the tables, the subsequent
text contains a narrative description of the trend.
7.63. We are of the view that the information which remains in the non-confidential version of the
Petition does not permit a reasonable understanding of the substance of the redacted
information
127, because providing year-over-year changes in percentage terms without a
non-confidential summary of what constitutes the baseline does not allow a reasonable
understanding of the magnitude of the change. With respect to cash flow, the graph and
explanation only show whether there was a net cash inflow or outflow in a given year. The graph
purports to describe the magnitude of the net inflows or outflows but does so with columns against
an unmarked scale and therefore provides no inform ation on the order of magnitude of either the
baseline or the changes.
128 In the case of labour productivity, a conclusory statement that the
labour productivity has remained stable as a whole is provided in the explanation, but without any
non-confidential summary of the redacted information.
129
7.64. Therefore, we consider that MOFCOM did not require the Petitioner to provide
non-confidential summaries consistent with Articles 6.5.1 and 12.4.1 with respect to the
information on inventories, wages and employment, cash flow, and labour productivity.
7.2.2.6.4 Conclusion
7.65. In light of the above, we consider that th e non-confidential version of the Petition does not
permit a reasonable understanding of the substance of the confidential information that was
redacted with respect to the six areas identified by the United States and thus does not constitute
a non-confidential summary of that information wi thin the meaning of Articles 6.5.1 and 12.4.1.
Consequently, we conclude that MOFCOM failed to satisfy the obligation in those provisions to
require the Petitioner to provide non-confidential summaries of the information that was submitted
in confidence. Accordingly, we find that China acted inconsistently with Articles 6.5.1 and 12.4.1 in
the investigations at issue.
7.2.3 Whether MOFCOM disclose d the "essential facts" as required by Article 6.9 of the
Anti-Dumping Agreement
7.2.3.1 Introduction
7.66. The United States claims that China failed to comply with the obligation in Article 6.9 of the
Anti-Dumping Agreement to disclose to interested parties the essential facts forming the basis of
MOFCOM’s decision to apply anti-dumping duties by failing to make available the data and
calculations it performed to determine the existence and margin of dumping, including the
calculation of the normal value and export price for the respondents.
130
7.2.3.2 Relevant provisions
7.67. Article 6.9 of the Anti-Dumping Agreement provides:
The authorities shall, before a final determination is made, inform all interested
parties of the essential facts under consideration which form the basis for the decision
whether to apply definitive measures. Such disclosure should take place in sufficient
time for the parties to defend their interests.

127 Again, the relevant question in our view is not, as China argues, whether the "summary" provides
key information pertaining to the application of particular substantive provisions, but whether it permits a
reasonable understanding of the redacted information.
128 Petition, Exhibit CHN-2, pp. 82-83; Petition, Exhibit USA-1, pp. 80-82.
129 Petition, Exhibit CHN-2, p. 84; Petition, Exhibit USA-1, p. 83.
130 The United States has also made a claim with respect to the disclosure for the "all others" rate. The
Panel addresses this claim in Section 7.3.4.6.2 below.

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7.2.3.3 Factual background
7.68. The Final Anti-Dumping Disclosure for each mandatory respondent 131 provides a narrative
d e s c r ip t io n o f h o w M O F C O M d e t e r m in e d n o r m a l v alue, export price, and certain adjustments to
normal value and export price. This description is accompanied by a table with company-specific
figures relating to export volumes, export prices and normal values for various product categories
of the subject merchandise and a total dumping margin for the subject merchandise as a whole.
The disclosure documents show the weighted-average dumping margin calculation at its final stage
i.e. the comparison of weighted-average export prices to weighted-average normal values on a
model basis and the weight-averaging of the model-specific "margins" into a margin for the
subject merchandise as a whole.
7.2.3.4 Main arguments of the parties
7.2.3.4.1 United States
7.69. The United States contends that the disclosure requirement in Article 6.9 serves an essential
due process function, because unless an interested party is provided with these essential facts on
a timely basis by the investigating authority, it cannot adequately defend its interests.
132 The
United States argues that for the purposes of the investigating authority's dumping determination,
the essential facts under Article 6.9 are the "indispensable and necessary" facts considered by the
investigating authority in determining whether definitive measures are warranted, e.g. whether
dumping has occurred and, if so, the magnitude of such dumping.
133
7.70. Therefore, the United States argues, the "essential facts" include both the calculations and
the data relied upon by the investigating authority. 134 In particular, the United States contends
that in order to fulfil the obligation in Article 6.9, the calculations and related information MOFCOM
should have made available include, but are not limited to: (i) all calculations performed with
respect to the derivation of the normal value; (ii) all calculations performed with respect to the
derivation of the export price; and (iii) all calculations performed with respect to the determination
of costs of production.135
7.71. Moreover, the United States submits that "[f]or normal value, export price and costs of
production MOFCOM should have provided detail ed analyses of the data provided by each
respondent, made available adjustments and revisions made by MOFCOM to the sales data
provided by each respondent, and specifically described MOFCOM’s elimination or rejection of data
provided by each respondent."
136 The United States also argues that MOFCOM should have
provided the actual files and spreadsheets create d within any computer programme it used, along
with the formulas used to calculate normal value and export price, and with any adjustments.137
7.72. Relying on dictionary definitions of the term "fact" 138, the United States maintains that data
underlying the investigating authority's calculations consisting of various production costs and
sales data submitted by the interested parties and adjusted, where appropriate, by the
investigating authority are "facts" because they are things "known for certain to have occurred"
and "events or circumstances as distinct from their legal interpretation." The United States adds

131 See, e.g. Final Anti-Dumping Disclosure to Pilgrim's Pride, Exhibit USA-13, p. 9; Final Anti-Dumping
Disclosure to Keystone, Exhibit USA-14, p. 5; and Final Anti-Dumping Disclosure to Tyson, Exhibit USA-12,
p. 4.
132 United States' first written submission, paras. 61-62 (citing Panel Report, EC – Salmon (Norway),
para. 7.805).
133 United States' first written submission, paras. 55-56 (citing Panel Report, EC – Salmon (Norway),
para. 7.796, where the panel concluded that essential facts included not only those facts supporting a
determination, but encompassed "the body of facts essential to any determination that are being considered in
the process of analysis and decision-making by the investigating authority.")
134 United States' first written submission, para. 53.
135 United States' first written submission, para. 66.
136 United States' first written submission, para. 66.
137 United States' first written submission, para. 66; see also response to Panel question Nos. 8 and 9;
138 United States' response to Panel question No. 12 (citing New Shorter Oxford English Dictionary
(Clarendon Press, 1993) defining a fact as "[a] thing known for certain to have occurred or to be true; a datum
of experience" and "[e]vents or circumstances as distinct from their legal interpretation."

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that the investigating authority aggregates, disagg regates or otherwise applies this adjusted data
to calculate the normal value and export price. Th e United States contends that the calculations
similarly are "facts" because they also represent events or circumstances, as distinct from the
investigating authority’s legal interpretation of that data.139
7.73. The United States argues that without a ccess to the actual calculations performed and the
actual data used the interested parties could not, for example, check MOFCOM's methodology and
math for errors or confirm that MOFCOM did what it purported to do. Likewise, without that
information the interested parties could not "comment on the completeness and correctness of the
facts being considered… provide information or correct perceived errors, and comment on or make
arguments as to the proper interpretation of those facts", consistent with the requirement to
disclose the essential facts as described by the panel report in EC – Salmon (Norway).
140
7.74. With respect to the disclosures in the investigation in question, the United States accepts
that MOFCOM provided tables with the weighted-average model-specific normal value, export
price, and "dumping margin" as well as the total weighted-average dumping margin. However, the
United States maintains that MOFCOM provided no disclosure of how these summary figures were
derived and that the bare conclusory summaries of MOFCOM’s methodologies, adjustments and
calculations in its Preliminary Anti-Dumping Determination and Final Disclosures are insufficient to
satisfy the requirements of Article 6.9 of the An ti-Dumping Agreement and preclude the interested
parties from adequately defending their interests.
141
7.2.3.4.2 China
7.75. China argues that Article 6.9 "clearly links 'essential facts' to the limited purpose of allowing
interested parties to defend their interests". China explains that in its view, Article 6.9 does not
require the type of expansive disclosure the United States calls for, which would seemingly oblige
disclosure of every detail that comprised part of the authority's consideration of the matter,
whether it be individual transaction data, the basic calculation methodology, any calculation
worksheets, and the calculation programme itself.
142
7.76. China recalls that disclosure under Article 6.9 is limited to facts, as opposed to the
reasoning of the investigating authorities. Additionally, China notes that not all facts are essential
facts. China argues that "essential facts" are those that established the basis of the authorities'
decision whether to apply definitive measures; therefore Article 6.9 does not imply an obligation to
disclose any and all aspects of an authority's dumping calculation.
143 In China's view, the
obligation under Article 6.9 is more appropriately lim ited to the fact of the existence of margins of
dumping and those other fundamental facts that provide an understanding of how the conclusion
was reached.
144
7.77. With respect to the disclosure documents in the investigation at issue, China maintains that
MOFCOM provided all the facts necessary for the interested parties to defend their interests 145,
because "one can trace the references made in the final disclosure documents to the specific
adjustments and data contained in submissions made by the respondents in the case" and thus
the interested parties could reasonably defend their interests.146
7.78. China argues that disclosure of the calculation program or worksheets was not necessary,
because MOFCOM's manner of disclosing the essentia l facts by providing a detailed explanation of
the methodology applied, and leaving it to respondents to replicate those steps if they wish to

139 United States' first written submission, para. 59.
140 United States' second written submission, para 16 (citing Panel Report, EC – Salmon (Norway),
para 7.805).
141 United States' first written submission, para. 65.
142 China's first written submission, para. 23.
143 China's first written submission, paras. 25-28 (citing Panel Report, US – Oil Country Tubular Goods
Sunset Reviews (Article 21.5 – Argentina), para. 7.148; and Panel Report, EC – Salmon (Norway),
para. 7.796).
144 China's first written submission, para. 28.
145 China's first written submission, para. 23.
146 China's first written submission, paras. 33-34.

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recreate the details allowed the respondents to "defend their interests" and was consistent with
the obligation in Article 6.9.147
7.79. China submits that the respondents were in control of their own facts, and were provided
MOFCOM’s basis for disregarding sales in terms of market viability and affiliated sales, or where
sales were excluded as below cost. China argues that the disclosure provided to the individual
US respondents goes well beyond the basic disclos ure required by Article 6.9, as MOFCOM gave
each respondent a particularized disclosure document that summarized MOFCOM's calculation, and
provided the key benchmarks – normal value, c.i.f. price, and net export price – necessary for
each respondent to see which products created what dumping margins, and sufficient for each
respondent to cross check MOFCOM's calculations with the data that the respondent had
provided.
148
7.2.3.5 Arguments of the third parties
7.80. Chile considers compliance with the obligations set forth in Article 6.9 to be of
vital importance as it is a fundamental rule of due process. In Chile's view, the obligation
guarantees not only the parties' right to defend th eir interests, but also ensures the legitimacy of
the authority's investigation and decision. Pursuant to Chile's understanding of Article 6.9, the role
of the Panel is to verify that the information prov ided by the authority includes the body of facts
essential to any determination that are being considered in the process of analysis and
decision-making by the investigating authority and that the investigating authority provided those
"essential facts" in sufficient time for parties to formulate their defence.
149
7.81. The European Union agrees with the United States that "essential facts" includes the
calculation method employed by an investigating authority to determine dumping margins, and the
data underlying the authority's calculations as they are both "material for the authority's decision"
and "important to the authority's determination".
150 The European Union maintains that access to
this information is necessary to enable exporters to check the investigating authority's
methodology and calculations for errors. The European Union submits that "essential" within the
meaning of Article 6.9 is any fact on which the investigating authority bases its final
determination, so that if it were not established or not taken into account, or if it were completed
by other facts that were not taken into account , the final determination would be different. The
European Union considers that the investigating authority's conclusions regarding the qualification
and treatment of individual data, as well as th e formal grounds and benchmarks underlying such
conclusions, are facts that must be disclosed pursuant to Article 6.9 of the Anti-Dumping
Agreement, and they should be distinguished from the detailed reasoning describing how the
benchmarks were chosen and actually applied, which is not subject to disclosure.
151 The
European Union argues that the information MOFCOM provided in this case would not enable
exporters to check the calculations against the methodological explanations given.152
7.82. In Japan's view, "essential facts" that must be disclosed to interested parties pursuant to
Article 6.9 include the authority's actual dumping margin calculations and results of its application
of the below-cost test. Japan argues that the fact-finding processes for normal value, export price,
and adjustments thereof are all indispensable to th e calculation of the margin of dumping and the
conclusion of the existence of dumping. Therefore, according to Japan, the authorities are required
to disclose facts found in the process of analysis of the raw data submitted by foreign producers.
153
Japan maintains that given that small adjustments in normal value or the sales included in the
calculation can have significant impacts on the final finding of dumping, full disclosure of the
dumping margin calculation is indispensable to interested parties to defend their interests.
154
7.83. Norway contends that the "essential facts" are the facts necessary to the process of
analysis and decision-making by the investigating authority, not only those that support the

147 China's second written submission, para. 28.
148 China's response to Panel question No. 12; second written submission, para. 26.
149 Chile's third-party statement, para. 3-5.
150 European Union's third-party submission, paras. 5-6 (citing Appellate Body Report, EC – Fasteners
151 European Union's third-party response to Panel question No. 3.
152 European Union's third-party submission, paras. 5-8.
153 Japan's third-party submission, para. 13.
154 Japan's third-party submission, para. 14.

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decision ultimately reached.155 Norway argues that Article 6.9 is meant to place interested parties
in a position where they can properly understand, verify, and challenge the facts that are likely to
lead the investigating authority to impose definitive measures. 156 Norway maintains that if the
calculations performed to determine the existence and margin of dumping and the data
underpinning these calculations are not disclosed, interested parties cannot assess whether the
final determination has been reached in a correct manner.157
7.84. Saudi Arabia maintains that a disclosure pursuant to Article 6.9 must concern the factual
basis for making the determination of the existence of dumping or subsidization, injury and
causation. According to Saudi Arabia, if domestic prices are rejected or cost data are disregarded,
the factual basis for doing so must be disclosed.
158
7.2.3.6 Evaluation by the Panel
7.2.3.6.1 What constitutes "essential facts"?
7.85. The questions before the Panel are what co nstitute "essential facts" within the meaning of
Article 6.9 of the Anti-Dumping Agreement and whether MOFCOM disclosed those essential facts to
the three respondents in the anti-dumping investigation on broiler products.
7.86. We agree with both the panels in China – GOES and Mexico – Olive Oil that in order to
apply definitive measures at the conclusion of countervailing and anti-dumping investigations, an
investigating authority must find three key elements: (i) dumping or subsidization, (ii) injury, and
(iii) a causal link. Therefore, the "essential facts" underlying the findings and conclusions relating
to these elements form the basis of the decisi on to apply definitive measures and must be
disclosed.
159 Although Article 6.9 does not imply an obliga tion to disclose any and all aspects of an
authority's dumping calculation 160, the provision does require the disclosure of "the body of facts
essential to any determination that are being considered in the process of analysis and
decision-making by the investigating authority."
161
7.87. In determining what constitutes "essential facts", we bear in mind that the second sentence
of Article 6.9, which states that the disclosure of essential facts "should take place in sufficient
time for the parties to defend their interests", pr ovides context for interpreting the scope of the
obligation in the first sentence.
162 As the Appellate Body explained in its decision in China – GOES,
"essential facts":
refer to those facts that are significant in the process of reaching a decision as to
whether or not to apply definitive measures. Such facts are those that are salient for a
decision to apply definitive measures, as well as those that are salient for a contrary
outcome. An authority must disclose such facts, in a coherent way, so as to permit an
interested party to understand the basis for the decision whether or not to apply
definitive measures. In our view, disclosing the essential facts under consideration
pursuant to Articles 6.9 and 12.8 is paramount for ensuring the ability of the parties
concerned to defend their interests.
163
7.88. Thus we agree with the panel in EC – Salmon (Norway) that disclosures of "essential facts"
made pursuant to Article 6.9 of the Anti-Dumping Agreement must:
provide the interested parties with the necessary information to enable them to
comment on the completeness and correctness of the facts being considered by the

155 Norway's third-party submission, para. 14 (citing Panel Report, EC Salmon (Norway), para. 7.807).
156 Norway's third-party submission, para. 15.
157 Norway's third-party submission, para. 16.
158 Saudi Arabia's third-party response to Panel question No. 2.
159 Panel Report, China – GOES, para. 7.652 (citing Panel Report, Mexico – Olive Oil, para. 7.110).
160 Panel Reports, US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina),
161 Panel Report, EC – Salmon (Norway), paras. 7.796 and 7.805.
162 Panel Report, China – X-Ray Equipment, para. 7.400.
163 Appellate Body Report, China – GOES, para. 240.

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investigating authority, provide additional information or correct perceived errors, and
comment on or make arguments as to the proper interpretation of those facts.164
7.89. What constitutes "essential facts" must therefore be understood in the light of the content
of the findings needed to satisfy the substantiv e obligations with respect to the application of
definitive measures under the Anti-Dumping Agr eement and the SCM Agreement, as well as the
factual circumstances of each case. These findings each rest on an analysis of various elements
that an authority is required to examine.
165 In the context of the determination of whether
dumping exists, the magnitude of such dumping, and thus whether to apply definitive measures,
the elements an authority is required to ex amine are those set forth in Article 2 of the
Anti-Dumping Agreement, including, depending upon the authority's findings, the determination of
normal value and export price under Article 2.1, constructed normal value under Article 2.2,
constructed export price under Article 2.3, and the fair comparison between normal value and
export price under Article 2.4.
7.90. We note China's argument that too broad an interpretation of the obligation to disclose the
essential facts would seemingly require the disclos ure of every detail the investigating authority
considered. However, too restrictive an interpreta tion of what constitutes "essential facts" can,
conversely, hinder the ability of interested parties to defend their interests. We agree that
Article 6.9 does not require the disclosure of all facts, nor does it require the disclosure of
reasoning.166 However, in our view, "essential facts" are not simply the disclosure that a
determination has been made, but rather the data that are the basis of the determination.
Therefore, a declaration of the weighted-average dumping margin for a particular model will not
suffice as a disclosure of essential facts under Article 6.9 without being accompanied by the data
relied upon to reach that conclusion.
167
7.91. Bearing in mind the requirements of Article 2, we find that in the context of the
determination of dumping, the essential facts which must be disclosed include the underlying data
for particular elements that ultimately comprise normal value (including the price in the ordinary
course of trade of individual sales of the like product in the home market or, in the case of
constructed normal value, the components that make up the total cost of production, selling and
general expenses, and profit); export price (inclu ding any information used to construct export
price under Article 2.3); the sales that were us ed in the comparisons between normal value and
export price; and any adjustments for differences which affect price comparability. Such data form
the basis for the calculation of the margin of dumping, and the margin established cannot be
understood without such data.
168 Furthermore, the comparison of home market and export sales
that led to the conclusion that a particular model or the product as a whole was dumped, and how
that comparison was made169, would also have to be disclosed. 170 In our view, a proper disclosure
of the comparison would require not only identifica tion of the home market and export sales being
used171, but also the formula being applied to compare them. What formula was applied is an
essential element of a comparison of normal value to export price and is just as fundamental to an

164 Panel Report, EC – Salmon (Norway), para. 7.805.
165 Appellate Body Report, China – GOES, para. 241.
166 Panel Report, US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina),
para. 7.148.
167 Appellate Body Report, China – GOES, para. 249 (citing Panel Report, China – GOES, para. 7.573,
concluding that in order to allow the respondents to defend their interests, a summary of the "essential facts"
supporting the finding of a "low price strategy" was required, rather than merely stating the conclusion that
such a strategy existed).
168 Panel Report, China – X-Ray Equipment, para. 7.417.
169 I.e. whether it was transaction-to-transaction, weighted-average to weighted-average, or
weighted-average to transaction (see Article 2.4.2).
170 See e.g. Appellate Body Report, China – GOES, para. 247. In this case the Appellate Body found that
the panel correctly concluded that the essential facts that MOFCOM should have disclosed with respect to the
"low price" of imports "include the price comparisons between subject imports and the like domestic products"
including the average unit values used for determining the prices. We are of the view that the same logic that
applies to price comparisons to determine the impact of subject imports on the domestic industry as part of the
inquiry as to whether injury exists also applies to the price comparisons between normal value and export price
to determine whether dumping exists. As the panels in Mexico – Olive Oil and China – GOES noted, the
essential facts underlying these determinations (injury and dumping) form the basis of the decision to apply
definitive measures and must be disclosed.
171 This identification could take the form of a spreadsheet or list containing the sales data or a narrative
description that would enable the exporter to understand precisely which sales were used.

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understanding of the establishment of the margin of dumping as the data reflecting the individual
sales. The disclosure of the formulas applied is necessary to enable the respondent to comment on
the completeness and correctness of the conclusions the investigating authority reached from the
facts being considered, provide additional information or correct perceived errors, and comment on
or make arguments as to the proper interpretation of those facts.
172 Without these formulas, a
respondent would have an insufficient understanding of what the authority has done with its
information and how that information was being used to determine the dumping margin.
173
7.92. The Panel is aware that the panel in China – X-Ray Equipment , when faced with a similar
claim from the European Union, did not consider that the "actual mathematical determination" by
which an investigating authority calculates a respondent's margin of dumping constitutes a "fact …
under consideration", but rather that the mathematical determination is part of the "consideration"
of those facts.
174 We note that in that case the European Union argued that the essential facts
comprise the calculations as well as the data and adjustments underlying the calculations. To the
extent that the panel in China – X-Ray Equipment 's reference to the "actual mathematical
determination" was to the calculations themselves (including any files or spreadsheets created
during the calculations), we agree that these are not "essential facts" that must be disclosed.
175
However, if the holding of the panel in China – X-Ray Equipment were to stand for the premise
that the investigating authority does not have to disclose the formula used to make the
calculations, as explained above, we respectfully disagree.
7.93. In sum, with respect to a determination of the existence and margin of dumping, pursuant
to Article 6.9, the investigating authority must disclose what data was used in: (i) the
determination of normal value (including constructed normal value); (ii) the determination of
export price; (iii) the sales that were used in the comparisons between normal value and export
price; (iv) any adjustments for difference which affect price comparability; and (v) the formulas
that were applied to the data.
7.2.3.6.2 Whether MOFCOM disclosed the "essential facts" to the respondents
7.94. With respect to the disclosures at issue in the anti-dumping investigation on broiler
products, the Panel notes that MOFCOM provided a distinct disclosure document for each
respondent for both the Preliminary and Final Anti-Dumping Determinations. The United States'
arguments solely address the Disclosures for the Final Anti-Dumping Determination ("Final
Anti-Dumping Disclosure"). Each Disclosure contains narrative descriptions of the methodological
choices of the investigating authority as well as a table containing the weighted-average normal
values, export prices, c.i.f. prices, model-specific "dumping margins" and the total
weighted-average dumping margin for each company.
7.95. Article 6.9 does not prescribe a particular format for the disclosure of the essential facts
under consideration. The standard by which to assess whether a disclosure satisfies the
requirements of Article 6.9 is not whether it wa s provided in the respondent's preferred format,
but whether it provided sufficient disclosure of the essential facts such that the respondent could
defend its interests. In a situation, as the one here, where the essential facts the investigating
authority is referring to are in the possession of the respondent in the form of their own
questionnaire responses, a narrative description of what data was used from which sources cannot
ipso facto be considered insufficient disclosure. The question for this Panel, therefore, is not the
form of the disclosure, but whether the information in the three disclosure documents provided the

172 Panel Report, EC – Salmon (Norway), para. 7.805.
173 China's second written submission, para. 32 ("the issue is whether the authority has provided
enough information and explanation for the respondent to have understood was [sic] the authority had done
with the respondents' information, and how that information was being used to determine the dumping
margin").
174 Panel Report, China – X-Ray Equipment, para. 7.420.
175 We note that the disclosure of the computer programmes, spreadsheets, and actual calculations
would undoubtedly be of value to interested parties and may be the most efficient way to disclose the essential
facts, but other forms of disclosure could nevertheless be consistent with Article 6.9. For instance, if an
investigating authority wishes to explain in a narrative fashion what formulas it applied to which data (by
reference to the respondent's own questionnaire responses or data – such as by model number, sales
ID number, or other identifying factor) and the final result of the calculation, this would suffice to fulfil the
obligation in Article 6.9 so long as the respondent would be able to defend its interests based on the
information disclosed.

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necessary level of detail as to the data used in the calculations to satisfy the obligation in
Article 6.9.
7.96. China provides to this Panel tables prepared for the purposes of this dispute which it argues
demonstrate how the respondents could have deduced from the narrative statements in the
disclosure documents what data MOFCOM used in the calculation and recreate the calculation
themselves.176 However, the information in the actual disclosure documents is not presented in
this fashion and, as explained earlier, the Panel's determination must be based on the record
developed by MOFCOM.177
7.2.3.6.2.1 Pilgrim's Pride
7.97. In the Final Anti-Dumping Disclosure to Pilgrim's Pride
178, MOFCOM explains that it has
conducted a test to determine whether domestic sales were made in sufficient quantities and
which models did not have a proportion of domestic sales quantity in excess of 5% of the quantity
exported to China and would thus have their normal value constructed. MOFCOM then explains
that to construct normal value it adopted the production cost plus reasonable expenses and profits
of the products for which it decided to construct normal value. MOFCOM explains that for cost and
expenses, it adopted the company's first supplemen tal response Form 6-3, Tab 3 and a 5% profit
margin. MOFCOM then disclosed the resulting weighted average USD/tonne normal value.
7.98. In the Final Anti-Dumping Disclosure, MOFC OM states that it determined that there were
partial formula setup mistakes in the spread-sh eets submitted by the company and that MOFCOM
took the initiative and adjusted the mistakes in the formula before performing the below-cost test.
MOFCOM does not indicate precisely what the mistakes were or how they were fixed. Thus,
MOFCOM does not divulge to Pilgrim's Pride what data was used to run the below-cost test and
Pilgrim's Pride would have had no way to correct any perceived errors of MOFCOM's.
7.99. Furthermore, with respect to sales made below cost, MOFCOM indicates that for certain
models such sales exceeded 20% of the domestic sales quantity and that the below-cost sales
would be excluded. However, MOFCOM does not indicate which sales are being excluded from the
calculation of normal value. Therefore, while Pilgri m's Pride knew that some of its sales of certain
models had been excluded, it could not determin e from the disclosure the universe of sales that
were used to calculate normal value. For certain models MOFCOM indicates that it is excluding all
sales. This is sufficient disclosure of the universe of sales used for the normal value for those
models. However, without the formula for how MO FCOM performed the below cost test, Pilgrim's
Pride would be unable to determine whether MOFCOM had correctly conducted the test.
Furthermore, it is undisputed that MOFCOM also did not disclose the formulas used to calculate
normal value, export price, the "dumping margins" for each model, or the final total
weighted-average dumping margin.
179
7.100. The sales under consideration and the normal value of those sales used to calculate
aggregate normal value are essential facts under consideration which form the basis for the
determination to apply definitive measures. Without the information as to what sales prices were
being used to calculate normal value, Pilgrim's Pride would not be able to ascertain the accuracy of
MOFCOM's calculations and thus would be unable to defend its interests. Likewise, without the
formulas used to calculate normal value, export price, and the weighted-average dumping margins
Pilgrim's Pride would not be able to ascertain the accuracy of MOFCOM's calculations. Therefore,
the Panel finds that MOFCOM did not disclose all of the essential facts underlying the determination

176 Tyson Dumping Calculation Table, Exhibit CHN-4; Keystone Dumping Calculation Table,
Exhibit CHN-5; and Pilgrim's Pride Dumping Calculation Table, Exhibit CHN-6. China explains that what
MOFCOM used as the basis of the starting price and each adjustment for calculating normal value, export price,
and constructed export price as disclosed to each of the respondents is listed in the second column of each
table, along with a reference to the document containing such disclosure provided to each respondent. The
source document for the actual information is listed in the third column. According to MOFCOM, based on the
explanations in the first two columns, each respondent could go to the source information and reconstruct the
exact calculation performed by MOFCOM to determine the margin if it so desired. (China's first written
submission, para. 34).
177 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, para. 188; see also
Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 157.
178 Final Anti-Dumping Disclosure to Pilgrim's Pride, Exhibit USA-13.
179 Final Anti-Dumping Disclosure to Pilgrim's Pride, Exhibit USA-13.

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that dumping exists, to Pilgrim's Pride and thus acted inconsistently with Article 6.9 of the
Anti-Dumping Agreement.
7.2.3.6.2.2 Tyson
7.101. With respect to normal value, the Final Anti-Dumping Disclosure to Tyson contains a
narrative description of what MOFCOM did.
180 MOFCOM indicates that it used domestic sales for
those models whose domestic sales quantity exceeds 5%, but does not provide the actual normal
value assigned to each individual sale, only an average normal value per model in a summary
table at the end of the document. Because it wa s this weighted average normal value that was
compared to the export price to determine whethe r there was dumping, it would be crucial for a
respondent to know how this weighted average was arrived at. Without knowing the normal values
for the individual sales, Tyson would be unable to determine whether MOFCOM's calculation of the
average normal value for that model was correct.
7.102. With respect to the sales where MOFCOM determined that the domestic sales quantity was
below 5%, the Final Anti-Dumping Disclosure to Tyson does specify the models and that
constructed normal value will be based on the weig hted average production cost plus a reasonable
amount for expenses and 5% for profit margin. MOFCOM does disclose the per unit USD/pound
production cost, and that this was taken from Tyson's Second Supplemental Questionnaire
Response. The Disclosure also refers to MOFCOM making adjustments to certain expenses based
on documents gained during verification. Although the Disclosure refers to the particular document
the information was derived from, it does not say what the adjustments were or to which sales
MOFCOM applied the adjustments. MOFCOM then re fers to certain models for which more than
20% of the sales were below cost and indicates that it is excluding those lower-than-cost sales
from normal value. However, MOFCOM does not identify how many or which sales failed the
below-cost test. This would make it impossible for Tyson to know the universe of sales being used
to determine normal value. We do note that for one model, MOFCOM indicates that it is excluding
all sales. In this particular instance the disclosure on this item provides sufficient information.
7.103. With respect to export price, the Final Anti-Dumping Disclosure to Tyson indicates that
MOFCOM will accept the company's data and calcul ate export price based on the data submitted
after verification. The same is true with respect to adjustments, particularly for normal value.
However, as noted above, Tyson could not know the universe of sales being used to calculate
normal value and thus it could not completely understand the specific adjustment applied even
though MOFCOM affirmed it was using the data Ty son submitted. Furthermore, it is undisputed
that MOFCOM did not disclose the formulas used to calculate normal value, export price, the
dumping margins for each model, or the final total weighted-average dumping margin.
181
7.104. The sales under consideration and the normal value of those sales used to calculate
aggregate normal value are essential facts under consideration which form the basis for the
determination to apply definitive measures. Without the information as to what sales prices were
being used to calculate normal value, Tyson would not be able to ascertain the accuracy of
MOFCOM's calculations and thus would be unable to defend its interests. Likewise, without the
formulas used to calculate normal value, export price, and the weighted-average dumping
margins, Tyson would not be able to ascertain th e accuracy of MOFCOM's calculations. Therefore,
the Panel finds that MOFCOM did not disclose all of the essential facts underlying the determination
that dumping exists, to Tyson and thus acted inco nsistently with Article 6.9 of the Anti-dumping
Agreement.
7.2.3.6.2.3 Keystone
7.105. MOFCOM's Final Anti-Dumping Disclosure to Keystone explains that MOFCOM found that
for all of Keystone's models, domestic sales quantities were less than 5% of the quantities of sales
to China and that it would therefore apply constructed normal value to all sales.
182 MOFCOM
explains that it used production costs plus reasonable expenses and 5% profit. MOFCOM does not
indicate what data was used to determine the production cost nor what data was used for the
reasonable expenses. In that regard, we note that Keystone submitted one set of cost data

180 Final Anti-Dumping Disclosure to Tyson, Exhibit USA-12.
181 Final Anti-Dumping Disclosure to Tyson, Exhibit USA-12.
182 Final Anti-Dumping Disclosure to Keystone, Exhibit USA-14.

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according to its normal books and records (i.e., using value-based allocations) and two alternative
versions of costs with different weight-based methodologies after the Preliminary Determination.
Without the knowledge of how the elements of th e cost of production were derived, Keystone
would be unable to correct any perceived errors in MOFCOM's calculation of normal value and thus
would be unable to defend its interests.
183 Although MOFCOM indicated there were no factual
changes between the Preliminary and Final Determinations, Keystone's dumping margin changed
from 44% in the Preliminary Determination to 50.36% in the Final Determination. In the Final
Anti-Dumping Disclosure to Keystone, MOFCOM indicates that it is making an adjustment to raw
material prices and using an unaffiliated raw materi al purchase price rather than the one reported
in its calculation of the cost of production. MOFCOM also explains that it is making adjustments to
export price with respect to alleged errors in the reporting of freezer expenses.
184
7.106. The sales under consideration and the normal value of those sales used to calculate
aggregate normal value are essential facts under consideration which form the basis for the
determination to apply definitive measures. Without the information as to what sales prices were
being used to calculate normal value, Keystone would not be able to ascertain the accuracy of
MOFCOM's calculations and thus would be unable to defend its interests. Furthermore, it is
undisputed that MOFCOM did not disclose the form ulas used to calculate normal value, export
price, the dumping margins for each model, or the final total weighted-average dumping
margin.
185 Without these formulas, Keystone would not be able to ascertain the accuracy of
MOFCOM's calculations. Therefore, the Panel fi nds that MOFCOM did not disclose all of the
essential facts underlying the determination that dumping exists, to Keystone and thus acted
inconsistently with Article 6.9 of the Anti-dumping Agreement.
7.2.3.6.3 Conclusion
7.107. For the reasons set forth above, the Panel finds that China acted inconsistently with
Article 6.9 of the Anti-dumping Agreement as MOFCOM did not disclose all of the essential facts, in
particular those pertaining to its determination of the existence and margins of dumping to the
three relevant interested parties: Pilgrim's Pride, Tyson, and Keystone.
7.3 Substantive issues with respect to the determination of the anti-dumping and
countervailing duties
7.3.1 Whether MOFCOM complied with Articl e 2.2.1.1 of the Anti-Dumping Agreement
when it calculated the respondents' costs of production
7.108. The United States claims that China acted inconsistently with Article 2.2.1.1 because
MOFCOM declined to use the respondents' normal books and records, most importantly their cost
allocations, in constructing normal value.
186 The United States contends that the methodology for
determining the cost of production for the purp ose of constructing normal value that MOFCOM
eventually used was itself inconsistent with Articl e 2.2.1.1. Furthermore, the United States claims
that for one respondent, Tyson, MOFCOM included in its allocation methodology costs for products
not subject to the investigation and that this repr esents an additional basis for finding that China
acted inconsistently with Article 2.2.1.1.
7.109. China maintains that the respondents' normal books and records did not reasonably reflect
the costs associated with the production and sale of the product under consideration and thus it
was perfectly proper for MOFCOM to decline to utilize them in constructing normal value. China
argues that MOFCOM's methodology complied wi th Article 2.2.1.1 and that MOFCOM did not
allocate any costs for non-subject products to subject ones when constructing Tyson's cost of
production.

183 Final Anti-Dumping Disclosure to Keystone, Exhibit USA-14.
184 We note that it is this adjustment that is the subject of the United States' claim under Article 2.4.
185 Final Anti-Dumping Disclosure to Keystone, Exhibit USA-14.
186 In its panel request, the United States referred to both Articles 2.2 and 2.2.1.1 with respect to this
claim. However, in its written and oral submissions before the Panel, the United States did not seek a finding of
inconsistency with respect to Article 2.2.

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7.3.1.1 Relevant provisions
7.110. Article 2.1 states, in pertinent part, that a product is considered "dumped" "if the export
price of the product exported from one country to another is less than the comparable price, in the
ordinary course of trade, for the like product when destined for consumption in the exporting
country."
7.111. Article 2.2 provides that when there are no sales of the like product in the ordinary course
of trade the margin of dumping shall be determined either "by comparison with a comparable price
of the like product when exported to an approp riate third country, provided that this price is
representative, or with the cost of production in the country of origin plus a reasonable amount for
administrative, selling and general costs and for profits." (emphasis added)
7.112. Article 2.2.1.1 explains that for purposes of Article 2.2:
costs shall normally be calculated on the basis of records kept by the exporter or
producer under investigation, provided that such records are in accordance with the
generally accepted accounting principles of the exporting country and reasonably
reflect the costs associated with the production and sale of the product under
consideration. Authorities shall consider all available evidence on the proper allocation
of costs, including that which is made avai lable by the exporter or producer in the
course of the investigation provided that such allocations have been historically
utilized by the exporter or producer, in particular in relation to establishing
appropriate amortization and depreciation periods and allowances for capital
expenditures and other development costs. Unless already reflected in the cost
allocations under this sub paragraph, costs shall be adjusted appropriately for those
non-recurring items of cost which benefit future and/or current production, or for
circumstances in which costs during the period of investigation are affected by
start-up operations.
6
(footnote original ) 6 The adjustment made for start-up operations shall
reflect the costs at the end of the start-up period or, if that period
extends beyond the period of investigation, the most recent costs which
can reasonably be taken into account by the authorities during the
investigation.
7.113. The Panel will first address the parties' ar guments with respect to the scope and nature of
the obligation in the first sentence of Articl e 2.2.1.1 and whether the United States has
demonstrated that China acted inconsistently with that obligation. Subsequently, the Panel will
address the parties' arguments with respect to the scope and nature of the obligation in the
second sentence of Article 2.2.1.1 and whether the United States has demonstrated that China
acted inconsistently with that obligation.
7.3.1.2 Factual background
7.3.1.2.1 The respondents' books and records
7.114. In the course of the investigation, MO FCOM issued anti-dumping questionnaires and
supplemental questionnaires to all three respondents.
187 Each respondent reported that, given the
nature of the production of chicken products – which all have common costs up to the point of the
split-off of the various parts from the whole chicken – it had used a "relative sales value" allocation
methodology – whereby pre-split-off cost of production were allocated to the various joint products
according to the proportion of revenue generated by the sale of those products.188
7.115. Tyson explained that it allocated meat costs under its fully absorbed cost system as
follows. Meat costs are allocated based on a value-based cost allocation. For wing tips, paws, and
gizzards, the meat cost is assigned based on the o ffal market price. The offal market price is then

187 See Final Anti-Dumping Duty Determination, Exhibit USA-4, pp. 3-4.
188 Tyson Anti-Dumping Questionnaire Response, Exhibit USA-36, section VI; Keystone Anti-Dumping
Questionnaire Response, Exhibit USA-34, pp. 85-97.

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adjusted using a formula to account for freight and processing costs to arrive at a meat value for
these products. This is called the "offal credit." For leg quarters, the meat cost is determined based
on the market price for leg quarters. This is called the "dark meat credit." The remaining meat
costs (total meat cost minus the offal credit and the dark meat credit) are assigned to the front
half of the bird, i.e., the white/breast meat.
189
7.116. Keystone explained that under its normal accounting systems, it assigns production costs
[***].190
7.117. Pilgrim's Pride noted that:
…the meat costs of the chicken are assigned to the prime value product, chicken
breasts, with other pieces of the chicken receiving costs based upon their relative
values in the marketplace. These by-products are assigned a meat value plus
processing cost equal to the estimated future market value at the time of standard
cost updates performed each quarter. The processing cost by meat type is determined
by cost centres assigned by processing ty pe to produce finished product. The cost
centres are assigned actual (directly related) and allocated costs, such as utilities.
191
7.118. MOFCOM asked Pilgrim's Pride to re-submit its cost allocation data in the second
supplemental questionnaire, because the information submitted in response to the original
Questionnaire and in response to the First Supplemental Questionnaire contained information that
MOFCOM could not understand. In response, Pilgrim's Pride emphasized that it had provided all the
information in response to the two earlier questionnaires.192
7.119. In the Preliminary Anti-Dumping Determination, MOFCOM determined that it would not use
all three respondents' cost allocation methodologies as reflected in their books and records and
would instead apply its own methodology which allocated the pre-split-off costs based on the
weight of the various chicken products. With respect to Tyson and Keystone, MOFCOM concluded
that the costs claimed did not reasonably reflect the production cost related to the subject
products.
193 The Preliminary Anti-Dumping Disclosures to both Tyson and Keystone contained
similar language to that in the Preliminary Anti-Dumping Determination. 194 With respect to

189 Tyson Anti-Dumping Questionnaire Response, Exhibit USA-36, Section VI. Tyson also explained that
during the POI it transitioned between a fully absorbed cost system and a standard cost. Under the standard
cost system, the meat cost for paws, wing tips, and gizzards is also based on an offal credit. The offal credit is
updated weekly. The meat costs for other products are based on market prices. Tyson uses weekly market
price data collected by the Urner Barry commodities pricing service to determine the market value for the front
half of the chicken (i.e., the breast meat). Tyson collects monthly market prices for the back half of the chicken
(i.e., leg quarters). Tyson allocates the meat cost between the front half and back half based on their relative
values.
190 Keystone Anti-Dumping Questionnaire Response, Exhibit USA-34, pp. 85-97; see also Keystone
Supplemental Anti-Dumping Questionnaire Response, Exhibit USA-35, pp. 20-21:
[T]he company [***] Thus, [***].
191 Pilgrim's Pride Anti-Dumping Questionnaire Response, Exhibit USA-32, p. 55; see also Pilgrim's Pride
Response to the First Supplemental Anti-Dumping Questionnaire, Exhibit USA-28. Pilgrim's Pride included the
actual data on costs and expenses related to the production and sale of the products under consideration in
Pilgrim's Pride's Table 6-3, which was not provided to the Panel. The United States provides a summary of the
total cost of production Pilgrim's Pride calculated for breasts, wing tips, leg quarters, and paws in Exhibit
USA-62.
192 Pilgrim's Pride Response to the Second Supplemental Anti-Dumping Questionnaire, Exhibit USA-74,
pp. 5 and 7.
193 Preliminary Anti-Dumping Determination, Exhibit USA-2, pp. 17-18 (Tyson), and pp. 19-20
(Keystone).
194 Preliminary Anti-Dumping Disclosure to Tyson, Exhibit USA-8, where MOFCOM informed Tyson that it
had examined the production cost data submitted in the second supplemental questionnaire and that "the
specification cost alleged by the company does not reasonably reflect the production cost related to subject
merchandise." MOFCOM stated that it was using the data from the supplemental questionnaire response and
taking the weighted average production cost of every "specification product" as the cost of production of
subject merchandise and the like products. See also Preliminary Anti-Dumping Disclosure to Keystone,
Exhibit USA-10, p. 2, where MOFCOM states:
After the preliminary investigation, the authorities believe that the model basis costs as you
claimed do not reasonably reflect the production costs related to the subject products and decide
to temporarily use the weighted average of production costs for these models as the production
costs for the subject products and like products in the preliminary determination…

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Pilgrim's Pride, MOFCOM concluded that there were unexplained great differences in production
volume of the subject and like products in Pilgrim's Pride questionnaire responses. MOFCOM
explained that because it could not obtain producti on cost data for the different types of subject
products, it was using a different cost allocation methodology than in Pilgrim's Pride's books and
records.
195 In the Preliminary Anti-Dumping Disclosure to Pilgrim's Pride MOFCOM stated that it
had found large discrepancies in the total producti on quantity of all types of subject merchandise
reported and that Pilgrim's Pride had not provided a reasonable explanation for this discrepancy.
Furthermore, MOFCOM stated that none of Pilg rim's Pride's questionnaire responses provided,
based on the types it claimed, definite annual pr oduction costs and the expenses to be allocated
concerning sales, general and administrative expenses, and overhead.196
7.120. All three respondents, in their Comments on the Preliminary Anti-Dumping Determination
and Disclosure, argued that MOFCOM's determination not to accept their reported costs was
inconsistent with Article 2.2.1.1 of the Anti-Dum ping Agreement. In particular, the respondents
noted that relative sales value-based allocations were standard accounting practice in industries
that produce joint products.197 Tyson also noted that the product-specific processing costs are not
allocated as they are the actual costs incurred in the production of those specific products.198 In its
Comments, Pilgrim's Pride specifically addresse d the discrepancies MOFCOM had identified and
argued that they could be accounted for by changes in the unit of measure in their books and
records (pounds) to the unit of measure MOFCOM required (metric tonnes) of some of the data
while other data was not converted. Pilgrim's Pride also erroneously included intra-company
transfers to an affiliate in sales data, and included some production data of a subsidiary purchased
during the POI while excluding other data from the same company. Pilgrim's Pride provided
revised tables in both tonnes and pounds. Pilgrim's Pride also noted that the number MOFCOM
used for total annual cost was mistakenly derived because of the problem with the pounds to
tonnes conversion.
199 Pilgrim's Pride asked MOFCOM to verify and accept the revised numbers.
7.121. MOFCOM verified all three respondents' responses after the Preliminary Determination.
However, neither the United States nor China has provided the Panel with documentation of the
substance of what occurred during the anti-dumping verifications.200
7.122. In the Final Anti-Dumping Disclosures, MOFCOM maintained its conclusions from the
Preliminary Anti-Dumping Determination with respect to all three respondents and continued to
use its own weight-based allocation methodology rather than the cost allocations that were kept in
the respondents' normal books and records.
201 In particular, MOFCOM noted that neither Tyson nor
Keystone had provided sufficient reasons to justify the reasonableness of their costs. 202 With

195 Preliminary Anti-Dumping Determination, Exhibit USA-2, pp. 15-16.
196 Preliminary Anti-Dumping Disclosure to Pilgrim's Pride, Exhibit USA-9, Annex.
197 Tyson's Comments on the Preliminary Anti-Dumping Disclosure, Exhibit USA-25 for example, noted
that value-based cost allocations are used in numerous industries, including: poultry, beef, ham, citrus fruits
(oranges and lemons), and petrochemicals. In support of its argument, Tyson provided a letter from its
accountant, which explained that value-based cost allocations are a well-established approach to costs incurred
in the production of joint products and referenced various accounting texts. (Tyson Accountant Letter, Exhibit
USA-76). See also Keystone's Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-30,
pp. 1-7 (in particular, Keystone argues that: (i) it reported its costs on the same basis that it keeps its books
and records in the normal course of business; (ii) its accounting and reporting methodologies tie to its audited
financials which are in accordance with the GAAP in the United States; (iii) its cost of production methodology
is a well-established and widely-recognized cost accounting practice, which is recognized as such in the
United States and China; and (iv) its cost of production methodology accurately and reasonably captured its
actual product-specific costs for the poultry products at issue.
198 Tyson's Comments on the Preliminary Anti-Dumping Disclosure, Exhibit USA-25.
199 In particular, Pilgrim's Pride noted that MOFCOM calculated total annual cost by [***].
200 The United States did provide the Panel with the Verification Report for Keystone, Exhibit USA-58,
and China provided the Verification Disclosures for Tyson and Pilgrim's Pride, Exhibits CHN-70 and 71.
However, these documents simply provide a basic summary of the main topics covered and of who was
present, without any evaluation of the documents examined at verification or the responses of the company
officials to MOFCOM's questions.
201 Final Anti-Dumping Disclosure to Tyson, Exhibit USA-12; Final Anti-Dumping Disclosure to Keystone,
Exhibit USA-14, p. 3; Final Anti-Dumping Disclosure to Pilgrim's Pride, Exhibit USA-13, pp. 7-8.
202 Final Anti-Dumping Disclosure to Tyson, Exhibit USA-12; Final Anti-Dumping Disclosure to Keystone,
Exhibit USA-14, p. 3. Similar sentiments were expressed in the disclosure document provided to the
US Government:
The Authority examined the production cost and expenses of the company [Keystone]. In the
Preliminary Determination, the Authority thinks the model-specific cost claimed by the company

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respect to Pilgrim's Pride, MOFCOM noted that Pilgrim's Pride had provided corrected information
to the discrepancies, but that the information was untimely and would not be utilized.203
7.123. All three respondents also provided comments on the Final Anti-Dumping Disclosure. Tyson
responded to this disclosure and disputed MOFC OM's claim that it had not provided sufficient
justification for the reasonableness of its allocations. Tyson noted that MOFCOM had not provided
any logical explanation for its conclusion that value-based allocations are not reasonable. 204
Keystone disagreed with MOFCOM's characterisati on that the submitted costs were unreasonable,
because its costs were in accordance with books and records kept in the normal course of
business, and consistent with US GAAP and International Accounting Standards. Keystone also
noted that its officials explained at great length to the verifiers the company's operation strategy
[***] which underpins its cost allocation system.
205 Pilgrim's Pride argued that because the revised
tables submitted with its Comments on the Preliminary Disclosure were modified and
supplemented rather than completely new and were true, accurate, and complete, MOFCOM should
adopt them instead of "continuously using the wrong cost data as the basis for dumping margin
calculation, which had made the dumping margin of the Company distorted completely."
206
7.124. The United States Government also commented on the Final Anti-Dumping Disclosures,
objecting to MOFCOM's lack of support for its determination that the reported costs did not
reasonably reflect the actual costs of production. 207 MOFCOM did not address the arguments the
respondents raised in their comments but did acknowledge that according to the respondents, the
basis of distinguishing different broiler products is the physical cutting of the product. MOFCOM
then concluded that "the investigating authority does not think the method accurately reflects
difference of cost of the subject merchandise."
208
7.125. The Final Anti-Dumping Determination contains nearly identical language to that in the
Final Anti-Dumping Disclosures.209
7.3.1.2.2 MOFCOM's allocation methodology
7.126. MOFCOM applied the same cost allocation methodology to the data of all
three respondents. MOFCOM explained in the Preliminary Determination that it would "take the
weighted average production cost of various types as the production cost of the Subject Products
and the like products."210 In the Preliminary Disclosures, MOFCOM provided similar information. To
Tyson, MOFCOM stated that it preliminarily determined to use the production cost plus reasonable
expenses and profit to construct the normal value.
211 To Pilgrim's Pride, MOFCOM stated that it
"decided to temporarily use the production costs plus reasonable expenses and profit (costs and
expenses are determined based on the weighted av erage data contained in Tab 3 of Table 6-3 of

can't reasonably reflect the production cost relating to the Subject Goods, and determines the
production cost of each model based on the average production cost reported by the company.
After the Preliminary Determination, the company gave comment on the method adopted by the
Authority, but it didn't give sufficient reason to justify the Subject Goods in different positions
have different cost. After examination and on-the-spot verification, the Authority discovers there
is no change to the facts found in the Preliminary Determination, and decides to maintain the
decision made in the Preliminary Determination. (Anti-Dumping Disclosure to the US
Government, Exhibit USA-11, p 10).
203 Final Anti-Dumping Disclosure to Pilgrim's Pride, Exhibit USA-13, pp. 7-8. MOFCOM reiterated its
position in the Final Anti-Dumping Disclosure to the US Government. (Anti-Dumping Disclosure to the US
Government, Exhibit USA-11, p. 7).
204 Tyson's Comments on the Final Anti-Dumping Disclosure, Exhibit USA-40.
205 Keystone's Comments on the Final Anti-Dumping Disclosure, Exhibit USA-29. We note that the only
document either party provided with respect to Keystone's verification is a brief disclosure letter related to the
verification, which simply states "(1) Keystone has explained the calculation samples of cost of the subject
product and it's like product. (2). Keystone has submitted manufacturing costs details of the subject product
and it's like product" without any discussion of how MOFCOM evaluated the information it was provided at
verification. (Verification Report for Keystone, Exhibit USA-58).
206 Pilgrim's Pride Comments on the Final Anti-Dumping Disclosure, Exhibit USA-75, p. 9.
207 US Government's Comments on the Final Disclosure, Exhibit USA-41.
208 Response to the US Government Comments on the Final Anti-Dumping Disclosure, Exhibit USA-37.
209 Final Anti-Dumping Determination, Exhibit USA-4.
210 Preliminary Anti-Dumping Determination, Exhibit USA-2.
211 Preliminary Anti-Dumping Disclosure to Tyson, Exhibit USA-8, p. 1.

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its first supplemental questionnaire response)". 212 To Keystone, MOFCOM stated that it decided to
"temporarily use the weighted average of production costs for these models as the production
costs for the subject products and like products in the preliminary determination".
213
7.127. China provides some additional detail in response to the Panel's questions about precisely
how MOFCOM calculated the costs. China reports that for Tyson and Keystone, the constructed
normal value consisted of weight-based production costs (total meat and processing) + reported
model-specific SG&A + uniform reasonable profit of 5% determined by MOFCOM.
214 Looking
specifically at Form 6-3, MOFCOM re-allocated those costs reported in "Total Production Costs" on
a weight basis, and accepted "Total Relevant Expenses" on a model-specific basis as reported by
the respondents.
215 For Pilgrim's Pride, China indicates that because the company did not provide
SG&A in the format repeatedly requested by MOFCOM216, all costs were weight-averaged.217
7.128. After MOFCOM used this methodology in the Preliminary Determination, the respondents
provided comments on the methodology. For instance, Keystone argued that MOFCOM's
methodology: (i) is contrary to how Keystone calculates its production cost in the normal course of
business; (ii) is illogical and inconsistent with Article 2.1 of the Anti-dumping Agreement, since it
attributes a single cost to products that have different values; and, importantly, (iii) disregards the
fact that costs other than meat cost (i.e. cost incurred after the split-off point) are model-specific
and cannot be allocated across board to all products.
218 Keystone expressed the view that
MOFCOM's own method of cost allocation was unreasonable, illogical and contradicted WTO law. In
this respect, it added to its Comments on the Preliminary Anti-Dumping Disclosure that MOFCOM's
method unavoidably results in a consistent finding that a significant portion of the value of the
chicken is sold outside of the ordinary course of trade due to prices far below the (average) cost of
production, while the primary products are sold at a falsely astronomic profit. Furthermore,
Keystone stated that MOFCOM's single cost method has the effect of attributing costs to almost
entirely bone-in products sold to China which absolutely are not applicable to the production and
sale of those products (e.g. the cost of de-boning to create a boneless product).
219
7.129. In case MOFCOM decided to maintain its decision to reject Keystone's costs, Keystone
offered two alternatives for calculating a more reasonable anti-dumping margin on the basis of the
data available on the record. These alternatives suggested that MOFCOM: (i) allocate pre-split-off
costs to all products on the basis of relative value
220; or (ii) allocate pre-split-off costs to all
products on the basis of total output.221
7.130. Tyson also argued against a weight-based methodology, but proposed a manner in which
its data might be adjusted so that a weight-based approach would be more accurate.222 Tyson also
contended that it was inappropriate to average product-specific costs across all products. In
particular, Tyson argued that MOFCOM's weight-based approach allocated total production costs
incorrectly to the subject merchandise while allocating no costs to other products that result from
the live chicken. Tyson argued that if MOFCOM insisted on maintaining a weight-based cost, it
would be more accurate to divide the total cost incurred to raise live birds by the total weight of
the live birds to obtain a cost per pound for the raw material. Tyson argued that the resulting

212 Preliminary Anti-Dumping Disclosure to Pilgrim's Pride, Exhibit USA-9.
213 Preliminary Anti-Dumping Disclosure to Keystone, Exhibit USA-10, p. 2.
214 Preliminary Anti-Dumping Disclosure to Keystone, Exhibit USA-10, p. 2.
215 Keystone's Form 6-3, Exhibit USA-54.
216 Preliminary Anti-Dumping Disclosure to Pilgrim's Pride, Exhibit USA-9, p. 4.
217 China's response to Panel question No. 96.
218 Keystone's Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-30.
219 Keystone's Comments on the Final Anti-Dumping Disclosure, Exhibit USA-29.
220 United States' response to Panel question No. 29. The United States indicates that Keystone used
[***] Although it is not clear from the United States' response, as Keystone did not use relative sales values
for paws in its normal books and records, it appears that the United States is referring to the values used for
the first alternative allocation proposed by Keystone. See e.g. United States' first written submission, para.100
(citing Keystone's Comments on the Preliminary Determination, Exhibit USA-30). We note that the
United States acknowledged that it received this information directly from the respondents in an effort to
answer the Panel's question. The United States contends that the information was not on the record of the
investigation, because China never asked. (See United States' response to Panel question No. 94(b)).
221 Keystone's Comments on the Preliminary Determination, Exhibit USA-30, pp. 8-11.
222 See Tyson's Further Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-26.

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USD/pound unit cost should be used as [***] whereas processing costs should be applied to the
specific part they relate to and not allocated across all products.223
7.131. Pilgrim's Pride focused most of its comment s on explanations for the original inaccuracies
or incompleteness of its responses. However, it also requested that MOFCOM adopt the
product-by-product costs recorded, calculated and maintained in its records, because "this
product-by-product costing method, compared with the single-product cost, follows US GAAP, and
is more in conformity with the actual cost in the broiler sector." 224 Pilgrim's Pride also requested
additional disclosure from MOFCOM on the margin calculation because it could not deduce
precisely how MOFCOM had derived certain no rmal values. Nevertheless, Pilgrim's Pride
highlighted what it believed were potential errors in MOFCOM's calculations. In particular, Pilgrim's
Pride noted that the domestic selling prices for certain products were lower than the single average
cost of production MOFCOM determined and also argued that the normal value of other products
was too high. Pilgrim's Pride argued that if MOFCOM were to make the corrections to the
calculations of certain normal values without changing any other data, its margin would drop
significantly; if MOFCOM were to confirm all of Pilgrim's Pride's revised tables and still use a single
average cost method, the margin would be even lower; and if MOFCOM were to use Pilgrim's
Pride's reported costs, the margin would be negative.
225
7.132. MOFCOM continued to apply the same methodology for determining the cost of production
and constructing the normal value in the Final Anti-Dumping Determination. MOFCOM noted that
the parties had provided comments on the cost al location issue, but that they did not provide
sufficient reasons to prove the reasonableness of their own preferred cost allocation
methodologies.226
7.3.1.3 Whether MOFCOM complied with th e obligation in the first sentence of
Article 2.2.1.1 to normally calculate costs on the basis of the producers' books and
records
7.3.1.3.1 Main arguments of the parties
7.3.1.3.1.1 United States
Whether there is an obligation for an investig ating authority to explain its decision to
decline to use a respondent's books and records
7.133. The United States argues that the first sentence of Article 2.2.1.1 establishes the
obligation of the investigating authority to "normally" calculate costs on the basis of records kept
by the exporter or producer so long as certain conditions – conditions plainly met in this case – are
present. The use of the term "shall" in the se ntence signifies a sense of legal duty and the
definitions for the term "normally" include "in the usual way" or "as a rule." Accordingly, the
investigating authority must calculate costs on the basis of records kept by the exporter or
producer as a rule whenever (i) the records are consistent with GAAP of the exporting country, and
(ii) reasonably reflect the costs associated with the production and sale of the subject
merchandise.
227
7.134. The United States contends that the second part of the first sentence contains an
exception to how costs should "normally" be calculated and that in considering this exception, it is
important to consider its relationship to the overall rule. Specifically, according to the
United States it is the investigating authority that must comply with the rule of "normally" using a
producer’s costs.228 The United States argues that Article 2.2.1.1 imposes a positive obligation 229

223 Tyson's Further Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-26.
224 Pilgrim's Pride Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-27.
225 Pilgrim's Pride Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-27, pp. 2-7
and 10-15.
226 Final Anti-Dumping Determination, Exhibit USA-4, pp 29-30 (Tyson) and p. 32 (Keystone).
227 United States' first written submission, paras. 91-92 (citing Concise Oxford Dictionary, (2009)
p. 975; Appellate Body Report, US – Clove Cigarettes, para. 273 ("We observe that the ordinary meaning of
the term 'normally' is defined as 'under normal or ordinary conditions; as a rule'"); and Panel Report, Egypt –
Steel Rebar, para. 7.393).
228 United States' first written submission, para. 94.

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and that when an investigating authority seeks to establish that it met the requirements for
derogation from a positive obligation, it must set forth its explanation in the investigation as to
why derogation was appropriate.
230
7.135. The United States finds further support for its contention that Article 2.2.1.1 contains an
obligation for the investigating authority to explain its decision to reject the cost allocations of a
respondent in the standard of review which focuses not on whether an investigating authority did
the correct thing in the panel's view, but whether it has presented a reasoned and adequate
explanation based on the facts on the record.
231 Furthermore, the United States argues that
Article 2.2.1.1 must be read as a whole and that the sentences do not contain isolated separate
obligations. Therefore, according to the United States, the obligation to "consider all available
evidence on the proper allocation of costs" in the second sentence of Article 2.2.1.1 is relevant to
making a finding under the prior sentence. As the investigating authority must consider all
available evidence on the proper allocation, it must of course consider whether the producers'
books and records are proper or no t, e.g. not in accordance with GAAP or reasonably associated
with the production and sale of the product under consideration.
232
7.136. Additionally, the United States contends that MOFCOM improperly put the burden on the
respondents to demonstrate that their historically-used and GAAP-consistent allocations were
reasonable such that MOFCOM would use them. The United States argues that an interpretation
that allows an investigating authority to choose without explanation to rely on costs other than
those calculated on the basis of the producer or exporter's records would both be inconsistent with
the text of the Agreement – which provides that reported costs shall normally be used – and would
eviscerate the protections of the provision.
233
7.137. With respect to the application of Article 2.2.1.1 in the broiler products investigation, the
United States emphasizes that MOFCOM did not make a single finding in the investigation
regarding why it rejected the US respondents costing systems. In particular, the United States
contends that China has not provided any eviden ce that MOFCOM engaged in any consideration
regarding the values utilized by respondents. The United States notes that China cannot produce a
single sentence by MOFCOM suggesting it was actually interested in the issues it now claims to be
so critical.234 The United States hypothesizes that if MOFCOM was concerned, for example, that the
values should have reflected global prices, it could have inquired about the basis for respondents'
values and whether it was possible to make such adjustments. The United States notes that for at
least some products in this investigation, the benchmark relative sales value used in the
respondents' cost allocations was in fact global prices.
235 Notably, MOFCOM never solicited or
analysed any record evidence on that point. 236 Indeed, the United States argues that all of China's
concerns about Keystone's costs are post hoc rationalizations and cannot be found anywhere in the
record of the investigation or in the Determinations.237
Whether MOFCOM correctly determined that the respondents' books and records did not
"reasonably reflect the costs associated with production and sale of the product under
consideration"
7.138. With respect to how to determine whether a respondent's books and records reasonably
reflect the costs associated with the production and sale of the product under consideration, the
United States clarifies that it is not arguing that if books and records are GAAP-consistent, they are
ipso facto reasonable, but rather that – given the purposes of GAAP – consistency with GAAP may

229 United States' first written submission, para. 104 (citing Panel Report, US – Softwood Lumber V,
para. 7.237).
230 United States' response to Panel question No. 31 (the United States cites the Panel Report in Egypt –
Rebar, concluding that a responding Member would have a difficult time rebutting a prima facie case that it did
not conduct an "evaluation" pursuant to Article 3.4 if there is no written record of said evaluation).
231 United States' response to Panel question No. 31 (citing Appellate Body Report, US – Lamb,
paras. 106-107).
232 United States' response to Panel question No. 31.
233 United States' first written submission, para. 105.
234 United States' response to Panel question No. 90.
235 United States response to Panel question No. 29. As noted in footnote 220, the information provided
by the United States in response to this question was not on the record of the investigation.
236 United States' comments on China's response to Panel question No. 89(a).
237 United States' comments on China's response to Panel question No. 94(a).

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also often indicate that a respondent's books and records reasonably reflect the costs associated
with the production and sale of the product under consideration 238, but is not determinative of the
question. The United States posited that reasonableness and GAAP-consistency were like a Venn
diagram of two significantly overlapping circles.
239
7.139. The United States disagrees with China's implication that a measure of whether costs
based on relative sales values reasonably reflect the costs associated with the production and sale
of the product under consideration is whether they are not "fair," i.e., too low compared to what
China's investigating authority feels appropriate for its own market.
240 According to the
United States, China's concerns are inconsistent with the objective of calculating the cost of
production in the country of origin. 241 In particular, the United States points to two elements in
Article 2.2.1.1 that, in its view, demonstrate that the relevant market for purposes of normal value
must be the domestic market in the exporting Me mber. First, the United States notes that the
relevant GAAP under Article 2.2.1.1 is that of the exporting country, not the importing country.
Second, the United States points to the requirement in the second sentence of Article 2.2.1.1 for
an investigating authority to consider a producer's historically-used allocations. According to the
United States, such allocations will not have been prepared in light of their reasonableness in the
context of an anti-dumping proceeding and are never going to reflect conditions in the importing
market.
242 Finally, the United States contends that China's position contradicts the express
preferences of in Article 2.2 of the Anti-Dumpi ng Agreement for use of sales in the exporting
market if they are made in the ordinary course of trade.
7.140. The United States contends that the ultima te conclusion of China's logic would be that any
exporting country with weak domestic demand for a product would be engaged in dumping if it
exports the product to a country where the product is highly valued. That is fundamentally against
the notion that trade will naturally arise where relative costs and values differ.
243 According to the
United States, the Anti-Dumping Agreement accept s the situation where a product's price in the
exporting country is subject to less demand and is thus lower than in the importing country. 244
The United States contends that China's posi tion would vitiate the "reasonably associated"
requirement by destroying any boundaries on the application of the condition, because an
investigating authority would be free to reject a producer's costs whenever the investigating
authority believes they are unfair from its perspective, i.e. not capable of sustaining a dumping
margin.
245
7.141. The United States argues that Tyson fully explained that th e "relative sales value
approach," is appropriate in the situation of joint products (which are produced simultaneously by
raising a live bird), in accordance with US GAAP, US and Chinese accounting texts, and
international accounting standards.246
7.142. The United States disputes China's contentions that Tyson used fictional values in its
allocation methodology. Specifically, with respect to Tyson's use of the "offal price" to value paws
and other products, the United States notes that Tyson explained that the "offal price" was based
on sales in the United States. Tyson thus explained that what China pejoratively emphasizes as
the "offal price" was in fact a market price – and that Tyson in fact sells paws as offal.
247

238 United States' response to Panel question No. 25.
239 United States' opening statement at the second meeting of the Panel, para. 31.
240 United States' response to Panel question No. 25 (citing China's first written submission, paras. 79,
88, and 104).
241 United States' response to Panel question No. 25.
242 United States' opening statement at the first meeting of the Panel, para. 46.
243 United States' opening statement at the first meeting of the Panel, para. 45.
244 United States' opening statement at the first meeting, para. 46 (citing Appellate Body Report, US –
1916 Act, para. 107).
245 United States' response to Panel question No. 25.
246 United States' first written submission, para. 98 (citing Tyson's Comments on the Preliminary
Anti-Dumping Disclosure, Exhibit USA-25, p. 4; Tyson's Further Comments on the Preliminary Anti-Dumping
Determination, Exhibit USA-26, pp. 6, notes 5 and 8, explaining that such a methodology is appropriate when
products are "produced in groups" and citing to Exhibit 3, Joel G. Singer, GAAP-Handbook of Policies and
Procedures, (Prentice Hall, 2010), at 3.31).
247 United States' comments on China's response to Panel question No. 89(a).

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7.143. The United States contends that Keystone's costs reflect its business model [***] and are
GAAP-consistent and reasonable. 248 The United States disputes China's characterization of
Keystone's allocations as applying [***] to paws. The United States argues that, consistent with
common accounting practice for by-products, while Keystone did apply [***]; it did record any
profits from the sale of paws (revenue minus post-split-off specific processing costs) as the value
of paws.
249
7.144. The United States argues that Pilgrim's Pride explained how its books and records captured
costs of production for the various models according to their respective values and that this
allocation methodology is consistent with US GAAP and described in standard, widely-referenced
accounting textbooks.
250 With respect to China's argument that MOFCOM decided not to accept
Pilgrim's Pride reported costs, because there were "huge differences among production quantities
reported in different parts of the responses and no reasonable explanation" and that it rejected the
corrected information as untimely, the United States points out the lack of an explanation as to
why the data is irreconcilable – or any discussion of the efforts by MOFCOM to understand the
data. Furthermore, the United States argues that China glides over the fact that MOFCOM accepted
Pilgrim's Pride data, let Pilgrim file submissions addressing its data, and subjected that data to
verification and only three months after it was initially submitted, decided to reject it as
untimely.
251 Finally, the United States argues that it was only after being asked directly by the
Panel that China asserted that MOFCOM's rejection of Pilgrim's Pride's data meant that it had
applied facts available. Furthermore, the United States argues that MOFCOM did not follow the
steps necessary to apply facts available pursuant to Article 6.8 of the Anti-Dumping Agreement.
252
7.3.1.3.1.2 China
Whether there is an obligation for an investig ating authority to explain its decision to
decline to use a respondent's books and records
7.145. China argues that the first sentence of Article 2.2.1.1 contains two independent conditions
(GAAP-consistency and that the records "reasonably reflect" the costs of production and sale).
According to China, if either condition is not met, the investigating authority need not use the
producer/exporter's recorded costs. China's view, which is also expressed in the Determinations, is
that the burden lies on the respondent to demonstrate that these two conditions are met or, at the
very least, that the authority does not bear any special burden to demonstrate that the records do
not reasonably reflect costs.
253 China finds support for its view in the fact that Article 2.2.1.1
refers to the calculation of costs in the passive voice. According to China, this means that the
provision does not indicate any particular responsibility on the part of the investigating authority
with respect to the calculation of costs.
254
Whether MOFCOM correctly determined that the respondents' books and records did not
"reasonably reflect the costs associated with production and sale of the product under
consideration"
7.146. China argues that in determining whethe r an exporter's books and records reasonably
reflect the costs associated with the production and sale of the product under consideration, an
investigating authority must look to the particular purpose of the Anti-Dumping Agreement. China
submits that the overarching purpose of the Anti-D umping Agreement is about establishing a fair
price or, more specifically, about measuring the degree of any unfairness in price based on

248 United States' first written submission, para. 100 (citing Keystone's Comments on the Final
Anti-Dumping Disclosure, Exhibit USA-29, pp. 21-23).
249 See e.g. United States' responses to Panel question Nos. 34 and 38; second written submission,
paras. 62-64; comments on China's response to Panel question No. 94(a); Keystone's Comments on the
Preliminary Anti-Dumping Determination, Exhibit USA-30; Keystone Anti-Dumping Questionnaire Response ,
Exhibit USA-34; Keystone Supplemental Anti-Dumping Questionnaire Response, Exhibit USA-35; and Keystone,
Table 6-4, Exhibit USA-60.
250 Pilgrim's Pride Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-27, pp. 6-8,
10 (citing to J. Siegel & J. Shim, Barron's Accounting Handbook (3rd ed. 2000), p. 103).
251 United States' second written submission, paras. 24-25.
252 United States' comments on China's response to Panel question No. 99.
253 China's first written submission, paras. 103, 113; response to Panel question No. 26; second written
submission, paras. 71-76.
254 China's response to Panel question No. 26; second written submission, paras. 73-76.

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differences between normal value and export pric e. Therefore, according to China, any cost
allocations must generate costs of production that allow an authority to use the costs in ways that
make sense given the purpose to which they are being used in an anti-dumping case, and that
make sense given the specific circumstances of each case.
255
7.147. China states that anti-dumping investigations are not unlike "rate regulation" proceedings
in that both are designed to determine a "fair" price for sellers and buyers alike. According to
China, in the context of the Anti-Dumping Agreemen t, and much like a rate regulation proceeding,
there has to be some objective and uniform basis for determining what is a "normal value." An
improper methodology may defeat the entire purpose of the proceeding. Accounting texts note, for
example, the problems associated with circularity and the use of value-based allocation
methodologies. The use of a low price that may be outside the bounds of what is "fair" or "normal"
to set a "fair" price or "normal" value amounts to circular reasoning and frustrates the purpose of
the exercise. Thus, the appropriateness of the value being used to allocate a cost that comprises
part of normal value must always be considered.
256
7.148. China notes that the margin of dumping is the price difference determined in accordance
with the comparisons described under Article VI :1 of the GATT 1994. This overarching purpose
helps inform the plain meaning of "cost of production." To China, the issue is not cost of
production generally or conceptually within the confines of a GAAP-consistent methodology; the
issue is cost of production of a specific product and the specific normal value to be derived from
that cost.
257 For this reason, China submits that that GAAP-consistency cannot be a proxy for
reasonableness.258
7.149. According to China, the focus should be on what the producer had to pay to be able to
produce the items at issue, and not on the revenues the producer might be able to gain by selling
what has been produced. This distinction can be critical depending on the circumstances of a
particular case. A producer might have very similar costs to produce two different versions of a
product, but might be able to sell one for a much higher price than the other. Because the cost of
production under Article 2.2.1.1 is a proxy for fairness, China believes that it must be sufficiently
independent of both export price and home market price and that using sales values to determine
the cost of production would create a circular situ ation that defeats the purpose of the exercise of
comparing normal value to export price.
259
7.150. In addressing the relative sales-value based allocation methodologies at issue in the broiler
products investigation, China argues that, given that the goal under Article 2.2.1.1 is to determine
the cost of all production in the country of origin, if a firm is to use relative sales values it must
use the values of all sales, including those to export markets. 260 In China's view, not using global
prices to assign the relative sales values would be an indicia that the allocations in the exporter's
books and records do not reasonably reflect the costs associated with production and sale of the
product under consideration.
7.151. China argues that all three respondents' cost allocation methodologies treated paws
improperly by assigning too little of the cost of production to them. China argues that the
respondents only used US sales values, rather than global sales values, to determine the
appropriate apportionment of pre-split-off costs.
261 China argues that this is what led to the
alleged distortion in the allocations whereby certain parts, e.g. paws, which account for most of
their exports to China, were allocated a very small portion or none of the total costs incurred to
produce the bird as a whole.
262 Furthermore, China contends that these low domestic sales values

255 China's first written submission, paras. 61-62.
256 China's first written submission, para. 62; response to Panel question No. 92; see also China's
opening statement at the second meeting of the Panel, para. 30.
257 China's first written submission, para. 79.
258 China's first written submission, para. 65-66 (citing Panel Report, US – Softwood Lumber V,
para. 7.237).
259 China's first written submission, paras. 73-76.
260 China's second written submission, paras. 50, 62 and 64.
261 We note that the United States provided information as to what markets the companies used for
their allocations in response to Panel question No. 29. As noted in footnote 220, the information provided by
the United States in response to this question was not on the record of the investigation.
262 China's first written submission, paras. 86-90.

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do not even accurately reflect the respondents' actual experience in the US market, where they do
sell paws and receive prices in the United States that are comparable to those received in China.263
7.152. With respect to Tyson, China presents three particular concerns. First, that although
Tyson's accounting system was value-based, it did not use an appropriate product-specific value
for paws, but rather used a single generic market price for offal which China contends was tailored
to specific preferences in the US market and did not represent a true cost of production of the
product concerned.264 Second, China argues that Tyson did not use actual joint-product accounting
for paws, but rather, its allocation reflected a by-product approach. 265 In particular, China argues
that Tyson valued products like paws for allocation purposes as waste. China argues that using
these prices, rather than an actual realized value or price of paws is distortive.
266 Finally, China
raises doubts as to the reliability of the data Tyson provided.267
7.153. China maintains that Tyson never addressed its actual recorded costs or explained, for
example, why its actual recorded costs for products like paws, wing tips, and gizzards reasonably
reflected the cost of production for those products as sold in the Chinese market (or the US market
for that matter). Rather, Tyson emphasized that its methodology was reasonable because it was
GAAP-consistent, and then essentially assumed that GAAP-consistency automatically meant
"reasonably reflects" the cost of production. With respect to the letter from Tyson's auditor, China
notes that that auditor never addressed Tyson's specific methodology or its actual costs, either
generally or in the context of the anti-dumping proceeding in which Tyson was involved.
268
7.154. China's main point with respect to Keystone is that Keystone's costs were facially
unreasonable as they applied [***] to paws which was contrary to the circumstances of that
product in the market.269
7.155. With respect to Pilgrim's Pride, China argues that the United States misrepresents the
reasons why Pilgrim's Pride's costs were reject ed as being the same as those for Tyson and
Keystone.270 China argues that MOFCOM determined that Pilgrim's Pride had not provided
adequate or reliable information on costs within reasonable time limits and that the United States
has not challenged this decision.
271 According to China, MOFCOM determined that in light of
Pilgrim's Pride's failure to address its serious data problems in multiple supplemental responses
and corrections, and its need to continue the investigation in a timely manner, it had to resort to
an alternative basis for allocating costs.
272 China confirms in response to a question from the
Panel, that the statements in the Preliminary and Final Anti-Dumping Determinations as well as in

263 China's first written submission, paras. 104-105; response to Panel Question No. 34; second written
submission, para. 65 (citing USAPEEC Foreign Producer Response, Exhibit CHN-45, Annex III-6 (pricing data
for HTS code 0207.1422, frozen paws).
264 China's first written submission, paras. 90 and 103; comments on United States' response to Panel
question Nos. 89(a) and 90.
265 China's second written submission, para. 69; response to Panel question No. 94(d); comments on
United States' response to Panel question No. 94.
266 China's second written submission, paras. 52, 59 and 69; response to Panel question No. 94(d);
comments on United States' response to Panel question No. 94.
267 China's second written submission, para. 90 (citing Tyson Cost Comparison Tables, Exhibit CHN-46).
China argues that the cost data reported in Tyson's initial Form 6-3 and reported again in its second
supplemental questionnaire responses as form S2-5 were significantly different.
268 China's first written submission, para. 93.
269 China's first written submission, paras. 110-112; opening statement at the first meeting of the Panel,
paras. 12-13; second written submission, paras. 54-60; opening statement at the second meeting of the Panel,
para. 28; response to Panel question No. 89(a).
270 Despite maintaining that the basis for MOFCOM's rejection for Pilgrim's Pride was different than for
Tyson and Keystone, China does note that Pilgrim's Pride cost allocation "…suffered from the same problems as
the Tyson and Keystone methodologies." (China's opening statement at the first meeting of the Panel,
para. 15).
271 China's first written submission, para. 84 (citing to Final Anti-Dumping Determination, Exhibit CHN-3,
pp. 27-28).
272 China's first written submission, paras. 84, 115-117 (citing inter alia to Final Anti-Dumping
Determination, Exhibit CHN-3, pp. 27-28); see also China's second written submission, paras. 58, 67 and 80.
According to China, there were serious discrepancies in the original questionnaire response, forcing a
supplemental submission, only to have Pilgrim's Pride provide substantial corrections yet again after the
preliminary disclosure. China contends that despite two sets of corrections to the same data, Pilgrim's Pride's
information remained internally inconsistent.

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the Disclosure Documents reflect MOFCOM's decision to apply facts available under Article 6.8 of
the Anti-dumping Agreement. 273
7.3.1.3.2 Arguments of the third parties
7.156. The European Union disagrees with the United States' characterization of the first
sentence of Article 2.2.1.1 as containing a general rule and an exception. Rather, the
European Union considers that the sentence contains two conditions, introduced by the term
"provided that". The structure of this provision is therefore, in the European Union's view, better
characterised as "conditioned normality".
274 However, the European Union does agree with the
United States that the determination should explain why the surrounding facts and circumstances
of a particular case supported the conclusion that the value-based allocation methodology did not
reasonably reflect the costs associated with the production and sale of the product under
consideration.
275 The European Union also states that it is not clear why China's argument that
paws are more valued in China than the United States is pertinent to the question of whether or
not sales in the US domestic market are in the ordinary course of trade and permit a proper
comparison. The European Union argues that "if in the ordinary course of trade" in the domestic
market, one of the two parts separated from the whole has no value, and is in fact waste, it is not
clear why one would allocate any costs to it at all.
276
7.157. In Mexico's opinion, Article 2.2.1.1 establishes a rebuttable ( juris tantum ) presumption
consisting in that, unless proven otherwise, it will be considered that the records of the exporter or
producer investigated reasonably reflect the costs of production and sale of the product under
investigation. Therefore, it is the investigating authority that bears the initial burden of proving
that the accounting records in question do not reasonably reflect the costs associated with the
production and sale of the product under consideration.
277
7.158. Saudi Arabia argues that the second condition, that the costs have to "reasonably reflect"
the costs "associated with" the production and sale of the product under consideration, does not
allow an authority to question the accuracy or "reasonableness" of the costs as such, but merely
concerns their association with the product under consideration as compared with other products
to which the costs may also be associated.
278 Saudi Arabia does agree that before rejecting the
cost allocation evidence historically utilized by respondents as not "reasonably reflecting" costs
associated with the production and sale of the particular product under consideration, the
investigating authority must provide a compelling explanation as to why that methodology is not
"reasonable". Saudi Arabia adds that a responde nt's allocation methodology cannot be rejected
simply because another, maybe equally reasonable methodology, would have been preferred by
the investigating authority. Furthermore, it should not be rejected because it leads to less costs
being allocated to a by-product or a waste product, even if that by-product or that waste product
is of great value in the country of importation.
7.159. Thailand is of the view that the burden of proof in demonstrating that the record does not
reasonably reflect the costs is initially with the investigating authority and the burden shifts to the
interested party at the time when this issue is raised by the investigating authority within the
context of the proceedings. This may occur following the questionnaire response as highlighted in
the deficiency letter, during the on-site-verification or in response to the preliminary determination
or essential facts.
279

273 China's response to Panel question No. 99.
274 European Union's third-party submission, para. 35.
275 European Union's third-party submission, paras. 36-37.
276 European Union's third-party statement, paras. 13 and 15.
277 Mexico's third-party response to Panel question No. 10.
278 Saudi Arabia's third-party submission, para. 13 (citing to Panel Reports, US – Softwood Lumber V,
para. 7.321; EC – Salmon (Norway), para. 7.483; Egypt – Steel Rebar, paras. 7.393 and 7.422). See also
Saudi Arabia's third-party response to Panel question No. 10.
279 Thailand's third-party response to Panel question No. 10.

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7.3.1.3.3 Evaluation by the Panel
7.3.1.3.3.1 Whether there is an obligation fo r an investigating authority to explain its
decision to decline to use a respondent's books and records
7.160. Article 2.2.1.1 states that "costs shall normally be calculated on the basis of records kept
by the exporter or producer under investigation…" The panel in US – Softwood Lumber V explained
that this imposes a positive obligation on an investigating authority to normally use the books and
records of the respondents if two conditions are met: (i) the books and records are consistent with
the generally accepted accounting principles (G AAP) of the exporting country, and (ii) they
reasonably reflect the costs associated with the production and sale of the product under
consideration.
280
7.161. In our view, the use of the term "normally" in Article 2.2.1.1 means that an investigating
authority is bound to explain why it departed from the norm and declined to use a respondent's
books and records. The Appellate Body observed in US – Clove Cigarettes that the ordinary
meaning of the term "normally" is defined as "under normal or ordinary conditions; as a rule".
According to the Appellate Body, "the qualification of an obligation with the adverb "normally" does
not, necessarily, alter the characterization of that obligation as constituting a "rule"… [r]ather, the
use of the term 'normally' ... indicates that the rule … admits of derogation under certain
circumstances."
281 As using the respondents' books and records is the rule and declining to do so is
a derogation from that rule, it is for the investigating authority to decide to do so and to justify its
decision on the record of the investigation and/or in the published determinations.
7.162. We recall that Article 17.6(i) of the Anti-D umping Agreement indicates that the role of the
Panel is to determine whether the authorities' establishment of the facts was proper and whether
their evaluation of those facts was unbiased and obje ctive. If an evaluation is not evident on the
record of the determination, it would be im possible for the Panel to complete its task.
282 This
understanding is bolstered by the Appellate Body's interpretation of the obligation in Article 11 of
the DSU, which also applies to disputes under the Anti-Dumping Agreement, that in conducting an
"objective assessment" of an investigating authority's determinations, a panel must review
whether competent authorities have provided a reasoned and adequate explanation of how the
evidence on the record supports their factual find ings and how the factual findings support their
overall determination
283, in particular whether that reasoning takes sufficient account of conflicting
evidence and responds to competing plausible explanations of that evidence.284
7.163. China argues that MOFCOM had no obligati on to explain its decision, because Article 2.2.1
only obligated MOFCOM to use the respondents' books and records if they demonstrated to
MOFCOM's satisfaction that they met the two criteria. China supports its view by pointing to the
use of the passive voice in Article 2.2.1.1. Accord ing to China, this means that the provision does
not impose a particular obligation on the investigating authority.
285 The Panel finds the issue of
who bears the burden before the investigating authority irrelevant to the matter at hand.
Irrespective of whoever bore the initial burden of proof, an investigating authority is not excused
from having to explain why it decided to deviate from the normal procedure outlined in
Article 2.2.1.1 – i.e. using the respondent's books and records. If that decision results from an
affirmative determination to reject the books or if it is because the respondent did not prove that

280 Panel Report, US – Softwood Lumber V, para. 7.237.
281 Appellate Body Report, US – Clove Cigarettes, para. 273.
282 We note that the United States also contends that MOFCOM had an obligation to explain its reasoning
for rejecting the respondents' books and records under the requirement in the second sentence of
Article 2.2.1.1 to "consider all available evidence" on the proper allocation of costs. As the Panel finds that
MOFCOM was required to explain its determination to reject the respondents' books and records under the first
sentence of Article 2.2.1.1 and under the obligation to provide a basis for an objective assessment of its
actions, we do not see the need to address the question of the relationship between the two sentences to
provide a positive resolution to the dispute.
283 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, para. 186; see also
Appellate Body Report, US – Lamb, para. 103.
284 See, e.g. Appellate Body Report, US – Tyres (China), para. 280.
285 China's response to Panel question No. 26; second written submission, paras. 73-76.

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its books satisfy the two criteria 286, those reasons must be set forth in the record of the
investigation and/or the published determinations, so as to allow for review of that decision.287
7.164. In sum, the Panel is of the view that al though Article 2.2.1.1 sets up a presumption that
the books and records of the respondent shall normally be used to calculate the cost of production
for constructing normal value, the investigating authority retains the right to decline to use such
books if it determines that they are either (i) inconsistent with GAAP or, (ii) do not reasonably
reflect the costs associated with the production and sale of the product under consideration.
However, when making such a determination to derogate from the norm, the investigating
authority must set forth its reasons for doing so.
7.3.1.3.3.2 Whether MOFCOM correctly determined that the respondents' books and
records did not "reasonably reflect the costs associated with production and sale of the
product under consideration"
7.165. Article 2.2.1.1 states that an investigating authority will calculate costs on the basis of the
producers books and records if those books and records (i) are consistent with the GAAP of the
exporting country, and (ii) reasonably reflect the costs associated with the production and sale of
the product under consideration. China's arguments before the Panel with respect to why MOFCOM
declined to use the respondents' books and reco rds have focused on the second criterion. The
United States, for its part emphasizes that in arguing that their reported costs were reasonable,
US respondents put evidence on the record that their costs were calculated in a manner that is
consistent with authoritative accounting texts, is the common form of allocating costs in the
industry, and is considered appropriate under international accounting standards. The
United States further asserts that the US respondents also offered evidence that Chinese
producers of broiler products use a value-based allocation methodology as well and that Chinese
accounting literature substantiated that the use of a value-based allocation methodology can be
reasonable.
288
7.166. We note the United States' argument that GAAP-consistency and reasonableness are like a
Venn diagram of overlapping circles, such that GAAP-consistent records could also reasonably
reflect a firm's costs. However, there will be places where the two do not overlap. The
two conditions in the first sentence of Article 2.2.1.1 are cumulative. 289 The very existence of the
second criterion – reasonable reflection of cost of production and sale – in Article 2.2.1.1 is an
acknowledgment that there is more to determining whether to use the books and records of the
exporters than whether the books are appropriate for accounting purposes. Therefore, the fact
that the respondents in the broiler products investigation maintained their books and records
consistently with US GAAP
290 would not, in and of itself require MOFCOM to use them under
Article 2.2.1.1.

286 In our view, an explanation of the investigating authority's reasoning would be even more important
in the latter situation. If investigating authorities could simply say they were unconvinced without being
required to provide reasons why, it could lead to the exception (declining to use the books and records)
becoming the norm.
287 We note that this review could be conducted not only by a WTO panel or the Appellate Body, but also
by a domestic court under Article 13 of the Anti-Dumping Agreement.
288 United States' second written submission, para. 51.
289 Panel Report, EC – Salmon (Norway), para. 7.483:
The first sentence of Article 2.2.1.1 establishes that the data sources to be privileged when
calculating an investigated party's cost of production shall "normally" be the records kept by that
party, provided that such records: (i) are consistent with GAAP of the exporting country; and
(ii) reasonably reflect the costs associated with the production and sale of the product under
consideration. When the records kept by an investigated party evidence these characteristics, an
investigating authority will "normally" be required to use them in the calculation of cost of
production. In our view, the fact that GAAP-consistent records, which reasonably reflect costs
"associated with the production and sale" of the like product, must "normally" be used to
calculate cost of production, implies that the test for determining whether a cost can be used in
the calculation of "cost of production" is whether it is "associated with the production and sale" of
the like product.
290 We note that in its second written submission China argued that MOFCOM never made a
determination that the US respondents' books and records were consistent with US GAAP. (China's second
written submission, para. 71). However, China has never presented any argumentation that the books and

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7.167. Both parties and the respondents in the investigation agree that in the case of joint
products, which arise at a split-off point, pre-split-off costs cannot be directly assigned on a
product-specific basis and must be allocated.
291 Of the two types of methodologies for doing so
that were discussed in this case – one based on relative sales value ("value-based allocation") 292
and one based on the weight of the products ("weight-based allocation"), the Panel is of the view
that neither method is in principle inherently unreasonable. The respondents in the broiler
products investigation sought the use of the allocations maintained in their normal books and
records, which were value-based. MOFCOM ad opted a weight-based allocation whereby the
recorded costs of the various products were aver aged according to weight to generate a common
cost of production for the various products. Before the Panel, China raised two main concerns with
respect to the reasonableness of the respondents' cost allocations, which it argues justify
MOFCOM's determination that the respondents' books and records did not reasonably reflect the
costs associated with the production and sale of the product under consideration.
7.168. First, China contends that the respondents were using incorrect values to determine the
proportion of pre-split off costs to allocate to each product. In particular, China argues that despite
having significant global sales, the respondents only used revenue from US sales in determining
the value based allocations. Given that MOFCOM had concluded that the volume of domestic sales
was too small to permit a proper comparison with export price, China maintains that using the
same data, which had already been considered to be inappropriate for the purpose of determining
normal value, to calculate cost of production would insert circularity into the determination.
293 With
respect to Tyson, China notes that it did not use the sales values it earned on paws and other
products in its allocations, but rather used reference prices from a commodity pricing service,
Urner Barry, which used one price for a basket of goods that included paws and other products
such as wing tips, gizzards, and contaminated meat.
7.169. Second, China argues that, even though pa ws had value in both the domestic and export
markets, the respondents treated them as by-products — allocating none of the pre-split off costs
to these products — rather than as one of the main joint products.
294
7.170. The United States contends that for some of the allocations, global sales values were
indeed used 295 and that costs are not unreasonable simply because they are low. 296 The

records were not GAAP-consistent and MOFCOM's silence on the issue would indicate that the matter that
concerned it was not that the books and records were inconsistent with US GAAP.
291 United States' first written submission, paras. 84, 98 and 100 (citing GAAP-Handbook of Policies and
Procedures, Joel G. Singer, Prentice Hall, 2010, 3.31 (quoted in Exhibit USA-26); Barron's Accounting
Handbook 103 (3rd ed. 2000) by J. Siegel & J. Shim (quoted in Exhibit USA-27); International Accounting
Standards No. 2 – Inventories (IASB Revised Dec. 2003), para. 14 (quoted in Exhibit USA-26 and Exhibit
USA-29); and Statement 6 of Chapter 4, "Inventory Pricing," of Accounting Research Bulletin No. 43. Financial
Accounting Standards Board and Accounting Standards Codification Code 905 360 30 p. 5, Financial Accounting
Standards Board (quoted in Exhibit USA-29).
292 Our understanding of the methodology is that companies producing joint or co-products which have
a single production cost up to a certain point allocate that cost across the various resulting products according
to the proportion of revenue those products will earn in the market. For example if a single chicken was divided
up and the breast sold for $5, the thigh for $2, the wings for $2, and the paws for $1 then 50% of the
pre-split-off production costs would be allocated to the breast, 20% to thighs and wings respectively and 10%
to paws. However, if there were other products that were by-products, in that they were inevitably produced
as part of making a chicken, but were not part of the commercial business of the firm – such as blood,
feathers, gizzards, etc… then these wo uld have none of the pre-split-off costs assigned to them and would only
have specific post-split-off costs recorded (such as processing, disposal, or packaging).
293 China's first written submission, paras. 73-76.
294 We note that Keystone and Pilgrim's Pride affirmatively expressed that they treat paws as
by-products. (Keystone Anti-Dumping Questionnaire Response, Exhibit USA-34, pp. 85-97; see also Keystone
Supplemental Anti-Dumping Questionnaire Response, Exhibit USA-35, pp. 20-21; Pilgrim's Pride Anti-Dumping
Questionnaire Response, Exhibit USA-32, p. 55; see also Pilgrim's Pride Response to the First Supplemental
Anti-Dumping Questionnaire, Exhibit USA-28). China contends that Tyson did not use actual joint-product
accounting for paws, but rather, its allocation reflected a by-product approach. (See China's second written
submission, para. 69; response to Panel question No. 94(d); comments on United States' response to Panel
question No. 94).
295 United States' response to Panel question No. 29. The United States acknowledged that it received
this information directly from the respondents in an effort to answer the Panel's question. The United States
contends that the information was not on the record of the investigation, because MOFCOM never asked.
(United States' response to Panel question No. 94(b)).
296 United States' response to Panel question No. 32(b).

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United States also argues that none of the concerns China now espouses were discussed on the
record of the investigation.297
7.171. During the investigation MOFCOM did ask a series of questions about the cost accounting
methods of the respondents over several questionnaires, which indicate a general concern with
understanding the cost allocation methods of the respondents. However, MOFCOM's analysis of the
answers is not evident in the determination or on the record. With respect to MOFCOM's
determination for both Tyson and Keystone, the Preliminary Anti-Dumping Determination simply
states that their costs have "not reasonably reflected the production cost related to the Subject
Products".
298 In the Final Anti-Dumping Determinatio n, MOFCOM acknowledges that Tyson and
Keystone submitted comments with respect to this decision, but concludes that they did not
"provide sufficient reason to prove the reas onableness of different parts of the subject
merchandise having different production cost."
299 In both the Preliminary and Final Determinations
MOFCOM makes a statement of its conclusion without providing the supporting reasoning.
Therefore, even though the arguments China makes before us could serve as a basis for
determining that Tyson and Keystone's books and records do not reasonably reflect their costs of
production for paws, we cannot conclude – based on the record of the investigation – that the
concerns expressed in China's arguments before the Panel were indeed the reasons why MOFCOM
departed from the norm of using a respondent's books and records. Therefore, with respect to
MOFCOM's determination to decline to use Tyson an d Keystone's books and records, we find that
China has acted inconsistently with the first sentence of Article 2.2.1.1.
7.172. For the reasons mentioned in the previous paragraph, the Panel takes no view on the
reasonableness of the cost allocation method used by the US respondents and on China's concerns
in that respect. Nonetheless, the Panel notes that the types of concerns that China has expressed
are concerns that an investigating authority may assess under 2.2.1.1 to determine whether the
records kept by the exporter or producer reasonably reflect the costs associated with the
production and sale of the product under consideration.
7.173. With respect to Pilgrim's Pride, the question before the Panel is the same, i.e. whether
MOFCOM properly declined to use Pilgrim's Pride's books and records under the first sentence of
Article 2.2.1.1. However, the record with respect to MOFCOM's treatment of the issue in respect of
Pilgrim's Pride differs markedly from the record with respect to Keystone and Tyson. Rather than a
one sentence declaration that the costs were " unreasonable" without any further explanation,
MOFCOM instead concluded that Pilgrim's Pride's data was incomplete and that efforts to correct it
were untimely. In this instance, MOFCOM's basis for rejecting the costs as recorded in the
respondent's books and records is not the unreasonableness of the allocation, but rather a specific
determination that the data as originally submitted was irreconcilable and that the information to
correct the errors was untimely. MOFCOM explains the numerous errors in Pilgrim's Pride's
responses in its Preliminary Anti-Dumping Determination and the Preliminary Anti-Dumping
Disclosure. Indeed, Pilgrim's Pride's Comments on the Preliminary Anti-Dumping Disclosure
acknowledge and confirm that the data was incorre ct as Pilgrim's Pride goes into great detail
describing how the errors arose.
300 In the Final Anti-Dumping Disclosure to Pilgrim's Pride,
MOFCOM informs it that the replacement information was untimely and would not be accepted.
7.174. As noted above, MOFCOM's reasons for rejecting Pilgrim's Pride's books and records are
noted in the Preliminary and Final Determinations and in the accompanying Disclosure documents.
C h i n a d i d c o n f i r m , i n r e s p o n s e t o a q u e s t i o n f r o m t h e P a n e l , t h a t M O F C O M ' s r e f e r e n c e s i n t h e
Determinations and Disclosures to rejecting Pilgrim's Pride's data as untimely meant that MOFCOM
had applied facts available under Article 6.8 of the Anti-Dumping Agreement. The United States
responded that absent evidence that MOFCOM follo wed proper procedures to apply facts available
under Article 6.8 of the Anti-Dumping Agreement, the only conclusion left is that MOFCOM's failure
to examine Pilgrim's Pride's evidence resulted in a breach of Article 2.2.1.1.
301 The question before

297 United States' response to Panel question No. 32; second written submission, paras. 35-42; and
opening statement at the second meeting of the Panel, paras. 23-27.
298 Preliminary Anti-Dumping Determination, Exhibit USA-2, pp. 17-18 (Tyson) and pp. 19-20
(Keystone). Similar language is contained in the Preliminary Anti-Dumping Disclosures to both Tyson and
Keystone, Exhibits USA-8 and USA-10.
299 Final Anti-Dumping Determination, Exhibit USA-4. Similar language is contained in the Final
Anti-Dumping Disclosures to both Tyson and Keystone, Exhibits USA-12 and USA-14.
300 Pilgrim's Pride Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-27.
301 United States' comments on China's response to Panel question No. 99.

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the Panel is not whether MOFCOM complied with Article 6.8, but rather whether it acted
consistently with Article 2.2.1.1, in particular whether it provided an explanation of why it
derogated from the general norm in Article 2.2.1.1. The basis for MOFCOM's rejection is set forth
in its Determinations and we consider that with respect to MOFCOM's determination to decline to
use Pilgrim's Pride's books and records, MOFCOM has explained why it found that Pilgrim's Pride's
books and records did not reasonably reflect the costs associated with production and sale of the
product under consideration. Therefore, we find that the United States has not established that
China acted inconsistently with the first sentence of Article 2.2.1.1 with respect to Pilgrim's Pride.
7.3.1.3.3.3 Conclusion
7.175. The Panel has determined that MOFCOM had an obligation, under the first sentence of
Article 2.2.1.1, to explain any decision it made to depart from the norm established in the
provision to utilize a respondent's books and records if they were GAAP-consistent and reasonably
reflected the costs associated with the production and sale of the product under consideration. In
the broiler products investigation, although China has expressed serious concerns about the
reasonableness of Tyson and Keystone's books and records to the Panel, these concerns are not
reflected on the record of the investigation. Therefore, the Panel finds that China acted
inconsistently with the first sentence of Articl e 2.2.1.1 when MOFCOM declined to use Tyson and
Keystone's books and records in calculating the co st of production for determining normal value.
With respect to Pilgrim's Pride, the Panel finds that MOFCOM did explain its reasons for departing
from the norm and declining to use Pilgrim's Prid e books and records. Therefore, with respect to
Pilgrim's Pride, the Panel finds that the United States has not established that China acted
inconsistently with the first sentence of Article 2.2.1.1.
7.3.1.4 Whether MOFCOM complied with the obligations in the second sentence of
Article 2.2.1.1 when it devised and applied its own allocation methodology
7.3.1.4.1 Main arguments of the parties
7.3.1.4.1.1 United States
7.176. The United States contends that, if the investigating authority decides to reject the
reported costs, and use an alternative allocation, it must affirmatively demonstrate with relevant
evidence that the allocation it is implementing is proper.302 Furthermore, the United States cites to
the panel report in EC – Salmon (Norway) for the premise "that any allocation of cost performed
for the purpose of establishing cost of production must not result in the inclusion of costs not
'associated with the production and sale' of the like product during the period of investigation."303
7.177. The United States argues that the allocation MOFCOM used was itself inconsistent with
Article 2.2.1.1 as it did not reasonably reflect the cost of production. In particular, MOFCOM
attributed costs based on the weight of the produc ts, not the value of the products. Therefore, the
cost of production of products as diverse as breast meat, leg quarters, and chicken paws was
determined on a per pound basis. The United States disputes China's claim that the weight-based
methodology is neutral, instead arguing that it is tailored to find dumping in these particular
circumstances.
304 The United States also notes that Keystone provided two alternative cost
allocation methodologies which MOFCOM did not address. In particular, Keystone used the same
data in its original questionnaire to do a traditional relative sales value methodology where it
treated paws as one of the joint products rather than as a by-product.
305
7.178. The United States argues that China also acted inconsistently with Article 2.2.1.1 because
MOFCOM allocated costs for the production of all products only to those products subject to the
investigation.306 With respect to Tyson, the United States argues that there are several products
derived from the chicken (such as blood, feathers , and organs) that generate revenue and should

302 United States' first written submission, para. 94.
303 United States' first written submission, footnote 140 para. 113 (citing Panel Report, EC – Salmon
(Norway), para. 7.491).
304 United States' opening statement at the second meeting of the Panel, para. 38; response to Panel
question No. 93.
305 United States' second written submission, para. 64.
306 United States' first written submission, footnote 140.

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absorb a proportionate share of production cost s, but were not assigned costs under MOFCOM's
calculations. According to the United States, MOFCOM's methodology unfairly assigns all of the
costs incurred in producing the chickens to subject products (e.g. breasts, wings, and paws) which
are only [***]% of the products derived from the chickens. 307 The United States points to
Exhibit CHN-64, where China provides the worksheet for its allocation of costs by weight, which
does not include the additional chicken "products" Tyson referred to. In other words, MOFCOM
excluded the costs and values of these products , even though pursuant to MOFCOM's theory, a
pound of chicken heads or a pound of chicken blood should cost the same as a pound of paws or
breast meat.308 The United States argues that by assuming all costs were borne by the subject
merchandise, MOFCOM essentially allocated additional costs to that merchandise.309
7.179. According to the United States, MOFCOM did not address these arguments or similar ones
made by the other respondents and the United States Government in its determination. The
United States relies on the reasoning of the panel in EC – Salmon (Norway) to support its
contention that this lack of a deliberative process is inconsistent with Article 2.2.1.1. 310 In
particular, the panel in EC – Salmon (Norway) , concluded that "it was incumbent on the
investigating authority to at the very minimum explain why it was appropriate to allocate the
relevant [costs]" in the manner the investigating authority required, and that "[a]bsent any such
explanation, the approach undertaken by the investigating authority fails the test that is
established under Article 2.2.1.1."
311
7.3.1.4.1.2 China
7.180. China recognizes that Article 2.2.1.1 impo ses an obligation to "consider" all evidence for
the proper allocation of costs. According to China, the issue is not what the authorities "should" do
in such circumstances, but rather what limits, if an y, exist in the text of Article 2.2.1.1 concerning
what the authorities may decide to do. China argues that Article 2.2.1.1 contains only one
affirmative obligation: "to consider all available evidence on the proper allocation of costs." Thus,
according to China, if the foreign respondents' costs have been rejected as not "reasonably
reflecting" the actual costs of production, the authority may re-allocate costs provided it has
"considered" the evidence about cost allocations. China notes that the text of Article 2.2.1.1 does
not stipulate any specific allocation method should the authority be required to re-allocate costs.
312
China posits that through this language, the Anti-Dumping Agreement recognises that in such
situations the authorities may well have time constraints and limited information from the foreign
respondents.
313 In China's view, the obligation to "consider" does not require an explanation of the
investigating authority's reasoning.314
7.181. China submits that the weight-based cost allocation MOFCOM applied was a reasonable
alternative cost allocation methodology. China argues that this methodology was neutral and not
influenced by consumer perceptions in either Ch ina or the United States. Further, China argues
that a weight-based allocation also reflected the fact that much of the costs were incurred
uniformly for the whole bird prior to it being cut into pieces, and that weight-based allocation was
listed as one of the reasonable alternatives in the reference materials cited by respondents (in
particular Keystone) in the investigation.315 According to China, MOFCOM's weight-based allocation
avoided the serious distortions of the value-based methodology and was grounded in both the
realities of raising live birds as well as accepted accounting practice as reflected in accounting
texts presented by the respondents. As betw een these two approaches, MOFCOM’s approach
reflected a reasonable and "proper" allocation of costs while respondents’ methodologies did
not.316

307 United States' first written submission, para. 113 (citing Tyson's Comments on the Final
Anti-Dumping Disclosure, Exhibit USA-40, pp. 5-6).
308 Tyson Clarksville Plant Cost Flowchart, Exhibit USA-79.
309 United States' comments on China's response to Panel question No. 91.
310 United States' response to Panel question No. 93.
311 United States' first written submission, para. 116 (citing Panel Report, EC – Salmon (Norway),
para. 7.509).
312 China's first written submission, paras. 137-138.
313 China's response to Panel question No. 32.
314 China's response to Panel question No. 30; second written submission, paras. 91-92 and 94-95.
315 China's first written submission, paras. 129-136.
316 China's second written submission, para. 87.

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7.182. China argues that in the investigations at issue, the circumstances surrounding the
respondents' reported costs were self-evident, as was the need to adopt a neutral basis for
assigning costs given the extreme differences in the market concerned. China maintains that
MOFCOM considered all the evidence concerning costs allocation to reach a reasonable allocation
methodology.317 With respect to the two alternative methodologies Keystone presented to
MOFCOM, China argues that one alternative was to allocate meat costs to all products on the basis
of relative sales value but that Keystone did not reveal the precise basis or method upon which it
determined the relative sales value and that its processing costs remained ill-defined.
318 According
to China, the other alternative was to allocate meat costs to total output per tonne, which was
identical to the method of MOFCOM. China contends that, since MOFCOM employed a weight-based
approach, though not identical to that proposed by the respondents, it is difficult to argue that
MOFCOM did not consider or "address" this alternative. Indeed, in the Final Anti-Dumping
Disclosure MOFCOM specifically noted that it reviewed the comments submitted by the
respondents on the cost-allocation issue, which would have included all alternatives they
presented, and responded to those arguments.
319 China believes that this renders the
United States' arguments that MOFCOM did not "address" the alternatives moot.320
7.183. China notes that Tyson also proposed an alternative methodology which was a
weight-based allocation. 321 China interprets this proposal as Tyson agreeing with MOFCOM that
weight-based allocation could be used to allocate the meat cost. 322 However, China claims that
MOFCOM found Tyson's processing costs to be unreliable.323
7.184. In response to a question from the Panel, China argues that the reasonableness of
MOFCOM's weight-based methodology is demons trated in light of the following: (i) the
respondents' meat costs were allocated based on arbitrary and clearly distortive valuations that
did not reflect the price to be paid for the act of producing, consistent with the plain meaning of
the cost of production as used in Article 2 of the Anti-Dumping Agreement; (ii) the respondents
processing costs were not reasonable or not subs tantiated; (iii) weight-based allocations were
cited as among those reasonable methods to be employed in rate regulation proceedings in the
accounting texts submitted by the respondents
324; (iv) the respondents also proposed
weight-based allocations in their comments to MOFCOM 325; and (v) a weight-based allocation
reflected a neutral approach between the respondents' distorted value allocations reflecting
preferences or perceptions in one market and th e value placed on those same products in the
Chinese market.
326
7.185. China considers that the United States' argument that MOFCOM allocated costs of non-
subject merchandise to subject merchandise is mistaken. China explains that MOFCOM’s
methodology was to take total reported costs for the production of subject merchandise and
allocate those costs over total reported weight of subject merchandise production . Because there
was no introduction of non-subject costs or non-subject weight, there could be no over-allocation
of costs. This methodology was implemented using the data reported in Table 6-3 provided by the
various respondents where such data was reported. Thus, there could be no over-allocation of
costs to subject merchandise.
327

317 China's first written submission, paras. 137-138.
318 China's response to Panel question No. 97.
319 China's comments on the United States' response to Panel question No. 97.
320 China's comments on the United States' response to Panel question No. 97.
321 Tyson's Further Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-26, p. 12.
In particular Tyson argued that MOFCOM should use [***].
322 China's response to Panel question No. 97(a).
323 China's response to Panel question No. 97(a).
324 China's first written submission, paras. 134-136.
325 Keystone's Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-30, pp. 10-11;
and Tyson's Further Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-26, p. 12.
326 China's response to Panel question No. 94(d).
327 China's response to Panel question No. 91; see also China's second written submission, para. 89;
comments on the United States' response to Panel question No. 98. China refers the Panel to Exhibit CHN-64 -
a summary table that condenses Exhibit S2-5-Revised – and argues that it demonstrates that the
weight-average unit price calculated by MOFCOM was derived from reported costs and quantities of subject
merchandise and that the calculated unit cost matches the unit cost disclosed by MOFCOM in its Final
Anti-Dumping Disclosure.

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7.3.1.4.2 Evaluation by the Panel
7.186. The issue before the Panel is whether MOFCOM, in applying its own cost allocation
methodology, complied with the requirements in the second sentence of Article 2.2.1.1 to consider
all available evidence to arrive at the proper allocation of costs. In particular, the Panel is faced
with the questions of: (i) whether MOFCOM took into consideration "compelling evidence" with
respect to the reasonableness of its own methodol ogy and available alternatives; and (ii) whether
MOFCOM improperly included costs not associated with the production and sale of the product
under consideration in the costs it allocated to that product.
7.187. The Appellate Body, in US – Softwood Lumber V noted that the ordinary meaning of the
term "consider" is, inter alia, to "look at attentively", "reflect on", or to "weigh the merits of". 328
With respect to the second sentence of Article 2.2.1.1, the Appellate Body read the term
"consider" to mean that:
an investigating authority is required, when addressing the question of proper
allocation of costs for a producer or exporter, to "reflect on" and to "weigh the merits
of" "all available evidence on the proper allo cation of costs". As we stated above, the
requirement to "consider" evidence would not be satisfied by simply "receiving
evidence" or merely "tak[ing] notice of evidence".
329
7.188. The Appellate Body found further support for its reading of the word "consider" in the
second sentence of Article 2.2.1.1 from the fact that the provision requires the consideration of "all
available evidence on the proper allocation of costs". (emphasis added) In the Appellate Body's
view, the word "proper" suggests some degree of deliberation on the part of the investigating
authority in "consider[ing] all available evidence"; so as to ensure that there is a proper allocation
of costs. The Appellate Body also stated that the nature of this deliberative process will depend on
the facts of a particular case before the investigating authority.330
7.189. Particularly pertinent to the case before this Panel, the Appellate Body also dealt with the
issue of what the obligation in the second sentence of Article 2.2.1.1 requires when an
investigating authority is presented with more than one potential allocation methodology. While
recognizing that the precise nature of the obligation to "consider all available evidence" will vary
case-by-case, the Appellate Body did conclude that in certain instances:
such as where there is compelling evidence available to the investigating authority
that more than one allocation methodology potentially may be appropriate to ensure
that there is a proper allocation of costs—the investigating authority may be required
to "reflect on" and "weigh the merits of" evidence that relates to such alternative
allocation methodologies, in order to satisfy the requirement to "consider all available
evidence".
331
7.190. Therefore, although an investigating authority will not always have to reflect on and weigh
the merits of evidence relating to alternative allocation methodologies, in some instances the
obligation in Article 2.2.1.1 will require such consideration. Furthermore, the panel in EC – Salmon
(Norway), concluded that "it was incumbent on the investigating authority to at the very minimum
explain why it was appropriate to allocate the relevant [costs]" in the manner the investigating
authority did so, and that "[a]bsent any such explanation, the approach undertaken by the
investigating authority fails the test that is established under Article 2.2.1.1."
332
7.191. Furthermore, in the recent China – GOES report, the Appellate Body stated – albeit with
respect to another provision of the Anti-Dumping Agreement – that "an investigating authority's
consideration … must be reflected in relevant documentation, such as an authority's final

328 Shorter Oxford English Dictionary, 5th ed., W.R. Trumble, A. Stevenson (eds.) (Oxford University
Press, 2002), Vol. 1, p. 493.
329 Appellate Body Report, US – Softwood Lumber V, para. 133.
330 Appellate Body Report, US – Softwood Lumber V, paras. 133-134.
331 Appellate Body Report, US – Softwood Lumber V, para. 138.
332 Panel Report, EC – Salmon (Norway), para. 7.509.

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determination, so as to allow an interested party to verify whether the authority indeed considered
such factors."333
7.192. Pursuant to the analytical framework set forth by the Appellate Body, in determining
whether MOFCOM satisfied the obligation in the second sentence of Article 2.2.1.1, the Panel must
address three questions: (i) whether MOFCOM did more than simply receive evidence and take
note of evidence; (ii) whether, in this particular instance, MOFCOM was required to reflect on and
weigh the merits of the various allocation methodol ogies; and (iii) if so whether there is evidence
of its consideration reflected in relevant documentation. The arguments of the parties also invite
the Panel to reach a further conclusion – whether the methodology itself was indeed "proper". In
that respect, we recall the reasoning of the panel in EC – Salmon (Norway), "that any allocation of
cost performed for the purpose of establishing cost of production must not result in the inclusion of
costs not "associated with the production and sale" of the like product during the period of
investigation."
334
7.193. We recall the reasoning of the Appellate Body in US – Softwood Lumber V that in instances
where there is "compelling evidence" available to the investigating authority that more than one
allocation methodology potentially may be appropriate to ensure that there is a proper allocation
of costs, the investigating authority may be required to "reflect on" and "weigh the merits of"
evidence that relates to such alternative allo cation methodologies, in order to satisfy the
requirement to "consider all available evidence".
335 Given the explanations and alternative cost
methodologies proposed to MOFCOM by the resp ondents, there was "compelling evidence" that
more than one allocation methodology potentiall y may be appropriate. Therefore, MOFCOM was
required to reflect on and weigh the merits of the various allocation methodologies.
7.194. The Panel must determine whether the required reflection and weighing is evidenced in
relevant documentation from the investigation. China has not provided any citations to the record
of the investigation where MOFCOM deliberated or explained the weight-based methodology it
chose to apply or why it chose that methodol ogy over the alternatives proposed by the
respondents. All of the evidence of consideration that China points to in its submissions relates to
MOFCOM's consideration of the original books and records of the respondents, rather than to the
appropriateness of MOFCOM's allocations or the alternative methodologies that Keystone and
Tyson proposed.
336
7.195. The consideration of the appropriate cost allocation methodology necessarily includes the
exercise of considering the methodologies used in the respondents' books and records. As noted
above, the Panel finds that during the investigation MOFCOM not only received and took note of
the evidence presented, but also asked a series of questions about the cost accounting methods of
the respondents over several questionnaires, which indicates a general concern with understanding
the cost allocation methods of the respondents. Ho wever, we see no evidence on the record of the
investigation that the merits of the alternative allocation methodologies put forward by the
respondents after the Preliminary Anti-Dumping Determination were weighed or reflected upon.
Neither did MOFCOM explain the reasons why its own methodology led to a proper allocation of
costs. Therefore, the Panel finds that China acted inconsistently with the obligation in the second
sentence of Article 2.2.1.1 to consider all available evidence on the proper allocation of costs.
7.196. In terms of whether MOFCOM's weight-based methodology was a proper allocation of
costs, the issue is not whether weight-based methodologies are appropriate for joint products in
the abstract, but whether the particular application of the weight-based methodology that
MOFCOM devised is consistent with Article 2.2. 1.1. MOFCOM's straight allocation of total
processing costs to all products
337 necessarily means that it included costs solely associated with
processing certain products in its calculation of costs to all subject broiler products. 338 This is not a

333Appellate Body Report, China – GOES, para. 131 (citing e.g. Panel Reports, Thailand – H-Beams,
334 Panel Report, EC – Salmon (Norway), para. 7.491.
335 Appellate Body Report, US – Softwood Lumber V, para. 138, cited above, para. 7.189.
336 China's response to Panel question No. 30; second written submission, para. 93.
337 China's response to Panel question No. 34(d).
338 We note that as an example of the potential impact of such an allocation, the United States
mentioned that generally processing breast meat involves procedures such as skinning, deboning and
deveining which are more intensive and costly than for the production of other chicken parts.

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reasonable reflection of the costs associated with production and sale of the product under
consideration. Therefore, we conclude that MOFC OM impermissibly included costs not associated
with the production and sale of the product under consideration in its allocations in contravention
of Article 2.2.1.1.
7.197. With respect to the United States' arguments that, for Tyson, MOFCOM allocated
production costs of non-subject merchandise to subject merchandise and thus inflated the normal
value, China argues that MOFCOM’s conclusions are correct because it used Tyson's own data from
Table 6-3. China provides the Panel with Ex hibit CHN-64 – a summary table that condenses
Tyson's model-specific quantities and costs – and contends that it demonstrates that the
weight-average unit price calculated by MOFCOM was derived only from subject merchandise and
thus it was appropriate for MOFCOM to assign that unit price to subject products.
339
Exhibit CHN-64 lists various products with a per product production quantity in pounds and a
corresponding per product cost of production in USD. The sum of the product-specific costs of
production is then divided by the sum of the product-specific production quantities to arrive at the
per pound cost of production. The "non-subject"340 products which Tyson argues are also produced
from the live chicken are not listed in this breakdown. On its face, Exhibit CHN-64 does not
indicate that the per pound costs assigned to each product were derived from total cost minus the
costs associated with the production of the products derived from a chicken that are not in the list.
The United States has made a prima facie case, not rebutted by China, that MOFCOM improperly
allocated costs from certain products derived from a chicken to other products derived from a
chicken (e.g. those in the summary table in Exhi bit CHN-64) Therefore, with respect to this
specific aspect of the allocation of Tyson's costs, we find that China has acted inconsistently with
the second sentence of Article 2.2.1.1.
7.3.1.4.3 Conclusion
7.198. In sum, the Panel concludes that China acted inconsistently with the second sentence of
Article 2.2.1.1 because (i) there was insufficient evidence of its consideration of the alternative
allocation methodologies presented by the respondent s, (ii) it improperly allocated all processing
costs to all products, and (iii) it allocated Tyson's costs to produce non-exported products to the
normal value of the products for which MOFCOM was calculating a dumping margin.
7.3.2 Whether MOFCOM made a fair compari son between normal value and export price
as required by Article 2.4 of the Anti-Dumpi ng Agreement when it adjusted Keystone's
export price to account for freezer expenses
7.3.2.1 Introduction
7.199. The United States claims that MOFCOM acted inconsistently with the "fair comparison"
requirement under Article 2.4 of the Anti-Dumping Agreement when it deducted freezer storage
expenses incurred by Keystone from its export price.
341 The United States argues that the
adjustment was unwarranted or that even if it was warranted, it produced an imbalance between
the normal value and the export price. The United States explains in this regard that MOFCOM
constructed Keystone's normal value on the basis of the cost of production reported by the
company, which included freezer storage expenses; as a consequence, the adjustment meant that
MOFCOM compared a normal value which included freezer storage expenses to an export price
which included no such expenses, inconsistently with Article 2.
342
7.200. China argues that the United States' request for consultations failed to include a claim
under Article 2.4 with respect to MOFCOM's adjustment to Keystone's export price concerning
freezer storage expenses. As a result, China argues, the United States could not include such a

339 The Panel notes that with the exception of a few pages of excerpts in Exhibit CHN-46, China did not
provide the actual Table 6-3 to the Panel.
340 We note that the United States refers to these as "non-subject" products even though by-products of
broiler products are included in the scope of the investigation. Nevertheless, the Panel finds that this
misunderstanding of the scope of the investigation does not vitiate the fact that the United States has made a
claim that MOFCOM improperly allocated the costs of those products to other subject products produced by
Tyson.
341 United States' first written submission, paras. 3, 118, 135-138.
342 United States' first written submission, paras. 135-138.

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claim in its panel request, the claim falls outside the Panel's terms of reference and the Panel
should refrain from making any rulings and recommendations with respect to it.343
7.201. China also disputes the United States' claim on the merits. China submits that MOFCOM's
adjustment was consistent with the requirement to perform a fair comparison; prior to the
adjustment, there existed an imbalance between the normal value and the export price. China
explains that Keystone had allocated its freezer ex penses over all sales even though all its exports
to China were of frozen broiler products whereas only a very small fraction of its domestic sales
w e r e o f f r o z e n p r o d u c t s . C h i n a a l s o s u b m i t s t h a t w h i l e M O F C O M r e c o g n i z e d t h a t K e y s t o n e h a d
allocated some freezer costs to normal value the issue was discovered at a late stage of the
anti-dumping proceedings and was a consequence of Keystone's failure to provide clear and
complete information concerning the fees during the investigation.
344
7.3.2.2 Relevant provisions
7.202. Article 2.4 of the Anti-Dumping Agreement reads in relevant part:
A fair comparison shall be made between th e export price and the normal value. This
comparison shall be made at the same level of trade, normally at the ex-factory level,
and in respect of sales made at as nearly as possible the same time. Due allowance
shall be made in each case, on its merits, for differences which affect price
comparability, including differences in conditions and terms of sale, taxation, levels of
trade, quantities, physical characteristics, and any other differences which are also
demonstrated to affect price comparability.
7.203. Article 4 of the DSU, which sets forth requirements applicable to consultations requests,
provides in relevant part, that:
4.4 Any request for consultations shall be submitted in writing and shall give the
reasons for the request, including identification of the measures at issue and an
indication of the legal basis for the complaint. …
4.7. If the consultations fail to settle a disp ute within 60 days after the date of receipt
of the request for consultations, the complaining party may request the establishment
of a panel. The complaining party may request a panel during the 60-day period if the
consulting parties jointly consider that consultations have failed to settle the
dispute."345 (emphasis added)
7.204. Article 6.2 of the DSU, the provision gove rning requests for the establishment of a panel,
provides in relevant part that:

343 China's first written submission, para. 139; opening statement at the first meeting of the Panel,
para. 19; second written submission para. 105. We note that China has not formulated its objection in the form
of a request for preliminary ruling.
344 China's first written submission, paras. 140-141 and 159-177; opening statement at the first
meeting of the Panel, paras. 21-22; second written submission, paras. 106-115.
345 Article 17 of the Anti-Dumping Agreement also contains provisions regarding consultations in
disputes under that Agreement, providing in relevant part:
17.1 Except as otherwise provided herein, the Dispute Settlement Understanding is applicable to
consultations and the settlement of disputes under this Agreement. ...
17.3 If any Member considers that any benefit accruing to it, directly or indirectly, under this
Agreement is being nullified or impaired, or that the achievement of any objective is being
impeded, by another Member or Members, it may, with a view to reaching a mutually
satisfactory resolution of the matter, request in writing consultations with the Member or
Members in question. Each Member shall afford sympathetic consideration to any request from
another Member for consultation.
17.4 If the Member that requested consultations considers that the consultations pursuant to
paragraph 3 have failed to achieve a mutually agreed solution, and if final action has been taken
by the administering authorities of the importing Member to levy definitive anti-dumping duties
or to accept price undertakings, it may refer the matter to the Dispute Settlement Body ('DSB').
(emphasis added)

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The request for the establishment of a panel shall be made in writing. It shall indicate
whether consultations were held, identify the specific measures at issue and provide a
brief summary of the legal basis of the complaint sufficient to present the problem
clearly… (emphasis added)
7.205. Article 7.1 of the DSU further establishes:
Panels shall have the following terms of reference unless the parties to the dispute
agree otherwise within 20 days from the establishment of the panel:
"To examine, in the light of the relevant provisions in (name of the covered
agreement(s) cited by the parties to the dispute), the matter referred to the DSB by
(name of party) in document ... and to make such findings as will assist the DSB in
making the recommendations or in giving the rulings provided for in that/those
agreement(s)."
7.3.2.3 Factual background
7.206. As noted above, this claim relates to an adjustment MOFCOM made to Keystone's export
price
346 concerning certain freezer storage expenses Keystone incurred during the POI. Keystone
incurred the freezer storage expenses in re lation to the production or sale of frozen broiler
products sold on the domestic, Chinese and other export markets. The facts before the Panel
indicate that while all exports to China were of frozen products, most of Keystone's sales on the
domestic US market were of fresh, i.e. unfrozen, products.347
7.207. In its questionnaire responses, Keystone reported the freezer storage expenses [***] or
that these costs were only incurred in respect of certain sales or products. Keystone allocated the
costs equally to all sales, which meant that the vast majority of the freezer storage expenses were
allocated to domestic sales, even though most of those sales were not frozen.348
7.208. As noted above, the Preliminary Anti-Dumping Determination and the Preliminary
Anti-Dumping Disclosure for Keystone state that MOFCOM constructed the normal value for
Keystone on the basis of the company's costs of production, a reasonable amount for expenses,
and a 5% profit. They also indicate that MOFCOM made various adjustments to the export price
that had been claimed by Keystone. The adjustment with respect to freezer storage expenses is
not mentioned.
349
7.209. In the Final Anti-Dumping Disclosure for Keystone, MOFCOM indicates that it maintains its
decision to construct the cost of production for Keystone. 350 In addition, MOFCOM indicates, under
the section discussing adjustments to the export price, that "[d]uring verification, the authority
found that your company did not report freezer storage expenses. The authority added such
adjustment according to data collected during verification."
351 MOFCOM explains that it is
allocating to Keystone's sales of the subject product to China an amount corresponding to the
proportion (on a weight basis) of Keystone's sales of frozen products that were to the Chinese
market.
352 Thus, we understand that MOFCOM applied an adjustment to Keystone's export price by

346 In para. 3 of its first written submission, the United States submits that it cannot ascertain
MOFCOM's treatment of the freezer expenses because MOFOM did not provide the dumping calculations for
US respondents. In the remainder of its submissions to the Panel, however, the United States appears to
accept that MOFCOM did in fact make the adjustment which is discussed in MOFCOM's Final Anti-Dumping
Disclosure and Final Anti-Dumping Determination. Our analysis proceeds on this basis.
347 China's response to Panel question No. 1; United States' response to Panel question No. 40.
348 Keystone's Form 6-7, Exhibit USA-57; and Keystone's Form 6-5, Exhibit USA-55. In its response to
Panel question No. 43, the United States explains that the allocation corresponds to the proportion of total
sales to the various markets during the POI.
349 Preliminary Anti-Dumping Determination, Exhibit USA-2, pp. 19-20; Keystone Preliminary
Anti-Dumping Disclosure, Exhibit USA-10.
350 Final Anti-Dumping Disclosure to Keystone, Exhibit USA-14, p. 3.
351 Final Anti-Dumping Disclosure to Keystone, Exhibit USA-14, p. 4; see also Final Anti-Dumping
Determination, Exhibit USA-4, p. 33; China's second written submission, para. 111.
352 MOFCOM then further allocates these costs among the four product types exported by Keystone to
China. (Final Anti-Dumping Disclosure to Keystone, Exhibit USA-14, p. 4).

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which it deducted from the actual export price an amount corresponding to the freezer storage
fees that would have been incurred in relation to exports of the subject product to China.
7.210. In its Comments on MOFCOM's Final Anti-Dumping Disclosure, Keystone objected to the
adjustment. Keystone argued, inter alia, that MOFCOM should not have deducted the freezer fees
from the export price as the fees were already included in the costs used by MOFCOM to construct
its normal value; thus the "deduction resulted in double-counting of the freezer storage fees".353
7.211. The Final Anti-Dumping Determination explains that MOFCOM maintains the adjustment to
the export price announced in the Final Anti-Dumping Disclosure, indicating that: "[d]uring the
on-site verification, the Investigating Authority found the company did not report the expense for
cold storage, so the Investigating Authority increased the adjustment according to the data
obtained in the on-site verification".
354
7.3.2.4 Main arguments of the parties on the Panel's terms of reference
7.212. As noted above, China objects to the United States' inclusion of the Article 2.4 claim in its
panel request and argues that the claim is outside the Panel's terms of reference. We first consider
this objection given that if China is correct, the Panel has no jurisdiction over the claim.
7.3.2.4.1 China
7.213. China acknowledges that prior decisions re cognize that the provisions referred to in the
request for the establishment of a panel need not be identical to those referred to in a complaining
party's request for consultations. Yet, China submits, there are limits to this rule: in particular, in
adding provisions to a panel request that were not in the consultations request, a complainant may
not expand the scope of the dispute. A new legal basis may only be raised in a panel request if it
may reasonably be said to have evolved from the legal basis that formed the subject of
consultations.
355
7.214. China explains why, in its view, the United States' claim under Article 2.4 may not
reasonably be said to have evolved from the legal basis indicated in its consultations request and
impermissibly expands the scope of the United States' complaint included in that request. China
submits that Article 2.4 concerns methodological issues related to performing a fair comparison in
dumping calculations. China submits that the only other provisions cited in the United States'
request for consultations that impose obligations of a methodological nature are those under
Articles 2.2 and 2.2.1.1 of the Anti-Dumping Agr eement concerning the allocation of production
costs. China submits that the focus of Articles 2.2 and 2.2.1.1 is dramatically different from that of
Article 2.4. The former concern the proper identifica tion and/or calculation of normal value, one of
the two variables in the comparison, whereas the latter deals with the adjustments that need to be
made to ensure that the comparison between both sides of the equation is fair. Moreover, China
argues that Articles 2.2 and 2.4 of the Anti-Dumpi ng Agreement are not derivative of each other,
and that the United States' consultations request makes no reference to "fair comparison" that
might imply a legal claim that could reasonably evolve into the Article 2.4 claim. China also
contends that the factual basis relied on for the Articles 2.2 and 2.2.1.1 claims in the
United States' request for consultations was narrow and pertained solely to MOFCOM's failure to
calculate costs on the basis of the records kept by the US producers and to properly allocate
production costs. By contrast, the Article 2.4 claim included in the United States' panel request
pertains to freezer storage expenses, which have nothing to do with the respondents' cost records
or how allocation of costs was effected.
356

353 Keystone's Comments on the Final Anti-Dumping Disclosure, Exhibit USA-29, pp. 25-29.
354 Final Anti-Dumping Determination, Exhibit USA-4, p. 32.
355 China's first written submission, paras. 147-148, 151 (citing, inter alia, Appellate Body Reports,
Mexico – Anti-Dumping Measures on Rice, paras. 138-139; Brazil – Aircraft, para. 132; US – Upland Cotton,
second written submission, paras. 97-98.
356 China's first written submission, paras. 152-158; opening statement at the first meeting of the Panel,
opening statement at the second meeting of the Panel, para. 22.

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7.215. China submits that the record does not support the United States' argument that the
United States had not understood how Keystone's freezer costs were treated prior to consultations
and that it was clear from the Final Anti-Dumping Disclosure that MOFCOM had addressed the
freezer costs issue by making an adjustment to th e export price to effect a fair comparison, which
is the subject of Article 2.4.
357
7.3.2.4.2 United States
7.216. The United States submits that prior Appellate Body decisions have held that the
provisions referred to in the panel and consultation s requests need not be identical, provided that
the legal basis in the panel request may reasonably be said to have evolved from the legal basis
that formed the subject of consultations.
358 The United States argues that this condition is met in
the case of its Article 2.4 claim. The United States explains that it was apparent at the time of its
request for consultations that there was a problem with MOFCOM's treatment of Keystone's
reported costs, including freezer storage expenses. Yet because of MOFCOM's flawed disclosures, it
was unclear what adjustments MOFCOM had made or not made in respect of the normal value and
export price. In fact, the United States argu es, MOFCOM's discussion of the freezer storage
expenses in the Final Anti-Dumping Disclosure and Final Anti-Dumping Determination could be
read as suggesting that MOFCOM had allocated addi tional freezer storage costs both to the export
price and to the normal value. 359 The United States submits that the consultations clarified that
MOFCOM had made an adjustment to Keystone's export price, an issue falling properly under
Article 2.4 of the Anti-Dumping Agreement.360
7.217. The United States responds to China's argument that the legal and factual bases for the
claim cited in the panel request are unrelated to any of the legal and factual bases identified in the
consultations request. With respect to the legal bases, the United States argues that the
constructed normal value that is determined under Articles 2.2 and 2.2.1.1 of the Anti-Dumping
Agreement is one of the two variables subject to the "fair comparison" to be conducted under
Article 2.4 and that for this reason the two sets of provisions are not "unrelated". The
United States also argues that the issue of MOFC OM's treatment of Keystone's costs of production
in the construction of its normal value, including its treatment of Keystone's reported freezer
storage costs, is directly related to the question of whether MOFCOM performed a fair comparison
under Article 2.4.
361 The United States adds that China's insistence that MOFCOM's adjustment had
nothing to with normal value and how costs were allocated to construct normal value conflicts with
China's own post hoc explanation that MOFCOM made the adjustment precisely as a result of how
these costs were allocated to normal value.362
7.3.2.5 Evaluation by the Panel
7.218. China's objection concerns the question of the relationship between, on the one hand, the
claim(s) ("legal basis of the complaint" 363) set out in the US request for consultations and, on the
other hand, the claim(s) set out in the United States' panel request.
7.219. As set forth in Article 7.1 of the DSU, a panel's terms of reference are defined on the basis
of the panel request. That being said, the Appellate Body has clarified that pursuant to the terms
of Article 4 of the DSU, which set forth the requirements applicable to consultations and
consultations requests, and those of Article 6.2 of the DSU, governing panel requests, the request

357 China's second written submission, paras. 99-103; opening statement at the second meeting of the
Panel, para. 23. In addition, China submits that whether a panel request has impermissibly expanded the
scope of a dispute must be determined by exclusive reference to the written request for consultation, not from
what is discussed at consultations.
358 United States' opening statement at the first meeting of the Panel, paras. 55-57; and response to
Panel question No. 39 (citing Appellate Body Reports, Mexico – Anti-Dumping Measures on Rice, paras. 136,
138; and Brazil – Aircraft, para. 132).
359 United States' response to Panel question No. 39.
360 United States' opening statement at the first meeting of the Panel, paras. 58; response to Panel
question No. 39; and opening statement at the second meeting of the Panel, paras. 39-40.
361 United States' second written submission, paras. 79-80.
362 United States' opening statement at the second meeting of the Panel, para. 40. The United States
considers that in contrast to China's arguments before the Panel, MOFCOM's Determination (erroneously) cite
to Keystone's failure to report the freezer storage expenses as its reason for making the adjustment.
363 Appellate Body Report, Korea – Dairy, para. 139.

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for consultations constitutes a prerequisite for the panel request and as a result circumscribes the
scope of the panel request.364
7.220. A number of prior panel and Appellate Body reports have examined this question of the
relationship between the request for consultations and the request for the establishment of a
panel. These decisions underline that the purpose of consultations is not only to reach a mutually
acceptable solution, but also to clarify the matter in dispute. The Appellate Body has stated that
consultations "provide the parties an opportunity to define and delimit the scope of the dispute
between them".365 Consequently, the Appellate Body has considered that:
As long as the complaining party does not expand the scope of the dispute, we
hesitate to impose too rigid a standard for the "precise and exact identity" between
the scope of consultations and the request for the establishment of a panel, as this
would substitute the request for consultations for the panel request.
366
7.221. With respect to the specific question before us, that of the legal basis of the complaint, the
Appellate Body considered in Mexico – Anti-Dumping Measures on Rice that:
A complaining party may learn of additional information during consultations—for
example, a better understanding of the operation of a challenged measure—that could
warrant revising the list of treaty provisions with which the measure is alleged to be
inconsistent. Such a revision may lead to a narrowing of the complaint, or to a
reformulation of the complaint that takes into account new information such that
additional provisions of the covered agreem ents become relevant. The claims set out
in a panel request may thus be expected to be shaped by, and thereby constitute a
natural evolution of, the consultation process.
367
7.222. Consequently, the Appellate Body considered that it is not necessary that the provisions
referred to in the request for consultations be identical to those set out in the panel request,
provided that the "legal basis" in the panel request may reasonably be said to have evolved from
the "legal basis" that formed the subject of consultations; the addition of provisions must not have
the effect of changing the essence of the complaint.368
7.223. We agree with this reasoning and note that the parties are in agreement that the relevant
question which we must decide is whether the Article 2.4 claim included in the United States' panel
request may reasonably be said to have evolved from the claims that were included in the
United States' request for consultations.
7.224. Although necessarily dependent upon the specific circumstances of each case, the
application of this test in prior disputes reveals that at the very least, some connection must exist
between the claims set forth in the panel request and those identified in the request for
consultations in terms of either the provisions cited, the obligation at issue or issue in dispute, or
the factual circumstances leading to the alleged violation.
369
7.225. We are guided by these general principles in our examination of the relationship between
the claims included in the United States' requ est for consultations and the Article 2.4 claim
included in the United States' panel request. Moreover, consistent with prior decisions on the
issue, we conduct this analysis on the basis of the text of these documents without inquiring into
the actual consultations that took place between the parties.
370

364 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US), paras. 54 and 58.
365 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US), para. 54.
366 Appellate Body Report, US – Upland Cotton, para. 293 (citing Appellate Body Report, Brazil –
Aircraft, para. 132). (footnotes omitted)
367 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, para. 138.
368 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, para. 138. See also Panel Report,
Canada – Aircraft, para. 9.12; Appellate Body Reports, India – Patents (US), para. 94; Brazil – Aircraft,
369 See, e.g. Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, para. 141; Panel
Reports, China – Publications and Audiovisual Products, paras. 7.121-7.131; EC – Fasteners (China),
para. 7.207 and 7.320-7.323.

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7.226. The Article 2.4 claim with respect to the freezer storage expenses adjustment is set out
under paragraph 2 of the United States' panel re quest, pertaining to MOFCOM's calculation of
anti-dumping margins. It reads:
[The United States considers that China's measures are inconsistent with China's
commitments and obligations under …] Article 2.4 of the AD Agreement because in
calculating Respondents' dumping margins, including that of Respondent Keystone,
MOFCOM precluded a fair comparison between the export price and normal value by
improperly applying certain costs and expenses.
7.227. By contrast, the United States' request for consultations contains no reference either to the
provision at issue (Article 2.4), the obligation (to make a "fair comparison" between the export
price and the normal value) or the factual circumstances (MOFCOM's adjustment to Keystone's
export price) implicated in the claim included in the panel request. As China points out, the US
request for consultations is very precise in its identification of claims in respect of MOFCOM's
dumping margins calculations (as opposed to, for instance, procedural violations), the only claims
which could conceivably have evolved into the Article 2.4 claim included in the panel request. The
request for consultations includes only two such claims, both of which challenge certain aspects of
MOFCOM's actions in constructing the normal value for US producers.
371
7.228. The first claim challenges a very specific aspect of MOFCOM's actions with respect to the
determination of the normal value, MOFCOM's failure to calculate costs on the basis of the records
kept by the US producers as required by Articles 2.2 and 2. 2.1.1 of the Anti-Dumping Agreement,
which is entirely distinct from MOFCOM's actions in adjusting Keystone's export price, and pertains
to an obligation which has nothing in common with the obligation to perform a "fair comparison"
under Article 2.4. As a result, this claim could not in our view reasonably be said to have evolved
into the Article 2.4 claim included in the United States' panel request.
7.229. The second claim included in the consultations request challenges MOFCOM's failure "to
properly allocate production costs" under Article 2.2.1.1. As noted above, Article 2.2.1.1 imposes
obligations concerning the manner in which costs of production are to be calculated for the
purpose of constructing the normal value in the circumstances provided for under Article 2.2. By
contrast, Article 2.4 focuses on the relationship between the export price and the normal value,
and requires, inter alia , that the investigating authority ensure price comparability in order to
arrive at a "fair comparison" between the two. Hence, the obligations set forth under these two
provisions are of a different nature and apply in respect of a different action of the investigating
authority, the construction of the normal valu e, on the one hand, and the comparison of the
normal value (constructed or not) with the export price, on the other hand.
7.230. We understand the United States to be arguing that China itself recognizes that the issues
of MOFCOM's treatment of Keystone's costs of production and of MOFCOM's adjustment to
Keystone's export price are closely linked because the adjustment was made in response to
perceived problems with the costs of production. China's arguments before the Panel indeed
suggest that MOFCOM may have decided to apply the adjustment because it considered that the
manner in which Keystone had reported its freezer storage expenses led to the normal value being
undervalued once MOFCOM constructed it on the basis of the costs reported by the company.

Thus, we agree with the United States that, at least under China's explanations, the two issues are
not unrelated. Yet the situation before us is one in which two different, albeit related, sets of facts
lead to two distinct violations. The facts implicated in the United States' claim under Article 2.2.1.1
concern MOFCOM's actions in constructing the normal value; by contrast, the US claim under
Article 2.4 target MOFCOM's actions to address the perceived imbalance (if that, indeed was the
basis for MOFCOM making the adjustment). Once MOFCOM decided to address the perceived
imbalance by applying an adjustment to the export price, the relevant claim to challenge this
specific action no longer involved Article 2.2.1.1, a provision which exclusively deals with the
normal value, but rather involved Article 2.4, which addresses the comparability between the
export price and the normal value, including any adjustments made by an authority that affect

371 Points 1 and 2 of the United States' request for consultations allege that the measures at issue are
inconsistent with:
1. Articles 2.2 and 2.2.1.1 of the AD Agreement because China failed to calculate costs on the
basis of the records kept by the US producers under investigation.
2. Article 2.2.1.1 of the AD Agreement because China failed to properly allocate production costs…

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price comparability. 372 This does not exclude the possibility that the United States could have
challenged the manner in which MOFCOM constructe d the normal value in relation to the freezer
expenses under Article 2.2.1.1; that would have been a different claim though.
7.231. Pursuant to the foregoing, we consider that if there is any connection, in terms of the
provisions or obligation at issue or the factual circumstances leading to the alleged violation,
between the claims included in the consultations request and the Article 2.4 claim, it is tenuous at
best. Therefore, we cannot conclude that the Article 2.4 claim in the panel request reasonably
evolved from the legal basis of the complaint identified in the United States' request for
consultations.
7.232. We note the United States' argument that because of the vague explanations provided by
MOFCOM, it had initially understood MOFCOM's trea tment of the freezer storage expenses to be
linked to, or to be part of, the broader issue of MOFCOM's construction of Keystone's normal value.
This suggestion by the United States that it was under the impression that MOFCOM's treatment of
the freezer storage expenses implicated Articles 2.2 and 2.2.1.1 of the Anti-Dumping Agreement
cannot be reconciled with the facts before us. First, although the United States argues that it was
apparent that there was something problematic wi th MOFCOM's treatment of the freezer storage
expenses, the request for consultations does not mention MOFCOM's treatment of these expenses.
Second, the issue of Keystone's freezer storage expenses is addressed in relation to "adjustments"
to the "export price" in both the Final Anti-Dumping Disclosure and the Final Determination, which
would have left the United States in no doubt that MOFCOM had addressed what it considered to
be Keystone's failure to report the freezer storag e expense by making an adjustment to its export
price.
373 This is confirmed by Keystone's own Comments on the Final Anti-Dumping Disclosure, in
which it refers to MOFCOM's "deduction of freezer fees from export price". 374 This being the case,
the United States could not, at the time of the submission of its request for consultations, have
been oblivious to the nature of MOFCOM's actions in respect of the freezer storage expenses or as
to the provision of the covered agreements potentia lly implicated by these actions, Article 2.4 of
the Anti-Dumping Agreement.
7.233. In light of the foregoing, we find that the United States' claim under Article 2.4 of the
Anti-Dumping Agreement falls outside our terms of reference. This being the case, we do not
consider the merits of the claim.
7.3.3 Whether MOFCOM properly calculated th e amount of subsidization as required by
Article 19.4 of the SCM Agreement and Article VI:3 of the GATT 1994
7.3.3.1 Introduction
7.234. The United States argues that China acted inconsistently with Article 19.4 of the
SCM Agreement and Article VI:3 of the GATT 19 94 because MOFCOM improperly calculated the
amount of subsidization per unit of the subs idized and exported product for two of the
US producers, Tyson and Pilgrim's Pride. In particular, the United States contends that the
numerators of the subsidy equation for Tyson and Pilgrim's Pride include a subsidy that benefited
the production of non-subject merchandise, while their denominators reflect only the production of
subject merchandise. According to the United States, this mismatch means that the countervailing
duty rates for Tyson and Pilgrim's Pride are, on th eir face, greater than the alleged subsidies that
each of these respondents received for the production of subject merchandise.
375
7.3.3.2 Relevant provisions
7.235. Article VI:3 of the GATT 1994 sets forth the fundamental rule that:
No countervailing duty shall be levied on any product of the territory of any
contracting party imported into the territory of another contracting party in excess of

372 The United States' argument on the merits is, in part, that the adjustment to the export price
resulted in an unfair comparison because the constructed normal value included some of the freezer fees.
373 Final Anti-Dumping Disclosure to Keystone, Exhibit USA-14, p. 4; Final Anti-Dumping Determination,
Exhibit USA-4, pp. 32-33.
374 Keystone's Comments on the Final Anti-Dumping Disclosure, Exhibit USA-29, pp. 25-29.
375 United States' first written submission, para. 226.

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an amount equal to the estimated bounty or subsidy determined to have been
granted, directly or indirectly, on the manufacture, production or export of such
product in the country of origin or exportation, including any special subsidy to the
transportation of a particular product. The term "countervailing duty" shall be
understood to mean a special duty levied for the purpose of offsetting any bounty or
subsidy bestowed, directly, or indirectly, upon the manufacture, production or export
of any merchandise.
7.236. Article 19.4 of the SCM Agreement states:
No countervailing duty shall be levied on any imported product in excess of the
amount of the subsidy found to exist, calculated in terms of subsidization per unit of
the subsidized and exported product. (footnote omitted)
7.3.3.3 Factual background
7.237. MOFCOM initiated the countervailing duty investigation on 27 September 2009. Among the
subsidies included in the investigation were alleged "upstream" subsidies to US corn and soybeans
producers. The Petitioner alleged that these subsid ies allowed US producers of broiler products to
secure very low feed prices for the production of the subject product. Throughout the course of the
investigation MOFCOM issued several questionnaires and supplemental questionnaires to the
respondents and the United States Government that dealt with these alleged subsidies to corn and
soybean producers.
376
7.238. In the Preliminary Determination, which was published on 28 April 2010, MOFCOM
concluded that the subsidies to corn and soybean producers passed through to US producers of
broiler products. To determine the amount of th e benefit received by producers of the subject
product, MOFCOM multiplied the quantity of co rn or soybean purchased by US respondents and
the quantity of soybeans converted into soybean meal during the period of investigation by the
possible subsidy that each ton of corn and soybeans might receive from the United States
Government.377 MOFCOM added this benefit to those received by respondents from other subsidy
programmes and divided the result by the sales volu me of the subject products during the period
of investigation to arrive at the subsidy amount per tonne of the subject products. MOFCOM then
divided this amount by the weighted average c.i.f. price of the subject products to arrive at the
final ad valorem subsidy rate. 378 MOFCOM used the data reported in response to question I.4 of
the Second Supplemental Questionnaire for Tyson 379 and question I.6 of the Second Supplemental
Questionnaire with respect to Pilgrim's Pride for the purchase quantities that were used in the
numerator of the subsidy calculation equation.380
7.239. After the Preliminary Countervailing Du ty Determination, Tyson and Pilgrim's Pride
submitted arguments to MOFCOM contending that MOFCOM's subsidy allocation was incorrect. 381
They explained that MOFCOM used the figures th ey had reported for corn and soybean purchases
and consumption, but that these figures were for all chickens and that they used chickens to
produce a significant quantity of non-subject merchandise.382
7.240. MOFCOM officials conducted verification in the countervailing duty investigation at Tyson
and Pilgrim's Pride as well as with the United States Government in late May and early June 2010.

376 See China's first written submission, paras. 201-215 (detailing questionnaires sent to Tyson and
Pilgrim's Pride in October 2009, December 2009, and March 2010).
377 Preliminary Countervailing Duty Determination, Exhibit USA-3, p. 42; see also Preliminary
Countervailing Duty Disclosure to Tyson, Exhibit USA-15; Preliminary Countervailing Duty Disclosure to
Pilgrim's Pride, Exhibit USA-16; Preliminary Countervailing Duty Disclosure to Keystone, Exhibit USA-17.
378 Preliminary Countervailing Duty Determination, Exhibit USA-3, p. 62; see also China's response to
Panel question Nos. 45 and 47; Final Countervailing Duty Disclosure to Tyson, Exhibit USA-18, p. 10; and Final
Countervailing Duty Disclosure to Pilgrim's Pride, Exhibit USA-19, p. 52.
379 Tyson's Second Supplemental Countervailing Duty Questionnaire Response, Exhibit CHN-13.
380 Pilgrim's Pride Second Supplemental Countervailing Duty Questionnaire Response, Exhibit CHN-16.
381 United States' first written submission, para. 225 (explaining that this issue did not arise for the
third US respondent, Keystone, because it only produced subject merchandise during the POI).
382 Pilgrim's Pride Comments on the Preliminary Countervailing Duty Determination, Exhibit USA-43,
p. 9; Tyson's Comments on the Preliminary Countervailing Duty Determination, Exhibit USA-44, pp. 2-4.

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7.241. In the Disclosure for the Final Countervailing Duty Determination, MOFCOM maintained its
subsidy allocation methodology.383 The respondents and the United States Government submitted
Comments on the Disclosure, again arguing that the subsidy calculation was incorrect because the
numerator included feed consumed in the production of non-subject products. In their Comments,
the US producers and the United States Government suggested ways in which the subsidy
calculation could be modified to produce a more accurate result.
384 M O F C O M r e s p o n d e d t o t h e
letter from the United States Government on 13 August 2010. 385 With respect to Pilgrim's Pride,
MOFCOM asserted that it had used the "amount of corn and soybean meal the company purchased
during the POI for subject merchandise production."386 With respect to Tyson, MOFCOM stated that
it had verified that "the amount of corn and soybean meal the company purchased during the POI
matches the amount of corn and soybean meal consumed for subject merchandise production."
387
MOFCOM noted that because it "used the data the respondents reported in calculating their
CVD margins" there was no mis-matching of data.388
7.242. MOFCOM made no change to its subsidy allocation in the Final Countervailing Duty
Determination. MOFCOM noted that it had received comments from the interested parties and that
it had seriously considered all the comments 389, but did not specifically refer to the issue of
whether MOFCOM had properly allocated the benefit across both subject and non-subject
merchandise.390
7.3.3.4 Main arguments of the parties
7.3.3.4.1 United States
7.243. The United States argues that a proper interpretation of the obligations in Articles 19.4 of
the SCM Agreement and VI:3 of the GATT 1994 requires an investigating authority, at a minimum,
to ensure that any countervailing duty reflect only the subsidies provided to the subject products
and not to any other products.
391 The United States maintains that these obligations "are
mandatory in nature and contain no exceptions." 392 According to the United States, even though
the scope of the investigation explicitly excludes certain chicken products and live chickens from
the investigation, MOFCOM took subsidies that benefited those non-subject products and allocated
them to the subject merchandise. The United Stat es argues that while the initial allocation may
have been a misreading of the data respondent s submitted, MOFCOM deliberately decided to
perpetuate the error even after Tyson, Pilgrim's Pride and the United States Government brought it
to MOFCOM's attention and proposed acceptable options for correcting it. As a result, MOFCOM's
countervailing duty calculations for Pilgrim's Pride and Tyson are inconsistent with Articles 19.4 of
the SCM Agreement and Article VI:3 of the GATT 1994.
393
7.244. In the United States' view, China is asserting some form of procedural default whereby
respondents provided incorrect answers and now they must suffer the consequences. The
United States argues that even if a procedural default on the part of the respondents excused
China from its obligation, China's logic does not make sense as it would mean that respondents
mislead MOFCOM in a manner that increased their countervailing duty rates. 394 Furthermore, the
United States maintains that the respondents unquestionably provided all of the data needed to

383 See Final Countervailing Duty Disclosure to Tyson, Exhibit USA-18; Final Countervailing Duty
Disclosure to Pilgrim's Pride, Exhibit USA-19; Final Countervailing Duty Disclosure to Keystone, Exhibit USA-20.
384 Pilgrim's Pride Comments on the Preliminary Countervailing Duty Determination, USA-43, providing
its own calculation of the subsidy benefit in Appendix 6; Tyson's Comments on the Preliminary Countervailing
Duty Determination, Exhibit USA-44, proposing that MOFCOM use Tyson's sales of all chicken products in the
denominator.
385 Reply to the US Government's Comments on the Final Disclosure, Exhibit USA-42.
386 Reply to the US Government's Comments on the Final Disclosure, Exhibit USA-42, p. 4.
387 Reply to the US Government's Comments on the Final Disclosure, Exhibit USA-42, p. 4.
388 Reply to the US Government's Comments on the Final Disclosure, Exhibit USA-42, p. 4.
389 Final Countervailing Duty Determination, Exhibit USA-5, p. 9.
390 See Final Countervailing Duty Determination, Exhibit USA-5, pp. 48-58.
391 United States' first written submission, paras. 228-231 (citing Panel Report, US – Lead and
Bismuth II, paras. 6.51-6.52; and Appellate Body Reports, US – Countervailing Measures on Certain EC
Products, para. 139; US – Softwood Lumber IV, para. 164, footnote 196; and US – Anti-Dumping and
Countervailing Duties (China), para. 556).
392 United States' second written submission, para. 91.
393 United States' first written submission, para. 241.
394 United States' second written submission, para. 90; and response to Panel question No. 49.

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calculate a proper countervailing duty prior to the Preliminary Determination and expressly pointed
out MOFCOM’s error long before the Final Determination. 395 Finally, the United States contends
that the authority has an affirmative obligation to reach the correct result; the authority cannot
knowingly reach the wrong result simply because it is dissatisfied by some aspect of a
questionnaire response.
396
7.245. The United States disagrees with China that it has placed too much emphasis on a
particular question in the second supplementa l questionnaire and should instead focus on
MOFCOM's holistic inquiry into the matter. The United States notes that during the investigation,
to the extent MOFCOM referenced any questio nnaire data, it was the data in the second
questionnaire and that MOFCOM never referenced the other questions or responses China refers to
in its first written submission.397 Accordingly, the United States views these arguments as post hoc
rationalizations.398 Additionally, the United States argues that nothing China points to changes the
fact that the respondents alerted MOFCOM to the "mismatch" and provided MOFCOM the potential
remedy.
399 The United States notes that throughout the entire dispute, China has not bothered to
explain why these remedies cannot be implemented.400
7.246. With respect to China's later contention that the questions in the Second Supplemental and
other Questionnaires were specific to subject products and did not ask for data on corn and
soybeans used to feed chickens that were processed into both subject and non-subject
merchandise, the United States asserts that contrary to China's arguments, the wording of the
questions (whether based on the United States' or China's translations) refers to "broilers" or
"chickens" which is not synonymous with the subject merchandise and could include non-subject
products. In particular, the United States contends that it was far from obvious to Tyson and
Pilgrim's Pride that the questions, spread out over multiple documents, were aiming to calculate
the proper subsidy benefit for only subject merchandise.
401 The United States argues that MOFCOM
knew Tyson and Pilgrim's Pride produced both subject and non-subject merchandise and that
MOFCOM failed to meet its obligations when it did not request information specific to the amounts
of subsidized feed that benefited production in respect to both subject and non-subject
merchandise.
402 Finally, it is the United States' view that even if there were any error in reporting
on the part of respondents, this does not excuse MOFCOM’s failure to try and correctly calculate
the subsidy margin once the respondents recognized what MOFCOM was trying to accomplish and
approached it with a viable solution.
403
7.3.3.4.2 China
7.247. China agrees with the United States that Article 19.4 of the SCM Agreement and
Article VI:3 of the GATT 1994 set forth a fundamenta l rule that an investigating authority has an
obligation under GATT 1994 and the SCM Agreement to align the numerator and denominator in
calculating the appropriate subsidy margin.404
7.248. China contends that MOFCOM's subsidy margin calculation was proper and relied upon
data provided by the respondents concerning the volume of feed purchased and consumed in the
production of subject merchandise and the total weight of subject merchandise sales.405 In China's
view, there is no question that this calculatio n aligns the proper numerator and denominator for
purposes of deriving a subsidy margin specific to subject merchandise.406

395 United States' second written submission, para. 90.
396 United States' comments on China's response to Panel question No. 100.
397 United States' second written submission, para. 94 (citing Reply to the US Government's Comments
on the Final Disclosure, Exhibit USA-42, p. 4; and United States' response to Panel question No. 49).
398 United States' second written submission, para. 94.
399 Tyson's Comments on the Countervailing Duty Disclosure, Exhibit USA-48; Pilgrim's Pride's
Comments on the Countervailing Duty Disclosure, Exhibit USA-45; and Subsidy Calculation Letter, Exhibit
USA-52, p. 1.
400 United States' second written submission, para. 95.
401 United States' response to Panel question No. 49.
402 United States' second written submission, para. 96.
403 United States' response to Panel question No. 49.
404 China's first written submission, para. 195.
405 China's response to Panel question No. 45.
406 China's second written submission, para. 125.

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7.249. In its first written submission, China argues that the United States places too much
emphasis on the answer to a particular question in the Second Supplemental Questionnaire about
the consumption of feed and that the responses to this question alone, contrary to the
United States' assertions, would not have enabled MOFCOM to properly allocate the subsidy to
subject and non-subject merchandise. China also argues that during the investigation, the
respondents "struggled to provide all the information necessary to perform a precise calculation,
and instead left MOFCOM to apply what respon dents had themselves held out as the feed
consumption data MOFCOM requested."
407 China later acknowledges that the answer in the Second
Supplemental Questionnaire was indeed the sole source of the data MOFCOM utilized in the
subsidy calculation.
408 In its second written submission, China argues that the information used
was complete and appropriate for its purpose. China contends that the many questions and
allegedly incomplete answers it referred to in its first written submission were MOFCOM assuring
itself that the respondents had accurately reported the specific purchase and consumption data
necessary for the per unit subsidy calculation.
409
7.250. China argues that the Second Supplemental Questionnaire asked directly for total
consumption for the production of the subject products, along with questions on total purchases
and unit consumption.
410 China contends that the United States' argument that MOFCOM asked for
information on "broiler products" as distinct from "subject products," is wrong. 411 According to
China, "the meaning of 'broiler products' as su bject merchandise was unambiguous, since it was
expressly defined in MOFCOM's notice of initiation, and the question plainly relates to consumption
and not purchases."412 China argues that MOFCOM's findings at verification support its conclusions.
In particular, China notes that MOFCOM found that the data in Tyson's consumption records for
corn and soybean / soybean meal was roughly 10% higher than reported in the Questionnaire
Response. China contends that this indicates that what was found at verification was total
consumption of corn and soybean / soybean meal and the lower amount reported in the
questionnaire related to production of subject merchandise.
413 With respect to Pilgrim's Pride,
China maintains that it did not substantiate its arguments that some of the corn and soybean meal
was used in the production of breeders and pullet s, nor that its data was for total production
rather than production of subject merchandise. In particular, China notes that the production data
Pilgrim's Pride cited to in its arguments was on the record of the anti-dumping proceeding and not
on the record of the countervailing duty proceeding.
414
7.251. China maintains that MOFCOM did not ask for or use data related to total feed purchases.
China points to the Final Disclosures to Tyson and Pilgrim's Pride for language that it contends
supports its view that MOFCOM never stated: (i) any intent to use total purchases of feed, (ii) that

407 China's first written submission, para. 200; see also paras. 216-217, explaining:
In its preliminary determinations, MOFCOM was presented with an imperfect record ... the full set
of data required by MOFCOM to allow it to fully confirm the extent of the feed subsidies had not
been provided by the respondents. Issues remained with respect to production volumes for live
broilers, subject merchandise, and costs of production. Given the state of the record, MOFCOM
had no real alternative but to take at face value the data reported by both companies in
response to questions posed in the second supplemental questionnaire on the amount of feed
consumed in the production of subject merchandise.

After its preliminary results, MOFCOM received arguments by both respondents. In both
instances Tyson and Pilgrim's argued that MOFCOM had over-allocated feed subsidies to subject
merchandise and sought to clarify that the feed information provided encompassed more than
subject merchandise. In none of these arguments, however, did either respondent actually
provide a basis for MOFCOM to discard the feed information used in the calculation.
For company-specific arguments, see China's first written submission, paras. 218-219 (Tyson) and
paras. 221-224 (Pilgrim's Pride).
408 China's response to Panel question No. 45.
409 China's second written submission, para. 126.
410 China's second written submission, para. 128.
411 United States' response to Panel question No. 49.
412 China's response to Panel question No. 100. See also China's second written submission,
paras. 140-142; opening statement at the second meeting of the Panel, para. 53.
413 China's response to Panel question No. 100.
414 China's response to Panel question No. 100.

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it used incomplete data, or (iii) that it used data it did not understand to be feed purchases for the
production (i.e. consumption) of subject merchandise during the POI.415
7.252. With respect to the United States' argument that MOFCOM did not properly consider the
respondents' arguments or correct its error once the respondents and the United States brought
the issue to its attention, China notes that MO FCOM was well aware of respondents' arguments,
but the arguments made by the respondents all fo cused on the wrong issue. According to China,
the basis of all the respondents' arguments – that MOFCOM affirmatively used reported total
purchases in the calculation – was incorrect and did not reflect MOFCOM’s methodology.416
7.3.3.5 Arguments of the third parties
7.253. The European Union agrees with the United States th at if the parallelism between the
numerator and the denominator in the calculation of subsidisation per unit is broken, the
countervailing duties determined on that basis are certain to exceed the ceiling imposed by
Articles 19.4 and VI:3.
417
7.254. Saudi Arabia points to the Appellate Body decision in US – Anti-Dumping and
Countervailing Duties (China) for the premise that Article 19.4 "places a quantitative ceiling on the
amount of a countervailing duty, which may not exceed the amount of the subsidization." 418
Therefore, both Articles 19.4 and VI:3 impose a minimum requirement on the investigating
authority to ensure a proper and correct allocation of the total subsidy amount to the specific
subject product.419 Saudi Arabia considers that if a subsidy benefits several products, including but
not limited to the product under consideration, it is improper to allocate the total subsidy amount
to the subject product alone. If an investigat i n g a u t h o r i t y w e r e t o m a k e s u c h a n i m p r o p e r
allocation, it would likely impose countervailing duties that are in excess of the amount of
subsidies benefitting the product.
420
7.3.3.6 Evaluation by the Panel
7.255. The issue before the Panel is whether MOFCOM impermissibly countervailed more than the
subsidies that benefited the production of subjec t imports in contravention of Article 19.4 of the
SCM Agreement and Article VI:3 of the GATT 1994. In particular, the Panel is presented with the
question of whether MOFCOM used a data set relating to the purchase of subsidized corn and
soybeans that benefited the production of live ch ickens and improperly allocated all of the benefit
from that subsidy to the subject broiler products.
7.256. The panel in US – Lead and Bismuth II explained that the ordinary meaning of the text of
Article 19.4 requires that "no countervailing duty may be imposed on an imported product if no
(countervailable) subsidy is found to exist with respect to that imported product, since in such
cases the amount of subsidy found to exist with respect to the imported product would be zero."421
The panel went on to conclude that:

415 China's second written submission, paras. 131-132. For Tyson: "Here, the investigation authority
clarifies that the investigation authority uses the quantity of corn and soybean meal provided by your company
in the response to the questionnaire as for the production of the subject product during the POI." Tyson Final
Countervailing Duty Disclosure, Exhibit USA-18, p. 10; for Pilgrim's Pride: "Herein, it needs to be clear that
investigating authority's calculation of your company's accepted subsidy benefits in the upstream subsidy
program is based on the quantity of corn and soy purchased for the production of subject merchandise during
the POI that was provided in your company's questionnaire response." (Final Countervailing Duty Disclosure to
Pilgrim's Pride, Exhibit USA-19, p. 52).
416 China's second written submission, para. 134; see Tyson's Comments on the Preliminary
Countervailing Duty Determination, Exhibit USA-44, p. 1; Pilgrim's Pride Comments on the Preliminary
Countervailing Duty Determination, Exhibit USA-43, pp. 7-9; Subsidy Calculation Letter, Exhibit USA-52, p. 1.
417 European Union's third-party submission, para. 56 (citing Appellate Body Report, US – Softwood
Lumber IV, para. 164, footnote 196), and paras. 63-64.
418 Saudi Arabia's third-party submission, para. 35 (citing Appellate Body Report, US – Anti-Dumping
419 Saudi Arabia's third-party submission, para. 37.
420 Saudi Arabia's third-party submission, para. 37.
421 Panel Report, US – Lead and Bismuth II, para. 6.52. (emphasis added)

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consistent with the fundamental premise underlying Articles 19.1, 19.4, and 21.1 of
the SCM Agreement, and Article VI:3 of the GATT 1994, and consistent with the object
and purpose of countervailing duties envisa ged by Part V of the SCM Agreement, we
consider that a countervailing duty may only be imposed on an imported product if it
is demonstrated that a (countervailable) subsidy was bestowed directly or indirectly
on the manufacture, production or export of that merchandise.
422 (emphasis added)
7.257. With respect to Article VI:3 of the GATT 1994, the Appellate Body clarified in US –
Countervailing Measures on Certain EC Products that, "under Article VI:3 of the GATT 1994,
investigating authorities, before imposing countervailing duties, must ascertain the precise amount
of a subsidy attributed to the imported products under investigation."
423 As the Appellate Body
explained in US – Softwood Lumber IV , "the correct calculation of the countervailing duty rate
would depend on matching the elements taken into account in the numerator with the elements
taken into account in the denominator."424
7.258. Consequently, the Panel agrees with the parties that under Articles 19.4 of the
SCM Agreement and VI:3 of the GATT 1994 China wa s obligated to accurately determine the per
unit subsidy amount and not impose countervailing duties exceeding that amount. Therefore, the
question before the Panel is not one of interpretati on, but rather one of application. We recall that
our role is neither to conduct a de novo review of the evidence nor to substitute our own
conclusions for those of MOFCOM. However, neither should we simply accept MOFCOM's
conclusions.
425 Our task is to review whether MOFCOM has provided a reasoned and adequate
explanation of how the evidence on the record supports its factual findings and how the factual
findings support its overall determination. 426 In particular, we must examine whether MOFCOM's
reasoning takes sufficient account of conflicting evidence and responds to competing plausible
explanations of that evidence.
427
7.259. China confirmed that the data MOFCOM us ed for the total quantity of soybean and corn
meal used to produce subject merchandise during th e period of investigation was that reported in
response to question I.4 of the Second Supplemen tal Questionnaire for Tyson and question I.6 of
the Second Supplemental Questionnaire for Pilgrim's Pride. 428 Most of the parties' argumentation
has centred on what MOFCOM specifically asked for in these questions. China maintains that the
Second Supplemental Questionnaire clearly asked for consumption in the production of subject
merchandise and thus MOFCOM used the correct data and its subsidy calculation was accurate.
429
By contrast, the United States argues that MOFCOM asked the respondents to report the total
quantity of corn and soybean purchased during the period of investigation, without asking them to
indicate how much feed was used for the producti on of subject merchandise. The United States
contends that in response to this question, Tyson and Pilgrim reported data in the Second
Supplemental Questionnaire that were for total consumption of corn and soybeans used in
production of all products (including non-subject merchandise).
430
7.260. China translates the relevant question from the Second Supplemental Questionnaire (I.4
for Tyson and I.6 for Pilgrim's Pride) as asking the respondents to provide "the specific name,

422 Panel Report, US – Lead and Bismuth II, para. 6.57.
423 Appellate Body Report, US – Countervailing Measures on Certain EC Products, para. 139 (footnote
omitted). We note that in the present case, the United States is not challenging MOFCOM's determination that
the upstream subsidies to corn and soybeans benefited the production of broiler products or the determination
that the entire amount of the benefit passed through to producers of the subject product. Rather the
United States' claim is limited to the allocation of that benefit between subject and non-subject broiler
products.
424 Appellate Body Report, US – Softwood Lumber IV, footnote 196. (emphasis original)
425 Appellate Body Report, US – Lamb, para. 106; see also Appellate Body Report, US – Cotton Yarn,
para. 74.
426 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS, para. 186; see also
Appellate Body Report, US – Lamb, para. 103.
427 Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada), para. 93 (citing Appellate
428 China's response to Panel question No. 45 (citing Pilgrim's Pride Second Supplemental Countervailing
Duty Questionnaire Response, Exhibit CHN-16).
429 China's first written submission, para. 207 (citing Tyson's First Supplemental Countervailing Duty
Questionnaire Response, Exhibit CHN-12) and para. 214; second written submission, paras. 138-142.
430 United States' first written submission, para. 240; see also United States' response to Panel
question Nos. 52 and 100.

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main ingredients, total quantities and value of th e various feeds (for example, corns and soybeans
etc.) consumed to produce the broiler products during POI." 431 Although the United States argues
that the question referred to "chicken products" 432, the United States' version of the question
translates the term as "subject merchandise".433 We are not convinced that a reference to "chicken
products" or "broiler products" in the context of this investigation unambiguously refers to the
subject merchandise. We recall that the scope of the investigation refers to the terms "broiler
products" or "chicken products" not only for included products, but also for excluded ones.
434
Furthermore, the debate over translations centres on what was clear or understandable to the
respondents when they received the questionnaire. However, we do not know whether any of the
translations presented to the Panel by the parties were what the respondents relied upon when
they were actually preparing the data. In sum, we find the debate on translations a distraction
from the main issue, which is whether MOFCOM pr ovided a reasoned and adequate explanation of
how the facts support its determination that the reported data was appropriate to use in the per
unit subsidy calculation.
7.261. Under Article 19.4 of the SCM Agreement and Article VI:3 of the GATT 1994, MOFCOM has
an obligation to ascertain the precise amount of subsidy attributed to the imported products under
investigation. This requires more effort on the part of an investigating authority than simply
accepting data and using it. We find contextual support for our understanding in Article 10 of the
SCM Agreement which requires Members to take all necessary steps to ensure that the imposition
of a countervailing duty is in accordance with the provisions of Article VI and the terms of the
SCM Agreement. Furthermore, the Appellate Body has clarified in US – Wheat Gluten , that
authorities charged with conducting an inquiry or a study – to use the treaty language, an
"investigation" – "must actively seek out pertinent information"
435 and may not remain "passive in
the face of possible shortcomings in the evidence submitted." 436 Thus, MOFCOM needed to ensure
that it had calculated the correct subsidy amount, rather than simply accept the information
submitted by respondents, particularly as the respondents had alerted MOFCOM that they may
have misunderstood the question and provided incorrect data.
7.262. MOFCOM was aware that the scope of the in vestigation specifically excludes certain broiler
products such as live chickens and sausages and pre-cooked products. MOFCOM was also aware
that both companies produced live chickens that were processed into products other than those
included in the scope of the investigation. In their Comments on the Preliminary Countervailing
Duty Disclosure and Determination Tyson, Pilgrim's Pride and the United States Government
argued that the respondents' Responses to the Second Supplemental Questionnaire (I.4 for Tyson
and I.6 for Pilgrim's Pride) included corn and soybean used in the production of all merchandise.
Thus, MOFCOM was alerted to the possibility that the amount of subsidy it was allocating to
subject merchandise might include subsidies to excluded products.
7.263. Despite these indications that there were alleged shortcomings in the evidence submitted,
MOFCOM did not directly address the competing plau sible explanations of the evidence. Nothing in
the disclosure of what took place at verification, which occurred after MOFCOM had received the
respondents' Comments on the Preliminary Countervailing Duty Disclosure and Determination,
refers to MOFCOM verifying whether the data reported was for consumption of corn and soybean in
the production of subject products. Indeed, the only issue mentioned under the heading relating to

431 Tyson's Second Supplemental Questionnaire Response, Exhibit CHN-13; and Pilgrim's Pride Second
Supplemental Questionnaire Response, Exhibit CHN-16.
432 United States' response to Panel question No. 49.
433 Second Supplemental Countervailing Duty Questionnaire, Exhibit USA-38.
434 Preliminary Countervailing Duty Determination, Exhibit USA-3. We note that in every notice that was
part of the investigation, the parties have provided slightly different translations of the text of the scope of the
investigation. Although China did not raise a formal objection to the translation pursuant to the Panel's
Working Procedures, it later argued that the proper translation to be utilized would be China's translation of the
scope in the Final Anti-Dumping Determination in Exhibit CHN-3, or the United States' translation of the Notice
of Initiation of the Countervailing Duty Investigation, Exhibit USA-7. China's main concern with the translation
relates to the headings used, not the main text of the paragraph. In Exhibit USA-3 for "Name of the Subject
Products" the United States does not translate the Chinese characters, whereas in Exhibit CHN-3 China
translates them as "white feather broiler products". Similarly, Exhibit USA-7 uses the term "broiler products or
chicken products." The next heading provides the "English name of the Product". Exhibit USA-3 uses the term
"white feather broiler products" here. By contrast, both Exhibits CHN-3 and USA-7 use the term "broiler
products or chicken products."
435 Appellate Body Report, US – Wheat Gluten, para. 53.
436 Appellate Body Report, US – Wheat Gluten, para. 55.

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verification of corn and soybean purchases is that the data would be placed simultaneously on the
records of both the anti-dumping and countervailing duty investigations. 437 The issue is also not
addressed in the Disclosure documents sent to Tyson and Pilgrim's Pride prior to the Final
Countervailing Duty Determination.
7.264. MOFCOM did respond to the United States Government's Comments on the Final
Disclosures in which the United States Government also argued that MOFCOM relied on incorrect
data for the amount of corn and soybean meal utilized in the production of subject products. In its
letter to the United States Government, MOFCOM an swered that it used the amount of corn and
soybean meal Pilgrim's Pride purchased during the POI for subject merchandise production
reported in Pilgrim's Pride's Questionnaire Response. For Tyson, MOFCOM maintains that it
requested, in the Second Supplemental Questionnaire, the company to provide the amount of corn
and soybean meal the company purchased during the POI, as well as corn and soybean meal
consumed for producing the subject products during the POI. MOFCOM states that it verified that
the amount of corn and soybean meal the company purchased during the POI matches the amount
of corn and soybean meal consumed in the production of subject products. On this basis, MOFCOM
states that it used the data the respondents re ported in calculating their countervailing duty
margins and there is no mismatching of data.
438 MOFCOM does not address the arguments of the
respondents with reference to the data provided in the Questionnaire Responses or the alternative
methods proposed. MOFCOM maintains that it received the information it asked for and therefore
there was no error.
7.265. China provides the Panel with exhibits from the verification and explains how they support
its interpretation of the data.
439 China also provides a discussion of the various Questionnaire
Responses in its written submissions. 440 Meanwhile, the United States points to record evidence
which seems to indicate that the data submitted related to consumption of corn and soybeans for
the production of live broilers, which are then fu rther processed into both subject and non-subject
merchandise.441 The Panel will not conduct a de novo review of the evidence. China provided, in its
submissions, a discussion of the questionnaire responses and of the exhibits taken during
verification. This is the type of discussion that we would have expected to find on the record of the
investigation. However, during the investigation MOFCOM confined itself to conclusory statements.
7.266. China accepts that MOFCOM was obligated under Article 19.4 of the SCM Agreement and
Article VI:3 of the GATT 1994 not to calculate a countervailing duty margin that exceeded the
actual per unit subsidisation rate. To ensure that its calculation was correct, MOFCOM should have
taken sufficient account of conflicting evidence and respond to competing plausible explanations of
that evidence, but it did not do so. MOFCOM also did not provide a reasoned and adequate
explanation as to why the facts supported the conclusions it reached with respect to the precise
amount of the subsidy attributed to the imported products under investigation. Therefore, the
Panel finds that China acted inconsistently with Article 19.4 of the SCM Agreement and Article VI:3
of the GATT 1994, because MOFCOM did not ensure that the countervailing duty levied did not
exceed the amount of the subsidization per unit of the subsidized and exported product.

437 Tyson's Verification Disclosure, Exhibit CHN-70; and Pilgrim's Pride Verification Disclosure, Exhibit
CHN-71. Given this statement, it is problematic that MOFCOM's reason for rejecting Pilgrim's Pride total
production data, which it claims would enable MOFCOM to fix the error, is that it was only on the record of the
anti-dumping proceeding.
438 Reply to the US Government's Comments on the Final Disclosure, Exhibit USA-42, p. 4.
439 China's response to Panel question No. 100; Corrected Exhibit CS2-I-3, Exhibit CHN-66; Tyson's
Verification Exhibit 34 and Comparison Table, Exhibit CHN-67; Pilgrim's Pride Verification Exhibit and
Comparison Table, Exhibit CHN-68; Pilgrim's Pride Revised Annex II-S1-2, Exhibit CHN-69; Tyson's Verification
Disclosure, Exhibit CHN-70; and Pilgrim's Pride Verification Disclosure, Exhibit CHN-71.
440 China's first written submission, paras. 200-215; response to Panel question No. 51; second written
submission, paras. 124-132; and response to Panel question No. 100. China simultaneously asserts that the
data provided on the one hand is incomplete and suspect, but on the other is complete and correct. (See e.g.
China's first written submission, para. 216: "[i]n its preliminary determinations, MOFCOM was presented with
an imperfect record. As discussed above, the full set of data required by MOFCOM to allow it to fully confirm
the extent of the feed subsidies had not been provided by the respondents"; and China's second written
submission, para. 129: "In response to question 4 of its second supplemental questionnaire on total
consumption, Tyson provided the information necessary to perform the per unit subsidy rate calculation, i.e.,
the quantity of consumption of feed materials during the period of investigation for the production of subject
merchandise.")
441 Tyson's Annex CS2-I-3, Exhibit CHN-37; and Pilgrim's Pride Annex II-S1-2, Exhibit CHN-38.

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7.3.4 Whether MOFCOM complied with Articles 6.8, 6.9, 12.2, 12.2.1 and 12.2.2 of the
Anti-Dumping Agreement when it applied fact s available to calculate the "all others"
rate for unknown producers/exporters in the anti-dumping investigation
7.3.4.1 Introduction
7.267. The United States' claims with regard to the "all others" rate determined by MOFCOM in
the context of the anti-dumping investigation concern a number of different provisions in the
Anti-Dumping Agreement:
i. The United States claims that China acted inconsistently with Article 6.8 and
Annex II, paragraph 1, of the Anti-Dumping Agreement by imposing an "all others"
rate based on adverse facts available on producers/exporters that MOFCOM did not
notify of the information required of them and that did not refuse to provide
necessary information or otherwise impede the anti-dumping investigation;
ii. The United States claims that China acted inconsistently with Article 6.9 of the
Anti-Dumping Agreement due to MOFCOM's fa ilure to inform the United States and
other interested parties of the essential facts under consideration that formed the
basis for the calculation of the "all others" rate; and
iii. The United States claims that MOFCOM did not disclose in sufficient detail the
findings and conclusions reached on all issues of fact, or all relevant information on
matters of fact, as required by Articles 12.2, 12.2.1 and 12.2.2 of the Anti-Dumping
Agreement.
7.3.4.2 Relevant provisions
7.268. Article 6.8 of the Anti-Dumping Agreement provides:
In cases in which any interested party refuses access to, or otherwise does not
provide, necessary information within a reasonable period or significantly impedes the
investigation, preliminary and final determinations, affirmative or negative, may be
made on the basis of the facts available. Th e provisions of Annex II shall be observed
in the application of this paragraph.
7.269. Paragraphs 1 and 7 of Annex II to the Anti-Dumping Agreement are particularly relevant to
the claims under consideration. They provide:
1. As soon as possible after the initiation of the investigation, the investigating
authorities should specify in detail the information required from any interested party,
and the manner in which that information should be structured by the interested party
in its response. The authorities should also ensure that the party is aware that if
information is not supplied within a reasonable time, the authorities will be free to
make determinations on the basis of the facts available, including those contained in
the application for the initiation of the investigation by the domestic industry.
7. If the authorities have to base their findings, including those with respect to normal
value, on information from a secondary source, including the information supplied in
the application for the initiation of the investigation, they should do so with special
circumspection. In such cases, the author ities should, where practicable, check the
information from other independent sources at their disposal, such as published price
lists, official import statistics and customs returns, and from the information obtained
from other interested parties during the investigation. It is clear, however, that if an
interested party does not cooperate and thus relevant information is being withheld
from the authorities, this situation could lead to a result which is less favourable to the
party than if the party did cooperate.
7.270. Article 6.9 mandates the disclosure of "the essential facts under consideration". Its text is
set out in preceding sections of this Report.

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7.271. Article 12.2 requires investigating authorities to give public notice:
… of any preliminary or final determination, whether affirmative or negative, of any
decision to accept an undertaking pursuant to Article 8, of the termination of such an
undertaking, and of the termination of a definitive anti-dumping duty. Each such
notice shall set forth, or otherwise make available through a separate report, in
sufficient detail the findings and conclusions reached on all issues of fact and law
considered material by the investigating authorities. All such notices and reports shall
be forwarded to the Member or Members th e products of which are subject to such
determination or undertaking and to other interested parties known to have an
interest therein.
7.272. This obligation is further elaborated in the subparagraphs of Article 12.2 as follows:
12.2.1 A public notice of the imposition of provisional measures shall set forth, or
otherwise make available through a separate report, sufficiently detailed explanations
for the preliminary determinations on dumping and injury and shall refer to the
matters of fact and law which have led to arguments being accepted or rejected. Such
a notice or report shall, due regard being paid to the requirement for the protection of
confidential information, contain in particular:
(i) the names of the suppliers, or when this is impracticable, the
supplying countries involved;
(ii) a description of the product which is sufficient for customs purposes;
(iii) the margins of dumping establis hed and a full explanation of the
reasons for the methodology used in the establishment and comparison of
the export price and the normal value under Article 2;
(iv) considerations relevant to the injury determination as set out in
Article 3;
(v) the main reasons leading to the determination.
12.2.2 A public notice of conclusion or suspension of an investigation in the case of an
affirmative determination providing for the imposition of a definitive duty or the
acceptance of a price undertaking shall contain, or otherwise make available through a
separate report, all relevant information on the matters of fact and law and reasons
which have led to the imposition of final measures or the acceptance of a price
undertaking, due regard being paid to the requirement for the protection of
confidential information. In particular, the notice or report shall contain the
information described in subparagraph 2.1, as well as the reasons for the acceptance
or rejection of relevant arguments or claims made by the exporters and importers,
and the basis for any decision made under subparagraph 10.2 of Article 6.
7.3.4.3 Factual background
7.273. Upon initiation of the anti-dumping investigation, on 27 September 2009, MOFCOM
transmitted the Notice of Initiation to the US Embassy in China
442 and posted the Notice together
with the relevant registration forms on its website.443 In the Notice of Initiation, MOFCOM provided
basic information concerning the investigation, required any interested party – including any US
exporter – that wished to participate in the investigation to register with MOFCOM by
19 October 2009, and indicated that failure to pa rticipate and provide the information requested
by MOFCOM could result in a determination based on facts available. 444 The Registration Form,
attached to the Notice of Initiation, asked foreign producers/exporters to fill in certain information

442 Preliminary Anti-Dumping Determination, Exhibit USA-2, p. 2; Letter to the US Embassy on
Initiation, Exhibit CHN-63.
443 Notice of Initiation of the Anti-Dumping Investigation, Exhibit CHN-47 (Chinese version containing
the internet link); Anti-Dumping Investigation Registration Form, Exhibit CHN-49.
444 Notice of Initiation of the Anti-Dumping Investigation, Exhibit USA-6.

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about their companies, including contact details and the quantity and value of broiler products
exported to China during the POI.445 MOFCOM received 36 separate entries of appearance from US
producers/exporters (6 of which were listed in the Petition) and an entry of appearance from
USAPEEC, a US industry association.
446
7.274. MOFCOM limited its examination to three producers: Keystone, Tyson, and Pilgrim's Pride.
On 20 October 2009, MOFCOM sent anti-dumpi ng questionnaires to those "mandatory
respondents", as well as to an additional producer/exporter, Sanderson, whom China refers to as a
"selected, non-mandatory respondent". 447 On the same day, 20 October 2009, MOFCOM posted
the anti-dumping questionnaires on its website.448
7.275. In its Preliminary Determination, MOFCOM determined the following anti-dumping rates for
the selected mandatory respondents: Keystone, 44 %; Tyson, 43.1%, and Pilgrim's Pride, 80.5%.
MOFCOM applied the weighted-average of these dumping margins, 64.5%, to the US companies
that registered with MOFCOM, but were not investigated, including Sanderson.449
7.276. MOFCOM preliminarily assigned a rate of 105.4% to "all other" US companies that did not
register with MOFCOM (and as a consequence, also did not file a questionnaire response). 450 The
Preliminary Anti-Dumping Determination indicates that:
As to all other companies in the U.S. that neither make an entry for appearance nor
provides a questionnaire response, according to Article 21 of the AD Regulations, the
Investigating Authority decides to make determination related to the dumping and
dumping margin using facts that have been obtained and the best information that
can be obtained.
451
7.277. Prior to the issuance of its Final Determ ination, MOFCOM issued to the United States
Government a Disclosure document explaining the basic facts on which it was reached. In this
Disclosure document, MOFCOM explained that:
For other American companies which didn't respond to the investigation and didn’t
submit an answer sheet, according to Arti cle 21 of the Antidumping Regulations, the
Authority decides to use the normal value and export price of a model from the
sampled companies to determine their dumping margins.
452
7.278. In the Final Determination, MOFCOM made the following changes to its rates: Keystone,
50.3%, Tyson, 50.3%; Pilgrim's Pride, 53.5%; and sampled companies (that registered but were
not investigated), 51.8%.
453 MOFCOM followed the same approach to determining the "all others"
rate as in the Preliminary Determination and confirmed the 105.4% rate applied to "all other" US
producers.454 The Final Determination indicates that:
As to all other companies in the U.S. that neither make an entry for appearance nor
provides a questionnaire response, according to Article 21 of the AD Regulations, the
Investigating Authority decides to determine their respective normal value and export
price using facts that have been obtained and the best information that can be
obtained.
455

445 Notice of Initiation of the Anti-Dumping Investigation, Exhibit USA-6; Anti-Dumping Investigation
Registration Form, Exhibit CHN-49.
446 Preliminary Anti-Dumping Determination, Exhibit USA-2, pp. 2-3.
447 Preliminary Anti-Dumping Determination, Exhibit USA-2, p. 3. As a voluntary respondent, Sanderson
submitted questionnaire responses, as did the three examined respondents.
448 China's response to Panel question No. 80.
449 Preliminary Anti-Dumping Determination, Exhibit USA-2, section 1.2.3, 4.1.D and Appendix II.
450 Preliminary Anti-Dumping Determination, Exhibit USA-2, section 4.1.E and Appendix II.
451 Preliminary Anti-Dumping Determination, Exhibit USA-2, pp. 20-21.
452 Anti-Dumping Disclosure to the US Government, Exhibit USA-11, p. 11.
453 Final Anti-Dumping Determination, Exhibit USA-4, Appendix II.
454 Final Anti-Dumping Determination, Exhibit USA-4, p. 62.
455 Final Anti-Dumping Determination, Exhibit USA-4, p. 33.

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7.3.4.4 Main arguments of the parties
7.3.4.4.1 United States
7.3.4.4.1.1 Application of a facts available rate under Article 6.8 and Annex II of the
Anti-Dumping Agreement
7.279. The United States argues that MOFCOM fa iled to notify "all other" US producers/exporters
of: (i) the initiation of the investigation, (ii) the information required, and (iii) the fact that failure
to participate and provide certain information would result in a determination based on facts
available.
456 As a consequence, MOFCOM could not consider that failure of these
producers/exporters to register justified resorting to facts available under Article 6.8. The
United States contends that an exporter that is unknown to the investigating authority is not
notified of the information required of it, and is thus denied an opportunity to provide it; it adds
that MOFCOM never sent copies of the questi onnaires to the unknown producers/exporters.
457 The
United States understands China to argue that MOFCOM applied a facts available "all others" rate
to induce cooperation. Yet, in the United States' view this incentive can only work if companies
were aware of the investigation, but declined to participate, which was not the case.
458
Consequently, the United States submits, MOFCOM resorted to facts available inconsistently with
Articles 6.8 and Annex II, since the unknown producers/exporters cannot be said to have:
(i) refused access to, or (ii) otherwise failed to provide necessary information, or (iii) impeded the
investigation, as provided in Article 6.8.
459
7.280. The United States comments on China's argument that MOFCOM attempted to notify all
producers/exporters by: (i) posting a public notice on MOFCOM's website; (ii) placing a copy of the
initiation notice in a reading room in Beijing; and (iii) contacting the US Embassy in China. First, in
the United States' view, posting a public notice on MOFCOM's website is not likely to provide
sufficient notice to an exporter or producer unless that exporter or producer was actively reviewing
MOFCOM's website at least once every 20 days, given that MOFCOM required them to register
within 20 days from the initiation of the investigation. The United States' position is that the
internet is not a specific locale that would confer knowledge to interested parties of the existence
of the initiation notice. The United States adds that had MOFCOM sent a targeted communication
to producers/exporters, there may be some validity to China's argument. Second, the
United States argues that placing a copy of the No tice of Initiation in a reading room is even less
likely to ensure that an exporter or producer is notified of the investigation. Third, the
United States rejects China's contention that MOFCOM's letter to the US Embassy in China
requested the United States Government to identify or contact US producers or exporters of the
subject products, including "all others" producers/exporters. But in any event, the United States
submits, the obligation to notify interested parties is on the investigating authority – not the
Member where those exporters or producers might be located.
460
7.281. The United States claims that MOFCOM applied an "all others" rate which was "apparently
adverse" to the interests of the producers/export ers concerned in violation of Article 6.8 of the

456 In its first written submission the United States mainly argues that MOFCOM failed to notify the "all
other" exporters of the information required from them. In subsequent submissions, the United States adds
that those exporters were also not notified of the investigation itself and the fact that non-cooperation on their
part may result in the determination based on facts available. (United States' first written submission,
paras. 145-146, 154; second written submission, para. 100; opening statement at the second meeting of the
Panel, para. 44).
457 United States' first written submission, paras. 151-152 and footnotes 169 and 170, and second
written submission, para. 111 (citing to inter alia, Panel Reports, Mexico – Anti-Dumping Measures on Rice,
footnote 211; and China – GOES, para. 7.393; and Appellate Body Report, Mexico – Anti-Dumping Measures
on Rice, paras. 258-264); United States' opening statement at the first meeting of the Panel, paras. 32-33.
458 United States' opening statement at the first meeting of the Panel, para. 33; second written
submission, para. 114. The United States notes that the facts available "all others" rate determined by
MOFCOM applies not only to companies that exported to China during the period of investigation and did not
register, but also to companies that began shipping after MOFCOM initiated the investigation, or even after the
conclusion of that investigation. The United States argues that the latter could not possibly be said to have
failed to provide information or impeded MOFCOM's investigation. (United States' second written submission,
para. 116).
459 United States' first written submission, paras. 150-152; second written submission, paras. 101-102.
460 United States' second written submission, paras. 103-110; comments on China's response to Panel
question No. 85 (citing Letter to the US Embassy on Initiation, Exhibit CHN-63).

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Anti-Dumping Agreement.461 The United States relies for this argument on the fact that the "all
others" rate was more than twice as high as any of the individual margins or the rate applied to
companies that registered but were not investigated
462, and on the fact that MOFCOM failed to
explain how it had arrived at this rate.463
7.3.4.4.1.2 Disclosure of essential facts and public notice pu rsuant to Articles 6.9, 12.2,
12.2.1 and 12.2.2 of the Anti-Dumping Agreement
7.282. The United States claims that MOFCOM acted inconsistently with Article 6.9 of the
Anti-Dumping Agreement since MOFCOM did not iden tify the essential facts that formed the basis
for its imposition of the 105.4% "all others" dumping rate. 464 Although MOFCOM did explain in the
Disclosure document that it derived this rate fr om the normal value and export price of "a model
from the investigated companies", MOFCOM did no t disclose either which model it used, the facts
that led MOFCOM to conclude that the use of th is single model was appropriate, or the facts
underpinning the calculation of the 105.4% rate, including the details of the calculation itself. 465
According to the United States, these facts are "essential facts" within the meaning of Article 6.9 of
the Anti-Dumping Agreement and without the disclosure of these facts, the interested US
companies could not adequately defend their interests concerning MOFCOM's calculation of the "all
others" dumping rate.
466
7.283. Further, the United States contends that MOFCOM's failure to disclose in the Preliminary
Determination, the Anti-Dumping Disclosure to the United States Government, or the Final
Determination the rationale for its decision to apply facts available in calculating the "all others"
dumping rate violates Articles 12.2, 12.2.1, and 12.2.2 of the Anti-Dumping Agreement. According
to the United States, the factual and legal bases for MOFCOM resorting to facts available constitute
"material issues of fact and law considered", and are essential in determining which dumping
margin to apply to the "all others" companies. The United States adds that the decision to resort to
facts available is a significant step in the process leading to the imposition of a final measure. The
United States mentions the following among the particular issues that MOFCOM should have, but
failed to disclose: the relevant facts underlying its determination that recourse to facts available
was warranted and an explanation of the methodology it used in the establishment and
comparison of the export price and normal value for "all other" respondents.
467 The United States
submits that the first explanation of MOFCOM's calculation of the "all others" rate was provided by
China during its statement at the first Panel meeting, when it indicated that the margin consisted
of the "highest calculated normal value and the lo west recorded export price", and that a similar
explanation is found nowhere on the record.
7.3.4.4.2 China
7.3.4.4.2.1 Application of a facts available rate under Ar ticle 6.8 and Annex II of the
Anti-Dumping Agreement
7.284. China contends that Article 6.8 and A nnex II of the Anti-Dumping Agreement apply to
unknown producers that otherwise do not provide necessary information within a reasonable
period.
468 China submits that given MOFCOM's comprehensive Notice of the Initiation of the
Investigation and given the non-cooperation of "unknown" exporters, it was appropriate for
MOFCOM to resort to facts available for determining the latter's dumping rate.
469 China further
argues that MOFCOM's public Notice of the Initiation of the Anti-Dumping Investigation made it
clear that all producers should register with the Ministry, and would be subject to an anti-dumping
rate based on facts available if they failed to register and/or fully participate in the investigation.
In addition, the notice specified the deadline for registration and the information required by the

461 United States' first written submission, para. 146; second written submission, para. 117 (citing
Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, para. 291 and 294).
462 United States' second written submission, para. 118.
463 United States' second written submission, paras. 118-120.
464 United States' first written submission, paras. 159 and 165.
465 United States' first written submission, paras. 144 and 161; opening statement at the first meeting
of the Panel, para. 34.
466 United States' first written submission, paras. 162-164.
467 United States' first written submission, paras. 169-173.
468 China's second written submission, para. 117; response to Panel question Nos. 17(a) and (b).
469 China's first written submission, paras. 183-184.

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authority.470 China notes that the United States acknowledges the fact that the Notice of Initiation
was provided to the six US known producers/exporters and the US Embassy. Furthermore, a public
notice was posted on MOFCOM's website and was available in a reading room at MOFCOM. 471
According to China, these actions provided th e necessary notice to all producers/exporters
required by Articles 6.1 and 6.8 of the Anti-Dumping Agreement, as is evidenced by the 37 entries
of appearance received by MOFCOM.472
7.285. China argues that MOFCOM's approach to notifying producers/exporters in the
investigations at issue differs from the one that was found inconsistent with Article 6.8 in Mexico –
Anti-Dumping Measures on Rice . China argues that whereas in Mexico – Anti-Dumping Measures
on Rice, the authority notified the US Embassy and th e two known exporters but apparently took
no other action, in the present case, MOFCOM disseminated the initiation notice and registration
document across the internet. China also disagrees with the statement by the China – GOES panel
that internet distribution arguably does not provide sufficient notice, and submits that this issue
warrants reconsideration by this Panel.
473
7.286. China maintains that MOFCOM's decision to apply an "all others" dumping rate of 105.4%
conforms to the requirements of paragraph 7 of A nnex II, establishing that "if an interested party
does not cooperate and thus relevant information is being withheld from the authorities, this
situation could lead to a result which is less favourable to the party than if the party did
cooperate." China states that the "all others" ra te was based on the best information available,
derived from confidential sources, consisting of the highest calculated normal value and the lowest
recorded export price.
474 China submits that if MOFCOM were to apply an "all others" rate based
on the rate applied to one of the cooperating respondents or to a party known to MOFCOM, there
would be no incentive for unknown companies who had been given effective notice to make
themselves known.
475
7.3.4.4.2.2 Disclosure of essential facts and public notice pu rsuant to Articles 6.9, 12.2,
12.2.1 and 12.2.2 of the Anti-Dumping Agreement
7.287. China rejects the United States' argument that MOFCOM did not adequately disclose the
essential facts consistent with the requirements of Article 6.9 of the An ti-Dumping Agreement.
China's position is that MOFCOM disclosed its proposed "all others" rate in the Preliminary
Determination, leaving enough time for the parties to consider it and comment if they wished.
Consequently, China argues, the only issue before the Panel is whether the disclosure was
sufficient to qualify as providing the "essential facts". In China's view the only "essential fact"
regarding the "all others" rate is the rate itself.
476 China adds that non-participating parties have
no need for additional details.477
7.288. China argues that as the "all others" rate was based on information derived from
confidential sources, MOFCOM was under no obligation to prepare a summary of the information
obtained from the confidential sources. China submits in this respect that the obligation to furnish
non-confidential summaries pursuant to Article 6.5.1 of the Anti-Dumping Agreement applies to
interested parties providing confidential information, as opposed to an investigating authority.
478
7.289. Concerning the United States' claims under Articles 12.2, 12.2.1, 12.2.2 of the
Anti-Dumping Agreement, China submits that the Preliminary and Final Determinations disclosed
that: (i) MOFCOM had relied on the facts available in calculating the "all others" rate, and (ii) the
"all others" rate was based on the normal value and export price of a model from the sampled

470 China's first written submission, para. 180 (citing Notice of Initiation of the Anti-Dumping
Investigation, Exhibit USA-6).
471 China's first written submission, para. 180.
472 China's first written submission, paras. 119 and 181.
473 China's first written submission, para. 182 (citing Panel Report, China – GOES, para. 7.386).
474 China's first written submission, para. 185; opening statement at the first meeting of the Panel,
para. 24.
475 China's first written submission, para. 183.
476 China's response to Panel question No. 20; opening statement at the second meeting of the Panel,
para. 47.
477 China's response to Panel question No. 20.
478 China's response to Panel question No. 20.

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companies. This information, in China's view, was sufficient to satisfy the relevant requirements of
the above provisions.479
7.3.4.5 Arguments of the third parties
7.290. In the European Union's view the United States does not explain how an investigating
authority could give a notice to producers that exist but are not known and do not make
themselves known to the investigating authority.
480 The European Union submits that it is possible
that the United States' claim does not raise a general question of how investigating authorities can
give a "notice" to this type of producers, but ra ther is limited to the narrower proposition that the
steps taken by MOFCOM in the case at hand did not constitute sufficient notice. The
European Union suggests that the Panel focus on the latter.
481
7.291. The European Union agrees with the United States that China acted inconsistently with
Articles 6.9, 12.2, 12.2.1 and 12.2.2 of the Anti-Dumping Agreement, given the apparent absence
of any meaningful disclosure or explanations by MOFCOM.482
7.292. Japan argues that the panel in China – GOES found that the authorities may not apply
facts available to determine dumping margins of unknown producers and agrees with this
reasoning.483 In particular, Japan submits that Article 6.1 and paragraph 1 of Annex II of the
Anti-Dumping Agreement obligate the investigating authorities to notify the exporter or foreign
producer of the specific information which they re quire from the exporter or producer. Therefore,
mere inaction by producers/exporters who were unknown to make themselves known to the
authorities would not be a valid reason for the importing Member to apply facts available.
484
7.293. In relation to the alleged non-disclosure of the essential facts, Japan argues that
investigating authorities must explain in sufficient detail the factual basis for applying facts
available, including facts relevant to the determination of normal value, export price, and the facts
upon which the authorities found that the interested party did not provide necessary
information.
485
7.294. With regard to the United States' claim conc erning public notices, Japan cites the ruling of
the panel in EU – Footwear (China) for the proposition that whether an issue is "relevant" or
"material" within the meaning of Article 12 and, th erefore, must be sufficiently explained, has to
be reviewed from the perspective of the authorities' final determination. Further, Japan points out
that the obligation set forth in Article 12.2 and elaborated in Articles 12.2.1 and 12.2.2 must be
understood in the light of the restrictions imposed by the confidentiality requirement in these
provisions. Finally, Japan submits that Article 12 of the Anti-Dumping Agreement is a procedural
provision, which does not discipline the substantive adequacy of an investigating authority's
reasoning.
486
7.295. Saudi Arabia submits that the conditions for the use of facts available under Article 6.8
and Annex II of the Anti-Dumping Agreement effectively mean that (i) an active approach on the
part of the investigating authority is required in order to ensure that interested parties have been
contacted and adequately notified as a precondition for resorting to facts available, and (ii) in the
event of the failure to identify and notify an ex porter or foreign producer, no facts available may
be used in respect of this producer/exporter.
487 Further, Saudi Arabia submits that "facts available"

479 China's second written submission, para. 120.
480 European Union's third-party submission, paras. 39-40.
481 European Union's third-party submission, para. 41.
482 European Union's third-party submission, paras. 42-43.
483 Japan's third-party submission, para. 33 (citing Panel Report, China – GOES, paras. 7.386
and 7.388).
484 Japan's third-party submission, paras. 33-34.
485 Japan's third-party submission, paras. 18-20 (citing Panel Report, China – GOES, para. 7.408).
486 Japan's third-party submission, paras. 40-45 (citing Panel Reports, EC – Tube or Pipe Fittings,
487 Saudi Arabia's third-party submission, paras. 25-27 (citing Appellate Body Report, Mexico –
Anti-Dumping Measures on Rice, paras. 259, 287-288).

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should only be used to fill in gaps in the necessary information and cannot be used in a punitive
manner.488
7.296. In regard to disclosure requirements, Saudi Arabia argues that it is very important that
interested parties be able to review and comment on the facts used to replace the missing
information.489 In Saudi Arabia's view, these facts are the factual basis for making the dumping
determination and are clearly part of the "essential facts under consideration" under Article 6.9.490
7.297. Saudi Arabia also submits that the factual basis for the dumping margin calculation, which
includes the factual basis for considering that resort to facts available was necessary, is an
important issue of facts and law considered material by the investigating authorities within the
meaning of Article 12.2 of the Anti-Dumping Agr eement, and, therefore, a sufficiently detailed
explanation of this factual basis must be included in the public notice of the determination.
491
7.3.4.6 Evaluation by the Panel
7.3.4.6.1 Whether MOFCOM applied facts av ailable consistently with Article 6.8 and
Annex II of the Anti-Dumping Agreement
7.298. The United States argues that MOFCOM did not fulfil the conditions prescribed by
Article 6.8 and Annex II for resorting to facts avai lable and that the "all others" rate applied by
MOFCOM was adverse to the interests of these producers/exporters, contrary to Article 6.8.492
7.299. We first consider the United States' argument that MOFCOM's actions to inform interested
parties failed to provide adequate notice to "all other", unknown producers/exporters regarding the
initiation of the investigation, the information required of these parties
493, and the fact that failure
on their part to provide that information would result in a determination based on facts available.
7.300. In the anti-dumping investigation at issue, MOFCOM: (i) issued a Notice of Initiation, which
it posted on its website along with the registration form 494; (ii) placed the Notice in the public
reading room at MOFCOM; and (iii) sent the Notice of Initiation to the US Embassy in China.495 The
Notice of Initiation required interested parties, including US producers/exporters, to register with
MOFCOM within 20 days and indicated that in case of failure to do so, MOFCOM would be entitled
to reject information subsequently submitted and make determinations on the basis of information
available.496 The registration form ("application to respond") posted on MOFCOM's website
requested that each US exporter/producer iden tify itself to MOFCOM and provide certain
information concerning the volume and value of its exports to China.497
7.301. In considering the United States' claim, we recall that the text of Article 6.8 allows an
authority to resort to facts available in circumstances in which an interested party refuses access
to, or otherwise does not provide "necessary information" within a reasonable period, or
significantly impedes the investigation. Pursuant to paragraph 1 of Annex II, such possibility is
subject to the investigating authority having "specif[ied] in detail the information required", and
having ensured that the party is aware that if information is not supplied within reasonable time, it
may resort to facts available. Neither Article 6.8 nor Annex II specify what form the request for
information should take or how the authority should communicate its request to the interested
party concerned.

488 Saudi Arabia's third-party submission, paras. 28-29 (citing Panel Report, China – GOES,
paras. 7.296, 7.302 and 7.450; and Appellate Body Report, Mexico – Anti-Dumping Measures on Rice,
paras. 289 and 293).
489 Saudi Arabia's third-party submission, para. 30.
490 Saudi Arabia's third-party submission, para. 32.
491 Saudi Arabia's third-party submission, para. 32.
493 The United States does not challenge that the information requested by MOFCOM was "necessary"
information.
494 Subsequently, MOFCOM also posted the questionnaires on its website, after transmitting them to the
respondents it had selected for individual examination.
495 The letter conveying the Notice of Initiation to the US Embassy in China was provided to the Panel in
Exhibit CHN-63.
496 Notice of Initiation of Anti-Dumping Investigation, Exhibit CHN-6.
497 Anti-Dumping Investigation Registration Form, Exhibit CHN-49.

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7.302. We must interpret the text of Article 6.8 in context. In this respect, Article VI of the
GATT 1994 as well as the Anti-Dumping Agreement pe rmit the imposition of an anti-dumping duty
with respect to all imports that are found to have been dumped and to have caused injury. In our
view, the fact that injury is determined on the ba sis of an assessment of all imports of the subject
product justifies the application of duties to all such imports. This includes imports from those
producers/exporters who were not individually identified, for example due to their non-cooperation
or the lack of information about them. In addi tion, Article 9.5 of the Anti-Dumping Agreement
implicitly recognises that an anti-dumping du ty may be applied even to the category of
producers/exporters who did not exist, or did not export during the POI, until they request an
individual rate through a new-shipper review.498
7.303. It is generally recognised and accepted that the manner to inform unknown interested
parties in an administrative or judicial proceeding is by way of public notices, including notices
published in an official gazette or on the internet. A similar concept is reflected in Article X of the
GATT 1994 (providing that certain laws, regulations, decisions, etc. of general application "shall be
published promptly in such a manner as to enable governments and traders to become acquainted
with them") as well as in Article 12 of the Anti-Dumping Agreement, requiring the issuance of
public notices of preliminary and final determinations. These provisions rely on the notion that the
intended recipients will consult the relevant documents emanating from national authorities of the
countries where they conduct business. An investigating authority which has no other, more direct,
means of reaching certain producers/exporters, may have no choice but to similarly proceed
through communications to the general public to request information from the parties it is unable
to identify.
7.304. The United States has cited to the Appellate Body decision in Mexico – Anti-Dumping
Measures on Rice in support of its argument that the actions taken by MOFCOM in the present case
would not suffice to notify the unknown US producers/exporters. Insofar as the United States may
be suggesting that the Appellate Body Report in that dispute stands for the general proposition
that a public notice, as opposed to a "targeted" communication
499, is not an acceptable form of
requesting information, then we must differ. We do not read the Appellate Body's findings in
Mexico – Anti-Dumping Measures on Rice as establishing a general rule that in all circumstances a
request for information must be conveyed through a "targeted", or individualized, communication.
The Appellate Body in that decision was addressing a specific factual situation which differs from
the situation in this case. In the current case, MOFCOM published a notice of initiation which
contained a description of the information required and the consequences of not providing such
information, whereas in Mexico – Anti-Dumping Measures on Rice there is no indication that the
public notice warned interested parties that the authority would resort to facts available in case of
failure to submit the information, if any was in fact requested.
500
7.305. The United States' line of argumentation would make it difficult, if not impossible, for a
Member to determine an appropriate anti-dumping duty rate for certain unknown
producers/exporters and thus apply anti-dumping measures with respect to their imports.
Moreover, it could create an incentive for an exporter/producer not to cooperate with the
investigation as it would benefit from the consequences of its non-cooperation, which would be no
anti-dumping measure. Such an outcome does not reflect an appropriate reading of Article 6.8.
Nor do we believe that such consequences were envisioned by the Appellate Body in its report in
Mexico – Anti-Dumping Measures on Rice.

498 In many investigations, notwithstanding its best endeavours in identifying all foreign
producers/exporters, the authority will be unable to satisfy itself that it has effectively identified all of them.
This will particularly be the case in a situation in which the number of foreign producers is large or the industry
highly fragmented. In addition, the authority will by definition be unable to identify producers/exporters who
do not exist or who have yet to start shipping. In fact, the investigating authority typically is not in a position
to differentiate between the two types of "unknown" producers/exporters (those who exist and are shipping
but do not appear and those who are not shipping) at the time when it imposes the measures.
499 See United States' second written submission, para. 105.
500 See, e.g. Panel Report, Mexico – Anti-Dumping Measures on Rice, para. 7.197, indicating that "the
application referred to two US exporters, Producers Rice, and Riceland. The Mexican authorities, upon initiation
of the investigation, sent a copy of the application, together with the notice of initiation, to these two exporters
as well as to the US authorities in Mexico City. Questionnaires were sent to the two US exporters mentioned in
the application. The notice to the US authorities included a form by which interested parties could make
themselves known …".

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7.306. In the case at hand, MOFCOM posted on its website the Notice of Initiation and
Registration Form, communicating the information required from interested parties, including
producers/exporters. The Notice included a warning that facts available could be resorted to in the
case of failure to register. The failure of certai n producers/exporters to register and provide the
required information meant that MOFCOM had no basis on which to determine their margin of
dumping.
501 In these circumstances, MOFCOM reasonably considered that the failure to register
meant that an interested party failed to "otherwise … provide … necessary information" within the
meaning of Article 6.8. 502 Furthermore, on the basis of the information before us, we have no
reason to believe that MOFCOM knew of producers/exporters other than those who registered, and
thus that it assigned a facts available rate to any producer/exporter which it could have contacted
through other means.
503
7.307. In light of the above facts, we consider that MOFCOM fulfilled the conditions set forth
under Article 6.8 and Annex II, allowing it to reso rt to facts available for the calculation of the
anti-dumping duty applied to US producers/exporters who failed to register.
7.308. The second aspect of the United States' claim concerns the manner in which MOFCOM
determined the "all others" rate, by using facts apparently adverse to the interests of the unknown
producers/exporters.
7.309. Concerning the manner in which facts available may be applied, paragraph 7 of Annex II
establishes that the authority must use "special circumspection" when they base their findings on
information from a secondary source.
7.310. In Mexico – Anti-Dumping Measures on Rice, the Appellate Body clarified that the
authority's discretion when using facts available to replace missing information is not unlimited.
The Appellate Body agreed with the panel's statement in that case that:
The use of the term "best information" [in Annex II] means that information has to be
not simply correct or useful per se , but the most fitting or "most appropriate"
information available in the case at hand. Determining that something is "best"
inevitably requires, in our view, an eval uative, comparative assessment as the term
"best" can only be properly applied where an unambiguously superlative status
obtains.
504 (emphasis original)
7.311. Further, in the context of Article 12.7 of the SCM Agreement, the panel in China – GOES
considered, and rejected, an argument similar to the one China makes before us:
In our view, the use of facts available should be distinguished from the application of
adverse inferences. While paragraph 7 of Annex II of the Anti-Dumping Agreement
states that non-cooperation by an interested party "could lead to a result which is less
favourable to the party than if the party did cooperate", we see no basis in Annex II
for the drawing of adverse inferences. In ou r view, the purpose of the facts available
mechanism is not to punish non-cooperation by interested parties. As explained by the
Appellate Body, the purpose of Article 12.7 of the SCM Agreement is rather to "ensure

501 In our view, in the case of a failure by an interested party to provide some initial information
necessary for the determination of a producer's margin of dumping, the authority is justified in replacing other
information that it cannot collect as a result of that failure, even if it did not specifically request the other
information. Such information initially required may include the producer's contact details and information
necessary for the authority to decide on sampling. For a similar view, see Panel Report, US – Shrimp
(Viet Nam), paras. 7.263-7.264. The panel in China – GOES appeared to come to the opposite conclusion.
502 In these circumstances, we need not consider whether additional actions taken by MOFCOM –
i.e. making the Notice of Initiation available in a reading room and transmitting it to the US Embassy in China
provided sufficient notice to unknown US producers/exporters.
503 We note in particular that the United States does not allege that there were additional
producers/exporters known to MOFCOM, and that China has indicated that the Chinese Government (including
any of its agencies) did not, at relevant times, maintain information with respect to importation of goods that
identifies the exporters of those goods for customs, sanitary or other purposes. (China's response to Panel
question Nos. 18 and 104).
504 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, para. 289 (citing Panel Report,
Mexico – Anti-Dumping Measures on Rice, para. 7.166).

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that the failure of an interested party to provide necessary information does not
hinder an agency's investigation", in the sense that "the provision permits the use of
facts on record solely for the purpose of replacing information that may be missing".
While non-cooperation triggers the use of facts available, non-cooperation does not
justify the drawing of adverse inferences. Nor does non-cooperation justify
determinations that are devoid of any factual foundation.
505
7.312. We agree that the rate based on facts available must have a logical relationship with the
facts on the record and be a result of an evaluative, comparative assessment of those facts.
7.313. In the present case, the limited explanation provided by MOFCOM does not allow an
understanding of which facts on the record it used to calculate the "all others" rate. 506 Therefore
we cannot determine whether MOFCOM acted consistently with the principles identified above in
calculating the "all others" rate. In light of these facts, we consider that the United States has
made a prima facie case that MOFCOM acted inconsistently with Article 6.8, which is not rebutted
by China. Therefore, we find that China acted in consistently with Article 6.8 of the Anti-Dumping
Agreement when MOFCOM calculated the "all ot hers" rate of 105.4% on the basis of facts
available.
7.3.4.6.2 Whether MOFCOM disclosed the "essential facts" pertaining to the "all others"
rate in the anti-dumping investigation as re quired by Article 6.9 of the Anti-Dumping
Agreement
7.314. The United States claims that China acted inconsistently with Article 6.9 of the
Anti-Dumping Agreement by failing to disclose "the essential facts under consideration" pertaining
to the "all others" rate.
7.315. We have noted above that the first senten ce of Article 6.9 of the Anti-Dumping Agreement
requires the investigating authority to inform all interested parties of the essential facts under
consideration which form the basis for the decision whether to apply definitive measures. This
obligation is further informed by the second sentence in Article 6.9, requiring that the disclosure
take place in sufficient time for the parties to defend their interests.
507 In China – GOES , the
Appellate Body clarified that the essential facts are those facts that are significant in the process of
reaching a decision as to whether or not to apply definitive measures; and that what constitutes
an "essential fact" must be answered by referring to the content of the findings needed to satisfy
the substantive obligations in the Anti-Dumping Agreement.
508
7.316. Article 6.8 limits the application of facts available to circumstances where an interested
party refuses access to, or otherwise does not provide, necessary information within a reasonable
period of time or significantly impedes the investigation. Further, Annex II establishes certain
requirements which must be satisfied in the application of facts available, including the obligation
to specify in detail the information required from an interested party, and to use the "best
information" on the record for replacing the missing information.
509
7.317. Interpreting Article 6.9 in the light of Article 6.8, the "essential facts" that MOFCOM was
expected to disclose include: (i) the precise basis for its decision to resort to facts available, such
as the failure by an interested party to provide the information that was requested; (ii) the
information which was requested from an interested party; and (iii) the facts which it used to
replace the missing information. In our view, the above information is facts under consideration in
MOFCOM's determination to apply facts available. Furthermore, this information formed the basis
for MOFCOM's determination, on the basis of facts available, of the "all others" rate of 105.4%;
therefore, it was essential for the interested parties to know whether the authority's application of
facts available conformed to the requirements of Ar ticle 6.8 and to properly defend their interests
in this regard.

505 Panel Report, China – GOES, para. 7.302 (citing Appellate Body Report, Mexico – Anti-Dumping
Measures on Rice, para. 293). (footnote omitted)
506 See below, para. 7.319.
507 Panel Report, China – X-Ray Equipment, para. 7.400.
508 Appellate Body Report, China – GOES, paras. 240-241.
509 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, paras. 287-289, 294.

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7.318. We are of the view that MOFCOM's disclosure of the essential facts does not satisfy the
requirements of Article 6.9 because it is essentia lly reduced to a conclusory statement, instead of
providing the essential facts underlying the authority's decision. In this regard, as discussed in
paragraph 7.90 above, pursuant to Article 6.9, the authority has an obligation to disclose the
actual data underlying its decision.
7.319. Contrary to that requirement, MOFCOM's Disclosure does not explain the data that the
authority used for replacing the missing information. In particular, MOFCOM's Disclosure is silent
on the particular model upon which the "all others" rate was based.
510 The Disclosure states that
MOFCOM used the normal value and export pric e of a model from the sampled companies, but
does not specify whether the normal value and export price were taken from the same model or
from different models and whether from one or fr om different "sampled companies". If, as the use
of the plural implies, it was more than one comp any, it would not be possible to check MOFCOM's
calculation in averaging the rates.
7.320. China states, before the Panel, that the "all others" rate consisted of the highest calculated
normal value and the lowest recorded export pric e, but acknowledges that an interested party
would be unable to determine that from the Disclosure.
511 We, therefore, do not need to take this
explanation into account in considering the consistency of MOFCOM's Disclosure with Article 6.9
China also argues that the information underlying MOFCOM's calculation of the facts available rate
was derived from confidential sources and, therefore, could not be disclosed.
7.321. Article 6 of the Anti-Dumping Agreement, in its paragraphs 5 and 9 respectively, strikes a
balance between the duty imposed on the investigating authority to protect any confidential
information on the one hand, and the duty to discl ose the "essential facts under consideration" on
the other hand. In China – GOES , both the Appellate Body and the panel clarified that when
confidential information constitutes "essential facts" within the meaning of Article 6.9 of the
Anti-Dumping Agreement, the disclosure obligatio ns under these provisions should be met by
disclosing non-confidential summaries of those facts. 512 In other words, a non-confidential
summary of the information from the respondents underlying the "all others" dumping rate should
be disclosed for the purposes of Article 6.9 of th e Anti-Dumping Agreement. We subscribe to this
view. The duty imposed under Article 6.5 on the investigating authority to protect confidential
information provides a limited exception to its disclosure obligations under Article 6.9. If the
relevant essential facts included confidential information, MOFCOM may have met its obligation
under Article 6.9 by disclosing such information in the form of a non-confidential summary.
7.322. Finally, China argues that MOFCOM disclosed its proposed "all others" rate in the
Preliminary Determination, leaving enough time for the parties to consider it and comment if they
wished.
513 We see no basis for China's argument. As noted by the panel in China – GOES ,
Article 6.9 is not a means by which authorities respond to arguments made by interested parties.
Moreover, a lack of comments on the Preliminary Determination is not proof that the essential
facts were properly disclosed.
514 Thus, the relevant question would not be whether interested
parties commented after the Preliminary Determination, but whether the Preliminary
Determination disclosed the "essential facts". In this case, it did not.
7.323. In sum, we find that China acted incons istently with Article 6.9 of the Anti-Dumping
Agreement in failing to disclose certain "essential facts" forming the basis of its determination of
the "all others" rate of 105.4%, and in particular the facts pertaining to the data relied upon by
MOFCOM in calculating this rate.

510 Anti-Dumping Disclosure to the US Government, Exhibit USA-11, p. 11.
511 China's first written submission, paras. 184-85; opening statement at the first meeting of the Panel,
para. 24; response to Panel question No. 21.
512 Appellate Body Report, China – GOES, para. 247; Panel Report, China – GOES, para. 7.410.
513 China's response to Panel question No. 20.

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7.3.4.6.3 Whether MOFCOM di sclosed in the public notices the rationale and relevant
facts underlying its decision to apply facts available and the rate determined as required
under Articles 12.2, 12.2.1 and 12.2.2 of the Anti-Dumping Agreement
7.324. The United States argues that China acted inconsistently with its obligations under
Articles 12.2, 12.2.1 and 12.2.2 of the Anti-Dumpi ng Agreement by not providing the rationale for
its decision to apply "facts available". In partic ular, according to the United States, MOFCOM did
not provide in sufficient detail the findings and conclusions that led to the application of facts
available, a full explanation of the methodology used to establish the export price and normal
value used for "all other" respondents, or all relevant information underlying its determination. 515
China contends that MOFCOM disclosed sufficient information to satisfy the requirements of
Articles 12.2, 12.2.1 and 12.2.2.
516
7.325. We note that a number of other panels have exercised judicial economy in relation to
claims under Articles 12.2 or 12.2.2 of the Anti-Dumping Agreement in circumstances where a
substantive inconsistency with another provis ion of the Anti-Dumping Agreement had been
found.
517 In the circumstances of this case, however, we are of the view that findings under the
public notice provisions may be relevant for the purposes of implementation. Therefore, we
proceed to examine the United States' claims in this regard.
7.326. In both the Preliminary and Final Anti-Dum ping Determinations, MOFCOM explained that it
determined the dumping rate for "all other" US companies who neither registered nor provided a
questionnaire response by using facts that had been obtained and the best information that could
be obtained.
518 Although the United States' claims relate to both the Preliminary and Final
Determinations, given that their language is not substantially different 519, we consider it
appropriate to make findings only in relation to the latter. In any event, we believe that, in the
circumstances of this case, making a finding in relation to the Preliminary Determination would not
contribute to securing a positive solution to the dispute.
7.327. Article 12.2 of the Anti-Dumping Agreement requires that a public notice be given of any
preliminary or final determination and that each such notice set forth, or otherwise make available
through a separate report, in sufficient detail the findings and conclusions reached on all issues of
fact and law considered material by the investigat ing authority. Further, Article 12.2.2 elaborates
on this requirement by establishing, inter alia , that the public notice must contain all relevant
information on the matters of fact and law and reasons which have led to the imposition of final
measures. The meaning of the term "issue of fact and law considered material" in Article 12.2 has
been clarified by a number of previous panels as "an issue that has arisen in the course of the
investigation that must necessarily be resolved in order for the investigating authorities to be able
to reach their determination".
520 Furthermore, in China – GOES , the Appellate Body clarified that
the issues of fact and law that the authority may consider material are determined by the
framework of the substantive provisions of the Anti-Dumping Agreement.
521
7.328. In relation to the obligation under Article 12.2.2, the Appellate Body in China – GOES
noted that the disclosure must allow an understanding of the factual basis that led to the
imposition of final measures and give a reasoned account of the factual support for an authority's
decision.
522 The Appellate Body has further explained that Article 12.2.2 captures the principle that

515 United States' first written submission, paras. 169-72. The United States argues that MOFCOM failed
to provide the required information in the Preliminary and Final Determinations as well as in the Disclosure to
the US Government. The latter does not, in our view, constitute a "public notice" within the meaning of
Articles 12.2, 12.2.1 and 12.2.2. We therefore do not take it into consideration in the assessment of the
United States' claims.
516 China's second written submission, para. 120.
517 See Panel Reports, EC – Bed Linen, para. 6.259; EC – Fasteners (China), para. 7.548.
518 Preliminary Anti-Dumping Determination, Exhibit USA-2, pp. 20-21; Final Anti-Dumping
Determination, Exhibit USA-4, p. 33.
519 The only difference is that whereas the Preliminary Determination reads: "… the Investigating
Authority decides to make determination related to the dumping and dumping margin using …", the Final
Determination states: "… the Investigating Authority decides to determine their respective normal value and
export price using …". Preliminary An ti-Dumping Determination, Exhibit USA-2, pp. 20-21; Final Anti-Dumping
Determination, Exhibit USA-4, p. 33.
520 See Panel Reports, EC – Tube or Pipe Fittings, para. 7.424; EU – Footwear (China), para. 7.844.
521 Appellate Body Report, China – GOES, para. 257.
522 Appellate Body Report, China – GOES, para. 256.

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those parties whose interests are affected by the imposition of final anti-dumping duties are
entitled to know, as a matter of fairness and due process, the facts, law and reasons that have led
to the imposition of such duties, and seeks to guar antee that interested parties are able to pursue
judicial review of a final determination as provided in Article 13 of the Anti-Dumping Agreement.
523
In China – X-Ray Equipment , the Panel clarified that the level of detail of the description of the
authority's findings and conclusions required und er Article 12.2.2 must be sufficient to allow
interested parties to assess the conformity of those findings and conclusions with domestic law and
the WTO Agreement.524 We agree with the reasoning of the A ppellate Body and previous panels in
these disputes and adopt it as our own.
7.329. In the Panel's view, MOFCOM's Final Determination does not provide the findings and
conclusions reached on all issue of fact and law considered material as it does not set forth the
relevant matters of fact leading to the conclusion that 105.4% was the appropriate anti-dumping
rate for "all other" exporters. Although the Final Determination states that the best information
available was used, it does not explain the factual bases underlying the rate.
7.330. Finally, as under Article 6.9, the fact that confidential information may have been part of
the relevant information that had to be disclosed does not excuse failure to comply with
Articles 12.2 and 12.2.2. Rather, in such circumstances, the investigating authority should meet its
disclosure obligations by providing non-confidential summaries of the confidential information.
525
7.331. Consequently, we conclude that MOFCOM did not disclose "in sufficient detail the findings
and conclusions reached on all issues of fact and law considered material" or "all relevant
information on matters of fact". We, therefore, find that China acted inconsistently with
Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement.
7.3.5 Whether MOFCOM complied with Articl es 12.7, 12.8, 22.3, 22.4 and 22.5 of the
SCM Agreement when it applied facts availa ble to calculate the "all others" rate for
unknown producers/exporters in the countervailing duty investigation
7.3.5.1 Introduction
7.332. The United States' claims with respect to MOFCOM's determination of the "all others"
countervailing duty rate in the countervailing duty investigation are similar to its claims with
respect to the "all others" rate in the anti-dumping investigation. They concern a range of
provisions in the SCM Agreement – Articles 12.7, 12.8, 22.3, 22.4 and 22.5 – which correspond to
Articles 6.8, 6.9, 12.2, 12.2.1 and 12.2.2 of the Anti-Dumping Agreement. In particular, the
United States claims that:
a. China acted inconsistently with Article 12.7 of the SCM Agreement because MOFCOM
imposed an "all others" rate based on adverse facts available on producers/exporters
that MOFCOM did not notify of the informatio n required of them and that did not refuse
to provide necessary information or otherwise impede the subsidy investigation;
b. China acted inconsistently with Article 12. 8 of the SCM Agreement due to MOFCOM's
failure to inform the United States and other interested parties of the essential facts
under consideration that formed the basis of its calculation of the "all others" rate; and
c. China acted inconsistently with Articles 22.3, 22.4, and 22.5 of the SCM Agreement due
to MOFCOM's failure to disclose in sufficient detail the findings and conclusions reached
on all issues of fact, or all relevant information on matters of fact.
7.3.5.2 Relevant provisions
7.333. Article 12.7 of the SCM Agreement sets forth the conditions under which an investigating
authority may apply facts available. It provides:

523 Appellate Body Report, China – GOES, para. 258.
524 Panel Report, China – X-Ray Equipment, para. 7.459.
525 Appellate Body Report, China – GOES, para. 259.

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In cases in which any interested Member or interested party refuses access to, or
otherwise does not provide, necessary information within a reasonable period or
significantly impedes the investigation, preliminary and final determinations,
affirmative or negative, may be made on the basis of the facts available.
7.334. Article 12.8 of the SCM Agreement requires that:
The authorities shall, before a final determination is made, inform all interested
Members and interested parties of the essential facts under consideration which form
the basis for the decision whether to apply definitive measures. Such disclosure
should take place in sufficient time for the parties to defend their interests.
7.335. Articles 22.3, 22.4 and 22.5 set forth the requirement to give public notice of certain
actions or determinations in a countervailing duty investigation:
22.3 Public notice shall be given of any preliminary or final determination, whether
affirmative or negative, of any decision to accept an undertaking pursuant to
Article 18, of the termination of such an undertaking, and of the termination of a
definitive countervailing duty. Each such notice shall set forth, or otherwise make
available through a separate report, in sufficient detail the findings and conclusions
reached on all issues of fact and law considered material by the investigating
authorities. All such notices and reports shall be forwarded to the Member or Members
the products of which are subject to such determination or undertaking and to other
interested parties known to have an interest therein.
22.4 A public notice of the imposition of provisional measures shall set forth, or
otherwise make available through a separate report, sufficiently detailed explanations
for the preliminary determinations on the existence of a subsidy and injury and shall
refer to the matters of fact and law which have led to arguments being accepted or
rejected. Such a notice or report shall, due regard being paid to the requirement for
the protection of confidential information, contain in particular:
(i) the names of the suppliers or, when this is impracticable, the supplying countries
involved;
(ii) a description of the product which is sufficient for customs purposes;
(iii) the amount of subsidy established and the basis on which the existence of a
subsidy has been determined;
(iv) considerations relevant to the injury determination as set out in Article 15;
(v) the main reasons leading to the determination.
22.5 A public notice of conclusion or suspension of an investigation in the case of an
affirmative determination providing for the imposition of a definitive duty or the
acceptance of an undertaking shall contain, or otherwise make available through a
separate report, all relevant information on the matters of fact and law and reasons
which have led to the imposition of final measures or the acceptance of an
undertaking, due regard being paid to the requirement for the protection of
confidential information. In particular, the notice or report shall contain the
information described in paragraph 4, as well as the reasons for the acceptance or
rejection of relevant arguments or claims made by interested Members and by the
exporters and importers.
7.3.5.3 Factual background
7.336. As in the anti-dumping investigation, upon the initiation of the countervailing duty
investigation, on 27 September 2009, MOFCOM noti fied the US Embassy of the initiation of the

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investigation, and posted the Notice of Initiation together with the relevant Registration Forms on
its website.526
7.337. MOFCOM limited its examination to three producers: Keystone, Tyson, and Pilgrim's
Pride.527 In the Preliminary Countervailing Duty Determination, MOFCOM determined the following
countervailing duty rates for the selected mandatory respondents: Keystone, 3.8%;
Tyson, 11.2%; and Pilgrim's Pride, 4.9%. MOFC OM applied the weighted average of these
three rates, 6.1%, to the US companies that regi stered with MOFCOM but were not investigated,
including Sanderson, the alternate respondent.528
7.338. MOFCOM assigned a 31.4% countervailing duty rate to "all other" US companies that
"failed to make an entry for appearance or fa iled to submit ... questionnaire responses". It
calculated this rate "on the basis of the already obtained facts and the obtainable best
information".529
7.339. Prior to the issuance of its Final Countervailing Duty Determination, MOFCOM issued to the
United States Government a Disclosure Document explaining the basic facts on which the
Determination was reached. The Disclosure explains that:
According to Article 21 of the CVD Regulations , with respect to other American
companies which have not registered and submitted answer sheets, the investigation
authority determines to adopt available facts to make a determination on ad valorem
countervailing duty rate.
The Authority chooses a sampled company and uses competitive benefit method to
calculate the benefit passed-through from upstream subsidy and received by the
company, and obtains the company’s ad valorem subsidy rate on this basis. In the
final determination, the Authority uses this tax rate as other responding companies’
ad valorem subsidy rate.
530
7.340. In the Final Determination, MOFCOM re vised the rates determined in the Preliminary
Determination as follows: Keystone, 4%; Tyson, 12.5%; Pilgrim's Pride, 5.1%; and companies
that registered but were not selected for individual examination, 7.4%.
531 MOFCOM's explanation
concerning the "all others" rate in the Final Determination is identical to its discussion of the issue
in the Preliminary Determination but revises the rate from 31.4% to 30.3%.532
7.3.5.4 Main arguments of the parties
7.3.5.4.1 United States
7.341. The United States' arguments concerning MOFCOM's determination of the "all others"
subsidy rate are similar to its arguments in support of its corresponding claims under the
Anti-Dumping Agreement.
533 The United States argues that in the absence of being notified of the
"necessary information", unregistered producers/ exporters cannot be said to have refused access
to or failed to provide necessary information or otherwise impeded the investigation within the
meaning of Article 12.7 of the SCM Agreement.
534
7.342. Furthermore, as in the context of the anti -dumping investigation, the United States claims
that MOFCOM violated Article 12.7 of the SCM Ag reement by determining an adverse "all others"

526 Preliminary Countervailing Duty Determination, Exhibit USA-3, section 2.2.1; Notice of Initiation of
the Countervailing Duty Investigation, Exhibit USA-7; Notice of Initiation of the Countervailing Duty
Investigation, Exhibit CHN-48 (Chinese version containing the internet link); Countervailing Duty Investigation
Registration Form, Exhibit CHN-50; Letter to the US Embassy on Initiation, Exhibit CHN-63.
527 Preliminary Countervailing Duty Determination, Exhibit USA-3, section 2.2.3, p. 4.
528 Preliminary Countervailing Duty Determination, Exhibit USA-3, p. 62 and Appendix II.
529 Preliminary Countervailing Duty Determination, Exhibit USA-3, p. 62 and Appendix II.
530 Countervailing Duty Disclosure to the US Government, Exhibit USA-49, p. 42.
531 Final Countervailing Duty Determination, Exhibit USA-5, Appendix II.
532 Final Countervailing Duty Determination, Exhibit USA-5, p. 78, Appendix II.
533 United States' first written submission, paras. 184-223.

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rate that significantly exceeded the highest rate determined for individually-examined companies,
and provided no sufficient explanation of such a rate. 535 The United States argues that given that
the highest countervailing duty rate calculated for an investigated company in the Final
Determination was 12.5%, the only way in which a "facts available" rate of 30.3% could be
obtained was for MOFCOM to include non-countervailable programmes in the calculation of the
rate. The United States argues that to the extent that such programmes are factored into
MOFCOM's calculation of the "all others" rate, MOFCOM ignored substantiated facts on the
record.
536 The United States contests China's response to this argument that the Disclosure
explained that the "all others" countervailing duty rate was based on an upstream subsidy feed
programme, and notes that the Disclosure refers to an "upstream subsidy" but not to a "feed"
programme.
537
7.343. The United States' arguments in support of its claim under Article 12.8 of the
SCM Agreement are similar to its arguments with respect to its claim under Article 6.9 of the
Anti-Dumping Agreement. Among the "essential fa cts" within the meaning of Article 12.8 that
MOFCOM allegedly failed to disclose, the United St ates mentions: (i) the facts that led MOFCOM to
conclude that resorting to the use of facts available adverse to a company's interests was
appropriate; (ii) the facts that led MOFCOM to conclude that a 30.3% countervailing duty rate was
an appropriate rate to apply to "all other" companies, especially given the fact that the
countervailing duty rates for the investigated companies were substantially lower than 30.3%; and
(iii) the facts underpinning the calculation of the 30.3% countervailing duty rate, including the
details of the calculation itself.
538
7.344. Finally, the United States' arguments concerning MOFCOM's violation of Articles 22.3, 22.4
and 22.5 of the SCM Agreement are similar to its arguments with respect to Articles 12.2, 12.2.1
and 12.2.2 of the Anti-Dumping Agreement. Concer ning the "issues of fact and law considered
material" that MOFCOM allegedly failed to disclose, the United States refers to the same
three facts cited in the context of the disclosure obligation under Article 12.8.539
7.3.5.4.2 China
7.345. China's response to the United States' claims under Articles 12.7, 12.8, 22.3, 22.4
and 22.5 of the SCM Agreement is substantially th e same as its response to the arguments it
makes under the corresponding claims under the Anti-Dumping Agreement.540
7.346. China explains that to calculate the "all others" countervailing duty rate, MOFCOM chose a
sampled company and calculated the benefit passed through from the upstream subsidies by using
the competitive benefit method. As in the anti-dumping investigation, the information relied upon
was not disclosed because it came from confidential sources.
541 China argues that the subsidy
programme used for determining the "all others" rate was a countervailable "feed" programme 542,
and that the reference to an "upstream subsidy" in the disclosure document was in fact a reference
to this feed programme.543
7.3.5.5 Arguments of the third parties
7.347. The European Union argues that textual differences between Articles 6.8 of the
Anti-Dumping Agreement and 12.7 of the SCM Agreement must be taken into account by the Panel
in assessing the United States' Article 12.7 claim. In particular, the European Union notes that
while Articles 6.1 and 6.8 of the Anti-Dumping Agreement refer to "interested parties", which

535 United States' first written submission, paras. 195-200; second written submission, paras. 117
and 121-125.
536 United States' first written submission, paras. 184 and 199.
537 United States' response to Panel question No. 103; comments on China's response to Panel
question No. 103.
538 United States' first written submission, para. 208; second written submission, para. 121; opening
statement at the first meeting of the Panel, para. 34.
539 United States' first written submission, paras. 220-221; second written submission, para. 128.
540 China's first written submission, paras. 187-194; second written submission, para. 121.
541 China's first written submission, para. 194; second written submission, paras. 122-123.
542 China's response to Panel question Nos. 23 and 24.
543 China's response to Panel question No. 103; comments on the United States' response to Panel
question No. 103.

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includes the government of the exporting Memb er, Articles 12.1 and 12.7 of the SCM Agreement
directly refer to "interested Member" and "interested party". 544 The European Union submits that
there could be cases, such as when a recipient of a subsidy is known to a Member, where a notice
to that Member would suffice for the purposes of the use of facts available under Article 12.7.545
7.348. The European Union's arguments with respect to the Unites States' claims under
Articles 12.8, 22.3, 22.4 and 22.5 of the SCM Ag reement are similar to the arguments it makes
with respect to the corresponding claims under the Anti-Dumping Agreement.546
7.349. Japan argues that the authorities have substantial discretion in deciding how to determine
a countervailing duty rate applicable to individu al exporters given that the SCM Agreement does
not stipulate whether an investigating authority must determine the existence of subsidisation and
the per-unit rate with respect to each known producer/exporter.
547 However, Japan argues, this
discretion is limited by the provisions of the SCM Agreement, such as Article 12.1, establishing a
due process requirement to give notice of the information required by the investigating authorities,
by the obligation to determine the total amount of subsidy and countervailing duty rate
consistently with the provisions of the Agreemen t, and by Article 12.7, which permits reliance on
facts available in certain limited circumstances.
548
7.350. With regard to Article 12.8 of the SCM Ag reement, Japan submits that under this provision
the authorities must disclose the body of fact s underpinning their finding of the financial
contribution, benefit, specificity, the calculation of per-unit ad valorem rate of subsidization, and
the facts leading to the conclusion that the application of facts available was warranted.549
7.351. Japan's arguments with respect to the United States' claims under Articles 12.2, 12.2.1
and 12.2.2 of the Anti-Dumping Agreement equa lly apply with respect to the claims under
Articles 22.3, 22.4 and 22.5 of the SCM Agreement.550
7.352. Saudi Arabia argues that despite the fact that the SCM Agreement does not contain an
equivalent to Annex II of the Anti-Dumping Agreement, Articles 6.8 and 12.7 establish similar
requirements concerning the investigating authority's use of facts available. Consequently,
Annex II can serve as relevant context for evaluating claims under Article 12.7 of the
SCM Agreement. In Saudi Arabia's view, this vi sion of the relationship between Articles 6.8
and 12.7 is supported by the Declaration on Dispute Settlement Pursuant to the Agreement on
Implementation of Article VI of the General Agr eement on Tariffs and Trade 1994 or Part V of the
Agreement on Subsidies and Countervailing Measures, adopted by the Trade Negotiations
Committee on 15 December 1993, declaring the need for the consistent resolution of disputes
arising from anti-dumping and countervailing duty measures, and by the Appellate Body's ruling in
Mexico – Anti-Dumping Measures on Rice.
551
7.353. Saudi Arabia's arguments with respect to the United States' claims under Articles 12.8,
22.3, 22.4 and 22.5 of the SCM Agreement are simi lar to those it makes with respect to the
corresponding claims under the Anti-Dumping Agreement.552

544 European Union's third-party submission, paras. 48-50; third-party response to Panel question No. 5.
545 European Union's third-party response to Panel question No. 5.
546 European Union's third-party submission, paras. 53-54.
547 Japan's third-party submission, para. 36 (citing Appellate Body Report, US – Softwood Lumber IV,
para. 152).
548 Japan's third-party submission, paras. 37-38 and footnote 42 (citing Appellate Body Reports, US –
Softwood Lumber IV, para. 154; Mexico – Anti-Dumping Measures on Rice, paras. 290 and 295).
549 Japan's third-party submission, paras. 22-24 (citing, inter alia, Panel Reports, Mexico – Olive Oil,
para. 7.110; China – GOES, paras. 7.463-7.464).
550 Japan's third-party submission, para. 44.
551 Saudi Arabia's third-party submission, para. 27 (citing Appellate Body Report, Mexico –
Anti-Dumping Measures on Rice, para. 295); third-party response to Panel question No. 6.
552 Saudi Arabia's third-party submission, paras. 31-32.

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7.3.5.6 Evaluation by the Panel
7.3.5.6.1 Whether MOFCOM app lied facts available consistently with Article 12.7 of the
SCM Agreement
7.354. The first aspect of the United States' claim under Article 12.7 concerns the basis for
MOFCOM's decision to use facts available in determining the "all others" countervailing duty rate.
The claim and the parties' arguments in this respect are identical to the claim and arguments
under Article 6.8 of the Anti-Dumping Agreemen t. Moreover, the facts are, for all relevant
purposes, identical to those we considered in respect of the United States' claim under Article 6.8.
7.355. The text of Article 12.7 of the SCM Agreem ent largely mirrors that of Article 6.8 of the
Anti-Dumping Agreement. There are, however, certain differences, notably the absence of an
equivalent to Annex II in the SCM Agreement. Notwithstanding these differences the Appellate
Body and previous panels have interpreted these provisions as imposing similar disciplines
concerning the circumstances under which an authority may resort to facts available.
553 We agree
with this approach to the interpretation and application of Article 12.7 and note that the parties to
this dispute, as well as certain third parties agree that the textual differences between Articles 6.8
and 12.7 are not significant.554
7.356. Consequently, we find it appropriate to transpose our reasoning and conclusions
concerning the parallel US claim under Article 6.8 mutatis mutandis to the United States' claim
under Article 12.7.555 For the reasons discussed above, we find that MOFCOM, having posted the
Notice of Initiation (including the warning that facts available could be resorted to in the case of
failure to register) and Registration Form on its website, could consider the failure to register and
to provide the requested information as a failure to "otherwise … provide … necessary information"
within the meaning of Article 12.7. MOFCOM, therefore, could determine the "all others" rate on
the basis of available facts on the record of the investigation.
7.357. The second aspect of the United States' claim concerns the question whether MOFCOM
applied an adverse rate, and in the affirmative, wh ether doing so was consistent with Article 12.7.
In the preceding section, we indicated that a rate determined on the basis of facts available under
Article 6.8 of the Anti-Dumping Agreement must have a logical relationship with the facts on the
record and be a result of an evaluative, comparat ive assessment of those facts. Article 12.7 of the

553 See, inter alia, Appellate Body Report, Mexico – Anti-Dumping Measures on Rice, paras. 291-298;
554 United States' response to Panel question No. 22; China's response to Panel question No. 22 and
second written submission, para. 121; Saudi Arabia's third-party response to Panel question No. 6; Japan's
third-party submission, para. 38, footnote 42. The European Union argues that the explicit reference to
"Members" in Article 12.7, which is lacking under the Anti-Dumping Agreement, could in certain circumstances
mean that a request for information addressed to the Member, requesting the name of beneficiaries of the
subsidy programmes at issue, would satisfy the requirements of Article 12.7. (European Union's third-party
submission, paras. 48-50; third-party response to Panel question No. 5). We note however that in the case at
hand, the subsidy programmes that MOFCOM found to be countervailable were indirect upstream subsidies
provided by the US Government to US corn and soybean producers.
 (Final Countervailing Duty Determination,
Exhibit USA-5, pp. 77-78). Therefore, although the US Government might know the identity of the direct
beneficiaries of the subsidies at issue (i.e. US corn and soybean producers), it does not logically follow that the
US Government would know the identity of indirect beneficiaries (i.e. all corn and soybean producers'
customers, including all US broiler producers who export subject merchandise to China). For this reason, we
need not consider the European Union's argument further.
555 As in the context of the imposition of anti-dumping measures, we consider that the SCM Agreement
envisages the possibility to apply a countervailing duty rate to exporters who were not individually examined,
even if they were "unknown" to the authority. We further note in this respect that the Appellate Body has held
that Article 19 of the SCM Agreement authorises Members to perform an investigation on an aggregate basis.
(See Appellate Body Report, US – Softwood Lumber IV, paras. 152-154). The Appellate Body reached this
conclusion in the light, inter alia, of Article 19.3, which provides that:
When a countervailing duty is imposed in respect of any product, such countervailing duty shall
be levied, in the appropriate amounts in each case, on a non discriminatory basis on imports of
such product from all sources found to be subsidized and causing injury, except as to imports
from those sources which have renounced any subsidies in question or from which undertakings
under the terms of this Agreement have been accepted. Any exporter whose exports are subject
to a definitive countervailing duty but who was not actually investigated for reasons other than a
refusal to cooperate, shall be entitled to an expedited review in order that the investigating
authorities promptly establish an individual countervailing duty rate for that exporter.

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SCM Agreement imposes disciplines similar to those under Article 6.8 556, and therefore permits
determining a rate on the basis of the information on the record under the same conditions.557
7.358. The United States argues that the fact that the "all others" rate is four times higher than
that of any individually-examined producer/exporter strongly suggests that MOFCOM relied on
non-countervailable programmes in calculating it. China responds that MOFCOM only relied on
programmes that were found to be countervaila ble (subsidy programmes benefiting corn and
soybean producers, the benefits of which MOFCOM found to have passed through to producers of
broiler products). China also explains that for individually-examined producers/exporters, MOFCOM
calculated the countervailing duty margin under two alternative methods ("competitive benefit"
and "pass-through") and retained the lowest margin so calculated. By contrast, for producers who
failed to register, MOFCOM calculated the countervailing duty rate based on the "competitive
benefit" amount calculated for one of the indivi dually-examined companies that had their subsidy
rate determined using the pass-through methodology.
558 In China's view, this difference explains
why the "all others" rate well exceeds the rate calculated for individually-examined
producers/exporters.559
7.359. MOFCOM's discussion of its calculation of the "all others" rate in the Disclosure and
Determinations does not indicate precisely which programmes MOFCOM took into consideration in
calculating the "all others" rate. 560 The "all others" rate, at 30.3%, does not appear to have any
logical relation with the highest individual rate, which stands at 12.5%. Furthermore, MOFCOM
used a different approach in calculating the benefit for determining the "all others" rate from the
approach it used for individually-examined prod ucers/exporters, without explaining the reasons
underlying this methodological choice. Consequently, it is not possible to establish that MOFCOM
has determined the "all others" rate consistently with the principles of Article 12.7. In these
circumstances, and given the limited information before us as to how MOFCOM determined the "all
others" rate, we find that the United States has made a prima facie case of violation, which has
not been rebutted by China.
7.360. We, therefore, uphold the United States' claim that China acted inconsistently with
Article 12.7 of the SCM Agreement because MOFCOM applied an "all others" rate determined on
the basis of facts available to US producers/exporters who failed to register.

556 See above, para. 7.355.
557 We note that the use by the authority of the best information for determining a subsidy rate ensures
that a countervailing duty ultimately levied on an imported product does not exceed the amount of the subsidy
received by the producer/exporter at issue, as required by Article 19.4 of the SCM Agreement.
558 China's second written submission, para. 123 and response to Panel question Nos. 24 and 103. In
the latter, China indicates that:
… MOFCOM calculated the ad valorem "all others" rate based on the data of one of the sampled
companies and used the "competitive benefit" method to calculate the benefit. The "all others"
rate is higher than the rate assigned to the sampled companies because of the distinction
between the "competitive benefit" analysis and the "pass-through" analysis applied by MOFCOM.
As explained in the final disclosure, the "competitive benefit" was the difference in the purchase
price paid for the subsidized feed materials versus the unsubsidized benchmark price. The "pass-
through" benefit was a calculation of the amount of the subsidy benefit received by the upstream
suppliers that actually passed through to the sampled companies. If the competitive benefit
exceeded the amount that may actually pass through from the upstream subsidy, then MOFCOM
took the pass-through amount as the basis of the subsidy benefit for the sampled companies.
This approach resulted in MOFCOM applying the pass-through amount in the case of Tyson and
Keystone, and the competitive benefit amount in the case of Pilgrim's. For the "all others" rate,
MOFCOM applied an ad valorem rate based on the competitive benefit amount of one of the
sampled companies that had their ad valorem subsidy rate determined using the pass-through
amount (i.e., Tyson and Keystone). … (footnotes omitted)
The Disclosure itself only indicates that MOFCOM applied the "competitive benefit method" to one of the
individually-examined companies' data. (Countervailing Duty Disclosure to the US Government,
Exhibit USA-49, pp. 8-30 and 42).
559 China's response to Panel question Nos. 24 and 103.
560 We read MOFCOM's Disclosure as indicating that it derived the "all others" subsidy rate from the
upstream subsidy programmes which MOFCOM found conferred a benefit on US producers of corn and
soybean, which benefit subsequently passed through to US producers of broiler products. The Disclosure
document and Determinations identify two countervailable upstream programmes, the direct payment subsidy
program and the crop insurance subsidy programme. Countervailing Duty Disclosure to the US Government,
Exhibit USA-49, pp. 8-30 and 42.

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7.3.5.6.2 Whether MOFCOM disclosed the "essential facts" pertaining to the "all others"
rate in the countervailing duty investigatio n, as required by Article 12.8 of the
SCM Agreement
7.361. We have earlier explained the nature of the obligation to disclose the "essential facts under
consideration" in Article 6.9 of the Anti-Dumping Agreement, which in our view is the same as the
obligation under Article 12.8 of the SCM Agreement. 561 The only relevant difference between the
two provisions and the obligation they impose is that in the context of a countervailing duty
investigation, the relevant "essential facts" concern information regarding subsidization (rather
than dumping), in addition to injury and the causal link.562
7.362. The Panel sees a number of problems arising from MOFCOM's disclosure. In particular, it is
not clear from any of the documents that might serve as the basis for a disclosure of the essential
facts (e.g., the Disclosure to the US Government and the Preliminary Determination) precisely
which programme(s), and which underlying data MOFCOM relied upon to determine the "all
others" rate. We recall that, in China – GOES, the Appellate Body clarified that a mere conclusion
is not sufficient to satisfy the obligation in Article 12.8; in order to enable the respondents to
defend their interests, the disclosure must contain the "essential facts" supporting the authority's
finding.563 As in the context of the anti-dumping investigation 564, we are not convinced that either
the mere fact that the "all others" rate was derived from confidential sources or the fact that
interested parties had an opportunity to comment on the Preliminary Determination exempt
MOFCOM from its obligation under Article 12.8.
7.363. On the basis of the foregoing, we find that China acted inconsistently with Article 12.8 of
the SCM Agreement due to MOFCOM's failure to disclose certain essential facts underlying its
decision to apply an "all others" countervailing duty rate of 30.3%.
7.3.5.6.3 Whether MOFCOM di sclosed in the public notices the rationale and relevant
facts underlying its decision to apply facts available and the rate determined as required
under Articles 22.3, 22.4 and 22.5 of the SCM Agreement
7.364. The United States' claims under Articles 22.3, 22.4 and 22.5 of the SCM Agreement
concern MOFCOM's explanation of the "all others" countervailing duty rate for unknown
producers/exporters.
7.365. In considering these claims, we adhere to our reasoning and approach taken with respect
to the claims of the United States concerning the corresponding provisions in the Anti-Dumping
Agreement. We recall that Article 22.3 of the SC M Agreement requires that a public notice be
given of any preliminary or final determination, which sets forth, or otherwise makes available
through a separate report, in sufficient detail the findings and conclusions reached on all issues of
fact and law considered material. Article 22.5 elaborates this requirement by establishing,
inter alia, that the public notice must contain all relevant information on the matters of fact and
law and reasons which have led to the imposition of final measures.
7.366. Contrary to the above requirements, MO FCOM's Final Countervailing Duty Determination
does not set forth in sufficient detail the findings and conclusions reached on all issues of fact
considered material, and all relevant information on the matters of fact.
565 Although the
determination states that the "best information" available was used in determining the "all others"
countervailing duty rate of 30.3%, it does not explain the factual bases underlying MOFCOM's
determination of the rate. Consequently, the information provided by MOFCOM in its Final
Determination is not sufficient to enable interested parties to verify the conformity of that
Determination with the relevant domestic law and the SCM Agreement, and, if necessary, pursue
judicial review of that Determination.

561 See, above sections 7.2.3 and 7.3.4.6.2.
562 See Appellate Body Report, China – GOES, para. 241; Panel Reports, Mexico – Olive Oil, para. 7.110;
and China – GOES, para. 7.652.
563 Appellate Body Report, China – GOES, para. 249.
564 See paragraph 7.321 above.
565 As for the corresponding claims of the United States under the Anti-Dumping Agreement, we do not
consider it necessary for the resolution of the dispute between the parties to make findings with respect to the
Preliminary Countervailing Duty Determination.

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7.367. For these reasons, we find that China acted inconsistently with Articles 22.3 and 22.5 of
the SCM Agreement.
7.4 Claims with respect to MOFCOM's injury determinations
7.4.1 Introduction
7.368. The United States makes a series of claims challenging MOFCOM's injury determinations in
the anti-dumping and countervailing duty investigations at issue. The United States alleges
violations of both substantive and procedural obligations concerning the following aspects of
MOFCOM's injury determinations:
i. MOFCOM's definition of the domestic industry in the investigations;
ii. MOFCOM's price effects analyses (findings of price undercutting and price
suppression) in the Final Determinations;
iii. MOFCOM's analyses of the impact of subjec t imports on the domestic industry in the
Final Determinations;
iv. MOFCOM's causation analyses in the Final Determinations.
7.369. We address each of these claims in turn in the following sections.
7.4.2 Whether MOFCOM properly defined th e domestic industry for purposes of the
injury determination
7.4.2.1 Introduction
7.370. The United States claims that China acted inconsistently with Articles 3.1 and 4.1 of the
Anti-Dumping Agreement and Articles 15.1 and 16.1 of the SCM Agreement in the manner in
which it defined the domestic industry for purposes of the investigations.
7.371. The United States contends that MOFCOM 's determination of what group of producers
constituted the domestic industry was inconsistent with Articles 4.1 and 16.1 because it did not:
i. first seek to define the domestic industry as a whole before turning to define the
domestic industry as producers of a major proportion of the total domestic output of
the like products;
ii. it did not make independent efforts to determine the extent of the domestic industry,
in particular by not investigating the possible existence of domestic producers other
than those made known to it by the Petitioner; and
iii. it limited the domestic industry to those supporting the Petition.
7.372. The United States argues that these flaws in the determination of the scope of the
domestic industry resulted in MOFCOM acting inconsistently with Articles 3.1 and 15.1 because
MOFCOM's improper exclusion of producers from the domestic industry resulted in an injury
analysis that was not based on positive evidence or an objective examination of the effects of the
subject imports on the domestic industry.
7.4.2.2 Relevant provisions
7.373. Article 3.1 of the Anti-Dumping Agreement and 15.1 of the SCM Agreement both read:
A determination of injury for purposes of Article VI of GATT 1994 shall be based on
positive evidence and involve an objective examination of both (a) the volume of the
dumped [subsidized] imports and the effect of the dumped [subsidized] imports on

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prices in the domestic market for like products, and (b) the consequent impact of
these imports on domestic producers of such products. (footnotes omitted)
7.374. Article 4.1 of the Anti-Dumping Agreement provides that:
For the purposes of this Agreement, the term "domestic industry" shall be interpreted
as referring to the domestic producers as a whole of the like products or to those of
them whose collective output of the products constitutes a major proportion of the
total domestic production of those products, except that:
(i) when producers are related
11 to the exporters or importers or are
themselves importers of the allegedly dumped product, the term
"domestic industry" may be interpreted as referring to the rest of the
producers;
(footnote original)
11 For the purpose of this paragraph, producers shall
be deemed to be related to exporters or importers only if (a) one of them
directly or indirectly controls the other; or (b) both of them are directly or
indirectly controlled by a third person ; or (c) together they directly or
indirectly control a third person, provided that there are grounds for
believing or suspecting that the effect of the relationship is such as to
cause the producer concerned to behave differently from non-related
producers. For the purpose of this paragraph, one shall be deemed to
control another when the former is legally or operationally in a position to
exercise restraint or direction over the latter.
(ii) in exceptional circumstances the territory of a Member may, for the
production in question, be divided into two or more competitive markets
and the producers within each market may be regarded as a separate
industry if (a) the producers within such market sell all or almost all of
their production of the product in question in that market, and (b) the
demand in that market is not to any substantial degree supplied by
producers of the product in question located elsewhere in the territory. In
such circumstances, injury may be found to exist even where a major
portion of the total domestic industry is not injured, provided there is a
concentration of dumped imports into such an isolated market and
provided further that the dumped imports are causing injury to the
producers of all or almost all of the production within such market.
7.375. Article 16.1 of the SCM Agreement sets forth a substantially similar definition of the
domestic industry for purposes of the SCM Agreement. Specifically, Article 16.1 states that:
For the purposes of this Agreement, the term "domestic industry" shall, except as
provided in paragraph 2
566, be interpreted as referring to the domestic producers as a
whole of the like products or to those of them whose collective output of the products
constitutes a major proportion of the total domestic production of those products,
except that when producers are related(48)
567 to the exporters or importers or are
themselves importers of the allegedly subsidized product or a like product from other
countries, the term "domestic industry" may be interpreted as referring to the rest of
the producers.
7.4.2.3 Factual background
7.376. MOFCOM published Notices of Initiation of the Anti-Dumping Investigation and of the
Countervailing Duty Investigation on 27 September 2009. The wording of the two Notices is
substantially the same. Both investigations were initiated upon the application of the same
Petitioner (the CAAA) and MOFCOM determined that the same group of companies had standing to

566 Paragraph 2 refers to the exceptional circumstance of dividing the territory of a Member into two or
more markets with different domestic industries.
567 Footnote 48 of the SCM Agreement is identical to footnote 11 of the Anti-Dumping Agreement set
forth in paragraph 7.374.

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file the Petition "on behalf" of the domestic indu stry. MOFCOM noted in the Notices of Initiation
that the companies comprising the CAAA accounted for 50.7% (2006), 55.1% (2007), 56.5%
(2008), and 62.5% (first half of 2009) of total domestic production.
568
7.377. In the Notices of Initiation, MOFCOM stated:
For the industry injury investigation, any interested party and interested government
can apply for response to the Investigation Bureau of Industry Injury ("IBII") of
MOFCOM within 20 days from the date of this Notice. The application to the IBII shall
contain the information regarding production capacity, output, inventory, and
producer’ production in construction and expansion plan, as well as its respective
volume and value of exports to Mainland China of the subject merchandise during the
POI for injury part. The Application Form can be downloaded from Column "Response
Registration" at http://www.cacs.gov.cn.
569
7.378. On the same day as it published the Notices of Initiation, MOFCOM published Notices of
Registration for participating in the injury portion of the investigation in the anti-dumping and
countervailing duty investigations. 570 The Notices required that interested parties and their
governments apply to and register with MOFCOM for participating in the investigation within
20 days.
571 MOFCOM did not receive any application or registration from domestic producers by
the deadline of 17 October 2009.572
7.379. In the Preliminary and Final Determinations, MOFCOM indicates that on 20 October 2009,
MOFCOM distributed a domestic producer's questionnaire to all known domestic producers (i.e.
9 companies listed in the body of the Petition and the 20 additional companies listed in Exhibit 2 to
the Petition).
573 MOFCOM also posted the questionnaire on the website "China Trade Remedy
Information," where it could be downloaded, completed and returned to MOFCOM. MOFCOM
received 17 questionnaire responses by the deadline. Those filling out the questionnaire
included 15 of the 29 companies listed in the Petition and 2 additional companies that had not
been made known to MOFCOM by the CAAA. All of them supported the investigations.
574
7.380. In the Preliminary and Final Determinations, MOFCOM determined that the aggregate
output of the producers who responded to the questionnaire accounted for 45.53% (2006),
50.72% (2007), 50.82% (2008) and 52.59% (first ha lf of 2009) of the total output volume of
domestic like products.575 Accordingly, MOFCOM found that the 17 producers represented the main
part of the total domestic production of the like products and determined that they "can represent
the Chinese domestic industry of broiler products."576
7.381. In its brief on injury, the US industry association – USAPEEC – provided MOFCOM with
information about companies that it believed were domestic producers that had not been identified

568 Notice of Initiation of the Countervailing Duty Investigation, Exhibit USA-7, p. 1; Notice of Initiation
of the Anti-Dumping Investigation, Exhibit USA-6, p. 1.
569 Notice of Initiation of the Countervailing Duty Investigation, Exhibit USA-7, p. 3; Notice of Initiation
of the Anti-Dumping Investigation, Exhibit USA-6, p. 3.
570 Notice of Registration for the Anti-Dumping Injury Investigation, Exhibit USA-39; Notice of
Registration for the Countervailing Duty Injury Investigation, Exhibit CHN-51.
571 Notice of Registration for the Anti-Dumping Injury Investigation, Exhibit USA-39; Notice of
Registration for the Countervailing Duty Injury Investigation, Exhibit CHN-51.
572 Final Anti-Dumping Determination, Exhibit USA-4, p. 25; Final Countervailing Duty Determination,
Exhibit USA-5, p. 27. China indicates in Exhibit CHN-62 that members of the CAAA were deemed registered.
573 China's response to Panel question No. 56 (citing Exhibit CHN-32).
574 Preliminary Anti-Dumping Determination, Exhibit USA-2, p. 14; Preliminary Countervailing Duty
Determination, Exhibit USA-3, p. 16.
575 Preliminary Anti-Dumping Determination, Exhibit USA-2, p. 14; Preliminary Countervailing Duty
Determination, Exhibit USA-3, p. 16; Final Anti-Dumping Determination, Exhibit USA-4, p. 24; Final
Countervailing Duty Determination, Exhibit USA-5, p. 27.
576 Final Anti-Dumping Determination, Exhibit USA-4, p. 26. MOFCOM does not specify the output
percentages of the domestic enterprises supporting the investigation in the Countervailing Duty Determination.
However, the ultimate definition of the domestic industry in both investigations is identical. (Final
Countervailing Duty Determination, Exhibit USA-5, p. 27).

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in the Petition and that MOFCOM had not contacted. 577 MOFCOM did not take any additional steps
in response to receiving this information from USAPEEC.578
7.4.2.4 Main arguments of the parties
7.4.2.4.1 United States
7.382. The United States argues that an in vestigating authority cannot comply with the
obligations in Articles 3.1 and 15.1 to base its injury determination on an objective examination of
positive evidence if the process for defining the domestic industry results in an examination of only
producers selected or identified by the Petitioner.
579 According to the United States, because
MOFCOM’s erroneous definition of the domestic industry prevented an objective examination of
positive evidence with respect to the impact of subject imports on the domestic industry, it would
have also tainted the analyses required in Articles 3.2, 3.4 and 3.5.580
7.383. In the United States' view, MOFCOM acted inconsistently with Articles 3.1 and 15.1,
because it did not make active efforts to collect data on all known domestic producers or data from
a representative sample of producers.
581 Instead, according to the United States, MOFCOM
effectively allowed the Petitioner to control which producers would be included in the domestic
industry.582
7.384. The United States contends that, when it only included in the domestic industry those
producers who "volunteered" by filling out the domestic producer questionnaire, MOFCOM allowed
a self-selection process among the domestic producers that introduced a "material risk of
distortion" in breach of Articles 3.1 and 15.1.
583 The United States argues that MOFCOM's
approach was, thus, similar to the one the European Commission took in EC – Fasteners (China)
that the Appellate Body found imposed a self-selection process that introduced a material risk of
distortion into the injury analysis.584
7.385. The United States argues that MOFCOM's process effectively excluded producers from the
domestic industry, because: (i) the 27 September 2009 Notices did not notify domestic producers
that they would need to register for participation in the injury investigations to receive a blank
domestic producer questionnaire; (ii) the notices did not invite domestic producers to complete the
domestic producer questionnaire or let them kn ow that it was available on the China Trade
Remedy Information website; (iii) MOFCOM only pr ovided blank domestic producer questionnaires
to the Petitioner and "known producers" listed in the Petition; and (iv) the Notices did not explain
that only domestic producers that completed domestic producers’ questionnaire responses would
be included in the domestic industry for purposes of the investigation.
585 Via these actions, the
United States contends, MOFCOM insured that only petition supporters would complete
questionnaire responses and be included in the domestic industry for purposes of its material
injury analysis and MOFCOM thus excluded from consideration producers that could account for
approximately half of domestic production.
586
7.386. The United States argues that MOFCOM’s definition of the domestic industry was also
inconsistent with both Article 4.1 of the Anti-Dumping Agreement and Article 16.1 of the
SCM Agreement. According to the United States, these Articles make clear that investigating
authorities are obligated to make active, independent efforts to identify the universe of domestic

577 USAPEEC Injury Brief, Exhibit USA-21, p. 3.
578 China's response to Panel question No. 111(a).
579 United States' response to Panel question No. 64.
580 United States' first written submission, para. 267 (citing Panel Report, Mexico – Olive Oil,
paras. 7.197-7.201).
581 United States' first written submission, para. 262 (citing Appellate Body Report, EC – Fasteners
582 United States' first written submission, paras. 258-259.
583 United States' first written submission, para. 260 (citing Appellate Body Report, EC – Fasteners
(China), para. 427); see also second written submission, paras. 137-139.
584 United States' first written submission, paras. 256 and 261 (citing Appellate Body Report, EC –
585 United States' first written submission, paras. 258-259. (footnote omitted)
586 United States' first written submission, para. 273 (citing Final Anti-Dumping Determination, Exhibit
USA-4, Sec. 3.2; Final Countervailing Duty Determination, Exhibit USA-5, Sec. 4.2).

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producers of the like product. The United States argues that this is because an investigating
authority may not exclude any known domestic producer that does not fall within the two specified
exceptions that are set out in subsections (i) and (ii) of Articles 4.1 and in Articles 16.1
and 16.2.
587 The United States argues that if an investigating authority does not make active
efforts to collect the information necessary to define the domestic industry as producers as a
whole of the like product, it effectively excludes domestic producers from the definition for reasons
other than those in the two specified exceptions.588
7.387. Furthermore, the United States argues th at an investigating authority cannot be excused
from the obligation to seek out the whole indust ry simply because the petitioners represent a
"major proportion" of total domestic production. 589 In the United States' view, pursuant to
Articles 4.1 and 16.1, an investigating authority is always required to first attempt to define the
domestic industry as "domestic producers as a whol e of the like products" and only if this proves
unsuccessful may the authority resort to the alternative, secondary definition of the domestic
industry, i.e. domestic producers "whose collective output of the products constitutes a major
proportion of the total domestic production of those products."
590 The United States finds this
requirement in the fact that the provisions list "the domestic producers as a whole of the like
products" first. According to the United States, if investigating authorities were free to define the
domestic industry to include no more than producers accounting for "a major proportion of the
total domestic production" at their option, the Agreements would not have included the more
stringent definition of domestic industry, and wo uld certainly not have listed the more stringent
definition first. Therefore, according to the Un ited States, regardless of whether the ultimate
domestic industry is a major proportion of total domestic production, an investigating authority
would always have to make efforts to identify the entire universe of domestic producers.
7.388. The United States does not provide a specif ic list of what actions are required to comply
with the alleged obligation to seek out the whole industry, but argues that "where, as in this
investigation, respondents have identified additional domestic producers, the investigating
authority has an obligation to seek to gather data from those domestic producers."
591 The
United States argues that even if the petitioner s purport to represent a major proportion of the
domestic industry, such efforts are still required, because without seeking information that allows
it to determine the universe of the domestic industry, the authority simply may not know the
amount of total domestic production.
592
7.389. The United States argues that in the broiler products investigation MOFCOM was capable of
procuring data on total domestic production which could have been used to send questionnaires to
substantially all domestic producers with a view to objectively defining the domestic industry so
that it included a broad range of domestic pr oducers in terms of performance and positions
concerning the anti-dumping and countervailing duty petitions.
593
7.390. The United States does not dispute China's point that it may be difficult to obtain
information on domestic producers in the situation of a fragmented industry. 594 Nevertheless, the
United States contends that a fragmented industry does not relieve an investigating authority from
the obligation to strive to collect data from a representative sample of domestic producers. 595 In

587 United States' first written submission, para. 271 (citing Panel Report, EC – Salmon (Norway),
para. 7.112). The United States also cites the Appellate Body Report in EC – Fasteners (China), para. 430, in
support of its argument that exclusion of producers from the domestic industry for reasons other than those
set out in Article 4.1 of the Anti-Dumping Agreement was a violation of that provision. The United States
argues that the same reasoning is applicable mutatis mutandis to Articles 16.1 and 16.2 of the SCM Agreement
(United States' response to Panel question No. 55).
588 United States' response to Panel question No. 55; second written submission, paras. 142-143.
589 United States' response to Panel question No. 64.
590 United States' response to Panel question No. 58; second written submission, para. 141.
591 United States' response to Panel question No. 55.
592 United States' response to Panel question No. 55.
593 United States' first written submission, paras. 265, 266 and 270 (citing Final Anti-Dumping
Determination, Exhibit USA-4, Sec. 3.2; Final Countervailing Duty Determination, Exhibit USA-5, Sec. 4.2).
594 The United States cites Appellate Body Report, EC – Fasteners (China), para. 435. (United States'
first written submission, footnote 265).
595 The United States cites Appellate Body Report, EC – Fasteners (China), para. 416 and Panel Report,

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addition, the United States argues that there is no evidence on the record that the Chinese broiler
industry is fragmented.596
7.391. In response to China's defence of MOFCOM 's process for defining the domestic industry,
the United States argues that (i) general press coverage on the existence of the investigation
cannot fulfil the obligation of the investigating authority to seek out evidence of other domestic
producers597; and (ii) the responses from two unknown domestic producers cannot serve as
evidence of the success of MOFCOM’s generic notice because the only apparent way these
producers could have received blank domestic produc ers’ questionnaires is if they received them
from the Petitioner as they did not receive them from MOFCOM.598 The United States also contends
that due to the small amount of production th ese two producers accounted for, the domestic
industry was still effectively limited to the Petitioner. 599 Furthermore, the United States disputes
China's justification for MOFCOM's admitted inaction when USAPEEC apprised it of four additional
Chinese poultry producers that were omitted from the Petition. 600 In particular, the United States
does not agree with China that two of the companies USAPEEC identified (Da Chan
(Asia) Foods, Ltd. and New Hope Group, Ltd.) filed questionnaire responses under different
names.601 Furthermore, the United States argues that China's assertion that one of those
companies (Fujian Sunner Development Co., Ltd.) knew about the pending case and decided not
to cooperate, is without citation to any record evidence.602
7.392. The United States does not dispute that the domestic industry, as defined by MOFCOM,
represents a major proportion of domestic production. Rather, the United States argues, by
deliberately confining its domestic industry definition almost exclusively to Petition supporters,
MOFCOM breached Articles 3.1 and 4.1 and Articles 15.1 and 16.1.
603 Therefore, the United States
argues, even if the Panel were to find that MOFC OM properly defined the domestic industry under
Articles 4.1 and 16.1 it would still have acted inconsistently with Articles 3.1 and 15.1 by defining
the domestic industry in a manner that was clearly biased in favour of Petitioners, and hence not
objective.604
7.4.2.4.2 China
7.393. China does not dispute that MOFCOM was required to conduct an objective examination
based on positive evidence of the domestic industry under Articles 3.1 and 15.1. China argues that
"objective examination" under Articles 3.1 and 15.1 does not require an impractical quest for
perfection. Rather, "objective examination" – partic ularly in an area such as deciding how much
investigation is enough in the context of defining a highly fragmented domestic industry – allows
flexibility.605 China argues that, given the nature of the industry, MOFCOM took reasonable and
practicable steps to determine the scope of the domestic industry, did not exclude any data it
received, and defined the domestic industry to include more than 50% of domestic production.

596 United States' first written submission, para. 265, footnote 266.
597 United States' second written submission, para. 146.
598 United States' second written submission, para. 148 (citing China's first written submission,
para. 246).
599 United States' second written submission, para. 149 (citing China's response to Panel
question Nos. 56 and 64). The United States notes that these two Petitioners only began producing the
domestic like product in the first half of 2009 and accounted for a very small amount of domestic production
during that period. Thus, all the data on domestic industry performance during the 2006-2008 period and
substantially all the data for the first half of 2009 would have been collected from the 15 Petitioners.
600 United States' response to panel question No. 54 (citing USAPEEC Injury Brief, Exhibit USA-21).
601 United States' response to Panel question No. 54 (citing Final Anti-Dumping Determination, Exhibit
USA-4, Sec. 1.2.2.3; Final Countervailing Duty Determination, Exhibit USA-5, Sec. 2.2.2.3). The United States
points out that MOFCOM did not list either producer among those that completed questionnaire responses.
602 United States' response to Panel question No. 54 (citing China's first written submission, para. 248).
603 United States' response to Panel question No. 58. Although the United States does not contest that
the Petitioners constitute a major proportion of domestic production, it does raise some questions about
whether MOFCOM's conclusion is consistent with other record information (see United States' second written
submission, para. 150, comparing Final Anti-Dumping Determination, Exhibit USA-4, Secs. 3.2, 5.3.11, and
Final Countervailing Duty Determination, Exhibit USA-5, Secs. 4.2, 6.3.11, with China's first written
submission, para. 238).
604 United States response to Panel question Nos. 60 and 64.
605 China's first written submission, para. 262.

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7.394. With respect to the efforts it took to de fine the domestic industry, China notes that even
though the Petitioner, on its face, represented more than 50% of total domestic output, MOFCOM
not only sent the domestic producer questionnaire to those producers listed in the Petition, but
also published its Notices of Initiation of the Investigations, which invited all interested parties to
participate in the investigations and register with the authorities.
606 China also placed the domestic
producer questionnaire on its web site, inviting any interested parties who produced broiler
chicken during the period of investigation to complete it. China argues that any Chinese company
that turned to the MOFCOM website or calle d MOFCOM officials could easily obtain the
questionnaire and any other information it needed.
607 In addition to MOFCOM's efforts, China notes
that the investigations were widely publicised in the Chinese press and TV news channels.608
7.395. China notes that two producers not identified in the Petition submitted responses to
MOFCOM’s questionnaire and that MOFCOM used those responses in its injury analysis. 609 China
maintains that MOFCOM defined the domestic industry as a "major proportion" after it had
received 17 responses, and was unlikely to receive any more. China notes that MOFCOM used the
data from all the 17 responding domestic producer s and that they constituted more than half of
the total domestic production and thus accounted for a major part of the total production quantity
of the domestic like product.
610 Furthermore, China states that MOFCOM calculated market share
and total apparent domestic consumption based on the available information on estimated total
domestic production rather than on the smaller set of responding domestic producers.611
7.396. China contends that the United States' arguments about MOFCOM's ability to procure data
on other producers in China does not take into account the fact that China’s domestic industry is
highly fragmented and consists of millions of pr oducers, including hundreds of large producers,
thousands of medium-sized producers, and million s of smaller producers, such as small village
cooperatives and family farms.612 China argues that the Appellate Body has specifically recognized
that in highly fragmented industries, the "major proportion" test in Article 4.1 "provides an
investigating authority with some flexibility to define the domestic industry in the light of what is
reasonable and practically possible."
613
7.397. China argues that the United States does not have any evidence to support the US
argument that MOFCOM was in a position to collect information from all domestic producers and
then take a representative sample of the domestic industry.
614 China argues that Exhibit 6 to the
Petition, which contained estimates on total production compiled by a consultant, did not have
information on how to contact specific producers. 615 Furthermore, China notes that there was no
Ministry of Agriculture data that identified indi vidual producers, and the United States has not
identified any known databases in China that would have provided this information to MOFCOM. 616
China argues that under the circumstances of this case, MOFCOM had neither the time nor the
resources to undertake such a massive project as identifying all Chinese producers, because of the
obligation to conduct the investigations within the prescribed deadlines.
617
7.398. With respect to the names of the four allegedly unknown producers identified in USAPEEC's
Injury Brief, China argues that three of these producers were in fact already known to MOFCOM 618
and that all four companies knew about the investigation. According to China, Da Chan (Asia Food)

606 China's first written submission, para. 241; Notice of Initiation of the Countervailing Duty
Investigation, Exhibit USA-7, p. 3; and Notice of Initiation of the Anti-Dumping Investigation, Exhibit USA-6,
p. 3.
607 China's first written submission, paras. 244-245.
608 China's first written submission, para. 242; USAPEEC's Injury Brief, Exhibit CHN-21.
609 China's first written submission, para. 246.
610 China's response to Panel question No. 106 (citing Final Anti-Dumping Determination, Exhibit CHN-3,
pp. 25-26). The share was 45.53% in 2006, 50.72% in 2007, 50.82% in 2008, and 52.59% in the first half
of 2009.
611 China's first written submission, paras. 259-261.
612 China's first written submission, paras. 236-39(citing USDA, China – Poultry and Products Annual
(2011), Exhibit CHN-20, p. 3).
613 China's response to Panel question No. 64 (citing Appellate Body Report, EC – Fasteners (China),
para. 415).
615 China's response to Panel question Nos. 53 and 61.
616 China's response to Panel question No. 61; second written submission, para. 151.
617 China's first written submission, para. 257.
618 China's first written submission, para 248.

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Ltd responded to the questionnaire on a consolidated basis under the name DaChan Wanda
(Tianjin), and from New Hope responded on a consolidated basis under the name
Shandong Liuhe.619 China argues that as a member of CAAA, Shandong Xinchang was directly sent
a questionnaire from MOFCOM and chose not to respond. 620 China acknowledges that MOFCOM did
not make any attempts to contact Fujian Sunner. However, China argues that this producer knew
about the investigation, because it discussed the investigation in its annual financial statement.621
7.399. According to China, the steps taken by MOFCOM correspond with the Appellate Body's
guidance in EC – Fasteners (China) and thus China complied with the "objective examination"
requirement in Articles 3.1 and 15.1.622
7.400. China argues that the United States' interpretation that the authority must start by making
every conceivable effort to include every domestic producer ignores the plain text of Articles 4.1
and 16.1. China notes that nowhere does the text of these provisions state that authorities must
start with the whole, and only turn to the alternative after exhausting all options for collecting data
from every producer. Rather, the text recognizes that in many cases (perhaps most cases),
including every domestic producer will be impossible. That is why the text uses the term "or" to
present the two options – (i) the domestic producers as a whole; and (ii) a major proportion of
those domestic producers – as equal alternatives.
623 China contends that, contrary to the
United States' view, the existence of the two except ions in Articles 4.1 and 16.1 does not exclude
the option of basing the domestic industry on those producers whose output constitutes a "major
proportion."
7.401. China does not dispute that an investigating authority must make some efforts to ensure
that it properly defines the domestic industry, but in China’s view, once the authority has
established that the responding producers themselv es represent a "major proportion" of the total
domestic industry, the obligation on the authority to gather additional responses is limited. When
the responding producers themselves are a majo rity – beyond a "major proportion" – of the
domestic industry, the obligation is even more limited. The obligation would include gathering
responses from other known domestic producers. The obligation would not extend to searching for
more unknown domestic producers.
624
7.402. Therefore, China argues, MOFCOM acted consistently with its obligations and did not
introduce any "self-selection bias" into the investigation. China maintains that there are no specific
steps that MOFCOM needed to take that were not taken, and adds that the United States has not
identified any.
625 According to China, because the United States does not contest that the
Petitioners do represent a major proportion of total domestic production, the United States' claim
is that somehow MOFCOM should have identified unknown producers and tried to obtain responses
even though there was no need to compel their responses.
626
7.4.2.5 Arguments of the third parties
7.403. The European Union does not see any direct relationship between Articles 4.1 and 16.1,
on the one hand, and Articles 3.1 and 15.1, on the other hand. According to the European Union, if
the domestic industry is a major proportion of total domestic production, then Articles 4.1

619 China's second written submission, para. 146 (citing Final Anti-Dumping Determination,
Exhibit CHN-3, p. 5)
620 China's response to Panel question No. 64. China, citing to Exhibit 2 from Petition (Exhibit CHN-32)
notes that Shandong Xinchang was a member of the Petitioner, CAAA. China hypothesizes that
Shandong Xinchang did not respond because of its affiliation with Tyson.
621 China's second written submission, para. 146 (citing Exhibit CHN-44, which is an excerpt from
the 2009 Annual Report of Fujian Sunner, published in March 2010, referring to the 5 February 2010
publication of the Preliminary Anti-Dumping Determination).
622 China's first written submission, para. 262.
623 China's first written submission, para. 264 (citing Appellate Body Report, EC – Fasteners (China),
624 China's response to Panel question No. 64.
625 China's second written submission, para. 159.
626 China's second written submission, para. 158.

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and 16.1 are complied with. The obligations in Arti cles 3.1 and 15.1 then pertain to the domestic
industry, as defined. The investigating authority is not under any obligation to do more.627
7.404. Mexico considers that if an investigating authority defines a domestic industry in a
manner inconsistent with Article 4.1 or 16.1, the authority, in basing its injury analysis on an
industry that had been incorrectly defined, would be acting in a manner inconsistent with
Articles 3.1 and 15.1, because injury would not have been proved with respect to the proper
"domestic industry".
628
7.405. Mexico argues that given that the definiti on of the domestic industry is an element that
forms part of an investigation, as explained by the Appellate Body in US – Wheat Gluten , the
investigating authority should carry out a "systematic inquiry" or a "careful study" where they
"actively seek out pertinent information."
629 Mexico argues that this standard applies regardless of
whether the domestic industry is defined as the domestic producers as a whole or as a major
proportion of those producers. Consequently, an investigating authority should, within reason,
make the efforts necessary to seek to identify as many producers as possible so as to define the
domestic industry and, subsequently, conduct its injury analysis.
630 Mexico argues that the actions
an investigating authority could take in defining the domestic industry include, but are not limited
to, questioning government agencies at local level and producers' associations, checking lists of
beneficiaries of subsidy programmes, consulting zoosanitary control agencies, etc.
631
7.406. Saudi Arabia states that Articles 3.1 and 15.1 establish an "overarching" obligation to
conduct an objective injury examination based on positive evidence, which "permeates all aspects
of the injury and causation investigation, including the definition of the domestic industry to be
examined".
632 According to Saudi Arabia, "an injury examination can only be objective if the
process that led to the definition of the domestic industry was equally objective". 633 Therefore,
Articles 3.1 and 15.1 impose an active and independent approach on the process of identifying the
domestic producers to be included in the definition of the domestic industry, involving a major
proportion of domestic producers.634
7.4.2.6 Evaluation by the Panel
7.407. The United States claims implicate two sets of provisions, Article 3.1 of the Anti-Dumping
Agreement and 15.1 of the SCM Agreement, which re quire an investigating authority to make an
objective examination of the evidence of injury to that domestic industry, and Article 4.1 of the
Anti-Dumping Agreement and Article 16.1 of the SCM Agreement, which set forth how to
determine the composition of that domestic industry.
7.408. Articles 4.1 and Article 16.1 set forth the definition for the domestic industry for purposes
of each Agreement, either as the domestic producers as a whole or those of them whose collective
output represents a major proportion of total domestic production. Investigating authorities may
exclude producers that might otherwise fall within the definition, if they fall within one of the
two listed exceptions. The domestic industry defi ned under those provisions forms the basis of an
investigating authority's injury determination which is governed by Articles 3.1 and 15.1. 635 Thus
the two sets of provisions are inextricably linked.
7.409. The Appellate Body, in Thailand – H-Beams , explained that "Article 3.1 is an overarching
provision that sets forth a Member's fundamental, substantive obligation" with respect to the

627 European Union's third-party response to Panel question No. 11.
628 Mexico's third-party response to Panel question No. 11.
629 Mexico's third-party response to Panel question No. 11 (citing Appellate Body Report, US – Wheat
Gluten, para. 53).
630 Mexico's third-party response to Panel question No. 11.
631 Mexico's third-party response to Panel question No. 11.
632 Saudi Arabia's third-party submission, para. 39 (citing Appellate Body Reports, Thailand – H-Beams,
633 Saudi Arabia's third-party submission, para. 40 (citing Appellate Body Report, EC – Fasteners
(China), paras. 414-417).
634 Saudi Arabia's third-party submission, para. 40.
635 Appellate Body Report, EC – Fasteners (China), para. 413 (citing footnote 9 to Article 3 of the
Anti-Dumping Agreement).

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injury determination.636 The Appellate Body expounded that this general obligation "informs the
more detailed obligations" in the remainder of Article 3. 637 The thrust of the investigating
authorities' obligation in Article 3.1 lies in the requirement that they base their determination on
"positive evidence" and conduct an "objective examination".
638
7.410. In its Report on US – Hot-Rolled Steel, the Appellate Body explained that the term
"positive evidence" relates to the quality of the evidence that authorities may rely upon in making
a determination while "objective examination" is concerned with the investigative process itself,
i.e. the way in which the evidence is gathered, inquired into and, subsequently evaluated.
639 The
use of the word "positive" to qualify the word evidence means that the evidence "must be of an
affirmative, objective and verifiable character, and that it must be credible"
640, while the
qualification of the word "examination" with "objective" indicates essentially that the "examination"
process must conform to the dictates of the basic principles of good faith and fundamental
fairness.
7.411. In short, an "objective examination" requires that the domestic industry, and the effects of
dumped imports, be investigated in an unbiased manner, without favouring the interests of any
interested party, or group of interested parties, in the investigation.641 Thus, for an examination to
be "objective", the identification, investigation and evaluation of the relevant factors must be
"even-handed" and the investigating authorities are not entitled to conduct their investigation in
such a way that it becomes more likely that, as a result of the fact-finding or evaluation process,
they will reach a certain determination.
642
7.412. The Appellate Body explained the relation ship between the definition of the domestic
industry in Article 4.1 of the Anti-Dumping Agreement and 16.1 of th e SCM Agreement and the
obligation to base injury determinations on an "objective examination" in EC – Fasteners (China).
In particular, the Appellate Body clarified that to ensure the accuracy of an injury determination,
an investigating authority must not act so as to give rise to a material risk of distortion in defining
the domestic industry, for example, by excludin g a whole category of producers of the like
product.643
7.413. We note that in EC – Fasteners (China), the Appellate Body did not explicitly state that an
improper definition of domestic industry could result in a violation of Articles 3.1 and 15.1,
independent from the obligations in Articles 4.1 and 16.1. Indeed, the only violation it found was
with respect to Article 4.1 of the Anti-Dumping Agreement. 644 However, it did leave open the
possibility that such a claim could be made. 645 In the Panel's view, the obligation to conduct an
objective examination in Articles 3.1 and 15.1 would require an investigating authority to assess
the significance, if any, of information it is made aware of during the process of defining the
domestic industry for its assessment of injury. This would include, for instance, information related

636 Appellate Body Report, Thailand – H-Beams, para. 106.
637 Appellate Body Report, Thailand – H-Beams, para. 106.
638 Appellate Body Report, US – Hot-Rolled Steel, para. 192.
639 Appellate Body Report, US – Hot Rolled Steel, paras. 192-193.
640 Appellate Body Report, US – Hot-Rolled Steel, para. 192. We note that in its arguments, the
United States has focused on the requirement to conduct an "objective examination" and not on whether the
evidence MOFCOM considered was "positive."
641 Appellate Body Report, US – Hot-Rolled Steel, para. 193.
642 Appellate Body Report, US – Hot Rolled Steel, para. 196.
643 Appellate Body Report, EC – Fasteners (China), para. 414.
644 Appellate Body Report, EC – Fasteners (China), para. 430 (finding that the panel erred in finding that
the European Union did not act inconsistently with Article 4.1 in defining a domestic industry comprising
producers accounting for 27% of the total estimated EU production of fasteners).
645 Appellate Body Report, EC – Fasteners (China), para. 438:
We note that China's above claims concern the issue of whether the sample itself selected in the
investigation was consistent with Article 3.1 of the Anti-Dumping Agreement. In declining to
uphold China's claim, therefore, our finding is limited to the issue of whether the sample was
inconsistent with Article 3.1 of the Anti-Dumping Agreement, and does not address the issue of
whether the domestic industry defined by the Commission in the fasteners investigation was
consistent with this provision. (emphasis original)

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to known domestic producers, which may affect its analysis of the various economic factors and
causation under Articles 3 and 15.646
7.414. We now move to address the United States' specific claims of inconsistency. The
United States argues that a flaw in the process of defining the domestic industry can lead to an
inconsistency not only with Articles 4.1 and 16.1, but also with the obligation to base the injury
determination on an objective assessment in Articles 3.1 and 15.1. The United States has not
argued that MOFCOM did not properly determine to tal domestic production or properly conclude
that the 17 responding producers constituted a major proportion of that production.
647 Rather, the
bases of the United States claims are that: (i) under Articles 4.1 and 16.1, MOFCOM was required
to attempt to identify and seek information from all domestic producers which it did not do; and
(ii) that because, in the process of defining the domestic industry, MOFCOM considered information
only from a self-selected subset of domestic pr oducers it effectively excluded producers from
consideration in a biased manner. The Panel will address each of these possible bases for an
inconsistency in turn.
7.4.2.6.1 Whether an investigating author ity must attempt to identify and seek
information from all domestic producers
7.415. The texts of Articles 4.1 and 16.1 do not co ntain explicit instructions on how investigating
authorities are to determine whether the domestic industry will be comprised of the domestic
producers as a whole or those whose output represents a major proportion of total domestic
production. The United States contends that investigating authorities have a positive obligation to
make active, independent efforts to identify the universe of domestic producers of the like product.
This is because, the United States contends, the investigating authorities may not freely choose
between the two possible definitions in Articles 4.1 and 16.1, but rather must first attempt to
define the domestic producers as a whole and only if that proves impossible may they move to
define the domestic industry as those producer s representing a major proportion of the total
domestic production.
7.416. Although the texts of Articles 4.1 and 16.1 do list one definition before the other, we see
nothing that explicitly indicates a hierarchy or sequencing between the two definitions. Indeed, the
texts of the provisions use the term "or" rather than terms that would indicate a hierarchy, such as
"first" or "if not, then". The use of the term "or" indicates the flexibility the agreements provide to
investigating authorities with respect to defining the domestic industry.
648 Moreover, the Appellate
Body has confirmed that the use of "a major proportion" within the meaning of Article 4.1 provides
an investigating authority with flexibility to define the domestic industry in the light of what is
reasonable and practically possible. 649 This inherent flexibility means that investigating authorities
are not required by the agreements to first attempt to identify every domestic producer before
they can define the domestic industry as those producers whose output constitutes a major
proportion of total domestic production.
7.417. We do not agree with the United States that such an understanding would render the
"domestic producers as a whole" option redundant, as investigating authorities would always take
the "easier" course of defining the domestic industry as a "major proportion".
650 Domestic
industries vary widely from investigation to investigation and what would be "easier" in one
situation may not be in another. For example, the claim in the Mexico – Olive Oil dispute was that
the investigating authority had improperly relied on one company as the entire domestic industry
without sufficiently determining the existence of other domestic producers.
651
7.418. Furthermore, treating the two definitions as equal options does not put at risk the ability of
an investigating authority to conduct a proper injury analysis based on an objective examination of

646 For instance, changes in market share between domestic producers included in the domestic industry
and those that were not could be relevant to the analysis of the impact of the subject imports on the domestic
industry (Article 3.4) and whether it is the imports that are causing injury (Article 3.5).
647 United States' response to Panel question No. 58.
648 We agree with the panel in EC – Salmon (Norway) that the most common grammatical function of
the term "or" is the introduction of two or more alternatives into a phrase or sentence. (Panel Report, EC –
Salmon (Norway), para. 7.165 (citing New Shorter Oxford English Dictionary (Clarendon Press, 1993)).
649 Appellate Body Report, EC – Fasteners (China), paras. 412-415.
650 United States' response to Panel question No. 107(b).
651 See e.g. Panel Report, Mexico – Olive Oil, paras. 7.239-7.248.

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positive evidence as the United States contends . In particular, the United States argues that
exclusion of non-petitioning producers could affect the injury analysis (with respect to volume,
price, and impact) and might also be relevant to the causation analysis when non-petitioners
outperform petitioners for reasons other than subject import competition.
652 The implication of the
United States' argument is that if the investigating authority can opt to define the domestic
industry as a major proportion, then it is more likely that un-injured domestic producers will not
be considered in the injury analysis.
7.419. We do not see how requiring investigating authorities to first try to define the domestic
industry as a whole would require the inclusion of non-petitioning producers in the domestic
industry as even pursuant to the United States' own interpretation, an investigating authority may
still ultimately use a "major proportion" for its injury analysis. Additionally, an investigating
authority is not allowed to ignore the situation of other domestic producers in its injury
determination. An investigating authority will make its analysis under Articles 3.2 and 3.4 with
reference to the defined domestic industry, but will still need to assess the situation of other
domestic producers in its evaluation of whether it is the impact of the subject imports that have
explanatory force for the changes in the various economic factors and whether the strength of
other domestic producers could be a possible separate cause of injury to the defined "domestic
industry."
653
7.420. For the foregoing reasons, Articles 4.1 and 16.1 do not require the investigating authority
at the outset to attempt to define the domestic industry as the domestic producers as a whole or
to have to make efforts to identify all domest ic producers before then defining the domestic
industry as producers whose output represents a major proportion of total production.
Nevertheless, the determination that a group of pr oducers represents a "major proportion" of total
domestic output must necessarily be determined in relation to the production of the domestic
producers as a whole.
654
7.421. It is only after establishing total domestic production that an investigating authority can
determine whether it can define the domestic industry as the domestic producers as a whole; or
those producers that represent a major proportion of total domestic production; or conclude that it
does not have information on a "domestic industry" within the meaning of Articles 4.1 and 16.1.655
This holds even if the petitioners claim to represent a major proportion of total domestic
production, as without an understanding of the total universe of production an investigating
authority will not be able to verify such an assertio n. In light of the links between the definition of
the domestic industry and the substantive provisions which require an analysis of that domestic
industry, it is our view that the investigating authority must establish total domestic production in
the same manner it would conduct any other aspect of the investigation, by actively seeking out
pertinent information and not remaining passive in the face of possible shortcomings in the
evidence submitted.
656
7.422. This does not mean that investigating authorities may not rely on information provided to
them by petitioners, particularly if it was gathered from independent sources. 657 Investigating

652 United States' response to Panel question No. 108(c).
653 We note that the United States itself makes a similar point in its claims against MOFCOM's causation
analysis. Namely that once MOFCOM had settled on one domestic industry, its injury determination could not
be made with reference to the other producers and that their situation could be a separate cause of injury
other than the subject imports.
654 Appellate Body Report, EC – Fasteners (China), para. 412.
655 We note that under the obligation in Articles 5.3 of the Anti-Dumping Agreement and 11.3 of the
SCM Agreement to review the accuracy and adequacy of the evidence provided in the application to determine
whether the evidence is sufficient to justify the initiation of an investigation, an investigating authority would
have to verify the accuracy and adequacy of data on total domestic production. However, the Appellate Body
explained in EC – Fasteners (China) that the determination of standing under Articles 5.4 and 11.4 is a distinct
determination from the definition of the entire universe of the domestic industry under Articles 4.1 and 16.1.
(See Appellate Body Report, EC – Fasteners (China), para. 418). Therefore, verifying the accuracy and
adequacy of the petition for purposes of determining standing would not necessarily be sufficient for an
investigating authority to comply with the obligation in Articles 4.1 and 16.1 to ensure that the information it is
relying upon for the extent of total domestic production in defining the domestic industry is accurate.
656 Appellate Body Report, US – Wheat Gluten, paras. 53-55.
657 See Panel Report, Mexico – Olive Oil, para. 7.226. In this case, China explained, MOFCOM
ascertained total domestic production from Exhibit 6 of the Petition, which is a consultant's estimate of

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authorities must take reasonable and practicable efforts to assure themselves that the information
they are relying on, whether derived from a petition or other sources, is accurate. 658 However, as
noted above, the United States has not argued that MOFCOM did not properly determine total
domestic production nor does it contest that the 17 responses to the domestic producers'
questionnaire constitute a major proportion of total domestic production.659
7.423. We recall our view above that in defining the domestic industry investigating authorities
are not required to attempt to identify all domestic producers so long as they can establish the
amount of total domestic production and assure themselves that they have information on
producers whose collective output constitutes a major proportion of that production. It is the
industry defined pursuant to Articles 4.1 and 16.1 that the investigating authority must assess in
making its injury determination under Articles 3 and 15. Therefore, the United States has not
established that China acted inconsistently with Articles 3.1 and 4.1 of the Anti-Dumping
Agreement and Articles 15.1 and 16.1 of the SC M Agreement because MOFCOM did not seek to
identify all domestic producers in the process of defining the domestic industry.
7.424. We now turn to the second possible basis for an inconsistency alleged by the United States
– that in the process of defining the domestic industry MOFCOM effectively excluded producers
from the domestic industry such that its injury determination could not be objective.
7.4.2.6.2 Whether MOFCOM's definition of the domestic industry involved a
self-selection process which effectively excl uded producers from the domestic industry
causing material risk of distortion in the examination of injury
7.425. The United States presents two arguments to support its view that MOFCOM's process for
defining the domestic industry involved a self-selection process whereby those companies that
supported the Petition would be more likely to be included in the domestic industry definition, thus
introducing a "material risk of distortion". First, the United States compares MOFCOM's actions to
those of the European Commission which the Appellate Body found inconsistent with these
provisions in EC – Fasteners (China) .
 Second, the United States argues that China ignored
information on the record that would have allowed it to collect data that would have represented
the broad range of known domestic producers in terms of performance and positions concerning
the antidumping and countervailing duty petitions.660
7.426. Addressing the first of the United States' arguments, we note that in EC – Fasteners
(China) the European Commission contacted and received information from a large number of
domestic producers and from that number it excluded those who did not indicate a willingness to
be part of the sample. The European Commission concluded that this smaller group nevertheless
constituted a "major proportion" because it re presented more than 25% of total domestic
production. The European Commission thus determ ined that this group of domestic producers
constituted the domestic industry for purposes of the injury determination.
661 The
European Commission then sampled these remaining producers and used the data from the
sample to evaluate "microeconomic" injury factors, while obtaining information from the defined

production based on "updating quantity" of chicken breeding pairs. (China's response to Panel
question No. 53(c), citing Exhibit 6 from Petition, Exhibit CHN-33).
658 What constitute reasonable and practicable efforts may vary from case to case depending on the
nature of the information and the industry in question. We note that Mexico provided an illustrative list of
possible actions an investigating authority could take to identify domestic producers, including questioning
government agencies at local level and producers' associations, checking lists of beneficiaries of subsidy
programmes, and consulting zoosanitary control agencies. Although investigating authorities are not required
to identify all domestic producers, such actions could be useful in verifying information on total domestic
production. (See Mexico's third-party response to Panel question No. 11; and United States' and China's
responses to Panel question No. 108).
659 United States' response to Panel question No. 58.
660 United States' first written submission, paras. 265, 266 and 270 (citing Final Anti-Dumping
Determination, Exhibit USA-4, Sec. 3.2; Final Countervailing Duty Determination, Exhibit USA-5, Sec. 4.2).
661 We note that the European Commission made this determination because it found that any group of
producers that met the minimum benchmark for standing to file a petition under Article 5.4 of the
Anti-Dumping Agreement would also be a "major proportion" under Article 4.1. The Appellate Body clarified
that the benchmark in Article 5.4 concerns the issue of standing and does not address the question of how the
entire universe of the domestic industry should be defined and thus is wholly unrelated to the proper
interpretation of the term "major proportion". (Appellate Body Report, EC – Fasteners (China), paras. 418
and 425).

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domestic industry (i.e. those who had indicated a willingness to be part of the sample) for
"macroeconomic" injury factors. 662 The Appellate Body found that through this process the
European Union acted inconsistently with Article 4.1 663, because the Commission failed to ensure
that the domestic industry definition would not introduce a material risk of distortion to the injury
analysis by relying on a minimum benchmark irrelevant to the issue of what constitutes "a major
proportion", and by excluding certain known prod ucers on the basis of a self-selection process
among the producers.664
7.427. The United States has not shown that MOFCOM's actions in the broiler products
investigation create the same inconsistencies as those identified by the Appellate Body in EC –
Fasteners (China). We see several pertinent distinctions.
7.428. MOFCOM provided public notice of the init iation and of the requirement to register. Those
notices contained information about how to contact the responsible MOFCOM officials. In addition,
MOFCOM placed information about the investigation and the questionnaire itself on its website.
Given the multiple steps that must be carried out in an anti-dumping or countervailing duty
investigation and the time constraint on an investigation, an investigating authority must be
allowed to set various deadlines to ensure an orderly conduct of the investigation.
665 Therefore, it
is reasonable for an investigating authority to set a deadline by which producers are required to
make themselves known. 666 Furthermore, two companies which MOFCOM did not notify directly
responded to the questionnaire. The United States argues that the only way they could have
received the questionnaire, if not from MOFCOM, would have been from the Petitioner.
667 However,
the United States omits the equally likely possibili ty that the companies read the Notice and the
website and downloaded the questionnaire. The United States has not proven that MOFCOM's
Notices effectively excluded any producers from participating in the investigation.
7.429. Unlike the European Commission in EC – Fasteners (China), MOFCOM did not apply a
minimum threshold (in Fasteners 25%) after which it considered it had information on producers
constituting a "major proportion". Rather, in the broiler products investigation, MOFCOM received
information from domestic producers whose collective output constituted more than 50% of total
domestic production and then determined that they represented a major proportion of that
production.
7.430. Moreover, MOFCOM's process of defining th e domestic industry did not involve a selection
of companies through sampling. Although MOFCOM required producers to register and submit
information within specified deadlines, it did not exclude any of the information it received – even
from companies that had not registered. This is not equivalent to receiving information from a
company and then declining to use it because the company had not volunteered to be part of a
sampling process. Additionally, MOFCOM did not affirmatively reject responses that did not support
the application, but rather all responses were supportive of the application.
7.431. The United States also points to three possible sources of data that it argues would have
enabled MOFCOM to collect information from all domestic producers for purposes of the injury
analysis, but were ignored: (i) the consultant's report in Exhibit 6 to the Petition; (ii) the Ministry
of Agriculture; and (iii) the domestic producers mentioned by USAPEEC.
7.432. Exhibit 6 to the Petition, which was redacted from the non-confidential version provided to
interested parties
668, contains production estimates based on the "updating quantity" of breeding

662 Appellate Body Report, EC – Fasteners (China), para. 429.
663 Although the United States argues that such actions are inconsistent with both Articles 3.1 and 4.1 of
the Anti-Dumping Agreement and 15.1 and 16.1 of the SCM Agreement, we note that the Appellate Body only
found an inconsistency with respect to Article 4.1 in the EC – Fasteners (China) dispute.
664 Appellate Body Report, EC – Fasteners (China), paras. 422 and 427.
665 Appellate Body Report, EC – Fasteners (China), para. 460.
666 Appellate Body Report, EC – Fasteners (China), para. 460 (upholding Panel Report, EC – Fasteners
(China), para. 7.219).
667 United States' second written submission, para. 148.
668 See para. 7.54 above. The fact that there was no non-confidential summary that provided a
reasonable understanding of the contents of the confidential exhibits to the Petition may have affected the
respondents' ability to defend their interests before MOFCOM and the United States' ability to make claims with
respect to China's compliance with its WTO obligations. This further highlights the importance of compliance
with Article 6.5.1 of the Anti-Dumping Agreement and Article 12.4.1 of the SCM Agreement.

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chickens. It does not contain names or other identifying information regarding specific
producers.669 China explains that the Ministry of Agriculture does not maintain information on all
producers in China, but rather relies on aggregated statistical reports from provincial agricultural
authorities to compile its estimates of the number of firms and total output in China.
670 With
respect to these two sources, the United States has not demonstrated that MOFCOM had
information on other domestic producers that it ignored.
7.433. USAPEEC provided four names to China. 671 One of these companies was listed in Exhibit 2
to the Petition and the United States does not dispute that China sent the domestic producer
questionnaire to all known domestic producers iden tified in the Petition. China provides the Panel
with information to show that two other companies USAPEEC identified responded on a
consolidated basis with two of the companies listed in the Final Determination.
672
7.434. With respect to one of the four comp anies, Fujian Sunner, China acknowledges that
MOFCOM made no efforts to contact it after USAPEEC identified it in January 2010.673 China argues
that Fujian Sunner knew of the investigation and was uninterested in participating. Although China
provides evidence that Fujian Sunner knew in Ma rch 2010 that preliminary duties were imposed in
February of that year 674, China does not provide any contemporaneous record evidence to
demonstrate that MOFCOM knew that Fujian Sunner was aware of the initiation of the investigation
at the time, and was uninterested in participating.
7.435. We would have expected MOFCOM to cont act Fujian Sunner and gather information on its
share of total domestic production and its posi tion on the imposition of anti-dumping and
countervailing duties. However, at the time USAPEEC mentioned Fujian Sunner to MOFCOM,
MOFCOM had already received information from producers accounting for approximately 50% of
total domestic production. MOFCOM also had information from the Petition indicating the identities
of producers accounting for an additional 10% of domestic production.
675 Furthermore, as noted
above, MOFCOM did not take any actions that would have excluded Fujian Sunner from
participating in the investigation if it had chosen to do so. Although USAPEEC refers to
Fujian Sunner as a "major producer"
676, it does not provide any estimates as to Fujian Sunner's
share of total domestic production. Therefore, although MOFCOM's actions were not ideal, we see
no basis to conclude that its decision not to co ntact Fujian Sunner in January 2010 gave rise to a
material risk of distortion in the injury determination.677
7.436. In light of the above, we conclude that the United States has not demonstrated, as a
matter of fact, that MOFCOM's actions effectively excluded domestic producers from the
investigation creating a self-selection process bias that gave rise to a material risk of distortion in
the injury determination. Therefore, the United States has not established that MOFCOM's process
for defining the domestic industry was inconsistent with Articles 3.1 and 4.1 of the Anti-Dumping
Agreement and Articles 15.1 and 16.1 of the SCM Agreement.
7.437. The United States argues that even if the Panel were to find that MOFCOM properly defined
the domestic industry, it would still have acted inconsistently with Articles 3.1 and 15.1 by defining
the domestic industry in a manner that was biased in favour of Petitioners, and hence not
objective, and that did not permit an injury analys is based on positive evidence of the industry’s
condition.
678 The United States does not offer any argumentation to support this claim other than
its arguments on self-selection, exclusion and bias that we have already addressed. As we have
found that the United States did not establish that MOFCOM acted in a manner to exclude
producers from the domestic industry creating a self-selection bias that gave rise to a material risk
of distortion in the injury determination, we find that the United States has not established that

669 Exhibit 6 from Petition, Exhibit CHN-33; China's response to Panel question No. 53.
670 China's response to Panel question No. 61.
671 USAPEEC Injury Brief, Exhibit USA-21, p. 3.
672 China's response to Panel question No. 111(c) (citing DaChan Injury Questionnaire Excerpts,
Exhibit CHN-74; and Shandong Liuhe Injury Questionnaire Excerpts, Exhibit CHN-75).
673 China's response to Panel question No. 112.
674 Excerpt from Fujian Sunner Financial Statement, Exhibit CHN-44.
675 These are the 14 companies listed in the Petition or its Exhibits that did not respond to the domestic
producers' questionnaire.
676 USAPEEC Injury Brief, Exhibit USA-21, p. 3.
677 Appellate Body Report, EC – Fasteners (China), para. 414.
678 United States' response to Panel question Nos. 60 and 64.

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MOFCOM's injury analysis was inconsistent with Articles 3.1 of the Anti-Dumping Agreement
and 15.1 of the SCM Agreement.
7.4.2.6.3 Conclusion
7.438. In sum, although investigating authorities have an obligation to seek out pertinent
information with respect to total domestic production when defining the domestic industry, China
was not required, under Articles 4.1 and 16.1 to seek to identify all domestic producers.
Furthermore, the Panel also finds that the United States did not demonstrate that MOFCOM acted
to effectively exclude domestic producers from co nsideration as part of the domestic industry
creating a self-selection bias which gave rise to a material risk of distortion of the injury analysis.
Therefore, the Panel finds that the United States has not established that China acted
inconsistently with the obligations in Articles 3.1 and 4.1 of the Anti-Dumping Agreement and
Articles 15.1 and 16.1 of the SCM Agreement in the process of defining the domestic industry.679
7.4.3 Whether MOFCOM's price effects analys es are consistent with Articles 3.1, 3.2
and 12.2.2 of the Anti-Dumping Agreement and Articles 15.1, 15.2 and 22.5 of the
SCM Agreement
7.4.3.1 Introduction
7.439. The United States claims that MOFCOM's price effects analyses in the Final Anti-Dumping
and Countervailing Duty Determinations are inconsistent with China's obligations under Articles 3.1
and 3.2 of the Anti-Dumping Agreement and Ar ticles 15.1 and 15.2 of the SCM Agreement.
Specifically, the United States argues that:
a. MOFCOM's price undercutting analyses are ba sed upon flawed price comparisons due to
MOFCOM's comparison of average unit prices (AUVs): (i) at different levels of trade
680;
and (ii) comprising different product mixes; and
b. MOFCOM's findings of price suppression are based on MOFCOM's flawed price
undercutting findings and MOFCOM failed to determine that the price suppression was
"the effect of" subject imports.
7.440. In addition, the United States claims that MOFCOM failed to disclose its methodology for
adjusting subject import price data with respect to different levels of trade and failed to provide in
its Determinations the reasons for rejecting parties' arguments with respect to the same issue of
differences in levels of trade, thereby acting inco nsistently with Article 12.2.2 of the Anti-Dumping
Agreement and Article 22.5 of the SCM Agreement.
7.441. China contests each of these claims.
7.4.3.2 Relevant provisions
7.442. The texts of Articles 3.1 of the Anti-Dumping Agreement and of 15.1 of the
SCM Agreement are set out in paragraph 7.373 abov e. Article 3.2 of the Anti-Dumping Agreement
provides as follows:
With regard to the volume of the dumped imports, the investigating authorities shall
consider whether there has been a significant increase in dumped imports, either in

679 We note that the United States has argued that a deficiency in the definition of the domestic industry
would vitiate the injury analysis conducted under Articles 3.2, 3.4 and 3.5 of the Anti-Dumping Agreement
and 15.2, 15.4 and 15.5 of the SCM Agreement. (United States' first written submission, para. 267, citing
Panel Report, Mexico – Olive Oil, paras. 7.197-7.201). These claims were not specifically raised in the
United States' request for establishment of a panel. However, as we have found no inconsistency with
Articles 3.1 and 4.1 of the Anti-Dumping Agreement and Articles 15.1 and 16.1 of the SCM Agreement, we
need not address these claims and whether they are within our terms of reference.
680 The United States defines "levels of trade" as "the different market stages at which goods are traded,
such as sales from manufacturer to wholesaler, from wholesaler to retailer, and from retailer to consumer",
and adds that "[t]he price of a good varies depending on the level of trade at which the good is offered for
sale". (United States' first written submission, para. 288).

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absolute terms or relative to production or consumption in the importing Member.
With regard to the effect of the dumped imports on prices, the investigating
authorities shall consider whether there has been a significant price undercutting by
the dumped imports as compared with the price of a like product of the importing
Member, or whether the effect of such imports is otherwise to depress prices to a
significant degree or prevent price increases, which otherwise would have occurred, to
a significant degree. No one or several of these factors can necessarily give decisive
guidance.
7.443. The text of Article 15.2 of the SCM Agreement is, for all relevant purposes, identical to that
of Article 3.2 of the Anti-Dumping Agreement, exce pt that it uses the terms "subsidized imports"
rather than "dumped imports".
7.4.3.3 Factual background
7.444. MOFCOM's price effects analyses in its Final Anti-Dumping and Countervailing Duty
Determinations are virtually identical. Moreover, MOFCOM's price effects analysis in each Final
Determination is also almost unchanged from the price effects analysis in the corresponding
Preliminary Determination. In each case, MOFCOM analyses trends in the average unit price of
subject imports and in the price of the domestic like product, and then compares the two on a
yearly basis (for 2006, 2007, 2008 and the first half of 2009).
7.445. With respect to the price of subject impo rts, the Determinations state that MOFCOM used
the "export price to China (CIF price)" according to statistics data from the Chinese customs
authorities.
681 MOFCOM reports two sets of yearly values, one in USD and one in RMB, the latter of
which it subsequently compares to the AUV of dome stic like products. In response to a question
from the Panel, China indicated that the prices used by MOFCOM were the "CIF, duty-paid prices,
without any handling or customs clearance fee", based on statistics data from Chinese customs
authorities, to which it adjusted for customs duties paid.682
7.446. With respect to the price of the domestic like product, the Final Determinations indicate
that MOFCOM used the "average sales price of the domestic like product". 683 China explains that
MOFCOM calculated this average unit price by dividing the total sales quantity by the total sales
values that were reported by domestic producers in their questionnaire responses. 684 China further
explains that the prices used were the average ex -factory unit sales prices of the domestic like
products to the first customer "without any loading, handling, or freight fees included".685
7.447. The Final Determinations indicate that upon comparing the two AUVs on a yearly basis,
MOFCOM found that during the POI, the price of subject imports followed the same trend as the
price of domestic like products, and that:
During the POI, the RMB price of the Subjec t Products is always lower than average
sales price of the domestic like products. In 2006, 2007, 2008 and the first half of
2009, the RMB price of the Subject Produc ts is 569.51 Yuan/ton, 54.64 Yuan/ton,
515.57 Yuan/ton and 232.79 Yuan/ton lower th an average sales price of the domestic

681 Final Anti-Dumping Determination, Exhibit USA-4, pp. 34-35; Final Countervailing Duty
Determination, Exhibit USA-5, pp. 79-80.
682 China's first written submission paras. 274, 289 and 303; response to Panel question Nos. 65
and 114. China explains that the values are the same as in the Petition. The Panel notes that although the
Determinations do not cross-reference the Petition, the values used by MOFCOM are identical or virtually
identical to the values provided in the Petition. The Petition indicates that the unit values in USD were arrived
at by dividing the aggregate import price by the aggregate quantity for 12 tariff lines of imported US broiler
products. In its submissions, China explains that the USD unit values reported in the Petition are exclusive of
customs duties and that the Petitioner added the customs duties paid to arrive at the AUV in RMB. (China's
first written submission, para. 305). These explanations are consistent with the explanations provided in the
Petition itself.
683 Final Anti-Dumping Determination, Exhibit USA-4, pp. 34-35; Final Countervailing Duty
Determination, Exhibit USA-5, pp. 79-80.
684 China's first written submission, paras. 274 and 289.
685 China's first written submission paras. 274, 289 and 303; response to Panel question Nos. 65
and 114.

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like products. The Subject Products have caused obvious price cuts for the domestic
like products.686
7.448. In each investigation, MOFCOM also made a finding of price suppression, which we discuss
below when considering the United States' claims concerning that finding in each of the
Determinations.687
7.449. In its Questionnaire Response, Injury Brief and Comments on MOFCOM's Preliminary Injury
Determination, USAPEEC argued that it was inappropriate for MOFCOM to compare an average
US import price with an average Chinese pric e given differences in product mix between the
two and the fact that different broiler products have different prices. USAPEEC argued that the
range of chicken products exported by US producers differed from the range of chicken products
sold by Chinese producers in China and that over 97% of the US imports in the POI consisted of
four products among the lowest-priced ones (paws, chicken cuts with bones – generally leg
quarters, mid-joint wings, and other offal).
688 The United States Government made additional
comments in its meeting with MOFCOM after the Preliminary Determination with respect to the
product mix issue. It also questioned whether MOFCOM had made the comparison at the correct
level of trade. In respect of the latter, the Unit ed States Government argued that subject import
prices based on official import statistics were at a level of trade different than that of domestic like
product prices, and that the former would be lower than the latter because import statistics do not
include the importer's mark-up.689
7.450. MOFCOM noted the US respondents' arguments concerning the product mix and level of
trade in its Final Determinations. MOFCOM rejected the argument on product mix on the following
grounds:
The Investigating Authority holds the view that in the practice of anti-dumping
investigation the scope of the Subject Products and like products may vary and be
divided into different types or specifications due to different characteristics, usages,
quality, and other factors of the products; however, such difference does not prevent
the Investigating Authority from deeming the products of different types or
specifications as "products of same category" or "identical products".
In this case, both the Subject Products and the domestic like products are [broiler]
products. Different specifications of the broiler products belong to one category
including the claws and other specifications of broiler products as well. The interested
parties have made no objection to this.
In this case, both the Subject Products and the domestic like products are sold in the
Chinese market, competing with each other and affected by the situation of the
market. The competitive conditions are the same, the two can substitute each other
and the prices of the two in the Chinese market are comparable. Thus, in assessing
the injury in this case, the Investigating Authority does not need to consider the
corresponding relationship among different specifications of the Subject Products and
the domestic like products and to segment the market to make comparison and
assessment. The Investigating Authority may assess to find out whether the Subject
Products caused injury to the domestic industry on the basis of the "the same
category of product".690 (emphasis added)
7.451. With respect to the argument on level of trade, the Final Determinations state that:

686 Final Anti-Dumping Determination, Exhibit USA-4, p. 35; Final Countervailing Duty Determination,
Exhibit USA-5, p. 80.
687 See below, section 7.4.3.5.
688 USAPEEC's Injury Brief, Exhibit USA-21, p. 19; USAPEEC's Comments on the Preliminary
Anti-Dumping Determination, Exhibit USA-46, pp. 5-8; Part II of USAPEEC Injury Questionnaire Response,
Exhibit CHN-41, p. 12.
689 United States Talking Points on Injury Issues, Exhibit CHN-27, p. 5.
690 Final Anti-Dumping Determination, Exhibit USA-4, p. 47. The language in the Final Countervailing
Duty Determination, Exhibit USA-5, pp. 92-93, is virtually identical.

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At the same time, when comparing the import price of the Subject Products and the
sales price of the domestic like products, the Investigating Authority has taken the
difference in sales levels into consideration, adjusting the import price based on the
Customs data accordingly. With respects to the data of the adjusted import price and
the price under-cutting on the domestic like products, the interested parties have
made no objection to this.691 (emphasis added)
7.452. The United States initially relied on this statement as an indication that MOFCOM had
purported to make an adjustment to account for differences in the levels of trade between the
prices of subject imports and the prices of domestic like products. China, for its part, contends that
while this paragraph reflects MOFCOM's consideration of the level of trade issue, MOFCOM did not
make any level of trade adjustment and the statement in fact refers to MOFCOM adding the
customs duties paid to the c.i.f. price of the subject products.
692 The Panel does not understand
the United States to challenge China's assertion that MOFCOM did not in fact make any level of
trade adjustment.
7.4.3.4 Whether MOFCOM's findings of price undercutting are consistent with
Articles 3.1 and 3.2 of the Anti-Dumping Agreement and Articles 15.1 and 15.2 of the
SCM Agreement
7.453. We first consider the United States' claim that MOFCOM's failure to control for differences
in product mix and level of trade means that MOFCOM's finding of price undercutting in each of the
investigations was: (i) not based on an "objective examination" of "positive evidence" as required
by Articles 3.1 of the Anti-Dumping Agr eement and 15.1 of the SCM Agreement; and
(ii) inconsistent with Articles 3.2 of the Anti -Dumping Agreement and 15.2 of the SCM Agreement
as it meant that the data relied upon by MOFCOM did not allow it to consider whether there had
been significant price undercutting by the allegedly dumped and subsidized imports.
7.4.3.4.1 Main arguments of the parties
7.4.3.4.1.1 United States
7.454. The United States argues that to conduct a price effects analysis consistent with the
objectivity and positive evidence requirements und er Articles 3.1 of the Anti-Dumping Agreement
and 15.1 of the SCM Agreement, an investigating authority must use domestic and subject import
pricing data that permit reasonably accurate price comparisons.
693 The United States submits that
the Appellate Body in China – GOES found that a failure to ensure price comparability would be
inconsistent with the requirement under Articles 3.1 and 15.1 that a determination of injury be
based on "positive evidence" and invo lve an "objective examination" of, inter alia, the effect of
subject imports on the prices of domestic like products.694
Level of trade
7.455. The United States notes that Article 2.4 of the Anti-Dumping Agreement requires that the
comparison of export price and normal value for the purpose of calculating the margin of dumping
be at the same level of trade. The United States submits that the same principle applies to the
comparison of subject import and domestic like product prices in the context of a price effects

691 Final Anti-Dumping Determination, Exhibit USA-4, pp. 47-48. The Final Countervailing Duty
Determination, Exhibit USA-5, p. 93, states that "the Investigating Authority has taken the difference in sales
links into consideration and adjusted the Subject Products' import price based on the customs' statistical data
accordingly."
692 China's first written submission, para. 304.
693 United States' first written submission, paras. 281-285.
694 United States' first written submission, paras. 285-286 (citing Panel Report, China – GOES,
paras. 7.528, 7.530 and 7.554); second written submission, paras. 164-166 (citing the same paragraphs of the
Panel Report in China – GOES as well as Appellate Body Report, China – GOES, paras. 197 and 200). The
Appellate Body report in China – GOES was circulated after the first meeting of the Panel, but before the
parties' second written submissions. For this reason, the parties discuss the findings of the China – GOES panel
in their first written submissions and answers to questions following the first meeting of the Panel, and discuss
the relevant portions of the Appellate Body Report in the same dispute in their subsequent submissions to the
Panel.

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analysis.695 The United States argues that the two sets of AUVs MOFCOM compared are at different
levels of trade and that, as a result, the undercutting margins MOFCOM relied upon are not a
reflection of the actual price undercutting, but rather also reflect the different levels of trade at
which subject import prices and domestic like product prices were collected.
696 The United States
argues that domestic producers' sales prices do not compete with c.i.f. prices but rather compete
with imports that are offered to the importers' first arm's-length customers. The latter are sold at
prices that reflect not only the c.i.f. price but al so additional transportation costs from the border
to the importer's warehouse and the importer's mark-up for selling, general and administrative
expenses and profit. The United States argues th at MOFCOM should have added this importer's
mark-up to the AUV of subject imports on a c.i.f. basis to render it comparable to the AUV of
domestic prices used by MOFCOM.
697
7.456. The United States takes issue with China's assertion that the evidence on the record
showed that some of the customers of US expo rters were distributors or end-users and with
China's estimation that 80% of importers were distributors. The United States argues that these
assertions have no evidentiary support, and that the flip side of China's argument is that some of
the importers were not distributors or end-users. The United States also rejects as unsupported by
evidence and contrary to market economics China's argument that importers may be reselling at a
loss, and notes that importers' prices to first arms-length customers would include not only profit,
but also transportation from the border to the im porter's warehouse, as well as selling, general
and administrative expenses.
698
7.457. The United States further argues that MOFCOM made no effort to collect information from
importers other than to post a copy of the import ers' questionnaire on its website, adding that
importers would not have been aware of these questi onnaires as the Notices of Initiation made no
mention of them. 699 The United States also finds China's defence that MOFCOM had no way of
identifying importers to be untenable in the light of the submission, by US exporters, of listings of
their customers/importers. Moreover, the United States argues, MOFCOM could have obtained
information on importers from Chinese Customs. In any event, the United States considers that
inability or difficulty in collecting information from importers does not dispense an authority from
meeting its obligations under Articles 3.1/15.1 and 3.2/15.2.
700
Differences in product mix
7.458. The United States argues that when the subject product comprises a heterogeneous range
of models with different characteristics corresponding to different prices, the comparability of the
AUV of subject import shipments with the AUV of domestic industry shipments will depend in
significant part on ensuring the comparability of the product mix between the two. The
United States argues that MOFCOM's failure to control for obvious differences in product mix
between subject imports and domestic industry shipments renders its price comparison
defective.
701
7.459. The United States claims that the record before MOFCOM demonstrated that different
chicken parts command substantially different prices in the Chinese market and that the product
mixes of subject imports and the domestic like product differed significantly.
702 The United States
argues in this respect that the overwhelming majority of subject imports consisted of lower-value
chicken products, such as chicken paws (which accounted for 40% of total imports of the subject
product) and wing-tips, whereas Chinese domestic producers' shipments consisted of a distribution

695 United States' first written submission, para. 289.
696 United States' first written submission, paras. 275 and 296.
697 United States' first written submission, para. 294; opening statement at the first meeting of the
Panel, para. 68; second written submission, paras. 168-169.
698 United States' second written submission, para. 169; opening statement at the second meeting,
para. 64.
699 United States' second written submission, para. 173.
700 United States' opening statement at the first meeting of the Panel, para. 82; second written
submission, para. 174-176; response to Panel question Nos. 69(b) and 70.
701 United States' first written submission, para. 297.
702 United States' first written submission, para. 298; opening statement at the first meeting of the
Panel, paras. 83-88; response to Panel question 65(a) (citing USAPEEC's Injury Brief, USA-21, p. 19;
USAPEEC's Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-46, pp. 5-6).

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of low and high value products including breast meat. 703 The United States also notes that
MOFCOM did not deny or refute this evidence of different pricing during the investigation; rather, it
claimed that it was under no obligation to take the product mix into account.
704
7.460. The United States argues that evidence submitted by China to the Panel purporting to
demonstrate that subject imports in fact consis ted of a higher value mix than domestic sales
constitutes a post hoc rationalization. 705 The United States also argues that the evidence is not
representative and does not constitute positive evidence, notably because it relies on a small
number of invoices collected by MOFCOM during the investigation.706
7.4.3.4.1.2 China
7.461. China considers that MOFCOM's price comparisons were consistent with its obligations.
China submits that Articles 3.2 and 15.2, as well as, more generally, Articles 3.1 and 15.1, do not
specify any particular methodology and afford investigating authorities a broad discretion in
choosing their own methods of pricing analysis, provided that they represent an "objective
examination" of "positive evidence".
707 China further submits that the obligation to consider price
comparability arises only based on the facts and circumstances of a particular case.708
7.462. China argues that MOFCOM used standard, neutral methodologies, and the United States'
arguments assume without evidence that the prod uct mix and levels of trade differed between the
two sets of AUVs compared by MOFCOM. 709 China adds that the approach advocated by the
United States on both product mix and levels of trade would have resulted in higher price
undercutting margins than those calculated by MOFCOM. China considers that product or levels of
trade differences only matter if they lead to distortions that are adverse to importers; only where a
methodology increases the likelihood of an affirmative determination does it cease being an
"objective examination".
710
Level of trade
7.463. China argues that the concept of level of trade in Article 2.4 of the Anti-Dumping
Agreement cannot casually be extrapolated to other provisions and that the absence of a similar
requirement in Article 3.2 suggests that an investigating authority is not required to consider the
level of trade in the context of conducting a price effects analysis.
711
7.464. China submits that the statement in the Final Determinations cited by the United States as
indicating that MOFCOM purported to take level of trade differences into account was in fact a
reference to MOFCOM having added the customs duties paid to the c.i.f. price. However, China
also submits that the paragraph at issue reflects MOFCOM's consideration of the level of trade
issue. In its responses to the Panel's question s after the second meeting, China argues that
MOFCOM addressed the issue of the level of trad e in the context of its discussion of the "like
product" in its Preliminary and Final Determinations; in this discussion, China explains, MOFCOM
found that imports and domestic broiler products shared the same sales channels.
712
7.465. China argues that MOFCOM's methodology of comparing both subject imports and
domestic prices on a duty-paid, landed basis (i.e . on the basis of products "physically in China
ready for resale") compares sales at the same level of trade. China also argues that MOFCOM's use

703 United States' first written submission, para. 301; opening statement at the first meeting of the
Panel, para. 83.
704 United States' opening statement, para. 84 (citing Final Anti-Dumping Determination, Exhibit USA-4,
Sec. 6.2.2).
705 United States' opening statement at the first meeting of the Panel, para. 89; second written
submission, para. 179.
706 United States' second written submission, paras. 182-189; comments on China's response to Panel
question No. 118.
707 China's first written submission, paras. 281-282.
708 China' second written submission, paras. 169, 221-225; response to Panel question No. 65(a).
709 China's response to Panel question No. 65(c); second written submission, para. 167.
710 China' second written submission, paras. 167-169, 172, 185 et seq.
711 China's first written submission, paras. 291-292. China also notes that the SCM Agreement includes
no reference to the concept of level of trade.
712 China's response to Panel question No. 113.

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of landed prices in China allowed it to compare domestic prices and import prices on a comparable
basis without the more difficult administrative burden of determining comparable prices at a later
stage in the distribution chain.
713
7.466. China argues that MOFCOM's methodology does not make any assumptions about whether
subject merchandise is being imported by importers, distributors, or end-users. 714 By contrast,
China argues, the United States' argument make s two assumptions: that the importer is an
intermediary as opposed to a distributor or end-user, and that the importer's mark-up is a positive
number. China argues that there is no factual basis for either of these assumptions.715
7.467. Moreover, China argues that the United States wrongly assumes that MOFCOM could easily
access all information on the level of trade of US imports and domestic producers. 716 China
submits that imported and domestic products may be sold through different channels of trade that
are not easily compared and that in injury investigations authorities are dealing with many
companies and make price comparisons across entire industries. Without some reasonable
simplifying assumptions, China submits, the task of making such comparisons is a daunting one.
717
China further argues that importers may have no incentive to cooperate in the investigation and
notes that in the investigations at issue, MOFCOM received no questionnaire response from any
importer. China submits that US exporters themselves were uncertain of their customers in China.
Differences in product mix
7.468. Concerning the United States' argument that MOFCOM's pricing comparisons did not take
into account differences in product mix, China submits that MOFCOM's methodology struck a
reasonable balance between the information available to it and the need to conduct an objective
examination of relative prices of various broiler chicken products being sold in China. China
submits that MOFCOM properly considered the issue of product mix and then decided that
comparing overall average prices made the most sense.
718 China explains that MOFCOM conducted
its analysis on an overall basis because all types of chicken competed with each other in the
Chinese market; MOFCOM's methodology allows it to capture all sales as opposed to just certain
products and recognises the substitutability among different types of products.
719 China adds that
where the investigating authority has defined a single like product, and that finding has not been
challenged; nothing in the "objective examination" requirement forces the authority to conduct a
price comparison on the basis of product segments within the single like product.720
7.469. China takes issue with the United States' assertion that the US exports to China
comprised mostly lower-valued parts whereas domestic products consisted of higher-value chicken
parts. China argues that the data submitted by th e United States in support of this assertion is
unreliable and focuses on US exports rather than on pricing in China. 721 China argues that Chinese
customers value all parts of the chicken and that it is not at all obvious that there are differences
between the prices of different parts on the Chin ese market that would matter for the purpose of
the price comparison. China also argues that the pa rts exported by US producers in fact attract a
higher value on the Chinese market than the parts sold by Chinese producers and that, as a result,
contrary to what the United States argues, MOFCOM's methodology in fact understates the price
undercutting.
722 China argues that a series of invoices, collected during verification of domestic
producers, confirm the point of common knowledge that in China, chicken paws command a higher
price than chicken breast. In its second written submission, China provides a product-specific price

713 China's first written submission, para. 282.
714 China's second written submission, para. 204.
715 China's first written submission, paras. 202, 285, 296. China submits, as evidence to contradict the
second assumption, a report from the US Department of Agriculture Foreign Agricultural Service indicating that
during 2008, the vast majority of importers in China were reselling imported broiler chicken at 20-30% losses.
(USDA GAIN Report CH9601 (January 2009), Exhibit CHN-40; China's response to Panel question 65(c) and
second written submission, para. 213). China acknowledges that this specific document was not on the record
before MOFCOM.
716 China's first written submission, para. 293.
717 China's first written submission, para. 293.
718 China's first written submission, para. 312.
719 China's first written submission, paras. 283, 313-316.
720 China's response to Panel question No. 66.
721 China's first written submission, paras. 319-322.
722 China's first written submission, paras. 325-326.

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undercutting calculation for three cuts (paws, wings and legs) relying on price data contained in
the invoices, which arrives at a margin of undercu tting exceeding that calculated by MOFCOM in
the investigations.723
7.4.3.4.2 Arguments of the third parties
7.470. The European Union argues that whenever a price effects analysis resorts to a price
comparison between domestic and imported goods, the comparison must necessarily take into
account possible discrepancies between the prices compared in terms of product mix and level of
trade. Based on the specific facts before it, the investigating authority has to determine if such
discrepancies have an actual impact on the comparability of prices, and if necessary, make
necessary adjustments.
724 In relation to the product mix issue, the European Union considers that
a methodology that compares AUVs for different products under investigation may be appropriate
for the purposes of a price undercutting analysis only where these products are relatively
homogeneous and sufficiently comparable. 725 The European Union considers that differences in
level of trade may prevent a proper price comp arison and that the principles expressed in
Article 2.4 of the Anti-Dumping Agreement should be extended by analogy to the provisions
governing the price effects analysis.726 The European Union agrees with the United States that the
AUVs used by MOFCOM in the broilers investigations were at different levels of trade given that
c.i.f. price of subject imports ex cludes a series of additional costs and that in the absence of
sufficient explanations on the level of trade issue in the Determinations, China can be found in
breach of Articles 3.2 and 15.2.
727
7.471. Mexico argues that the price comparison for the pu rposes of the injury analysis must be
conducted at the same level of trade and that the investigating authority may need to make
necessary adjustments to ensure that the comparison is objective and fair. Mexico argues on this
basis that MOFCOM's price undercutting analysis is inconsistent with Articles 3.1 and 2.4 of the
Anti- Dumpin g Agreement, in relat ion with Article 3.2 of the Anti-Dumping Agreement.
728 Mexico
also agrees with the United States that where average prices are used, a significant difference
between the values of the baskets of products compared could lead to a biased conclusion
regarding the level of price undercutting. Mexico considers that MOFCOM should have performed a
disaggregated comparison of products "of the same species", not a comparison of products "of the
same genus".
729
7.472. Saudi Arabia argues that an injury determination in accordance with Articles 3.2 or 15.2
needs to account for important differences between the subject product and the like product, such
as the product mix, and must compare prices at the same level of trade.730
7.4.3.4.3 Evaluation by the Panel
7.473. The principal question before the Panel is whether MOFCOM ensured the comparability of
the two sets of prices that it compared for th e purpose of determining price undercutting in the
context of Articles 3.2 and 15.2.
7.474. We note that neither Articles 3.1 and 15.1 nor Articles 3.2 and 15.2 impose a specific
methodology on an investigating authority in performing its price effects analysis. In fact, prior
panel and Appellate Body decisions recognize that the investigating authority is afforded a certain
level of discretion in choosing a methodology it considers appropriate in conducting the
examination envisioned by Articles 3.2 and 15.2.
731

723 China's second written submission, paras. 191-196.
724 European Union's third-party response to Panel question No. 14.
725 European Union's third-party submission, paras. 66-67; third-party response to Panel
question No. 15.
726 European Union's third-party submission, paras. 76-77.
727 European Union's third-party submission, paras. 78-81.
728 Mexico's third-party statement, paras. 35-41; third-party response to Panel question No. 14.
729 Mexico's third-party statement, paras. 42-44; third-party response to Panel question No. 14.
730 Saudi Arabia's third-party submission, para. 41.
731 Appellate Body Report, EC – Bed Linen (Article 21.5 – India), para. 113 (discussing the related issue
of the authority's examination of the volume of imports); Panel Report, China – X Ray Equipment, para. 7.41.

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7.475. Nonetheless, Articles 3.2 and 15.2 require the investigating authority to consider "whether
there has been a significant price undercutting by the [dumped or subsidized] imports as
compared with the price of a like product of the importing Member". There can be no question that
the prices being compared must correspond to products and transactions that are comparable if
they are to provide any reliable indication of the existence and extent of price undercutting by the
dumped or subsidized imports as compared with the price of the domestic like product, which may
then be relied upon in assessing causality between subject imports and the injury to the domestic
industry.
732
7.476. The authority's discretion is also circ umscribed by the overarching obligation under
Articles 3.1 and 15.1 that the determinations of in jury "be based on positive evidence and involve
an objective examination". A comparison of prices that are not comparable would not, in our view,
satisfy the requirement for the investigating author ity to conduct an "objective examination" of
"positive evidence".
7.477. The issue of price comparability was consid ered in two recent disputes. The panel and the
Appellate Body in China – GOES and the panel in China – X-Ray Equipment held that Articles 3.1
and 15.1 and 3.2 and 15.2 require that an investigating authority performing a price comparison in
the context of a price effects analysis ensure that the two prices it relies upon are comparable.
733
In China – GOES, the Appellate Body explained that:
… although there is no explicit requiremen t in Articles 3.2 and 15.2, we do not see
how a failure to ensure price comparability could be consistent with the requirement
under Articles 3.1 and 15.1 that a determination of injury be based on "positive
evidence" and involve an "objective examination" of, inter alia, the effect of subject
imports on the prices of domestic like products.
734
7.478. In addition, the Appellate Body explained that the obligations under Articles 3.1 and 3.2
"must be met by every investigating authority in every injury determination", meaning that the
requirement to ensure price comparability does no t depend on the respondents having raised the
issue before the investigating authorities.735
7.479. These decisions stand for the proposition that price comparability needs to be examined
any time that a price comparison is performed in the context of a price undercutting analysis, yet
also recognize that the need for adjustments necessarily depends on the factual circumstances of
the case and the evidence before the authority. We agree.
7.480. We note that several factors determine the sales price in a given transaction, and that,
consequently, price comparability has to be ensured in terms of the various features of the
products and transactions being compared. In particular, the sales price of a product reflects the
commercial transactions and circumstances in which the product is traded. It is made of different
pricing components that reflect the particular conditions or circumstances of the sale, starting with
an amount that represents the cost of production and sale of the product, to which is added an
amount for profit. Depending on the particular realities of the relevant market, additional pricing
elements – generally an amount for additional costs and profit for each of the successive
participant in the distribution chain – are added as the product gets traded further down the
distribution chain, from producer to wholesaler, from wholesale to retailer, and from retailer to
end-user.

732 In China – GOES, the Appellate Body indicated that the different paragraphs of Articles 3 and 15
contemplate a logical progression of inquiry leading to an investigating authority's ultimate injury and
causation determination and that the outcomes of the inquiries set forth in Articles 3.2 and 15.2 and the
examination required in Articles 3.4 and 15.4 form the basis for the overall causation analysis contemplated in
Articles 3.5 and 15.5.
733 Panel Report, China – GOES, para. 7.528; Appellate Body Report, China – GOES, paras. 197-203;
Panel Report, China – X-Ray Equipment, paras. 7.49-7.50.
734 Appellate Body Report, China – GOES, para. 200. (footnotes omitted)
735 Appellate Body Report, China – GOES, para. 201 (citing Appellate Body Report, EC – Bed Linen
(Article 21.5 – India), para. 109; and Panel Report, Mexico – Steel Pipes and Tubes, para. 7.259). The panel in
China – X-Ray Equipment reached the same conclusion on the basis that under WTO law, a Member's claims
before a panel are not limited to the claims that were made during the investigation (Panel Report, China –
X-Ray Equipment, paras. 7.39-7.40).

BCI deleted, as indicated [***]

7.481. Hence, the level of trade at which a transaction takes place – whether the sale takes place
between a producer and a wholesaler or between a wholesaler and a retailer for example – is an
important characteristic of a transaction as it determines which pricing components are included in
the sales price. In our view, for a price comparison to be informative of the level of price
undercutting by subject imports, it must compar e transactions that include the same pricing
components (insofar as pricing components have an impact on the price). This means that it must
compare transactions at the same level of trade. Alternatively, if the transactions are at different
levels of trade, the authority must apply approp riate adjustments to render them comparable in
terms of the pricing components that they include.
7.482. For these reasons, the concept of level of trade is relevant to the price comparison even
though it is not specifically referred to in the various paragraphs of Article 3, in contrast to
Article 2.4 of the Anti-Dumping Agreement.
736
7.483. Another fundamental determining factor of the price is the physical characteristics of the
product. Articles 3.1/15.1 and 3.2/15.2 mandate an analysis of the effects of prices on the
domestic market of the "like product". Yet, in our view, ensuring that the products being compared
are "like products" will not always suffice to ensu re price comparability. Where the products under
investigation are not homogenous, and where various models command significantly different
prices, the investigating authority must ensure that the product compared on both sides of the
comparison are sufficiently similar such that the resulting price difference is informative of the
"price undercutting", if any, by the imported pr oducts. For this reason, for the price undercutting
analysis to comply with Articles 3.1/15.1 and 3.2/15.2 may well require the investigating authority
to perform its price comparison at the level of product models. In a situation in which it performs a
price comparison on the basis of a "basket" of products or sales transactions, the authority must
ensure that the groups of products or transactions compared on both sides of the equation are
sufficiently similar so that any price differential can reasonably be said to result from "price
undercutting" and not merely from differences in the composition of the two baskets being
compared. Alternatively, the authority must make adjustments to control and adjust for relevant
differences in the physical or other characteristics of the product.
737
7.484. We will now consider the specific allegations of the United States that MOFCOM failed to
ensure price comparability in terms of: (i) the level of trade, and (ii) the product mix of the AUVs
compared in the investigations at issue. In doing so, we recall the general principle that a panel
must review an investigating authority's application of the covered agreement on the basis of the
record developed by the authority in the investigation at issue and of the authority's
determinations. In addition, with respect to the specific question before us, the Appellate Body in
China – GOES stressed that an authority's "consideration" of the price effects of subject imports
"must be reflected in relevant documentation, such as an authority's final determination, so as to
allow an interested party to verify whether the authority indeed considered such factors."
738
7.4.3.4.3.1 Whether MOFCOM ensured price comparability in terms of levels of trade in
the investigations at issue
7.485. We have explained above that, to ensure price comparability, an authority must consider
whether the transactions that are related to the prices being compared include the same pricing
components or elements, which reflect the "level of trade" of the transaction as this term is used
by the United States. The United States' challenge of this aspect of MOFCOM's price comparison is
limited to the fact that, in its view, the two sets of prices compared by MOFCOM, import prices on
a c.i.f. basis and domestic prices on an ex works basis, are not at the same level of trade.
7.486. The United States has not convinced us that MOFCOM needed to add a mark-up
corresponding to the importer's costs and profit to the subject import AUV to render that AUV

736 Similar conclusions were reached by the panels in EC – Tube or Pipe Fittings, paras. 7.292-7.293;
737 An authority only needs to make an adjustment where the difference in physical or other
characteristics of the products affects their competitive relationship. Because the focus of the comparison
performed under Articles 3.2 and 15.2 is on the competitive relationship between subject imports and domestic
like products in the market of the importing Member, price comparability needs to be ensured in terms of the
perceived importance of potential differences to consumers in that market, not the market of the exporting
Member. (See Panel Report, EC – Tube or Pipe Fittings, para. 7.293).
738 Appellate Body Report, China – GOES, para. 131. (emphasis original)

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comparable to the domestic price AUV. All else being equal, the Panel is of the view that a c.i.f.
price to which appropriate adjustments are made to reflect the price paid by the first purchaser in
the country of import (i.e. the importer) is compar able to an ex works price to the first purchaser
in the importing country. Both prices are situated at the first point at which a purchaser may take
delivery of the product in the country of importatio n and both contain pricing elements that reflect
the first point in the distribution chain where imported and like domestic products enter into
competition.
 Expressed differently, they are the prices upon which the "first" purchaser in the
country of import will base its purchasing decision to either import directly or to buy directly from
domestic producers. For these reasons, we are of the view that the two prices are, in principle, at
the same level of trade.
7.487. The pricing elements that the United St ates suggests MOFCOM should have added to the
AUV of subject imports derived from prices on a c.i.f. basis, i.e. transportation costs to the
importer's warehouse and an amount to cover the importer's eventual profit, are not by definition
contained in the domestic producer's ex works price as the United States argues. Therefore, the
AUV value calculated on the basis of c.i.f. prices should not have to be adjusted any more than to
reflect the total costs that are associated with bringing the imported good past the border, into the
Chinese territory, ready to be taken possession of by the importer.
7.488. In light of the foregoing, we conclu de that the United States has not made a prima facie
case that MOFCOM's finding of price undercutting in the anti-dumping investigation was
inconsistent with Articles 3.1 and 3.2 of the Anti -Dumping Agreement and that its finding of price
undercutting in the countervailing duty investigation was inconsistent with Articles 15.1 and 15.2
of the SCM Agreement due to its failure to compare prices at the same level of trade.
7.489. We note that this conclusion is circumscribed by the limits set by the United States' claim
regarding this aspect of MOFCOM's price comparison. In particular the United States does not
contest that MOFCOM used, as the price of the domestic like product, an AUV derived from the
prices at which domestic producers sold their products to their first customers on an ex-works
basis, i.e. exclusive of shipment or any other costs beyond the factory.
7.4.3.4.3.2 Whether MOFCOM ensured price comparability in terms of product mix in the
investigations at issue
7.490. Turning to the second argument of the Unit ed States, we have explained above that if the
product mix between the two sets of prices being compared varies, there is a high risk that the
differences in AUVs reflect these variations in product mix, rather than actual differences in
pricing. It is not in dispute that the product mix varied considerably between the two sets of data
compared by MOFCOM in the investigations at issue. The parties agree that US imports were
limited to certain chicken parts, and in fact incl uded a high proportion of paws, wings, and legs,
whereas sales from domestic producers included all other parts of the chicken, including breast
meat. Moreover, the information before MOFC OM – be it Chinese Customs' import data
739, the
price listings submitted by USAPEEC in support of its comments on injury 740, or invoices collected
by MOFCOM at verification, revealed important price differences between the different broiler
products. This meant that the differences in product mix just mentioned risked affecting price
comparability and distorting any price effects analysis if steps were not taken to control for product
mix, or necessary adjustments made.
7.491. China has explained to the Panel that MOFCOM's methodology understated the extent of
price undercutting given the well-known fact, in China, that cuts such as paws command a higher
price than cuts such as breasts on the Chinese market. China argues that this would have been
obvious to MOFCOM and that in addition, invoices collected by MOFCOM revealed the same
customer preferences and supported the notion t h a t t h e i m p o r t s i d e o f M O F C O M ' s p r i c e

739 Chinese Customs data distinguished between various cuts such that MOFCOM would have known the
prices at which US imports of different cuts took place. Both parties have sought to rely on this import data in
support of their own arguments. (See China's first written submission, paras. 328-329).
740 USAPEEC provided price listings to MOFCOM in support of its arguments on product mix. The listings
report average price by HTS number, broken down between domestic prices, export prices to China, and
export prices to third countries. The listings show that the prices at which US exporters sold their products,
even on the Chinese market, varied significantly depending on the chicken part concerned. (USAPEEC Foreign
Producer Response, Exhibit CHN-45; and USAPEEC Injury Questionnaire Response, CHN-41).

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comparison consisted of mostly higher value products, whereas the domestic side included a large
portion of lower value products. 741 China argues on this basis, and with the support of
product-specific price comparisons it prepared for this panel proceeding 742, that MOFCOM's
methodology understated the margin of undercutting . China argues that there can be no violation
of Articles 3.2 and 15.2 where differences in price comparability favour foreign respondents.
7.492. We recall that in the Determinations, MOFCOM rejected US interested parties' arguments
on product mix on the basis that it was under no obligation to conduct a disaggregated price
comparison or take the composition of the two AUVs into consideration because the different
chicken parts were all within the scope of the "like product" and in competition with one another,
and because their price were "comparable". This contradicts China's explanations before the Panel.
For this reason, we agree with the United States that the rationale offered by China in these
proceedings amounts to post hoc rationalization which is irrelevant for the purposes of our
assessment of MOFCOM's actions.
7.493. But even if China's depiction of MOFCOM's consideration of the issue were accepted,
MOFCOM could not in our view have assumed on the face of evidence such as the relatively small
sample of invoices produced before the Panel or even well-known market realities that price
differences between different chicken parts would favour US producers/exporters and
underestimate the extent of price undercutting. Ra ther, such evidence should in our view have
alerted MOFCOM to the fact that the outcome of its price comparison would be affected by the
composition of each of the product "baskets". It would by consequence have required MOFCOM to
take necessary steps to ensure price comparability.
743
7.4.3.4.3.3 Conclusion on price comparability
7.494. On the basis of the above, we conclude that:
i. The United States has not established that China acted inconsistently with
Articles 3.1/15.1 and 3.2/15.2 because MOFCOM relied for its findings of price
undercutting on a comparison of subject import and domestic average unit values at
different levels of trade; and
ii. China acted inconsistently with Articles 3.1/15.1 and 3.2/15.2 because MOFCOM
relied for its findings of price undercutting on a comparison of subject import and
domestic average unit values that included different product mixes without taking
any steps to control for differences in physical characteristics affecting price
comparability or making necessary adjustments.

741 China's second written submission, para. 187.
742 China provided the Panel with 63 invoices collected by MOFCOM during its verification of domestic
producers in Exhibit CHN-31. China submitted a breakdown of the data from these invoices in Exhibit CHN-43,
which provides a comparison of the price differential between domestic shipments of breast and paws for each
of the 21 invoices that included both breasts and paws. China also submits as exhibits a number of press
reports to support its argument that it is a well-known fact in China that chicken paws sell at a higher price
than breasts in China. (China's first written submission, para. 325; and Reports on Diverging Consumer
Preferences, Exhibit CHN-25). In its second written submission, on the basis of the prices reported in the
63 invoices collected by MOFCOM, China provides a price comparison on a product-type basis for three types of
products (wings, paws, legs) which China asserts represent 80% of the US exports to China (and 28% of
domestic sales). These comparisons arrive at a higher undercutting margin for each of the categories than the
comparison performed by MOFCOM in the investigation. (See China's second written submission, paras. 191
et seq.).
743 For a similar conclusion, see Panel Report, China – GOES, footnote 506. We would further note that
the United States contests the representativeness of the 63 invoices and that China confirms that the
63 invoices it relies upon represent a very small fraction of the relevant sales of domestic producers.

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7.4.3.5 Whether MOFCOM's findings of price suppression are consistent with Articles 3.1
and 3.2 of the Anti-Dumping Agreement and Articles 15.1 and 15.2 of the
SCM Agreement
7.495. We now consider the United States' claim that MOFCOM's findings of price suppression in
the two investigations are also inconsistent with, respectively, Articles 3.1 and 3.2 of the
Anti-Dumping Agreement and Articles 15.1 and 15.2 of the SCM Agreement.
744
7.4.3.5.1 Main arguments of the parties
7.4.3.5.1.1 United States
7.496. The United States submits that while, in theory, an investigating authority could find
significant price suppression without finding that significant price undercutting exists, in the
present instance, MOFCOM based its price suppression
745 analysis entirely on its WTO-inconsistent
price undercutting analysis. The United States adds that MOFCOM made no finding that the volume
and market share of subject imports alone could ha ve suppressed domestic prices to a significant
degree, and that the record would not have supported such a finding. 746 As MOFCOM's finding of
significant price undercutting is unsupported by an objective evaluation of positive evidence,
MOFCOM's price suppression finding was inconsis tent with Articles 3.1 of the Anti-Dumping
Agreement and 15.1 of the SCM Agreement. 747 Moreover, the United States submits that the
absence of any valid price comparisons or positive record evidence that subject imports influenced
domestic like product prices made it impossible for MOFCOM to consider properly whether subject
imports had the effect of depressing or suppressing domestic like product prices, as required under
Article 3.2 of the Anti-Dumping Agreement and Article 15.2 of the SCM Agreement.
748
7.497. Moreover, the United States also argues that the existence of price suppression is not
sufficient to support a finding of adverse price e ffects and that Articles 3.2 of the Anti-Dumping
Agreement and 15.2 of the SCM Agreement require the investigating authority, in addition, to
establish that any significant price suppression is the effect of such imports . The United States
argues that because the only evidence cited by MOFCOM linking subject imports to price
suppression was its deficient price undercutting analysis, MOFCOM failed to establish that any price
suppression was the effect of subject imports.749
7.4.3.5.1.2 China
7.498. China disagrees with the United States ' contention that MOFCOM's finding of price
suppression was predicated entirely on its defective finding of significant price undercutting.
750
China argues that under Articles 3.2 and 15.2, price undercutting, price depression and price
suppression are three distinct analytical techniques for the authority to find adverse price effects.
China argues that any of them alone can suffice and that the text of Articles 3.2 and 15.2
expressly sets out price suppression as an adverse price effect that may exist even in the absence
of a price undercutting finding.
751

744 United States' first written submission, paras. 309-310.
745 The United States argues that MOFCOM's adverse price effects analysis appears to have been limited
to finding of price suppression, and included no finding of price depression. In addition, the United States
writes, in a footnote, that "[r]ecord evidence clearly showed that subject import price competition did not
"depress" domestic like product prices". (United States' first written submission, para. 306 and footnote 311).
746 United States' first written submission, paras. 277, 305; opening statement at the first meeting of
the Panel, paras. 91-92; second written submission, paras. 192-197; and response to Panel question No. 72.
The United States adds, in its opening statement at the second meeting of the Panel, para. 67, that the record
would not have supported a finding that "volume effects" or "market share effects" suppressed domestic prices
given evidence on the record that the increase in subject import volume and market share did not come at the
expense of the domestic industry, which gained more market share than subject imports.
747 United States' first written submission, para. 309.
748 United States' first written submission, para. 310.
749 United States' opening statement at the first meeting of the Panel, para. 93; second written
submission, paras. 190-191 (citing Appellate Body Report, China – GOES, paras. 142, 159).
750 China's first written submission, para. 333.
751 China's first written submission, paras. 333-338, 340. China submits that in the investigations at
issue, MOFCOM considered all three categories of price effects but focused its discussion on the two adverse

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7.499. China argues that, as a factual matter, MOFCOM's finding of price suppression was not
dependent on the existence of undercutting, but was an additional effect. 752 China argues that in
analysing price suppression, MOFCOM relied on: (i) the volume effects of subject imports (which
China contends were not challenged by the United States); (ii) market share effects; and (iii) the
erosion of profit margins. China argues that MOFCOM's discussion of the issue shows that MOFCOM
expressly set price suppression as an independent and adverse price effect – price suppression did
not exist solely because of price undercutting, but rather existed in addition to price
undercutting.
753
7.500. In its first written submission and opening statement at the first meeting of the Panel,
China argued that Articles 3.2 and 15.2 only re quire a showing that adverse price effects exist,
and do not require the investigating authority to find that subject imports caused or affected the
price suppression. 754 In its second written submission, China asserted that MOFCOM's Final
Determination in fact explained how subject import s had "explanatory force" with regard to the
suppression of domestic prices through the adverse volume effects that were independent of the
price effects".755
7.4.3.5.2 Arguments of the third parties
7.501. The European Union argues that, consistent with Articles 3.2 and 15.2, findings of price
suppression or price depression may be made independently from a finding of price undercutting.
The European Union explains that this would be the case, where, for instance, due to consumer
preferences or other non-price related factors, imported goods are in a position to exert a
downward pressure on the domestic prices even if they are higher than the domestic prices. The
European Union is of the view that MOFCOM's finding of price suppression is insufficiently
substantiated, because: (i) to make a finding of price suppression, it is necessary to establish that
prices have not been able to match increases in costs, and the file reveals no indication of cost
increases during the period of investigation, making it questionable whether MOFCOM's factual
findings meet the very definition of price suppression; (ii) parallel evolution of domestic and import
prices is not, in itself, sufficient to establish causation as it can result from a number of factors and
in the investigations at issue, MOFCOM has not demonstrated that price suppression, if it existed,
was caused by subject imports.
756
7.4.3.5.3 Evaluation by the Panel
7.502. We note at the outset that our analysis below is limited to MOFCOM's finding of price
suppression. While China has argued that MOFCOM noted a decrease in domestic prices in 2009,
we do not understand China to be taking the position that MOFCOM reached a conclusion that
subject imports had the effect of depressing domestic prices over the period considered, and the
United States is not seeking findings with respect to any such conclusion.
7.503. MOFCOM's finding of price suppression is found in section 5.2.3 of the Final
Anti-Dumping Determination (6.2.3 of the Final Countervailing Duty Determination) entitled "The
effect of the import price of the product concerned on the price of the domestic like product of the
domestic industry", immediately following MOFCOM's conclusion that during the period considered,

effects that were the most pronounced, price undercutting and price suppression. With respect to third effect,
price depression, China agrees with the United States that there was no price depression in the 2006-2008
period, but argues that there was price depression in the first half of 2009, when compared to the same period
in 2008. China argues that the United States misleadingly compares data for 2006 to 2009, which comparison
reveals no price depression. China notes that although MOFCOM did not make any specific conclusion about
price depression in the first half of 2009, it did specifically note the decline in prices of subject imports and
domestic like products in that period as part of the parallel trends of imports and domestic pricing. (China's
first written submission, paras. 274-280 and footnote 248; opening statement at the first meeting of the Panel,
para. 38).
752 China's first written submission, paras. 339-341, and 347.
753 China's first written submission, paras. 342-348; opening statement at the first meeting of the Panel,
paras. 38-39 and 45; second written submission, paras. 226-227 (citing Appellate Body Report, China – GOES,
para. 137).
754 China's first written submission, paras. 337-338; opening statement at the first meeting of the Panel,
para. 38.
755 China's second written submission, para. 227.
756 European Union's third-party response to Panel question No. 13.

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the price of subject import was always lower than the price of the domestic like products. The
United States' translation of the relevant language in the Determinations reads as follows:
The lower price of the Subject Products has also suppressed sales price of the
domestic like products. Evidences from the investigation suggested that during the
POI (with year 2007 as the only exception), sales price of domestic like products had
been lower than their production costs for a quite long time, while gross profit margin
of the domestic like products in 2007 remained at a fairly low level. As a result, the
domestic like products sector had been losing money for a long time. Particularly since
2008, further price cuts on the part of the Subject Products have resulted in a loss in
money of the domestic like products sector.
To sum up, the continual expansion of the market shares of the Subject Products in
China is closely related to the continual export to China in a large amount at a low
price, and selling of the Subject Products in a large amount at a low price across China
not only has a cut-down effect on price of the domestic like products, but also leads to
a reduced profitability of the domestic like products.
757
7.504. MOFCOM repeats its finding of price suppression in the context of its causation analysis 758,
and also mentions price suppression when addressing US respondents' comments on the
Preliminary Determinations.759
7.505. China has provided its own translation of the paragraphs of the determinations containing
MOFCOM's finding of price suppression. China objects to the United States' translation, which in its
view mistakenly uses the term "lower price" in the opening sentence of the first paragraph,
whereas the correct translation would use the term "low-priced".
760 China's translation reads as
follows:
The low-priced sales of the product concerne d also suppressed the selling price of the
like product of the domestic industry. The investigation evidence indicates that, during
the investigation period, except for the year 2007, the selling price of the like product
of the domestic industry remained below the sales cost for a long time. In 2007, the
gross profit margin of sales of the like pr oduct of the domestic industry was at a low
level, the like product of the domestic industry were in a state of loss for a long time.
In particular, since 2008 the like product of the domestic industry was in a loss
because the further price undercutting of the product concerned.
Taking all the above into consideration, the continuous expansion of the market share
of the product concerned in Chinese market was closely linked to the continuous
low-priced exports of the product concerned in large quantity to China. The low-priced
sales of the product concerned in a large quantity in Chinese market not only
apparently undercut the price of the like product of the domestic market, but also
resulted in the decrease of profit level of the like product of the domestic industry.
761
7.506. China argues that the terms "low-priced sales of the product concerned" is a stock Chinese
language phrase to refer to dumped/subsidized imports and therefore that the reference in the

757 Final Anti-Dumping Determination, Exhibit USA-4, pp. 34-35. The Final Countervailing Duty
Determination uses quasi-identical language (Exhibit USA-5, pp. 80-81).
758 Final Anti-Dumping Determination, Exhibit USA-4, pp. 42-44; Final Countervailing Duty
Determination, Exhibit USA-5, pp. 87-89.
759 Final Anti-Dumping Determination, Exhibit USA-4, pp. 44-51; Final Countervailing Duty
Determination, pp. 89-96. MOFCOM also refers to the suppression of domestic prices in its discussion of the
"selling price" in the section of the determination concerning the "impact" on the domestic industry and refers
to domestic prices being undercut and suppressed in the section concerning pre-tax profits of the impact
analysis and in the concluding discussion on impact. (Final Anti-Dumping Determination, Exhibit USA-4,
pp. 36-40; Final Countervailing Duty Determination, Exhibit USA-5, pp. 81-84).
760 We note that China did not avail itself of the procedures for objecting to a translation submitted by
the other party set forth in para. 9 of the Panel's Working Procedures. We nonetheless have taken China's
translation of the Anti-Dumping Determination into consideration given that the United States did not object to
it and that, in any event we conclude that the differences between the two translations are immaterial to our
resolution of the United States' claims.
761 Final Anti-Dumping Determination (China's translation), Exhibit CHN-3, pp. 36-37.

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opening language of the paragraph is not to undercutting, supporting its argument that MOFCOM's
price suppression determination was not dependent on its price undercutting analysis. 762 In
essence, we understand China to argue that the two findings, of price undercutting, and of price
suppression, were independent of one another and that MOFCOM found that imports of the subject
product in important quantities and at low prices led to price undercutting, and the same causes
led in addition to price suppression.
763
7.507. China's explanation that MOFCOM's use of the terms "low-priced sales" was only intended
as shorthand for "dumped" or "subsidized" "impor ts" raises a number of questions. We need not
resolve these questions as China elsewhere acknowledges that MOFCOM's finding of price
suppression was partly based on its finding of price undercutting. In particular, China argues that
"[t]he fact that MOFCOM also noted the effect of price undercutting on price suppression does not
mean that subject import volume and market share were not also causing price suppression"
764
and that "China's position has been the finding of price suppression did not rest solely on price
undercutting, which has been the US argument. Rather, MOFCOM's price suppression finding
rested on both the volume effects (absolute increase and market share) and the price effects
(price undercutting) ."765 The latter is a reference by China to the sentence in the paragraphs
quoted above that, "[i]n particular, since 2008 the like product of the domestic industry was in a
loss because the further price undercutting of the product concerned." This statement in the Final
Determination as well as China's own reading of MOFCOM's conclusions before this Panel lead us to
conclude that MOFCOM found that price suppression was, at least in part, caused by price
undercutting.
7.508. Other statements also show that for MO FCOM, the issues of price undercutting and price
suppression were closely interlinked. In particular, in the section of its Determinations containing
its causation analysis, MOFCOM writes:
In 2007, although the like product of the domestic industry reduced its losses,
however, because the import volume of the product concerned increased continuously
afterwards, the import price further underc ut the price of the like product of the
domestic industry, resulted in the selling price of the like product of the domestic
industry was further suppressed, the selling price dropped again below the sales cost,
the domestic industry could not further reduce its losses or turn losses into profits,
and both the pre-tax profit rate and the rate of return on investment were in an
extremely low level.766 (emphasis added)
7.509. It follows that MOFCOM's finding of price suppression is at least partly dependent on its
earlier finding of price undercutting. As we have found that MOFCOM's finding of price undercutting
is inconsistent with Articles 3.1, 3.2 and 15.1 and 15.2, we now need to consider China's argument
that the finding of price suppression can stand independently on the basis of MOFCOM's findings
on volume and market share effects.
7.510. We note that in China – GOES, the Appellate Body found that in such a situation in which
the investigating authority relies on both subject import prices and volume, a panel must still allow
for the possibility that either prices or volumes were sufficient in themselves to sustain a finding of
price suppression or price depression.
767 In China – GOES, the Appellate Body noted that MOFCOM
had referred to both volume and price effects but had provided no explanation or reasoning as to
whether or how the prices and volume of subject imports interacted to produce an effect on
domestic prices. This being the case, the Appellate Body noted that the panel was itself unable to
disentangle the relative contribution of these effects in MOFCOM's Final Determination without
substituting its judgement for that of the authorit y. The Appellate Body agreed with the panel that
it was "not possible to conclude that MOFCOM's finding that price depression was an effect of

762 China's first written submission, paras. 333-348; opening statement at the second meeting of the
Panel, para. 101.
763 China's opening statement at the second meeting of the Panel, para. 99.
764 China's opening statement at the second meeting of the Panel, para. 97. (emphasis added)
765 China's response to Panel question No. 120. (emphasis added)
766 The language is that of China's translation of the Final Anti-Dumping Determination (Exhibit CHN-3,
pp. 44-45).
767 Appellate Body Report, China – GOES, para. 216.

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subject imports might be upheld purely on the basis of MOFCOM's findings regarding the effect of
the increase in the volume of subject imports."768
7.511. We reach a similar conclusion. MOFCOM's Determinations do not separately or
independently discuss the impact of the volume an d increased market share of subject imports on
the ability of domestic producers to sell at prices that would cover their costs of production. In
these circumstances, we find ourselves unable to disentangle the respective contribution, in
MOFCOM's determinations, of price undercutting and of volume and market share effects on the
resulting price suppression. In these circumstances, we cannot uphold the findings of price
suppression given our earlier findings that MOFCOM's findings of price undercutting are
inconsistent with Articles 3.1 and 15.1 and 3.2 and 15.2.
7.512. In light of this conclusion, we do not need to examine any further the second argument of
the United States, that MOFCOM acted inconsistently with Article 3.2 and 15.2 because it failed to
determine that any price suppression was an "effect" of subject imports.769
7.513. In light of the foregoing, we find that China acted inconsistently with Articles 3.1 and 3.2
of the Anti-Dumping Agreement as a result of MO FCOM's finding of price suppression in the Final
Anti-Dumping Determination and acted inconsistently with Articles 15.1 and 15.2 of the
SCM Agreement as a result of MOFCOM's finding of price suppression in the Final Countervailing
Duty Determination.
7.4.3.6 Whether MOFCOM provided in the De terminations its reasons for rejecting the
United States Government's argument concerning level of trade
7.514. The United States claims that MOFCOM's fa ilure to provide in the Final Determinations the
reasons for its rejection of the United States Gove rnment's argument concerning level of trade is
in breach of Article 12.2.2 of the Anti-D umping Agreement and Article 22.5 of the
SCM Agreement.
770
7.515. Before we proceed to examine these claims, we must address China's argument that they
are outside our terms of reference because they are not referenced in the United States' panel
request. China made this argument at the very end of the panel proceedings, in the context of
commenting on the United States' clarification of its claims in its responses to the Panel's
questions following its second meeting
771, and the United States has not had the opportunity to

768 Appellate Body Report, China – GOES, para. 220-221 (quoting Panel Report, China – GOES,
para. 7.542).
769 The United States cites to the Appellate Body Report in China – GOES, where the Appellate Body
found that an investigating authority's price effects analysis must include a "consideration" not only of the
existence of price suppression or price depression, but also of the "explanatory force" of the subject imports in
relation to the significant price depression or suppression. (Appellate Body Report, China – GOES,
paras. 129-131). The United States did not explain whether it wished us to examine this argument merely as
support for its principal argument that MOFCOM's finding of price suppression was predicated on its finding of
price undercutting or rather, considered that it provided a distinct basis on which to conclude that MOFCOM
acted inconsistently with the provisions cited.
770 United States' response to Panel question Nos. 73 and 117. The United States' claim is closely linked
to MOFCOM's statement in the Final Determinations that it had taken differences in "sales levels" into account
in its price comparison. The United States initially read this statement as an indication by MOFCOM that it was
making an adjustment to control for differences in levels of trade. In its first written submission, the
United States stated that, assuming that MOFCOM did in fact make a level of trade adjustment, MOFCOM was
in breach of Articles 6.4, 12.2, 12.2.2 of the Anti-Dumping Agreement and Articles 12.3, 22.3 and 22.5 of the
SCM Agreement, because MOFCOM failed to disclose its methodology for making the adjustment. The
United States subsequently conceded that if it were the case that MOFCOM did not make a level of trade
adjustment, as China appeared to argue, then MOFCOM would have had no methodology for making such an
adjustment to disclose to the parties in accordance with Article 6.4 of the Anti-Dumping Agreement and
Article 12.3 of the SCM Agreement, and thus the United States would not have a claim on this basis. The
United States added, however, that in this case MOFCOM's failure to provide the reasons for its apparent
rejection of the United States' argument concerning level of trade was nevertheless in breach of Articles 12.2.2
and 22.5. (United States' response to Panel question Nos. 73 and 117). In light of these clarifications, and
given China's confirmation – consistent with the facts before us – that MOFCOM did not apply a level of trade
adjustment, we only examine these latter claims and not the United States' initial claims that MOFCOM failed to
disclose the methodology it employed to adjust import prices for differences in levels of trade.
771 China's comments on the United States' response to Panel question No. 117.

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respond to it. 772 It is nonetheless appropriate for the Panel to consider China's argument; given
that the vesting of jurisdiction in a Panel is a fundamental prerequisite for lawful proceedings, a
Panel must satisfy itself that the claims before it are properly within its terms of reference even in
the absence of objections from the parties.
773
7.516. We recall that Article 6.2 of the DSU sets forth the requirements pertaining to a
complaining party's request for the establishment of a panel. It provides that the request shall,
inter alia, identify the specific measures at issue and provide a brief summary of the legal basis of
the complaint sufficient to present the problem clea rly. Together with the identification of the
specific measures at issue, the provision of a brief summary of a complaint constitute the "matter"
referred to the DSB; if either of them is not properly identified, the matter is not within the panel's
terms of reference.
774 This requirement to identify the measures at issue in a dispute and to
provide a brief summary of the legal basis of the complaint serves the dual purposes of defining
the outer bounds of the panel's jurisdiction and of notifying the responding party (and third
parties) of the nature of the complainant's case.
775 Prior decisions have also clarified that
compliance with Article 6.2 must be demonstrated on the face of the request for the establishment
of a panel, reading it as a whole, in light of the attendant circumstances, and without regard to
subsequent developments, for instance the parties' submissions.776
7.517. The United States' panel request contains a section entitled "Injury Determination: Price
Effects Analysis", setting out in four separate paragraphs the United States' claims pertaining to
price effects. Paragraphs 16 and 17 of the panel request set forth claims with respect to alleged
procedural violations by MOFCOM. Paragraph 16 is relevant to the claim now considered.
777 It
indicates that the United States considers that the measures at issue are inconsistent with:
Article 12.2 of the AD Agreement and Ar ticle 22.3 of the SCM Agreement because
MOFCOM did not disclose its methodology for adjusting import prices to reflect their
different level of trade or explain its rejection of respondent arguments concerning
price effects.
7.518. China argues that paragraph 16 of the United States' panel request does not refer to
Articles 12.2.2 of the Anti-Dumping Agreement and Article 22.5 of the SCM Agreement. China
considers that the United States cannot raise such new claims at this very late stage of the
proceedings.
778 China's argument pertains to the second requirement under Article 6.2 of the DSU,
the provision of a brief summary of the legal basis of the complaint sufficient to present the
problem clearly. The Appellate Body has found that the term "legal basis of the complaint" in
Article 6.2 of the DSU refers to the claim made by the complaining party which "sets forth the
complainant's view that the respondent party has violated, or nullified or impaired the benefits
arising from, an identified provision of a particular agreement."
779 To comply with the obligation to
"present the problem clearly" the panel request must set forth the complainant's view that the
respondent party has violated an identified provision of a particular agreement.
780
7.519. The United States identified Articles 12.2 and 22.3 in paragraph 16 of its panel request
with respect to the issue of MOFCOM's adjustment of import prices for level of trade. Yet, in its

772 We note that the United States did not approach the Panel to seek leave to comment on China's
argument.
773 In this respect, the Appellate Body considered in US – 1916 Act that "it is a widely accepted rule that
an international tribunal is entitled to consider the issue of its own jurisdiction on its own initiative, and to
satisfy itself that it has jurisdiction in any case that comes before it". Appellate Body Report, US – 1916 Act,
footnote 30. See also Appellate Body Reports, Mexico – Corn Syrup (Article 21.5 – US), para. 36 and US –
Carbon Steel, para. 123; Panel Report, US – Anti-Dumping and Countervailing Duties (China), para. 10.149.
774 See, e.g. Appellate Body Report, China – Raw Materials, para. 219.
775 Appellate Body Report, US – Carbon Steel, para. 126. The Appellate Body has, in recent decisions,
clarified that due process "is not constitutive of, but rather follows from, the proper establishment of a panel's
jurisdiction." (Appellate Body Reports, China – Raw Materials, para. 233; EC and certain member States –
Large Civil Aircraft, para. 640).
776 See, e.g. Appellate Body Report, China – Raw Materials, para. 233.
777 Paragraph 17 sets forth the related claim concerning MOFCOM's alleged failure to provide interested
parties an opportunity to see its methodology for making the level of trade adjustment which the United States
is not pursuing in the light of China's clarification that MOFCOM did not make a level of trade adjustment.
778 China's comments on the United States' response to Panel question no. 117.
779 Appellate Body Report, Korea – Dairy, para. 139.
780 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews, para. 162.

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submissions the United States claims that these actions by MOFCOM are inconsistent with
Articles 12.2.2 of the Anti-Dumping Agreement and 22.5 of the SCM Agreement. Therefore, the
Panel must consider whether the United States' identification of the claim in the panel request was
sufficient to place a claim under these provisions within its terms of reference and to notify China
of the case it had to answer.
7.520. We recall that we must assess the United States' panel request not by reading each of its
paragraph in isolation, but rather in the light of the request read as a whole, i.e. reading the
different claims in the request for establishment in context.
781 This being the case, we note that
the United States' panel request contains a section setting forth its claims concerning "Evidentiary
Issues". The third paragraph of this section – paragraph 25 – sets forth claims under:
Articles 12.2, 12.2.1, and 12.2.2 of the AD Agreement and Articles 22.3, 22.4,
and 22.5 of the SCM Agreement because China failed to provide in sufficient detail all
relevant information on the matters of fact and law and reasons which led to the
imposition of final measures, including the reasons for the acceptance or rejection of
relevant arguments or claims.
7.521. We find it relevant that the obligations set forth under the different sub-paragraphs of
Articles 12.2 of the Anti-Dumping Agreement (inc luding 12.2.1 and 12.2.2) and Article 22 of the
SCM Agreement (including 22.3 and 22.5), respectively, are not independent of one another.
Rather, much like the various sub-paragraphs of Article 3 of the Anti-Dumping Agreement and
Article 15 of the SCM Agreement which present more detailed obligations as part of an overarching
fundamental obligation with respect to an injury determination, the sub-paragraphs of Article 12.2
of the Anti-Dumping Agreement and Article 22 of the SCM Agreement provide more detailed
obligations of the overarching fundamental obligation to notify interested parties of the reasoning
behind anti-dumping and countervailing duty dete rminations. The provisions are inter-related,
such that compliance with Article 12.2 is in pa rt determined by compliance with Article 12.2.1
or 12.2.2 and compliance with Article 22.3 is in part determined by compliance with Articles 22.4
or 22.5.
7.522. Although the United States did not reference Articles 12.2.2 and 22.5 in paragraph 16 of
the panel request when it referred to the level of trade issue and MOFCOM's failure to explain the
reasons for its rejection of arguments on price effects, these are the provisions that contain the
obligation to provide, in the public determination, "the reasons for the acceptance or rejection of
relevant arguments or claims made by the exporters and importers" which is in the narrative
description of the obligation in this paragraph 16. Furthermore, these provisions are also referred
to in paragraph 25, which contains a general claim of the United States with respect to MOFCOM's
provision of reasoning in all aspects of the investigation, which as mentioned above includes the
level of trade issue. Therefore, while the drafting of the panel request is not ideal, considering it as
a whole and the claims in their context, it does in our view succeed in signalling the United States'
intention to pursue claims concerning MOFCOM's failure to explain the reasons for its rejection of
US respondents' arguments concerning price effects, including the question of the difference in
levels of trade, under not only the provisions listed under paragraph 16, but also under those cited
under paragraph 25 of the panel request. For this reason, we find that the United States' claims
under Articles 12.2.2 and 22.5 are within our terms of reference.
7.523. We now proceed to examine the merits of the United States' claims.
7.4.3.6.1 Main arguments of the parties
7.4.3.6.1.1 United States
7.524. The United States argues that the United States Government's argument concerning the
need for proper price comparisons is a very relevant argument that goes to the heart of the pricing
analysis relied upon by MOFCOM.
782 The United States notes that in its Determinations, MOFCOM
seemed to acknowledge that its import price data was at a different level of trade than its
domestic price data and indicated that it was adjusting import prices accordingly. In light of
China's insistence that MOFCOM made no level of trade adjustment and the importance of level of

781 Panel Report, Mexico – Anti-dumping Measures on Rice, para. 7.31.
782 United States' response to Panel question No. 73.

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trade to MOFCOM's underselling analysis, MOFCOM's failure to provide the reasons for its apparent
rejection of the United States' argument concerning level of trade was in breach of Articles 12.2.2.
and 22.5.
783
7.4.3.6.1.2 China
7.525. China argues that the Final Determinations discussed at length the reasons for rejecting
the US arguments concerning product mix and level of trade – the arguments were first
summarized and then discussed in some detail. China adds that Articles 12.2.2 of the
Anti-Dumping Agreement and 22.5 of the SCM Agreement only require the authority to include the
reasons in the disclosure and say nothing about the sufficiency of the reasons, which is a
substantive obligation that must be resolved based on the substantive provisions of the
Agreement.
784
7.4.3.6.2 Evaluation by the Panel
7.526. Articles 12.2, 12.2.2 of the Anti-Dumping Agreement and 22.3 and 22.5 of the
SCM Agreement require investigating authorities to issue public notices of their final
determinations that include, inter alia, the reasons for the investigating authority's acceptance or
rejection of relevant arguments or claims made by the exporters or importers. The United States'
claims focus on this component of the public notice requirement under Articles 12.2.2 and 22.5.
7.527. We agree with the panel in China – X-Ray Equipment that "'relevant' arguments or claims
are those that relate to the issues of fact and law considered material by the investigating
authority".
785 As we have noted above, the "issues of fact and law considered material" are those
issues that have arisen in the course of the investigation that must necessarily be resolved in
order for the investigating authorities to be able to reach their determination.786
7.528. Concerning the explanations that must be provided by the authorities for their acceptance
or rejection of relevant arguments, the China – X-Ray Equipment panel considered, aptly in our
view, that:
Since this provision concerns the arguments and claims made by exporters and
importers, whose interests will be adversely affected by an affirmative determination,
it is particularly important that the "reasons" for rejecting or accepting such
arguments should be set forth in sufficient detail to allow those exporters and
importers to understand why their arguments or claims were treated as they were,
and to assess whether or not the investigating authority's treatment of the relevant
issue was consistent with domestic law and/or the WTO Agreement.
787
7.529. Finally, we recall that the panel in China – GOES found that the provisions at issue here
impose procedural obligations, and not substantive ones. This suggests that in examining the
sufficiency of the notices provided, the Panel shou ld focus on whether they reveal "findings and
conclusions" actually reached by MOFCOM, not those that should have been reached by
MOFCOM.
788 This stresses the importance of distinguishing the United States' substantive claims
under Articles 3.1/15.1 and 3.2/15.2 from its claims of procedural violations under Articles 12.2.2
of the Anti-Dumping Agreement and 22.5 of the SCM Agreement.
7.530. Consistent with these principles, elaborated by previous panels, and which we adopt as our
own, we must address the two following questions: (i) whether the United States Government's

783 United States' response to Panel question Nos. 73 and 117. See also the United States' argument
that the methodology for MOFCOM's alleged level of trade adjustment was an integral part of MOFCOM's
pricing analysis, which was central to its finding of causation and consequently, MOFCOM's choice of a
methodology was an issue that had to be resolved before MOFCOM could render an affirmative injury
determination. (United States' first written submission, para. 320; opening statement at the first meeting of
the Panel, para. 96).
784 China's second written submission, paras. 228-231; comments on the United States' response to
Panel question No. 117.
785 Panel Report, China – X-Ray Equipment, para. 7.472.
786 See above, para. 7.327.
787 Panel Report, China – X-Ray Equipment, para. 7.472.

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argument concerning levels of trade addressed "issues of fact and law considered material" by
MOFCOM from the perspective of the determinations at issue; and if so, (ii) whether MOFCOM's
Final Determinations set forth the reasons for rejecting or accepting each of these arguments in
sufficient detail to allow the United States Government to understand why its level of trade
argument was treated as it was, and to assess whether or not MOFCOM's treatment of the issue
was consistent with domestic law and/or the WTO Agreement.
7.531. Considering the first question, we are satisfied that the argument is a relevant one, and
which MOFCOM was obligated, under Articles 12.2.2 and 22.5, to address in the public notices of
its Final Determinations. As we have discussed in our consideration of the United States' claims
under Articles 3.1/15.1 and 3.2/15.2, comparability of the prices compared is a fundamental
component of a price undercutting analysis, which in turn forms part of an investigating authority's
further consideration of injury under Articles 3 and 15. Our findings above further make it clear
that the issue of level of trade was a materi al one in the context of MOFCOM's injury
determination.
7.532. We now turn to the second question, i.e. whether MOFCOM provided the reasons for its
rejection or acceptance of the level of trade argument. We have explained, in the context of our
examination of the United States' claims under Articles 3.1/15.1 and 3.2/15.2, that MOFCOM
acknowledged the United States Government's argument concerning levels of trade in its Final
Determinations. However, MOFCOM does not provide the reasons underlying its treatment of the
level of trade issue. For this reason, we uphold the claim and find that China acted inconsistently
with Articles 12.2.2 and 22.5 due to MOFCOM's failur e to disclose, in the public notice of its Final
Determinations or separate report, its reasons for the rejection of this argument.
7.4.4 Whether MOFCOM's findings that subj ect imports had an adverse impact on the
domestic industry comply with Articles 3. 1 and 3.4 of the Anti-Dumping Agreement and
Articles 15.1 and 15.4 of the SCM Agreement
7.4.4.1 Introduction
7.533. The United States claims that MOFCOM's findings in each of the investigations that subject
imports had an adverse impact on the domestic industry were not based on an "objective
examination" of "all relevant economic factors and indices having a bearing on the state of the
industry" in violation of Articles 3.1 and 3.4 of the Anti-Dumping Agreement and Articles 15.1
and 15.4 of the SCM Agreement.
789
7.534. China asks the Panel to reject these claims.
7.4.4.2 Relevant provisions
7.535. The text of Articles 3.1 of the Anti-Dum ping Agreement and 15.1 of the SCM Agreement is
set out above.
7.536. Article 3.4 of the Anti-Dumping Agreement reads:
The examination of the impact of the du mped imports on the domestic industry
concerned shall include an evaluation of all relevant economic factors and indices
having a bearing on the state of the industry, including actual and potential decline in
sales, profits, output, market share, producti vity, return on investments, or utilization
of capacity; factors affecting domestic prices; the magnitude of the margin of
dumping; actual and potential negative effects on cash flow, inventories, employment,
wages, growth, ability to raise capital or investments. This list is not exhaustive, nor
can one or several of these factors necessarily give decisive guidance.
7.537. Article 15.4 of the SCM Agreement provides as follows:
The examination of the impact of the subs idized imports on the domestic industry
shall include an evaluation of all relevant economic factors and indices having a

789 United States' first written submission, para. 321.

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bearing on the state of the industry, including actual and potential decline in output,
sales, market share, profits, productivity, return on investments, or utilization of
capacity; factors affecting domestic prices; actual and potential negative effects on
cash flow, inventories, employment, wages, growth, ability to raise capital or
investments and, in the case of agriculture, whether there has been an increased
burden on government support programmes. This list is not exhaustive, nor can one
or several of these factors necessarily give decisive guidance.
7.4.4.3 Factual background
7.538. In its analysis of the situation of the domestic industry in the Final Determinations,
MOFCOM first examines individual factors. For most indicators, MOFCOM examines and discusses
relevant yearly figures and year-over-year growth or decline, for the period 2006-2008 as well in
the first half of 2009, which it compares to data for the first half of 2008. MOFCOM then provides
its overall assessment of the state of the domestic industry:
The above evidences show that during the POI, for the purpose of satisfying a demand
increase at the Chinese market, the domestic like products sector recorded certain
growth from 2006 through 2008 in terms of output capacity, output volume, sales
quantity as well as market share, number of employees, per capita payroll, labor
productivity and other economic indicators. However, during the same period,
capacity utilization rate of the domestic like products sector had always been fairly
low, and ending inventory across the industry kept rising. As sales price of the
domestic like products remained lower than their production cost for a long term, the
domestic like products sector could not gain a reasonable profit margin, so profit
before tax for the domestic like products remained negative during the POI. Though
the domestic like products sector once reduced its amount of loss in 2007, but sales
price of the domestic like products encountered further cuts and suppressions
thereafter, resulting in a second occurrence of a phenomenon where sales price of the
domestic like products is lower than their production cost, and profit before tax and
ROI in the trade were extremely low. During the POI, net cash flows from operating
activities in the domestic like products sector witnessed significant fluctuations, which
brought about some impacts on investing and financing activities in the trade. In the
first half of 2009, economic indicators of the domestic industry continued to
deteriorate. Although there was a continuous increase from demand side of the
domestic market, capacity utilization rate of the domestic like products sector declined
to 66%, and in addition to that, such economic indicators as output volume, sales
quantity, market share, sales income and number of employees in the said industry
recorded declines to different extents. As an ongoing phenomenon, sales price of the
domestic like products was still lower than their production cost, resulting more
severe losses; and the amount of loss across the trade for the first half of 2009 was
almost equivalent to that for the whole year of 2008.
In summary, the Investigating Authority determines that the domestic industry has
encountered a material injury.
790
7.539. MOFCOM next considers the output capacity and exporting capability of the US industry, as
well as "possible further impacts on domestic industry in China" and concludes that it is "very
possible for the US broiler producers to expand their export to China and to affect the domestic
industry adversely."
791
7.4.4.4 Main arguments of the parties
7.4.4.4.1 United States
7.540. The United States contends that contrary to the requirements of Articles 3.1/15.1
and 3.4/15.4, MOFCOM's injury analyses igno red that nearly all the economic evidence

790 Final Anti-Dumping Determination, Exhibit USA-4, p. 40; the text of the Final Countervailing Duty
Determination (Exhibit USA-5, p. 85) is virtually identical.
791 Final Anti-Dumping Determination, Exhibit USA-4, pp. 40-42; the corresponding finding in the Final
Countervailing Duty Determination, Exhibit USA-5, is on pp. 85-87.

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demonstrated that the performance of the domest ic industry was actually robust and improving
between 2006 and 2008. The United States allege s that MOFCOM's finding of adverse impact is
primarily based on its flawed findings regarding two indicators, production capacity utilization and
end-of-period inventories.
792
7.541. The United States argues that MOFCOM's finding that the subject imports had an adverse
impact on the domestic industry's rate of capaci ty utilization over 2006-2008 does not reflect an
"objective examination" because it is contradicted by record evidence demonstrating that between
2006 and 2008 the domestic industry's rate of capacity utilization increased slightly. 793 The
United States argues that MOFCOM also failed to take into account the domestic industry's
increase in capacity, which was well in excess of demand growth and was the true reason for the
alleged decline in capacity utilization.
794 Finally, the United States argues that subject import
competition could not have reduced domestic indu stry output and capacity utilization between
2006 and 2008 because subject imports increased thei r share of apparent consumption entirely at
the expense of non-subject imports, not at the expense of the domestic industry.795
7.542. According to the United States, MOFCOM, while focusing its attention on the purported
increase in end-of-period inventories, failed to consider the relative insignificance of that increase
vis-à-vis the domestic industry's actual performance, in particular, the increase in the domestic
industry's production and shipments.
796 The United States argues in this respect that the absolute
increase in domestic industry end-of-period in ventories from 2006 to 2008 was dwarfed by the
absolute increase in domestic industry output and shipments. 797 The United States further notes
that end-of-period inventories as a share of domestic industry production increased only
from 2.9% in 2006 to 3.3% in 2008, and end-of-period inventories as a share of domestic industry
shipments increased only from 3.2% in 2006 to 3.5% in 2008. 798 On the basis of this data, the
United States argues that MOFCOM's finding that the increase in inventories was significant was
not based on an objective examination of positive evidence.
7.543. The United States contends that all of the other indicators demonstrate that the domestic
industry was doing well. Specifically, the United States notes that between 2006 and 2008, the
domestic industry increased its production capa city by 26.2%; its output by 28.2%; its sales
quantity by 31.2%; its sales revenues by 88.6%; its market share from 37.81% to 42.42%; its
employment by 10.3%; and that its pre-tax loss decreased from 7.9% of sales income in 2006
to 4.7% of net income in 2008. The United States notes that MOFCOM itself noted the domestic
industry's growth in these respects. The United States argues that MOFCOM's findings in respect of
these indicators cannot be reconciled with the evidence on the record before it.
799
7.544. The United States also challenges what it considers to be MOFCOM's improper reliance for
its analysis on only part of the POI, the first half of 2009. The United States argues that an
investigating authority must examine the impact of subject imports on the domestic industry over
the entire period for which data was collected. In addition, the United States argues that MOFCOM
focused on the only period in which the do mestic industry's performance weakened. The
United States adds that the domestic industry' lagging performance in this period could not have
been the result of subject imports since the bulk of the increase in subject volume coincided with a
strengthening domestic industry performance in 2006-2008.
800 The United States argues that in
light of this evidence, MOFCOM could not find, without adequate explanations, that subject imports
had an adverse impact on the domestic industry based on domestic industry performance in the
first half of 2009 alone. The United States notes in this respect that in China – GOES, the Appellate
Body held that Articles 3.4 and 15.4 require not on ly an examination of the state of the domestic

792 United States' first written submission, paras. 325-338; second written submission, paras. 199-201.
793 United States' first written submission, para. 329.
794 United States' first written submission, para. 330.
795 United States' first written submission, para. 331. The United States explains that the domestic
industry increased its share of apparent consumption from 37.81% in 2006 to 42.42 per cent in 2008.
796 United States' first written submission, para. 333.
797 United States' first written submission, para. 334.
798 United States' first written submission, para. 335.
799 United States' first written submission, paras. 326-327; second written submission, para. 202.
800 United States' second written submission, para. 205.

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industry but contemplate that an investigating authority must derive an understanding of the
impact of subject imports on the basis of such an examination.801
7.545. Finally, the United States notes China's argument that MOFCOM also relied on projections
of future imports from the United States in supp ort of its finding that subject imports caused an
adverse impact. The United States argues that future increases in imports leading to adverse
impact to the domestic industry in the future are irrelevant to the impact analysis under
Articles 3.4 and 15.4 and therefore, MOFCOM's co nsideration of potential future imports volumes
and impact in no way remedies the defects in MOFCOM's impact analysis.
802
7.4.4.4.2 China
7.546. China asserts that the United States' ar guments rest on an inaccurate and misleading
reading of the Final Determinations and a number of analytical errors.
7.547. First, China disputes the United States' interpretation of the evidence in respect of capacity
utilization and end-of-period inventories.
803 China contends that, with respect to capacity
utilization, MOFCOM made a simple point that it was persistently low over the period of
investigation and dropped sharply in the first half of 2009.804 China argues that in its evaluation of
MOFCOM's findings, the United States made a number of mistakes. In particular, the United States
focused on causation (not relevant to Articles 3.4 and 15.4), selectively used periods of
assessment (i.e., 2006-2008 period, without considering the first half of 2009), and made an
unsubstantiated allegation that the domestic in dustry's capacity had grown in excess of the
increasing consumption.
805 With respect to end-of-period inventories, China criticizes the
United States' evaluation of the "significance" of their increase, and what China characterizes as a
selective use of periods of assessment, focusing on the 2006-2008 period without considering the
first half of 2009.806 China submits that Articles 3.4 and 15.4 do not specify any methodology for
how this factor should be evaluated, and do not require that any of the factors listed thereunder
individually or collectively be "significant".
7.548. Second, China argues that there is no support in the Determinations for the United States'
argument that MOFCOM found capacity utilization and inventories to be decisive factors. China
submits that, contrary to what the United States argues, in its overall evaluation of the Chinese
domestic industry, MOFCOM considered many other factors which were at least as important and
even more important than capacity utilization and inventories.
807 In particular, China argues, the
United States disregards MOFCOM's discussion of financial indicators ("profits", "return on
investments", "cash flow", and "ability to raise capital or investments"). China argues that
MOFCOM's consideration of these factors, which showed a negative trend, was a key part of
MOFCOM's finding of material injury.
808 China adds that Articles 3.4 and 15.4 provide that no one
or several of the relevant economic factors necessarily give decisive guidance and that these
provisions do not impose any requirement on how relevant economic factors are to be evaluated.
Rather, they require only that the evaluation be co mprehensive. That evaluation is properly left to
the discretion of the authority, based on the partic ular facts. China argues that the United States'
argument elevates two factors and tries to make them decisive, not giving any consideration to
many other factors that were at least as important and even more important in MOFCOM's
evaluation of the overall condition of the domestic industry.
809
7.549. Third, China makes the point that the United States focuses on an earlier period, the
period of 2006-2008, and ignores the sharp declines in various indicators during the most relevant
and most recent period, the first half of 2009, which MOFCOM considered in the Final

801 United States' second written submission, para. 206 (citing Appellate Body Report, China – GOES,
para. 149).
802 United States' second written submission, para. 208-210.
803 China's first written submission, paras. 369-70; opening statement at the first meeting of the Panel,
paras. 41-43; opening statement at the second meeting of the Panel, paras. 103-105.
804 China's first written submission, paras. 372 and 377.
805 China's first written submission, paras. 371-77.
806 China's first written submission, paras. 378-382.
807 China's first written submission, paras. 370, 385-387.
808 China's first written submission, para. 366.
809 China's first written submission, paras. 380-381.

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Determinations.810 China responds to the United States' argument that MOFCOM improperly
focused on the last six months of the POI that under the Anti-Dumping and the SCM Agreements,
authorities have discretion to set an appropriate pe riod of investigation, and then "to focus their
investigations accordingly", adding that no WTO decision has ever criticized an authority for
focusing on the most recent period of time, as long as relevant data before the authorities was not
being ignored.811 China adds that following the United States' reasoning would allow growth earlier
in the period to mask material injury being suffe red at the end of the period. China submits that
strong growth in apparent domestic consumption over the 2006 to 2007 period led to some
improved financial results in 2007, and the domestic industry did not have operating profits, but at
least the losses were more limited. This improvement reversed in 2008 and then the situation of
the domestic industry deteriorated more sharply in early 2009. Moreover, China disputes the
United States' contention that the domestic indu stry was doing well even if 2006 is used as the
baseline; China submits that the domestic industry's financial performance was bad in 2006,
improved briefly in 2007, and then worsened in 2008 and 2009.
812
7.550. Finally, China argues that the United States ignores MOFCOM's findings that US exporters
may expand exports to China and will cause further adverse effects to the domestic industry. 813
China argues that Articles 3.4 and 15.4 instruct authorities to evaluate "all relevant economic
factors", including the "actual and potential decline" in a number of specifically enumerated
factors.814
7.4.4.5 Arguments of the third parties
7.551. The European Union submits that, under Articles 3.4 and 15.4, an investigating authority
must assess the role, relevance and relative weight of each factor.
815 For the European Union, an
objective evaluation of factors means examination of both the particular evolution of the data
pertaining to each factor individually, and vis-à-vis other factors.
816 The European Union notes that
although there is under Article 3.4 no obligation that each and every factor individually be
indicative of injury, the investigating authorities must explain its conclusion as to the lack of
relevance or significance of each particular factor.
817 It adds that an overall contextual evaluation
of all factors, with "thorough and persuasive" explanation of their relevance and weight, becomes
even more pertinent in cases where several factors show positive trends. 818 The European Union
agrees with the United States that, contrary to Articles 3.1/15.1 and 3.4/15.4, MOFCOM appears
to have based its findings in the context of its impact analysis predominantly on the assessment of
two of the factors, production capacity and en d-of-period inventories, despite other factors
demonstrating a positive trend for the domestic industry. Furthermore, the European Union
considers that MOFCOM's findings did not engage an in-depth analysis of the particular relevance
and relative weight of all injury factors.
819
7.552. Saudi Arabia submits that, according to Articles 3.4 and 15.4, an injury determination
that is based on negative developments in only one or two of the factors is unlikely to be
objective, unless a very convincing explanation is provided of why these exceptional negative
trends outweigh the positive trends in respect of the other factors.820

810 China's first written submission, paras. 358-360; opening statement at the first meeting of the Panel,
para. 40.
811 China's first written submission, para. 361.
812 China's second written submission, paras. 232-236.
813 China's first written submission, para. 362.
814 China's first written submission, paras. 363-364 (citing to Panel Report, EC – Fasteners (China),
para. 7.402).
815 European Union's third-party submission, para. 85 (citing Panel Reports, Egypt – Steel Rebar,
816 European Union's third-party submission, para. 86 (citing Panel Reports, EC – Tube or Pipe Fittings,
817 European Union's third-party submission, para. 86.
818 European Union's third-party submission, para. 87 (citing Panel Reports in Thailand – H-Beams,
paras. 7.249 and 7.255; and Korea – Certain Paper, para. 7.273).
819 European Union's third-party submission, paras. 91-92.
820 Saudi Arabia's third-party submission, para. 42 (citing Appellate Body Report, US – Softwood

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7.4.4.6 Evaluation by the Panel
7.4.4.6.1 Introduction
7.553. The United States' claims focus on MOFCOM's treatment of two factors, capacity utilization
and inventories. The United States alleges that MOFCOM's treatment of these two factors was not
objective as required by Articles 3.1 and 15.1 and was inconsistent with Articles 3.4 and 15.4 and
that MOFCOM improperly focused on these factors and disregarded other factors that were not
indicative of injury.
821
7.554. The United States' arguments raise the question of the manner in which an investigating
authority should assess the situation of the domestic industry in light of the relevant economic
factors and indices. We recall in this respect that pursuant to Articles 3.1 of the Anti-Dumping
Agreement and 15.1 of the SCM Agreement, an investigating authority's assessment of the
evidence must be objective. This may require the authority to place the relevant data in context in
a manner that it is informative of the injury, if any, suffered by the domestic industry rather than
simply review evolution in yearly figures. Furt hermore, to comply with Articles 3.4 of the
Anti-Dumping Agreement and 15.4 of the SCM Agr eement, the authority must also evaluate the
relevant factors and indices in a manner which allows it to determine whether relevant trends in
these relevant factors and indices result from subject imports.
822
7.555. In the specific circumstances of this dispute, we do not find it necessary to decide whether
MOFCOM's treatment of capacity utilization and in ventories conforms to the relevant disciplines.
We recall that we have found in a preceding section that MOFCOM's findings of price undercutting
and of price suppression are inconsistent with Ar ticles 3.1/15.1 and 3.2/15.2. The United States
has not alleged that MOFCOM's analysis of the impact of dumped imports on the domestic industry
is inconsistent with Articles 3.1/15.1 and 3.4/15.4 as a consequence of these inconsistencies.
Nonetheless, MOFCOM's examination of the situation of the domestic industry is inextricably linked
to its earlier analysis of the price effects of subject imports. Implementing the Panel's findings with
respect to MOFCOM's price effects analysis will require China to re-examine MOFCOM's
Determination concerning the impact of subject imports on the domestic industry. This being the
case, we are of the view that making additional findings with respect to MOFCOM's analysis of the
impact of the subject imports on the domestic indu stry would not assist in the resolution of the
dispute between the parties.
7.556. In light of the foregoing, we do not make findings with respect to the United States' claims
that MOFCOM's finding that subject imports had an adverse impact on the domestic industry was
not based on an "objective examination" of "all relevant economic factors and indices having a
bearing on the state of the industry" in violatio n of Articles 3.1 and 3.4 of the Anti-Dumping
Agreement and Articles 15.1 and 15.4 of the SCM Agreement.
7.4.5 Whether MOFCOM's causation analyses comply with Articles 3.1, 3.5, 12.2
and 12.2.2 of the Anti-Dumping Agreement an d Articles 15.1, 15.5, 22.3 and 22.5 of the
SCM Agreement
7.557. The United States makes two series of claims regarding MOFCOM's findings of causation in
the Final Anti-Dumping and Countervailing Determinations.
7.558. First, the United States claims that MOFCOM's causation analyses are inconsistent with
China's substantive obligations under Articles 3.1 and 3.5 of the Anti-Dumping Agreement and
Articles 15.1 and 15.5 of the SCM Agreement because:

821 In response to China's arguments, the United States also alleges that MOFCOM improperly focused
its analysis on the situation in the first six months of 2009 and failed to explain how the domestic industry's
lagging performance in this period could have been the result of subject imports given that the bulk of the
increase in subject imports coincided with a strengthening of the domestic industry in the 2006-2008 period.
822 In China – GOES, the Appellate Body indicated that Articles 3.4 and 15.4 "do not merely require an
examination of the state of the domestic industry", but include a requirement that the investigating authority
pay attention to the "explanatory force" of subject imports for the state of the domestic industry. (Appellate

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i. MOFCOM ignored record evidence that the increase in subject import volumes and
market share was not at the expense of the domestic industry;
ii. MOFCOM's causation analyses were based on its flawed findings of price
undercutting; and
iii. MOFCOM failed to reconcile its analyses with record evidence that the domestic
industry's performance had improved as subject import volume and market share
increased in 2006-2008.
7.559. Second, the United States claims that China acted inconsistently with procedural
obligations under Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement and Articles 22.3
and 22.5 of the SCM Agreement because in the pu blic notices of the Final Anti-Dumping and
Countervailing Duty Determinations, MOFCOM failed to explain the reasons for its rejection of
two arguments raised by US interested parties with respect to causation.
823
7.560. For its part China asks that the Panel reject these claims.
7.561. We first consider the United States' claims of alleged violation of substantive provisions.
7.4.5.1 Whether MOFCOM's causation analyses are consistent with Articles 3.1 and 3.5
of the Anti-Dumping Agreement and Articles 15.1 and 15.5 of the SCM Agreement
7.4.5.1.1 Relevant provisions
7.562. Article 3.5 of the Anti-Dumping Agreement reads as follows:
It must be demonstrated that the dump ed imports are, through the effects of
dumping, as set forth in paragraphs 2 and 4, causing injury within the meaning of this
Agreement. The demonstration of a causal relationship between the dumped imports
and the injury to the domestic industry shall be based on an examination of all
relevant evidence before the authorities. The authorities shall also examine any known
factors other than the dumped imports which at the same time are injuring the
domestic industry, and the injuries caused by these other factors must not be
attributed to the dumped imports. Factors which may be relevant in this respect
include, inter alia, the volume and prices of imports not sold at dumping prices,
contraction in demand or changes in the patterns of consumption, trade restrictive
practices of and competition between the foreign and domestic producers,
developments in technology and the expo rt performance and productivity of the
domestic industry.
7.563. The text of Article 15.5 of the SCM Agreement is virtually identical, with references to
"subsidized imports" and "subsidies", rather than "dumped imports" and "dumping".
7.4.5.1.2 Factual background
7.564. MOFCOM's Final Anti-Dumping and Countervailing Duty Determinations conclude that there
is a causal link between subject imports and the injury suffered by the domestic industry.
824 In the
Determinations, MOFCOM observes that the "continuous and sharp increase" in the quantity of
subject imports and "continuous growth" of their ma rket share have caused significant impacts on
the price of domestic like products. MOFCOM also notes that the prices of subject imports and of
domestic like products have moved in parallel, but that the former have always been lower than
the latter, and have caused obvious "price cuts" in the price of domestic like products, which cuts
had been increasing since 2008. MOFCOM further indicates that as subject imports were selling in
great volume at low prices during the POI, the price of domestic like products was suppressed and
remained below costs of production, with the consequence that the sector was losing money.
MOFCOM also mentions that capacity utilization remained at a fairly low level for a long time; that

823 United States' first written submission, paras. 5, 339-343.
824 Final Anti-Dumping Determination, Exhibit USA-4, pp. 42-44. Nearly identical text is found in the
Final Countervailing Duty Determination, Exhibit USA-5, pp. 87-89.

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even though losses were reduced in 2007, a conti nuous growth in import quantities thereafter
caused further price cuts and price suppression and a consequent impact on profit before tax and
return on investment, which were extremely low.
825
7.565. MOFCOM adds that the quantity of subject imports increased again in the first half of 2009,
at decreasing prices, which impacted the domestic industry – capacity utilization "declined
drastically", and other indicators such as output volume, sales quantities, market share, sales
income and employment level declined, resulting in a loss for the first half of 2009 which was
almost equivalent to that of the whole year in 2008.
826
7.566. MOFCOM concludes its causation analysis as follows:
Through the analysis o[f] the overall situation during the entire POI, there is an
outstanding relevance between the change of imports of the Subject Products and the
situation of operation of the domestic industry. As the demand of the domestic market
was increasing constantly, the imports of the Subject Products were increasing
constantly on the one hand, while on the other hand the domestic industry could not
utilize its capacity efficiently and the inventory was increasing constantly.
During the POI, the increase of the import volume of the Subject Products was gained
by selling at low price. This kind of sales constituted price-undercut to the sales of the
like products of the domestic industry, and further seriously depressed the price of the
like products of the domestic industry.
827 Thus the domestic like products could not
gain the profit margin as it should, presenting substantial loss, which was getting
worse.
In the first half 2009, the relevance between the Subject Products and the domestic
like products was even more obvious. The production volume, sales volume of the
domestic like products presented a reverse relationship with the import volume of the
Subject Products; the market share of the domestic like products presented a reverse
relationship with that of the Subject Products; the price of the domestic like products
presented a reverse relationship with that of the Subject Products. All of these led to
the substantial decrease of the sales price of the domestic like products and incurred
worse loss.
The above situation shows that the volume and price changes of the imported Subject
Products have directly affected the operational situation and economic benefit of the
domestic like products.
To sum up, the Investigating Authority holds that based on the current evidence
presented, during the POI the huge volume of export of the boiler products of the US
to China at a low price has caused material injury to the domestic broiler industry.
There is causal link between the dumped imports and the material injury.
828
7.4.5.1.3 Main arguments of the parties
7.4.5.1.3.1 United States
Whether MOFCOM ignored evidence that subjec t import volume did not increase at the
expense of the domestic industry
7.567. The United States argues that MOFCOM's causation determination rests on its finding that
subject import volume and market share increa sed significantly and contemporaneously with
certain trends exhibited by the domestic indust ry. The United States argues that the record
evidence shows that the domestic industry actua lly gained market share at the same time as

825 Final Anti-Dumping Determination, Exhibit USA-4, p. 42.
826 Final Anti-Dumping Determination, Exhibit USA-4, p. 42.
827 China's translation of the Final Anti-Dumping Determination refers to price suppression rather than
price depression as the United States' translation does. (Exhibit CHN-3, p. 45)
828 Final Anti-Dumping Determination, Exhibit USA-4, pp. 43-44; Final Countervailing Duty
Determination, Exhibit USA-5, pp. 88-89.

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subject imports did, which contradicts MOFCOM's finding. The United States argues that this
means that the increase in subject import volume and market share, however significant when
considered in isolation, did not negatively impact the domestic industry. The United States argues
that the entire increase in subject import mark et share between 2006 and the first half of 2009
came at the expense of non-subject imports.
829 The United States notes that when US respondents
raised this issue, MOFCOM responded by saying that Chinese law allowed it to consider either the
absolute volume increase or relative volume increase, but did not oblige it to consider both.
830 The
United States claims that, by ignoring this important question, China failed to conduct an
"objective examination" of "positive evidence" an d did not examine "all relevant evidence", in
breach of Articles 3.1/15.1 and 3.5/15.5.831
7.568. With respect to China's argument that the increase in market share of subject imports was
gained at the expense of non-investigated Chinese producers, rather than at the expense of
third country imports, the United States makes two points. First, the United States argues that
China's arguments concerning the market share of non-investigated Chinese domestic producers
constitute post hoc rationalisation.
832 Second, the United States notes that the investigating
authority is required under the Agreements to rely on a consistent definition of the "domestic
industry" in its consideration of various injury indicators and that China's explanation does not
rebut the fact that the "domestic industry" that MOFCOM investigated actually gained market
share during the period of investigation or answer the question of how the domestic industry could
have been injured by subject imports if the do mestic industry itself gained market share.
833 On
this last point, the United States submits that MOFCOM collected no data from those Chinese
producers who lost market share and, therefore, possessed no positive evidence to examine the
causal relationship between subject imports and the performance of those producers.834
Whether MOFCOM relied upon a flawed price effects analysis
7.569. The United States recalls its claim that MOFCOM's findings of price underselling and price
suppression are WTO-inconsistent and its argument that there was no evidence of price
depression. The United States argues that in th e absence of any of these price effects, MOFCOM
failed to predicate its causal link analysis on an objective examination of positive evidence as
required by Articles 3.1/15.1 and 3.5/15.5. In addition, the United States submits that by failing to
establish that subject imports had any adverse price effects, MOFCOM failed to establish that the
"effects" of subject import price competition are wh at caused injury to the domestic industry, as
required under Articles 3.5 and 15.5.
835
7.570. The United States responds to China's argument that the Panel could uphold MOFCOM's
causal link analysis based on MOFCOM's analysis of subject import volume effects alone. The
United States argues that MOFCOM made no finding and provided no explanation as to how
subject import volume alone could have suppressed domestic like product prices to a significant
degree. In addition, the United States submits that it has challenged MOFCOM's discussion of
adverse volume effects in the Final Determination through its arguments that subject imports did
not gain market share at the expense of the do mestic industry, and that MOFCOM failed to
reconcile its impact and causation findings with the increase in subject imports volume trends in
2006-2008 and the first half of 2009. The United States rejects as post hoc rationalization China's
argument that MOFCOM found subject import volumes to have had both "direct" and "indirect"
effects on the domestic industry.
836 In addition, the United States argues that if an investigating

829 United States' first written submission, paras. 349-350. The United States submits, using MOFCOM's
data, that non-subject imports lost 3.92% in market share to subject imports and an even greater 4.38% in
market share to the domestic industry during this period.
830 United States' first written submission, para. 352.
831 United States' first written submission, paras. 353-354.
832 United States' opening statement at the first meeting of the Panel, para. 108; second written
submission, para. 212.
833 United States' comments on response to Panel question No. 122(c).
834 United States' second written submission, paras. 212, 217; opening statement at the first meeting of
the Panel, para. 114; opening statement at the second meeting of the Panel, paras. 72-74; comments on
China's response to Panel question No. 122(b).
835 United States' first written submission, paras. 355-357.
836 United States' second written submission, paras. 219-231.

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authority relies on the increase in subject import volume to make an affirmative material injury
determination, it must establish a causal link between that volume increase and material injury.837
Alleged failure to reconcile causation analysis with evidence that the domestic industry's
performance improved as subject import volume and market share increased
7.571. The United States argues that MOFCOM's ca usal link analysis was flawed because it failed
to address record evidence that the increase in subject import volumes and market share
coincided with a strengthening domestic industry performance. The United States argues that as a
result, MOFCOM failed to predicate its causation analysis on an objective examination of positive
evidence, in breach of Article 3.1 and 15.1, or on "an examination of all relevant evidence," in
breach of Article 3.5 and 15.5, and also failed to establish that "the effects of" the dumped and
subsidized imports are what "caused injury ," in breach of Article 3.5 and 15.5.
838 The
United States argues in this respect that almost all indicators showed an improvement in the
domestic industry's performance between 2006 an d 2008, at the same time as subject import
volumes increased the most.
7.572. The United States adds that MOFCOM fail ed to explain how the small increase in subject
imports volumes in the first half of 2009 could have contributed to the domestic industry's
performance trends given the lack of correlation in the 2006-2008 period.
839 The United States
also argues that many performance indicators in fact showed an improvement when the 2006
figures are compared to those for the first half of 2009. The United States submits that these
figures show that the domestic industry's wors t performance of the period examined occurred
in 2006, before any increase in subject import volume and market share. Finally, the United States
also argues that MOFCOM predicated its causal lin k analysis entirely on developments in the first
half of 2009 whereas Articles 3.1/15.1 and 3.5/15.5 required it to examine the causal relationship
in relation to the entire period of investigation, not just during a selective period.
840
7.4.5.1.3.2 China
Whether MOFCOM ignored evidence that subjec t import volume did not increase at the
expense of the domestic industry
7.573. China submits that, contrary to what the United States argues, MOFCOM properly
analysed evidence about market share. China su bmits that the market share gained by subject
imports (3.92% from 2006 to the first half of 2009) was almost twice the loss of the market share
of third country imports (1.90% during the same period). China explains that the remainder of the
gain by subject imports was at the detriment of Chinese producers who were not examined by
MOFCOM because they did not submit domestic pr oducer questionnaire responses. According to
China, this category lost 6.5% of its market share, meaning that overall, the domestic industry
lost almost 2% in market share to the subject imports. China argues that these facts should have
been readily apparent to the United States given that the market share figures in MOFCOM's Final
Determinations did not add up to 100%.841
7.574. China argues that although MOFCOM did not have complete questionnaire data for other
domestic producers, it did have record evidence on the total size of domestic production and as a
result was able to determine the market share held by the 17 responding domestic producers, as
well as the market share of the remaining domestic producers.
842 China also argues that the "key
point" that the 1.90% in market share gained by subject imports could not be explained by the
loss in market share of third country imports was on the record, both in the form of the publicly
available imports statistics in Exhibit 9 of the Petition, and in the Final Determination itself.
843
China also submits that, contrary to what the United States argues, MOFCOM in fact acknowledged

837 United States' second written submission, paras. 219-231.
838 United States' first written submission, paras. 358-361; opening statement at the first meeting of the
Panel, para. 111.
839 United States' opening statement at the first meeting of the Panel, para. 111.
840 United States' second written submission, paras. 232-240 (citing Appellate Body Reports, Mexico –
Anti-Dumping Measures on Rice, paras. 183, 187-88; Argentina – Footwear (EC), paras. 145-146; and US –
841 China's first written submission, paras. 398-402.
842 China's second written submission, para. 239.
843 China's second written submission, para. 242.

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and discussed the increase in the 17 responding do mestic producers' market share. China argues
that the existence of a causal link must rest on all the evidence before the investigating authority,
and that the evidence before MOFCOM showed that the Chinese domestic industry as a whole lost
market share to subject imports. China adds that the fact that MOFCOM may not have had full
questionnaire responses from the non-investigated domestic producers did not require, or even
allowed, MOFCOM to ignore the evidence about the total industry.
844
Whether MOFCOM relied upon a flawed price effects analysis
7.575. China submits that MOFCOM's price undercutting analysis was not flawed. But even if it
were, China submits, MOFCOM's price suppression finding would stand. China argues in this
respect that MOFCOM did not need to show that price suppression resulted solely from price
undercutting. Rather, China argues, MOFCOM n e e d e d o n l y t o s h o w t h a t s u b j e c t i m p o r t s
contributed to price suppression and ultimately, to injury to the domestic industry, through volume
effects, price effects, or some combination of these effects.
845
7.576. China argues that the United States has not challenged MOFCOM's findings concerning
volume effects, and that those unchallenged adverse volume effects contributed meaningfully to
the adverse condition of the industry. China considers that MOFCOM found that subject imports
had two types of volume effects: an direct effect , i.e. that if not for subject imports, domestic
producers would have sold more broiler products, and an indirect effect, i.e. that domestic
producers lowered their prices to avoid further loss of volume and market shares.
846
7.577. China adds that MOFCOM showed causation by analysing other factors: (i) the parallel
pricing trends between subject imports and domestic like products; and (ii) the causal link
between the decline in subject import prices in th e first half of 2009 on one hand, and the decline
in domestic prices resulting in domestic prices below cost on the other. China argues that in
MOFCOM's view, both of these factors led to the price suppression which contributed meaningfully
to the adverse condition of the domestic industry.
847 In this respect, China argues that MOFCOM
specifically referenced the domestic producers' need to sell below costs so as to stabilise their
market share; with or without any finding of price undercutting, the domestic producers had to
lower their prices to stabilize the market share.
848 China argues on this basis that MOFCOM's
conclusions about import volume and price suppression can stand and sufficiently support
MOFCOM's analysis of causal link regardless of the Panel's findings about price undercutting.
849
Alleged failure to reconcile causation analysis with evidence that the domestic industry's
performance improved as subject import volume and market share increased
7.578. China argues that the United States down plays the decline in performance of the domestic
industry in the first half of 2009. China argues that MOFCOM drew a causal link between the
increasing subject imports and the declining condition of the domestic industry in this period. With
respect to the United States' comment that non-fi nancial indicators in the first half of 2009 were
higher than in 2006, China considers that comparing 2006 figures to figures for the first half of
2009 is inappropriate and that the more appropriate way to control for seasonality is to compare
the first half of 2009 to the first half of 2008, a comparison that reveals sharp declines in most
indicators. Furthermore, China argues that the United States' comparison of 2009 to 2006 figures
focuses on volume indicators and ignores financial indicators, which showed a weak industry
financial performance.
7.579. China argues that the only comment of the United States about financial performance is to
observe that "the operating losses had been somewhat reduced in 2008 compared to 2006". China
disagrees with this statement, arguing that: (i) the operating losses had grown, from 1.208 billion
RMB in 2006 to 1.359 billion RMB in 2008; (ii) the cumulative effect of continuing losses had a
severe impact on the domestic industry; and (iii) the operating losses increased from 7.9% of
sales in 2006 to a more serious 10.5% of sales in the first half of 2009. China adds that MOFCOM

844 China's second written submission, paras. 243-245.
845 China's first written submission, para. 404-406.
846 China's first written submission, para. 409.
847 China's first written submission, paras. 410-412; second written submission, para. 250.
848 China's second written submission, para. 250.
849 China's first written submission, para. 413; second written submission, paras. 249-250.

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specifically noted the existing connection between the financial factors and price suppression.
Thus, China argues, while some indicators were positive, the cumulative assessment of all the
economic indicators showed that the financial status of the domestic industry deteriorated. The
same is true in respect of the 2006-2008 period and the domestic industry was, contrary to the
United States' assertions, also injured during this period, particularly with respect to financial
results.
850
7.4.5.1.4 Arguments of the third parties
7.580. The European Union argues that MOFCOM's causation analysis, developed on the basis of
its flawed price undercutting and/or impact analysis, is necessarily flawed as a result. 851
Concerning MOFCOM's analysis of volume and market share indicators, the European Union
submits that although the evolution of sales volumes and market shares presented by the
United States can be sufficient to make a prima facie case that US imports did not increase at the
expense of the domestic industry, it is not sufficient in itself to justify a definitive conclusion to
that effect. The European Union notes that, apart from eroding the volume and share of
third-country imports, US imports could result in preventing domestic product sales from
increasing at an even higher rate in view of the production capacity and capacity utilization
levels.
852
7.581. Saudi Arabia submits that, under Articles 3.5 and 15.5, investigating authorities are
required to establish a "genuine" and "substantial " causal link between the dumped or subsidised
imports and the injury. 853 Saudi Arabia also submits that the non-attribution requirement in
Articles 3.5 and 15.5 requires the authorities to "separate and distinguish the injurious effects of
dumped imports from the injurious effects of other factors, such as decisions on capacity
expansion and other business decisions that are unrelated to the dumped or subsidized
imports".
854
7.4.5.1.5 Evaluation by the Panel
7.582. Articles 3.5 of the Anti-Dumping Agreement and 15.5 of the SCM Agreement require that it
be demonstrated that the dumped or subsidized imports are, through the effects of dumping or
subsidies, as set forth in Articles 3.2/15.2 and 3.4/15.4, causing injury.
7.583. We have concluded in a previous section that MOFCOM's findings of price undercutting
and of price suppression in the Final Anti-Dumpi ng and Countervailing Duty Determinations are
inconsistent with, respectively, Articles 3.1 and 3.2 of the Anti-Dumping Agreement and
Articles 15.1 and 15.2 of the SCM Agreement.
7.584. Having concluded that MOFCOM's findings on price effects are inconsistent with the
relevant obligations and in the light of the rela tionship between the analysis envisioned under
Articles 3.2 and 15.2 and the causation analysis under Articles 3.5 and 15.5, we would not be in a
position to find that MOFCOM properly concluded to the existence of a causal link between the
subject imports and the injury to the domestic industry. Furthermore, China's implementation of
our findings concerning MOFCOM's findings of price effects will necessarily require that it
reconsider MOFCOM's findings of causation.
7.585. For the foregoing reasons, making findings with respect to the United States' claims under
Articles 3.1/15.1 and 3.5/15.5 would not contribute to the resolution of the dispute between the
parties. We therefore abstain from ruling on the Un ited States' claims that MOFCOM's findings of
causation in the Final Determinations are inconsistent with China's obligations under Articles 3.1
and 3.2 of the Anti-Dumping Agreement and Articles 15.1 and 15.5 of the SCM Agreement.

850 China's first written submission, paras. 414-425; second written submission, paras. 253-256.
851 European Union's third-party submission, para. 94.
852 European Union's third-party submission, para. 96.
853 Saudi Arabia's third-party submission, para. 43 (citing Appellate Body Report, US – Large Civil
Aircraft (2nd complaint), para. 913, footnotes 1865-1866).
854 Saudi Arabia's third-party submission, para. 44.

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7.4.5.2 Whether MOFCOM explained the rea sons for its rejection of certain arguments
as required under Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement and
Articles 22.3 and 22.5 of the SCM Agreement
7.4.5.2.1 Introduction
7.586. The United States claims that MOFCOM failed to address in its Final Anti-Dumping and
Countervailing Duty Determinations two arguments raised by USAPEEC concerning causation,
namely: (i) that there could be no causal link between subject imports and material injury because
subject import volume increased entirely at the expense of non-subject imports and did not take
any market share from the domestic industry; and (ii) that subject imports could not have had an
adverse impact on the domestic industry because over 40% of subject imports consisted of
chicken paws, which Chinese producers were incapable of supplying in adequate quantities.
855
7.587. The United States argues that in doing so, MOFCOM acted in breach of Articles 12.2
and 12.2.2 of the Anti-Dumping Agreement and Ar ticles 22.3 and 22.5 of the SCM Agreement,
which require investigating authorities to issue public notices of their final determinations that
include, inter alia , the reasons for the investigating authority's rejection of relevant arguments
made by interested parties.
7.588. China argues that MOFCOM did, in fact, address US interested parties' arguments
concerning market shares and chicken paws and in any event, neither of these arguments was
"material".
7.4.5.2.2 Relevant provisions
7.589. The texts of Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement and of Articles 22.3
and 22.5 of the SCM Agreement are set forth in preceding sections of this Report.
7.4.5.2.3 Factual background
7.590. In its Injury Brief submitted in the two investigations, USAPEEC argued that during the
POI, the subject products only accounted for a very small and stable market share in the domestic
market of China, that the volume of imports of the subject products in absolute term had not
considerably increased, and that the increase had just filled the gap in the Chinese market left by
other foreign producers.
856 The USAPEEC reiterated these views in its Comments on the
Preliminary Injury Determination.857
7.591. MOFCOM addressed this argument in it s Final Anti-Dumping and Countervailing Duty
Determinations as follows:
According to the relevant laws of China, when the Investigating Authority analyzes the
volume of the dumped imports, they may either analyze "whether increasing
considerably in absolute terms", or "whether increasing considerably in relative
terms"; the laws do not require considering the absolute import volume and the
relative import volume at the same time. In this case, USAPEEC did not raise
objection to the considerable increase of th e import volume of the Subject Products in
absolute terms in USAPEEC Comments on Preliminary Injury Determination.
…
Regarding the above arguments, the Investigating Authority holds that from 2006 to
2008, although the broiler products have been in great demand in the domestic
market and the domestic like products did gain a certain market space, this cannot
show that the domestic industry did not suffer injury. On the contrary, because the
import volume of the Subject Products increased considerably and the import price

855 United States' first written submission, paras. 5, 339-343.
856 USAPEEC's Injury Brief, Exhibit USA-21, pp. 16-18; Final Anti-Dumping Determination,
Exhibit USA-4, p. 44; Final Countervailing Duty Determination, Exhibit USA-5, pp. 89-90.
857 USAPEEC's Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-46, pp. 3-5.

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was low, which constituted serious suppression on the sales price of the domestic like
products, the domestic like products were forced to be sold at prices below the
production cost in order to maintain the market share. At the same time, the capacity
utilization of the domestic like products remained on a relatively low level, and the
inventory presented an upward trend.
858
7.592. In its Injury Brief, USAPEEC also argu ed that subject imports could not have had an
adverse impact on the domestic industry because over 40% of subject imports consisted of
chicken paws, which Chinese producers were inca pable of supplying in adequate quantities.
USAPEEC explained that Chinese domestic producers sell their entire chicken paws production and
cannot increase their production of paws without also increasing their production of other chicken
parts to uneconomic levels. USAPEEC concluded that US paws imports do not compete for sales
with domestic products. On the contrary, US imports were required to meet domestic demand in
China during the POI.
859
7.593. The parties agree that MOFCOM at least intended to address this argument in its
Preliminary Determinations. 860 MOFCOM noted that there are some differences between the
subject products and the domestic like products in terms of specific feature, usage and quality,
"and the relationship between them does not necessarily constitute a one-to-one correspondence".
MOFCOM added that these differences did not preclude it from treating products of different types
or specifications as the same category of product for the purpose of the investigation, adding that
"[i]n this case, chicken feet are included in scope of the Subject Products, therefore, the
Investigating Authority has carried out investigation on import of all Subject Products including
chicken feet, and has analysed and examined inju ries brought to the domestic industry by the
Subject Products."
861
7.594. In its Comments on Preliminary Injury Dete rmination, USAPEEC returned to this issue. It
argued that in its Preliminary Determinations, MOFCOM had misunderstood its argument and
therefore failed to respond to it. USAPEEC wrote that its argument was not that chicken paws were
not part of the product scope/domestic like product, or that MOFCOM should not evaluate the
effect of all investigated products. Rather, its argument was that as the largest segment of the
investigated products, paws could not cause injury to the domestic industry because their import
was required to supplement inadequate domestic capacity.
862
7.4.5.2.4 Main arguments of the parties
7.4.5.2.4.1 United States
7.595. The United States submits that the two arguments were material to MOFCOM's causal link
analysis and that MOFCOM rejected them without providing a sufficiently detailed explanation of its
reasoning in the public notices of the Final Determinations. 863 The United States submits that
simply providing a conclusory rejection of a respondent's argument raising a material issue does
not satisfy the requirements of Articles 12.2 and 22.3 as further elaborated in Articles 12.2.2
and 22.5 respectively.
864
7.596. With respect to the market share issue, the United States argues that MOFCOM avoided
addressing respondents' arguments and instead indicated that Chinese law does not require it to
examine both volume and market share developmen ts. The United States submits, however, that
US respondents were not arguing that subject imports did not increase, but rather their point was
that the increase was not at the domestic industry's expense. The United States argues that the
respondents raised a material issue because MOFCOM could not reach its decision on causality

858 Final Anti-Dumping Determination, Exhibit USA-4, p. 44-46; Final Countervailing Duty
Determination, Exhibit USA-5, pp. 89-91.
859 USAPEEC's Injury Brief, Exhibit USA-21, pp. 29-30.
860 United States' first written submission, footnote 357 (citing Preliminary Anti-Dumping Determination,
Exhibit USA-2, section 6.1; Preliminary Countervailing Duty Determination, Exhibit USA-3, section 7.1); China's
first written submission, paras. 431-432.
861 Preliminary Anti-Dumping Determination, Exhibit USA-2, p. 31.
862 USAPEEC's Comments on the Preliminary Anti-Dumping Determination, Exhibit USA-46, p. 22.
863 United States' first written submission, paras. 362-366; second written submission, para. 241;
opening statement at the first meeting of the Panel, paras. 116-120.
864 United States' second written submission, paras. 243-244.

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consistently with its relevant substantive obligations under the Agreements without reconciling
evidence that subject import volume did not increase at the expense of the domestic industry.865
7.597. As regards the issue concerning chicken paws, the United States notes China's
acknowledgement that MOFCOM did not explicitly address this issue in its Final Determinations. 866
The United States disagrees with China's suggestion that the issue was sufficiently addressed in
the Preliminary Determinations, given that MOFCOM's discussion in the Preliminary Determination
was based on a fundamental misunderstanding of the argument. USAPEEC's main point was that
paws could not cause injury to the domestic industry since the latter could not supply the market,
but MOFCOM's response was that paws were covered by the scope of the investigation.
867 The
United States argues that in the light of USAPEEC's Comments on the Preliminary Determinations,
China cannot credibly argue that MOFCOM did not believe that respondents had provided any new
information on the issue, such that it did not need to address this issue in its Final
Determinations.
868 Moreover, the United States rejects China's explanation that MOFCOM was
under no obligation to address this argument be cause MOFCOM did not consider it "material". The
United States submits that this argument of China is a post hoc rationalization, and that, in any
event, given that the US respondents alleged that nearly half of subject imports could have had no
adverse impact on the domestic industry the issue was material and had to be resolved in order
for MOFCOM to reach its final determination.
869
7.4.5.2.4.2 China
7.598. China argues that MOFCOM provided a sufficiently detailed explanation in response to the
US respondent's arguments regarding market shares and chicken paws. In China's view, the fact
that the United States disagrees with MOFCOM's reasons for rejecting the arguments is irrelevant,
and does not demonstrate that MOFCOM's final determinations did not contain "reasons" within the
meaning of Articles 12.2 and 12.2.2 and 22.3 and 22.5. In China's view, these provisions say
nothing about the substantive nature of the "reasons".
870
7.599. With respect to the issue concerning mark et shares, in China's view, MOFCOM provided its
reasons for rejecting USAPEEC's argument in its Final Determinations, sufficient to meet its
obligations under Articles 12.2 and 12.2.2, and 22.3 and 22.5. 871 China adds that the obligation is
only to address the arguments, not to address them to the satisfaction of the party making
them.
872
7.600. China acknowledges that MOFCOM did not explicitly address the second issue, concerning
the lack of domestic industry capacity for chicken paws, in its Final Determinations. China argues
that MOFCOM had sufficiently dealt with the issue in the Preliminary Determinations and that US
respondents did not provide any new information on this issue after the Preliminary
Determinations, thereby making it unnecessary for MOFCOM to address it again in the Final
Determinations.
873 In addition, China argues that MOFCOM did not regard this particular issue as
material, given its analytical approach to examining causation based on the like product as a
whole, as opposed to market segments.874 China explains that MOFCOM did not misunderstand the
US respondent's argument and reject it by saying that paws fell within the scope of the
investigation. Rather, MOFCOM found that all th e different types of products inside the scope,
including paws, could be analysed together.
875 Finally China notes that the United States itself did

865 United States' first written submission, paras. 352, 363-364; second written submission,
paras. 245-46.
866 United States' second written submission, para. 247.
867 United States' second written submission, para. 248.
868 United States' second written submission, paras. 248-249 (citing USAPEEC's Comments on the
Preliminary Anti-Dumping Determination, Exhibit USA-46, p. 22).
869 United States' first written submission, para. 366; second written submission, paras. 250-252.
870 China's second written submission, para. 263.
871 China's first written submission, para. 427; second written submission, para. 258; opening statement
at the second meeting of the Panel, para. 128.
872 China's first written submission, para. 428-430.
873 China's first written submission, paras. 431-432.
874 China's first written submission, paras. 433-435; second written submission, paras. 261-262.
875 China's second written submission, para. 260 (citing Preliminary Anti-Dumping Determination,
Exhibit USA-2, p. 31).

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not rely on this argument in its substantive claim on causation, which, in China's view, proves that
the argument was immaterial.876
7.4.5.2.5 Evaluation by the Panel
7.601. In examining the United States' claims under Articles 12.2 and 12.2.2 of the Anti-Dumping
Agreement and 22.3 and 22.5 of the SCM Agreement, we recall that we must address the
following two questions:
i. Whether the arguments at issue addressed "issues of fact and law considered
material" by MOFCOM from the perspective of the determinations at issue; and if so,
ii. Whether MOFCOM's public notices of the Final Determinations set forth the reasons
for its rejection of each argument in sufficient detail to allow USAPEEC to understand
why its arguments were treated as they were, and to assess whether or not
MOFCOM's treatment of the relevant issue was consistent with domestic law and/or
the covered agreements.
877
7.4.5.2.5.1 Argument concerning market shares
7.602. Considering the first question, we are satisf ied that the argument concerning the fact that
the market shares gained by the subject imports were not to the detriment of the domestic
industry is relevant to material issues of fact and law. Market share gains by the subject imports
were a significant consideration in MOFCOM's ultimate finding of causation. Moreover, USAPEEC's
argument seeks to sever the link between any gain in subject import market share and the injury
if any, suffered by the domestic industry. The argu ment therefore goes to the heart of the causal
relationship between subject imports and the injury, if any, suffered by the domestic industry. For
this reason MOFCOM necessarily had to address it if it were to ultimately establish a causal link
between subject imports and material injury.
7.603. Turning to whether MOFCOM's Final Determinations set forth, or made available the
reasons for accepting or rejecting the respondents' argument on this issue, as noted above,
MOFCOM acknowledged the argument in its Final Determination. As noted above, MOFCOM
rejected the argument on the basis that subject imports had increased in absolute terms and that
even though domestic producers had increased their market share, they were nonetheless injured,
particularly given the existence of price undercutting and price suppression as well as other
negative effects on the domestic industry.
878 In our view, in doing so, MOFCOM provided, in its
Final Determinations, the reasons why it rejected the argument raised by USAPEEC in a manner
that was sufficient for USAPEEC to assess the consistency of MOFCOM's treatment of the issue with
domestic law and WTO law.
7.4.5.2.5.2 Argument with respect to chicken paws
7.604. We consider that USAPEEC's argument that imports of chicken paws could not injure the
Chinese domestic industry given that the Chines e domestic industry could not supply more paws
pertains to material issues. Similar to the argument on market shares, USAPEEC's argument on
chicken paws goes to the causal link between subj ect imports and the injury, if any, suffered by
the domestic industry.
7.605. Turning to whether MOFCOM sufficiently explained its reasons for rejecting this argument
in its Final Determinations, we recall that MOFCOM acknowledged the argument in its Preliminary
Determinations and indicated that it considered that all chicken parts competed and were
substitutable with one another. MOFCOM neither acknowledged nor addressed the argument in its
Final Determinations. Since we have concluded that the argument is a relevant one under
Articles 12.2.2 and 22.5, MOFCOM was required to address it in its Final Determinations or through
a separate report. Considering that in its Comments on the Preliminary Determinations, USAPEEC
limited itself to repeating the argument without adding to it – other than to state that MOFCOM

876 China's second written submission, para. 262.
877 See above, para. 7.530.
878 See above, para. 7.591.

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had misunderstood it – MOFCOM could in our view have satisfied its obligations under Articles 12.2
and 12.2.2, and Articles 22.3 and 22.5 through a simp le reference to its treatment of the issue in
the Preliminary Determination. MOFCOM could no t, however, altogether abstain from even
mentioning the argument.
7.4.5.2.5.3 Conclusion
7.606. On the basis of the foregoing, we reject the United States' claims with respect to the
argument that any market share gained by su bject imports was not to the detriment of the
domestic industry and uphold the United States' claims with respect to the argument that subject
imports could not have had an adverse impact on the domestic industry because over 40% of
subject imports consisted of chicken paws, which Chinese producers were incapable of supplying in
adequate quantities.
7.607. On the basis of the foregoing, we find that the United States has not established that
China acted inconsistently with Articles 12.2 an d 12.2.2 of the Anti-Dumping Agreement and 22.3
and 22.5 of the SCM Agreement with respect to the explanations provided by MOFCOM in the
public notice of its Final Anti-Dumping and Countervailing Duty Determinations for its rejection of
USAPEEC's argument that any market share gained by subject imports was not to the detriment of
the domestic industry. We also find that China acted inconsistently with Articles 12.2 and 12.2.2 of
the Anti-Dumping Agreement and with Articles 22.3 and 22.5 of the SCM Agreement due to
MOFCOM's failure, in the Final Anti-Dumping and Countervailing Duty Determinations, to provide
the reasons for its rejection of USAPEEC's argument concerning the inability of Chinese domestic
producers to supply chicken paws in sufficient quantities.
7.5 Consequential violations
7.608. The United States claims that China's actions are inconsistent with Article 1 of the
Anti-Dumping Agreement and Article 10 of the SC M Agreement. The United States submits that
because of MOFCOM's conduct of the anti-dumping investigation, China breached Article 1 of the
Anti-Dumping Agreement
879 and that because MOFCOM's conduct in the subsidy investigation was
inconsistent with the provisions of the SCM Agreement cited in its other claims, China also
breached Article 10 of the SCM Agreement.880
7.609. China argues that it has acted consistently with its obligations under both Agreements and,
therefore, the United States' consequential claims under Article 1 of the Anti-Dumping Agreement
and Article 10 of the SCM Agreement lack merit.881
7.610. Article 1 of the Anti-Dumping Agreement reads in relevant part:
An anti-dumping measure shall be applied only under the circumstances provided for
in Article VI of GATT 1994 and pursuant to investigations initiated and conducted in
accordance with the provisions of this Agreement. (footnote omitted)
7.611. Similarly, Article 10 of the SCM Agreement provides that:
Members shall take all necessary steps to ensure that the imposition of a
countervailing duty on any product of the territory of any Member imported into the
territory of another Member is in accordan ce with the provisions of Article VI of
GATT 1994 and the terms of this Agreement. Countervailing duties may only be
imposed pursuant to investigations initiated and conducted in accordance with the
provisions of this Agreement and the Agreement on Agriculture. (footnotes omitted)
7.612. To succeed in a claim under Article 1 of the Anti-Dumping Agreement or Article 10 of the
SCM Agreement, a complaining Member need only establish that anti-dumping or countervailing

879 United States' first written submission, para. 174.
880 United States' first written submission, para. 243.
881 China's first written submission, paras. 186 and 226.

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duties were imposed and the imposing Member acted inconsistently with one of its obligations
under the relevant Agreement.882
7.613. Therefore, to the extent we have upheld the United States' claims under the Anti-Dumping
Agreement and the SCM Agreement, we find that China has also acted inconsistently with Article 1
of the Anti-Dumping Agreement and Article 10 of the SCM Agreement.
8 CONCLUSIONS AND RECOMMENDATION
8.1. For the reasons set forth in this Report, the Panel concludes as follows:
i. China acted inconsistently with the requirem ents of Article 6.2 of the Anti-Dumping
Agreement due to MOFCOM's failure to provide opportunities for interested parties
with adverse interests to meet and present opposing views and offer rebuttal
arguments, there being no evidence on record that other interested parties with
interests adverse to those of the United St ates Government declined to attend the
meeting.
ii. China acted inconsistently with Articles 6.5.1 of the Anti-Dumping Agreement
and 12.4.1 of the SCM Agreement due to MOFC OM's failure to require the Petitioner
to provide adequate non-confidential summaries of information that it submitted in
confidence.
iii. China acted inconsistently with Article 6.9 of the Anti-dumping Agreement as
MOFCOM did not disclose all of the essential facts, in particular those pertaining to its
determination of the existence and margins of dumping to the three relevant
interested parties: Pilgrim's Pride, Tyson, and Keystone.
iv. China acted inconsistently with the first sentence of Article 2.2.1.1 of the
Anti-dumping Agreement when MOFCOM declined to use Tyson and Keystone's books
and records in calculating the cost of production for determining normal value. With
respect to Pilgrim's Pride, the United States has not established that China acted
inconsistently with the first sentence of Article 2.2.1.1.
v. China acted inconsistently with the second sentence of Article 2.2.1.1 because:
(i) there was insufficient evidence of its consideration of the alternative allocation
methodologies presented by the respondents; (ii) MOFCOM improperly allocated all
processing costs to all products; and (iii) MOFCOM allocated Tyson's costs to produce
non-exported products to the normal value of the products for which MOFCOM was
calculating a dumping margin.
vi. The United States' claim under Article 2.4 of the Anti-Dumping Agreement is outside
the Panel's terms of reference.
vii. China acted inconsistently with Article 6. 8 of the Anti-Dumping Agreement due to
MOFCOM's application of an "all others" rate determined on the basis of facts
available to US producers/exporters who failed to register in the anti-dumping duty
investigation.
viii. China acted inconsistently with Article 6.9 of the Anti-Dumping Agreement due to
MOFCOM's failure to disclose certain "essential facts" forming the basis of its
determination of the "all others" anti-dumping rate.
ix. China acted inconsistently with Articles 12.2 and 12.2.2 of the Anti-Dumping
Agreement because MOFCOM failed to disclose "in sufficient detail the findings and
conclusions reached on all issues of fact and law considered material" or "all relevant
information on matters of fact" with respect to its calculation of the "all others"
anti-dumping rate in the Final Anti-Dumping Determination. The Panel does not rule

882 Appellate Body Reports, US – Anti-Dumping and Countervailing Duties (China), para. 358; US –
Softwood Lumber IV, para. 143.

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on the corresponding claims of the United States with respect to the Preliminary
Determination.
x. China acted inconsistently with Article 12. 7 of the SCM Agreement due to MOFCOM's
application of an "all others" rate determined on the basis of facts available to US
producers/exporters who failed to register in the countervailing duty investigation.
xi. China acted inconsistently with Article 12. 8 of the SCM Agreement due to MOFCOM's
failure to disclose certain "essential facts" underlying its decision to apply an "all
others" countervailing duty rate.
xii. China acted inconsistently with Articl es 22.3 and 22.5 of the SCM Agreement,
because MOFCOM failed to disclose "in sufficient detail the findings and conclusions
reached on all issues of fact and law considered material" or "all relevant information
on matters of fact" with respect to its calculation of the "all others" countervailing
duty rate in the Final Countervailing Duty Determination. The Panel does not rule on
the corresponding claims of the United States with respect to the Preliminary
Determination.
xiii. China acted inconsistently with Article 19.4 of the SCM Agreement and Article VI:3 of
the GATT 1994, because MOFCOM did not ensure that the countervailing duty levied
did not exceed the amount of the subsidization per unit of the subsidized and
exported product.
xiv. The United States has not established that China acted inconsistently with
Articles 3.1 and 4.1 of the Anti-Dumping Agreement and Articles 15.1 and 16.1 of
the SCM Agreement given that MOFCOM was not obligated to attempt to seek out
and identify all domestic producers in the process of defining the domestic industry.
Furthermore, the United States has not established that China effectively excluded
domestic producers from consideration as part of the domestic industry creating a
self-selection bias which gave rise to a material risk of distortion of the injury
analysis.
xv. China acted inconsistently with Articles 3.1 and 3.2 of the Anti-Dumping Agreement
and with Articles 15.1 and 15.2 of the SCM Agreement because MOFCOM relied for
its findings of price undercutting on a comparison of subject import and domestic
average unit values that included a different product mix, without taking any steps to
control for differences in physical characteristics affecting price comparability or
make necessary adjustments; and because MOFCOM's findings of price suppression
in each investigation relied on its findings of price undercutting. The United States
has not established that China acted inconsistently with the same provisions because
MOFCOM relied for its findings of price undercutting on a comparison of subject
import and domestic average unit values at different levels of trade.
xvi. The United States' claims under Article 12.2.2 of the Anti-Dumping Agreement and
Article 22.5 of the SCM Agreement concerning the United States Government's level
of trade argument fall within our terms of reference; and China acted inconsistently
with these provisions due to MOFCOM's failur e to disclose, in the public notice of its
Final Determinations, its reasons for the rejection of this argument.
xvii. The Panel does not rule on the United States' claims that China acted
inconsistently with Articles 3.1 and 3.4 of the Anti-Dumping Agreement and
Articles 15.1 and 15.4 of the SCM Agreement because MOFCOM's findings that
subject imports had an adverse impact on the domestic industry were not based on
an objective examination of all relevant economic factors and indices having a
bearing on the state of the industry.
xviii. The Panel does not rule on the United States' claims that China acted
inconsistently with Articles 3.1 and 3.5 of the Anti-Dumping Agreement and
Articles 15.1 and 15.5 of the SCM Agreement.

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xix. The United States has not established that China acted inconsistently with
Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement and 22.3 and 22.5 of the
SCM Agreement with respect to the explanat ions provided by MOFCOM in the public
notice of its Final Anti-Dumping and Countervailing Duty Determinations for its
rejection of US interested parties' arguments that any market share gained by
subject imports was not to the detriment of the domestic industry.
xx. China acted inconsistently with Articles 12.2 and 12.2.2 of the Anti-Dumping
Agreement and 22.3 and 22.5 of the SCM Agreement due to MOFCOM's failure to
provide, in the public notice of its Final Anti-Dumping and Countervailing Duty
Determinations, the reasons for its rejection of US interested parties' argument that
subject imports could not have had an adverse impact on the domestic industry
because over 40% of subject imports consisted of chicken paws, which Chinese
domestic producers were incapable of supplying in adequate quantities.
xxi. China acted inconsistently with Article 1 of the Anti-Dumping Agreement and
Article 10 of the SCM Agreement as a consequence of the foregoing violations of
these Agreements.
8.2. Under Article 3.8 of the DSU, in cases wh ere there is an infringement of 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 measures at issue are
inconsistent with the Anti-Dumping Agreement an d the SCM Agreement, they have nullified or
impaired benefits accruing to the United States under these agreements.
8.3. Pursuant to Article 19.1 of the DSU, we recommend that China bring its measures into
conformity with its obligations under the Anti-Dumping Agreement and the SCM Agreement.