CHINA – DEFINITIVE ANTI-DUMPING DUTIES ON X-RAY SECURITY INSPECTION EQUIPMENT FROM THE EUROPEAN UNION
Document: Request for Consultations by the European Union
Date: 28 July 2011
Document codes: WT/DS425/1; G/L/958; G/ADP/D89/1
Complainant: EU
Respondent: China
Third parties: Japan, U.S., Thailand, Norway, India, Chile
Dispute stage: Panel
Agreements cited: Art. 6.2, 6.4, 6.5.1, 6.9, 12.2.2, 3.1, 3.2, 3.4, 3.5  Anti-dumping

CHINA – DEFINITIVE ANTI-DUMPING DUTIES
ON X-RAY SECURITY INSPECTION EQUIPMENT
FROM THE EUROPEAN UNION

Request for Consultations by the European Union

 The following communication, dated 25 July 2011, from the delegation of the
European Union to the delegation of China and to the Chairperson of the Dispute Settlement Body, is
circulated in accordance with Article 4.4 of the DSU.

 The European Union ("EU") hereby requests consultations with the Government of the
People's Republic of China ("China") pursuant to XXIII:1 of the General Agreement on Tariffs and
Trade 1994 ("GATT 1994"), Article 17.3 of the Agreemen t on Implementation of Article VI of the
GATT 1994 (" Anti-Dumping Agreement ") and Article 4 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes ("DSU"). The issues which the European Union
would like to raise in the course of the consultatio ns include, but are not limited to, the following
measure:

– the imposition of definitive anti-dumping duti es on x-ray security inspection equipment from
the European Union, pursuant to Ministry of Commerce of the People's Republic of China,
Notice No. 1(2011), including its annex.

The EU considers the measure at issue to be inconsistent, among others, with China's
obligations under the following provisions of the Anti-Dumping Agreement and the GATT 1994:

 1. Articles 6.1, 6.2, 6.4 and 6.5 of the Anti-Dumping Agreement because China failed to
provide timely opportunities for all inter ested parties to see all non-confidential
information relevant to the defence of their interests with regard to, inter alia, the
methodology used to calculate the dumping margin including the adjustments made
to the export price and the methodology used to calculate the residual duty as well as
the material injury analysis.

 2. Article 6.5.1 of the Anti-Dumping Agreement because China failed to ensure the
provision of non-confidential summaries of confidential information or, where
provided, failed to give summaries in sufficient detail to enable a reasonable
understanding of that information with regard to, inter alia, the calculation of the
dumping margin as well as the price analysis in the injury investigation.

 3. Article 6.9 of the Anti-Dumping Agreement because China failed to provide interested
parties with information about the essentia l facts under consideration which form the
basis for the decision to impose definitive anti-dumping measures. In particular,

inter alia, China did not fully disclose the essential facts, which form the basis of the
dumping margin and injury determination, notably with regard to the price analysis.

4. Article 12.2.2 of the Anti-Dumping Agreement because neither in its public notice of
the imposition of definitive measures, nor in a separate report, China set forth
sufficiently detailed explanations for the definitive determinations on the dumping
margin and injury, together with references to the matters of fact and law which have
led to arguments being accepted or rejected. In particular, China failed to include in
relation to the margins of dumping established, a full explanation of the reasons for
the methodology used in the establishment and comparison of the export price and
normal value (Article 12.2.1(iii) of the Anti-Dumping Agreement) ; considerations
relevant to the injury determina tion (Article 12.2.1(iv) of the Anti-Dumping
Agreement), and with regard to the main re asons leading to the determination
(Article 12.2.1(v) of the Anti-Dumping Agreement).

5. Article 2.4 of the Anti-Dumping Agreement and Article VI:1 of the GATT 1994
because China failed to make a fair comp arison between the export price and the
normal value and did not make the appropr iate adjustments to the export price by
deducting also non relevant expenses.

6. Articles 3.1 and 3.2 of the Anti-Dumping Agreement, because China failed to make an
objective examination, on the basis of positiv e evidence, of the effect of the dumped
imports on prices in the domestic market for like products as defined in Article 2.6 of
the Anti-Dumping Agreement. In particular, it appears from the very limited
information disclosed by the Chinese authorities that the finding that EU imports had
the effect of undercutting and depressing the price of domestic products is not based
on an objective examination of positive evidence. Although the Chinese authorities
defined the scope of the investigation as including x-ray security inspection
equipment of an energy level above 300KeV (high energy scanners), exports from the
EU consisted exclusively of "low energy scanners". These two categories of scanners
have very different physical characteristics, uses and prices. In addition, the Chinese
authorities included in the scope of the investigation also automated explosive
detection systems (EDS) scanners, which differ from other low energy scanners by
reason of their higher image quality a nd performance standards and which are
exported from the EU to China but not produ ced in China. Yet the prices of EU
imports appear to have been compared to the prices of domestic high energy scanners
or to average domestic prices for all scanners, despite the manifest differences
between the two categories of products a nd within the category of "low energy
scanners" between EDS scanners and the other "low energy scanners".

7. Articles 3.1 and 3.4 of the Anti-Dumping Agreement because China failed to make an
objective examination, on the basis of positiv e evidence, of the effect of the dumped
imports on prices in the domestic market for like products and the consequent impact
of these imports on domestic producers of such products, including the factors listed
in Article 3.4, as the overwhelming majority of injury indicators were positive or
showed positive trends.

8. Articles 3.5 of the Anti-Dumping Agreement and Article VI:6(a) of the GATT 1994
because China failed to make an objective dete rmination, on the basis of all relevant
evidence before the authorities, that the dumped imports were, through the effects of
dumping, causing injury. The causality determin ation is flawed because it is based on

findings of price undercutting and price depression by EU imports which are
themselves not based on an objective exam ination of positive evidence. Moreover,
China did not consider other relevant factors having a bearing on the state of the
industry and/or affecting the domestic pri ces. China included in the scope of the
investigation x-ray security inspection equi pment of an energy level above 300KeV
(high energy scanners) which were not expor ted from the EU to China. Therefore,
any injury suffered in respect of "high en ergy scanners" cannot be attributed to EU
imports. In addition, the Chinese authorities in cluded in the scope of the investigation
also automated explosive detection system s (EDS) scanners, which differ from other
"low energy scanners" by reason of th eir higher image quality and performance
standards and which are exported from the EU to China but not produced in China.
Yet, China's determination of causality fails to distinguish between the two categories
of scanners, and within the category of "low energy scanners" between EDS scanners
and the other "low energy scanners".

The European Union reserves the right to address additional measures and claims under other
provisions of the WTO Agreement regarding the above matters during the course of the consultations.

The European Union looks forward to receivi ng in due course a reply from China to this
request. The European Union is ready to consid er with China mutually convenient dates to hold
consultations in Geneva.