Document: WT/DS405/R Page B-1 ANNEX B WRITTEN SUBMISSIONS, OR EXECUTIVE SUMMARIES THEREOF, OF THE THIRD PARTIES Contents Page Annex-B-1 Executive Summary of the Third Party Written Submission of
Document codes: WT/DS405/R
Complainant: China
Respondent: EU
Third parties: Australia, Brazil, Colombia, Japan, Turkey, U.S., Vietnam
Dispute stage: Panel
Agreements cited: Art. 9  Anti-dumping  Protocol of AccessionArt. 6.10, 9.2, 9.3, 9.4  Anti-dumpingArt. I, XVI:4, X:3(a)  GATT 1994Art. 2.1, 2.4  Anti-dumpingArt. VI:1  GATT 1994Art. 3.1, 17.6, 3.4, 3.5, 6.1.2, 6.5, 6.5.1, 6.5.2, 6.8, 11.3, 12.2.2, 1, 18.1, 2.2.2, 2.6, 9.1, 3.3, 6.2, 6.4, 6.5.1, 6.5.2, 6.1.1, 6.9, 6.10.2  Anti-dumping

ANNEX B

WRITTEN SUBMISSIONS, OR EXECUTIVE SUMMARIES
THEREOF, OF THE THIRD PARTIES

Contents Page
Annex-B-1 Executive Summary of the Third Party Written Submission of
Brazil B-2
Annex B-2 Executive Summary of the Third Party Written Submission of
Colombia B-5
Annex B-3 Executive Summary of the Third Party Written Submission of
Japan B-9
Annex B-4 Third Party Written Submission of Turkey B-14
Annex B-5 Executive Summary of the Third Party Written Submission of the
United States B-20
Annex B-6 Third Party Written Submission of Viet Nam B-24

ANNEX B-1

EXECUTIVE SUMMARY OF THE THIRD PARTY
WRITTEN SUBMISSION OF BRAZIL

A. ARTICLE 17.6(I) IMPOSES AN OBLIGATION ON THE PANEL AND NOT UPON WTO
MEMBERS

1. In its First Written Submission, China ra ises several independent claims based on
Article 17.6(i) of the Anti-Dumping Agreement ("ADA" ), all of them based on its understanding that
this provision is addressed not onl y to panels but creates an implic it obligation upon investigating
authorities ("IA") as well. Brazil is of the view th at Article 17.6(i) establishes an obligation solely
upon panels, in the course of their assessment of the conduct of IAs during the investigation.

2. This obligation imposed on panels, however, does not lead to the conclusion that the
obligation to conduct assessments in an unbiased and objective manner, which is an obligation also
imposed on the IAs, emanates from Article 17.6(i) itself. Rather, Brazil understands that such
obligation is found in other provisions throughout the ADA, such as in Article 3.1 of the AD
Agreement.

3. In conclusion, Brazil considers that Articl e 17.6(i) of the ADA imposes an obligation solely
upon panels, and therefore cannot co nstitute an independent basis for a claim of violation by a WTO
Member.

B. CONSISTENCY OF ARTICLE 9(5) OF THE BASIC AD REGULATION "AS SUCH"
WITH THE ADA

4. One of the key issues raised in this dispute is the alleged inconsistency of Article 9(5) of the
EU Basic Anti-Dumping Regulation (Basic AD Regulation) as such with Articles 6.10, 9.2, 9.3 and
9.4 of the ADA as well as with Articles I, X:3(a) and XVI:4 of the GATT 1994.

5. Article 2 of the ADA lays down rules in relati on to the determination of normal value, export
price and comparability between the two prices in or der to calculate dumping margins. Article 6.10 of
the ADA states that the investigating authority "sha ll, as a rule, determine an individual margin of
dumping for each known exporter or producer". Ho wever, the methodology used to calculate
dumping margins laid down in Article 2 and Article 6.10 of the ADA, as well as the exceptions to that
methodology, only apply where prices and costs – the core measures for determining the normal value
and the export price – are established according to market-economy rules. It ensues that the
determination of either the normal value or the expor t price for NMEs may ordinarily be subject to an
exceptional regime.

6. Regarding normal value, this exceptional regime for NMEs is confirmed in Article 2.7 of the
ADA and is further supported by paragraph 15(a)(ii) of China's Protocol of Accession. Under these
provisions, for exporters or pr oducers operating in NME conditi ons, the IA may depart from a
methodology which exclusively takes account of domest ic costs and prices. This will apply in cases
where NME producers fail to show that market econom y conditions prevail in their industry or their
individual operations. On the other hand, where inv estigated companies are able to show that market
economy conditions prevail in their industry and/or their individual operations, they may be entitled to

individual dumping margins, calculated in accordan ce with the standard methodology specified in
Article 2 of the ADA.

7. Brazil notes that the investigating authority enjoys a certain degree of discretion not only in
establishing its methodology for the calculation of the dumping margin in case of NME countries but
also in establishing the criteria that exporters from NME countries must fulfil in order to be subject to
the exceptional regime of market economy treatment . Brazil also consider s that WTO Members are
not prevented from treating collectively lega l entities located in NME countries as a single
producer/exporter for the purposes of dumping determina tions. Therefore, whether or not a particular
company should be classified as a distinct compa ny or as a single producer/exporter in conjunction
with other companies under Article 6.10 of the ADA la rgely depends on the assessment of the facts in
each case.

C. THE FAIR COMPARISON REQUIREMENT OF ARTICLE 2.4 OF THE ADA DOES NOT
APPLY IN THE SELECTION OF THE ANALOGUE COUNTRY

8. With regard to the selection of the anal ogue country, China considers that the selection
procedure applied by the EU, as well as the partic ular selection of Brazil in the case under analysis,
precluded a fair comparison between the Chinese export prices and the analogue country's normal
value.

9. In what pertains to this subject, Brazil understands that there are no specific WTO rules
governing the choice of the analogue country in anti-dumping investigations for the purpose of
calculating the normal value. It should be noted that neither the GATT nor the ADA indicate which
method should be used in order to establish the normal value in such a context.

10. The sole guidance provided by the GATT and the ADA is that the nor mal value used should
render a fair comparison with the export price possi ble. Therefore, insofar as the investigating
authority selects an analogue country which allows it to obtain a comparable, and thus appropriate,
normal value, it should not be found to be in breach of WTO rules. It can be concluded that, in the
selection of an analogue country, the IA has cert ain discretion to set its own parameters of
appropriateness, as long as they are unbiased and objective.

11. The definition of the analogue country to be used in an investigation is taken at a stage that
precedes the (fair) comparison of the export price and the normal value. Thus, the fair comparison
rule pertaining to this latter stage cannot be inte rpreted so as to apply to the choice of the analogue
country as such. Indeed, once the analogue country has been selected, the IA is required to make
proper adjustments on the normal value and/or the export price, in accordance with the parameters
established in Article 2.4 of the ADA. These adjustments ensure a fair comparison between the
export price and the normal value, as they will co mpensate for the differences found in the analogue
and exporting countries.

12. In any event, the options ava ilable to IAs as to the selection of an analogue country are further
limited as a result of limi ted availability of cooperating industrie s in analogue countries. This fact
further highlights the inherently imperfect character of the selection of an analogue normal value and
the need to ensure fair comparison through subsequent adjustments to the normal value and the export
price, wherever these are warranted in order to ensure compliance with Article 2.4 of the ADA.

13. Therefore, Brazil considers that Article 2.4 of the ADA does not apply at the stage of
selecting an analogue country as such and thus cannot fo rm the basis for claims in relation to fairness
in such a selection process.

D. PRODUCT UNDER CONSIDERATION

14. In its First Written Submission, China makes a series of claims related to the EU
establishment of the "product concerned/like product". Although the ADA defines the like product by
reference to the "product under cons ideration", the latter is nowhere defined within the ADA. Based
on this absence of definition of what is the product under consideration, the panels in US – Softwood
Lumber V , Korea – Paper AD Duties and EC – Salmon considered that there is no requirement of
likeness within the "product under consideration", an d that there is no guidance in the AD Agreement
on the way in which the 'product under consideration' should be determined.

15. China claims that when the EU decided to exclude certain STAF, it acknowledged that STAF
was not a like product. China further submits that by defining the product under consideration with
reference to its price, and considering that STAF having a CIF price lower than EUR7.5 was to be
included, the EU failed to correctly define the "product under consideration".

16. Brazil submits that the EU's decision to excl ude certain STAF and to maintain certain other
STAF was a decision by the IA defining the scope of the product under consideration. There is no
discipline in the ADA governing how the product unde r consideration should be defined. Brazil
considers that IAs have a large degree of discretion under the WTO discipline in their decision to
exclude a subset of a certain type of goods from the scope of the "product under consideration".

E. SAMPLING FOR INJURY DETERMINATION

17. China argues, inter alia , that the EU acted inconsistently with Articles 3.1 and 6.10 of the
ADA and VI:1 of the GATT 1994 as it used different sampling procedures for selecting domestic
producers and exporting producers, and that the domes tic producers' sample was neither statistically
valid nor did it represent the largest percentage of volume that could reasonably be investigated.

18. Brazil recalls that Article 6.10 of the ADA deals with the criteria and methodological
guidelines to be applied when sampling is used fo r the purpose of dumping determinations. Such
criteria and methodologies are not applicable for sampling in the context of injury determinations.

19. The only parameters established by the ADA with regard to sampling in the context of injury
assessment are those established in Article 3.1, i.e. that an injury determination should be based on
"positive evidence" and on "objective examination" as interpreted by WTO jurisprudence.

20. In support of its claims concerning Article 6.10, China recalls the EU's statement in EC –
Salmon that this article "may serve as a very good guidance for the determination of whether sampling
of domestic industry was conducted in compliance with Article 3.1".

21. Brazil, however, considers that the above st atement does not prevent an IA from taking an
approach which departs from the methodology est ablished in Article 6.10 of the ADA. While a
methodology mirroring the one contained in Article 6.10 should be seen as complying with the
requirements of "positive evidence" and on "objectiv e examination" under 3.1 of the ADA, this does
not lead to the conclusion that a different methodology is a priori inconsistent with Article 3.1.

ANNEX B-2

EXECUTIVE SUMMARY OF THE THIRD PARTY
WRITTEN SUBMISSION OF COLOMBIA

I. INTRODUCTION

1. Colombia thanks the Panel and the Parties for this opportunity to present its views in the
present proceeding. Colombia interv enes in this case given its systemic interest in the application of
several provisions of the GATT 1994 and the Agreement on Implementation of Article VI of the
General Agreement on Tariffs and Trade 1994 (the "ADA").

2. While not taking a final position on the specifi c facts of this case, Colombia will provide its
views on some of the legal claims advanced by the Parties to the dispute. First, Colombia will address
the issue of how anti-dumping duties should be im posed over products originating from non-market
economy countries under the rules of Article VI of the GATT 1994 and ADA, in light of the most
favoured nation obligation provided in Article I:1 of the GATT 1994. Second, it will refer to the
possibility of claiming that a measure as such breach es Article X:3(a). Then it will comment on the
rules that national authorities should follow when undertaking an anti-dumping duties review. Fourth,
Colombia will review the definition of domestic industry within the context of the injury
determination. Fifth, comments will be made on the other factors of attribution for the injury
determination in order to conclude that there is no causal link between dumping and injury, in
accordance with Article 3.5 of the ADA. Then Co lombia will comment on the elements that should
be taken into account in order to analyze likeness in a dumping investigation. Finally, Colombia will
review the way in which conditions of comp etition may affect the accumulation in dumping
investigations, in accordance with Article 3.3 of the ADA.

II. TREATMENT TO NON-MARKET ECON OMY COUNTRIES IN ANTI-DUMPING
INVESTIGATIONS

3. In the present case, China claims that Article 9(5) of Council Regulation (CE) No. 1225/2009
(the "AD Base Regulation") is contrary to the European Union's (the "EU") obligations under
Articles 6.10, 9.2, 9.3, 9.4 and 18.4 of the ADA, Article XVI:4 of the Marrakech Agreement and
Articles I and X:3(a) of the GATT 1994.

4. Colombia considers that based on the second interpretative note to paragraph 1 of Article VI
of the GATT 1994, the WTO Members have the possib ility to use particular methodologies, such as
the reconstruction of the normal value through an analogue country, to calculate the normal value of
goods subject to a dumping investigation from non-market economy countries.

5. Thus, for Colombia it is clear that WTO Me mbers are allowed to differentiate the way in
which the normal value is calculated for countri es with a market economy than that from those non-
market economy countries.

6. Colombia invites the Panel to determine if in the particular circumstances of the case, the
differential treatment that the EU grants to Chin a and other countries, given that those countries do
not have a market economy, is allowe d under Article 2.7 of the ADA and the second interpretative
note to paragraph 1 of Article VI of the GATT 1994. In this sense, Colombia suggests that if the

Panel concludes that Article 9(5) of the AD Base Re gulation is consistent w ith the EU's obligations
under the ADA, it should find that there is no breach of Article I:1 of the GATT 1994.

7. Given the debate advanced by the Parties w ith respect to the interpretation of the term
"unconditional" under Article I:1 of the GATT, Colo mbia invites the Panel to recall prior panel
reports
1 in order to clarify how that concept must be construed.

8. Colombia wishes to close its comments with resp ect to China's claims against Article 9(5) of
the AD Base Regulation based on Article I:1 of the GATT 1994, recalling that Member's obligations
on anti-dumping investigations with respect to Ch ina are subject to section 14 of China's Accession
Protocol
2, which must be read in light of paragr aph 151 of the Working Party Report on China's
Accession to the WTO. 3

III. CAN THERE BE A BREACH OF THE WTO MEMBERS' OBLIGATIONS UNDER
ARTICLE X:3(A) WITH A MEASURE AS SUCH?

9. In the present dispute, China claims that Ar ticle 9(5) of the AD Base Regulation is contrary,
as such, with the EU's obligations under Article X:3(a) of the GATT 1994.4

10. Thus, Colombia invites the Panel to analyze if given the particular circumstances of the case
at hand, it is acceptable that even though China's claim was made ag ainst Article 9(5) of the ADA as
such, China bases its arguments of the EU's breach of its obligations under Article X:3(a) of the
GATT 1994 on examples related to the application of the measure at issue.

IV. RULES APPLICABLE TO ADMINISTRA TIVE AND EXPIRY REVIEWS OF ANTI-
DUMPING DUTIES

11. Among the claims that China addresses against Council Implementing Regulation (EU)
No. 1294/2009 of 22 December 2009 (the "AD Review Regulation"), Colombia finds specially
interesting the legal debate surrounding claims II:2 to II:5, relative to how the review of the anti-
dumping duties was made by the EU.

12. Article 11.4 of the ADA provides that review procedures are subject to the procedural rules of
Article 6 when applicable. Prior panel reports
5 have clarified that Article 3, excluding Article 3.3 of
the ADA, is applicable to administrative a nd expiry reviews. Finally, WTO document
TN/RL/GEN/10 collects the Members' proposal with respect to sensitive issu es of administrative and
expiry reviews whose regulation should be clarified.

13. Colombia invites the Panel to take into account the mentioned proposal, as a non-legally
binding complement, in the interpretation process of Article 11 of the ADA. Colombia considers that
this proposal can be especially relevant to clarif y the debate between the Parties as to how the EU
undertook and concluded on the exte nsion of the definitive anti-dumping duties, reviewed in the AD
Review Regulation.

1 Panel Report, Canada – Autos , para. 10.23; and, Panel Report, Colombia –Ports of Entry ,
paras. 7.361 and 7.367.
2 WT/L/432, dated 23 November 2001.
3 WT/ACC/CHN/49, dated 1 October 2001.
4 China's First Written Submission, paras. 91, 92 and 296-312.
5 Panel Report, US – DRAMS, footnote 501.

V. DOMESTIC INDUSTRY

14. China alleges in claim II:4 that the EU breach ed its obligations under Article 3.4 of the ADA
by including, in the injury analysis made on the AD Review Regulation, information of producers that
were not part of the European domestic industry. 6 In addition, China claims that the EU did not
undertake an objective examination based on positive ev idence pursuant to Articles 3.1 and 17.6(i) of
the ADA; since it did not exclude from the injury asse ssment, information of producers that no longer
produced in the EU or outsourced its production out of the territory of the EU. 7 In reply, the EU
claims that China did an erroneous representation of the facts and thus there was no link between
China's claims and the facts of the case. 8

15. Colombia invites the Panel to review the wa y in which prior panels and the Appellate Body
have applied Articles 3.1, 3.4 and 4.1 of the ADA, in order to determine if the EU fulfilled its
obligation to determine injury based on an objective examination of th e positive evidence, and if such
information was properly collected from the European domestic industry.

VI. FACTORS OF ATTRIBUTION IN THE ANALYSIS OF THE LINK BETWEEN
DUMPING AND INJURY

16. With respect to the injury determination in th is case, China holds that in the EU's review of
the definitive anti-dumping duties (Claim II.5), the i nvestigating authority did not safeguard that the
injury caused to the European footwear industry by other factors, was not attributed to the dumped
imports.

17. Bearing the discussion advanced by the parti es, Colombia invites the Panel to take into
account what has been said by the Appellate Body
9 in order to conclude if the EU investigating
authority, during its investigation, effectively made the distinction between the dumped imports
adverse effects and the harmful effects caused by other factors over the European domestic industry.

VII. LIKENESS UNDER THE ADA AGREEMENT

18. China alleges in its claim III:4 that by m eans of Council Regulation (EC) No. 1472/2006 of
5 October 2006 (the "Definitive AD Regulation"), th e EU acted inconsistently with its obligation
under Article 2.6 of the ADA, read together with Articles 3.1 and 4.1 of such agreement. 10

19. The Parties discussion with respect to likeness under this claim, raises two different issues to
be solved by the Panel: (i) under what conditions national authorities must choose which is the
considered product; and (ii) to what extend is there an obligation of assessing the injury and
identifying the domestic industry, with regard to similar products.

20. In relation to the first question, Colombia i nvites the Panel to analyze the issue in light of
what was said by the Panel in EC - Salmon (Norway)
11, according to which each investigating
authority is free to choose the products under consideration.

21. On the second issue, Colombia considers th at there is a clear obligation to undertake a
likeness assessment between the product unde r consideration and the domestic product 12 in order to

6 China's First Written Submission, para. 550.
7 China's First Written Submission, paras. 553-560.
8 EU's First Written Submission, paras. 293-305.
9 Appellate Body Report, United States – Hot Rolled Steel, paras. 222 and 223.
10 China's First Written Submission, paras. 962-1004.
11 Panel Report, EC – Salmon (Norway) , para. 7.43, 7.51, 7.52, 7.76. This same position was held by
the Panel in US – Softwood Lumber V, para. 7.153.

determine if there has been dumping and in orde r to identify the domestic industry. Colombia
considers that an investigating authority, when assessing whether two products are alike in order to
determine if there is dumping, must follow Article 2.6 of the ADA and, if necessary, take relevant
elements of the likeness test in other covered agreem ents. In that vein, it is possible to bear aspects
like physical characteristics of the products, uses or applications, substitutability, distribution
channels, consumer preferences and tastes, among others.
13

22. Bearing in mind that in the present case, Chin a's claim is directed to point out likeness
between the products under consider ation and other products, the Panel should evaluate in the case at
hand, whether that classification affects the likeness analysis for the purpose of injury determination
and the identification of the domestic industry involved.

VIII. THE CONDITIONS OF COMPETITION IN THE ASSESSMENT OF CUMULATION
OF DUMPING INVESTIGATIONS

23. The claimant alleges that the Definitive AD Re gulation is contrary to the EU's obligations
under Article 3.3 of the ADA given that the cumulative evaluation of the importations is inadequate
based on the conditions of competition between imported and like domestic products.
14

24. Colombia considers that in order to assess this issue, the Panel should take into account the
opinion of the Appellate Body
15 and prior panels 16 on how the conditions for accumulation under
Article 3.3 of the ADA must be met. In addition, Co lombia invites the Panel to take this opportunity
to further clarify how the conditions of competition between the products subject to the investigation
are to be analyzed in order to decide upon the appropriateness of accumulation.

IX. CONCLUSION

25. Colombia considers that this case raises im portant questions on the interpretation of several
provisions of the ADA and the GATT 1994. While not taking a final position on the merits of the
case, Colombia requests this Panel to carefully re view the scope of the claims in light of the
observations made in this submission. Colombia re serves its right to make further comments at the
third party session of the first substantive meeting with the Panel.

12 Panel Report, EC – Salmon (Norway), para. 7.51.
13 Appellate Body Report, Japan – Alcoholic Beverages II, p. 20.
14 China's First Written Submission, paras. 1055 - 1064 and 1146 - 1166.
15 Appellate Body Report, EC – Tube or Pipe Fittings, para. 109.
16 Panel Report, EC – Tube or Pipe Fittings, paras. 7.224 and 7.240.

ANNEX B-3

EXECUTIVE SUMMARY OF THE THIRD PARTY
WRITTEN SUBMISSION OF JAPAN

I. INTRODUCTION

1. In this Written Submission, Japan focuses on th e following issues; (i) whether Article 9(5) of
the Basic AD Regulation is consistent with Article 6.10 of the AD Agreement; (ii) whether selection of
samples would be sufficient to determine likeliho od of continuation or recurrence of injury under
Article 11.3 of the AD Agreement in light of general duties under Ar ticle 3 thereof; and (iii) whether
certain information should have been disclosed to interested parties in ac cordance with Articles 6.2
and 6.4 of the AD Agreement.

II. THE CONSISTENCY OF ARTICLE 9(5) OF THE BASIC AD REGULATION WITH
ARTICLE 6.10 OF THE AD AGREEMENT

1. Permissible Conditions to Qualify an I ndividual Exporter/Producer for Assignment of
an Individual Margin of Dumping

2. The first sentence of Article 6.10 of the AD Agreement provides that "the authorities shall, as
a rule, determine an individual margin of dumpi ng for each known exporter or producer." The term
"shall" and the phrase "as a rule" in this sentence clarify that this provision is mandatory.

3. The second sentence of this Article provid es for the exceptional situation in which an
authority "may" limit the number of producers to be examined for determining a margin of dumping,
i.e. where the number of exporters, producers, import ers or types of products is so large as to make
individual examination impractical. When taking into account the individualized calculation of
margin of dumping for each known exporter or produ cer as a mandatory rule, the term "may" in this
sentence indicates that the second sentence sets forth exceptions to the first sentence.
1

4. It should be noted that the AD Agreement sets forth no other exceptions to this mandatory rule
under the first sentence of Article 6.10. Accordingly, an authority must determine individual margins
of dumping for each known exporter or producer unless the authorities find the number of the known
exporters or producers is so large as not to allow for individual calculations as provided in the second
sentence of Article 6.10.
2

2. The Identification of an "Exporter" a nd the Obligation to Examine Such an Exporter
under Article 6.10 of the AD Agreement

5. However, neither Article 6.10 nor any other provisions of the AD Agreement sets forth any
explicit criteria to identify an "exporter" or a "producer". In this regard, the panel in Korea – Certain
Paper provides insight that "Article 9.5 as context strongly suggests that the term 'exporter' in
Article 6.10 should not be read in a way to require an individual margin of dumping for each

1 See Appellate Body Report, EC – Bed Linen (Article 21.5 - India), para. 116.
2 See Panel Report, Argentina – Ceramic Tiles , para. 6.89; Panel Report, Argentina – Poultry Anti-
Dumping Duties, para. 7.214.

independent legal entity under all circumstances."
3 In other words, the importing Member has a
certain amount of discretion to define the meaning of these terms, taking into account the context of
Article 6.10 and other provisions of the AD Agreement. On this basis, depending on the particular
factual situations of a given case, the authorit y may find that a group of multiple legal entities
constitutes a single exporter.

6. However, the issue of the authority's identifi cation of an exporter must be distinguished from
the obligation to determine an individual margin of dumping for the exporter. Once the authority
determines what constitute an "exporter", the obligat ion to determine individual margins of dumping
attaches to the authority with respect to the exporters it has identified. In this case, the authority must
calculate individual margins of dumping for such exporters unless the exception in the second
sentence of Article 6.10 applies.

7. Japan respectfully request s that the Panel carefully review how criteria in the Basic AD
Regulation function in anti-dumping investigations in light of the mandatory rules to determine an
individual margin of dumping for each known expo rter or producer and the exceptions thereof as
discussed above.

III. SELECTION OF SAMPLES IN DETERMINING THE LIKELIHOOD OF
CONTINUATION OR RECURRENCE OF INJURY IN AN EXPIRY REVIEW AND
MATERIAL INJURY IN AN ORIGINAL INVESTIGATION

1. An Authority's Duty in Making Injury Determinations under Article 3.1 of the AD
Agreement

8. Article 3.1 of the AD Agreement sets forth "a Member's fundamental, substantive obligation"
4
with respect to injury determinations. In partic ular, this provision requires the authorities to make
injury determinations upon "positive evidence" and "objective examination". According to the
Appellate Body in US – Hot-Rolled Steel , "[t]he word 'positive' means, to us, that the evidence must
be of an affirmative, objective and verifiable ch aracter, and that it must be credible", and "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."5

9. Furthermore, Japan notes that an authority is generally required to establish the facts properly,
and evaluate facts in an unbiased and objective matter in all steps of anti-dumping investigations. The
Appellate Body clarified this general obligation an d held that it arises from Article 17.6(i) of the AD
Agreement.
6 However, it is noted that this provision prim arily sets out rules applicable to panels, and
does not impose any obligations directly on the authorities.7

2. Disciplines on the Authority's Determination of the Likelihood of Continuation or
Recurrence of Injury

10. The starting point to review the WTO consiste ncy of an authority's determination in expiry
reviews or sunset reviews in general terms is Article 11.3 of the AD Agreement.
8 In this regard, the
panel in US – Corrosion Resistant Sunset Review held that "it is clear that the investigating authority
has to determine, on the basis of positive evidence , that termination of the duty is likely to lead to

3 Panel Report, Korea – Certain Paper, para. 7.159.
4 Appellate Body Report, Thailand – H-Beams, para. 106.
5 Appellate Body Report, US – Hot-Rolled Steel, paras. 193-194 (footnotes omitted).
6 Appellate Body Report, US – Hot-Rolled Steel, para. 56.
7 Appellate Body Report, Thailand – H-Beams, para. 114.
8 Appellate Body Report, US – Corrosion Resistant Sunset Review, para. 103.

continuation or recurrence of dumping and injury." 9 Moreover, the Appellate Body further clarified
the general obligations under Article 11.3 by statin g that "[t]he words 'review' and 'determine' in
Article 11.3 suggest that authorities conducting a sunset review must act with an appropriate degree
of diligence and arrive at a reasoned conclusion on the basis of information gathered as part of a
process of reconsideration and examination." 10

11. Although the above citations were made with respect to the determination of likely dumping
under Article 11.3, Japan is of the view that this rati onale is equally applicable to the determination of
likely injury in sunset reviews. This provision sets forth rules on the determination of dumping and
injury in parallel, stating "determine, in a review …, that the expiry of the duty would be likely to lead
to continuation or recurrence of dumping and injury". Thus, Japan believes that there is no difference
in the applicability and meaning of the terms "r eview", "determine" and "likely" between the
determination of dumping and injury in sunset reviews. Therefore, in injury determinations in sunset
reviews, an authority also must act with an appropriate degree of diligence and arrive at a reasoned
conclusion on the basis of positive evidence.

3. Applicability of Article 3 to Sunset Reviews

12. The Appellate Body held that the definition of "injury" in footnote 9 of the AD Agreement
applies to injury determinations in sunset revi ew by virtue of the phrase "under this Agreement". 11
However, because of the absence of any explicit cros s-reference, and the differences in the nature and
purposes of original investigations and sunset reviews 12, it also held that "investigating authorities are
not mandated to follow the provisions of Article 3 when making a likelihood-of-injury
determination."13 Having said that, the non-applicability of specific provisions of Article 3 and the
absence of any provisions specifying the methodology to make injury determinations in sunset
reviews under Article 11.3 do not necessarily mean that an authority has unfettered discretion. As we
referred to before, an authority still must determ ine its injury based on "positive evidence" and an
"objective examination" in sunset reviews.
14

4. China's Arguments on Specific Factual Issues

13. With respect to the Commission's own sampli ng methodology to collect data on the injury of
the domestic industry, China alleges that its selection of sampling of European Union producers was
inconsistent with Article 3.1 of the AD Agreement .15 China also argues th at the European Union
producers' samples selected in the expiry review by the Commission were neither statistically valid
nor represented the largest percentage of volume that could reasonably be investigated.

14. The AD Agreement has no specific provisions prohibiting particular sampling methods, or
setting forth any specific methodologies for sampling to collect positive evidence. As the panel in EC
– Salmon (Norway) explained, sampling is legitimate to the extent that the authority satisfies its
general obligations. Specifically, it held that "[a] sample that is not sufficiently representative of the
domestic industry as a whole is not likely to allow fo r such an unbiased investigation, and therefore
may well result in a determination on the question of injury that is not consistent with the

9 Panel Report, US – Corrosion Resistant Sunset Review , para. 7.271 (emphasis added), affirmed by
Appellate Body Report, US – Corrosion Resistant Sunset Review, para. 114.
10 Appellate Body Report, US – Corrosion Resistant Sunset Review, para. 111 (emphasis added).
11 See Appellate Body Report, US – Oil Country Tubular Goods Sunset Review, para. 276.
12 See Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 124.
13 Appellate Body Report, US – Oil Country Tubular Goods Sunset Review, para. 280 (emphasis in
original).
14 Appellate Body Report, US – Oil Country Tubular Goods Sunset Review, para. 284.
15 First Written Submission by China submitted to this Panel on 24 September 2010 ("China FWS"),
paras. 463-487.

requirements of Article 3.1 of the AD Agreement."
16 Therefore, the Commission's sampling
methodology would be consistent with the AD Agreement provided that the sampled information was
"sufficiently representative of the domestic industry as a whole".

IV. CHINA'S ALLEGED INCO NSISTENCY OF DISCLOSURE BY THE COMMISSION
OF CERTAIN INFORMATION WITH ARTICLES 6.2 AND 6.4 OF THE AD
AGREEMENT

15. China argues that the Commission "failed to make available the information used by it for the
selection of the European Union producers' sample" in the expiry review
17, and that such failure is
inconsistent with Articles 6.4 and 6.2 of the AD Agreement.18 China also argues that the Commission
acted inconsistently with Articles 6.2 and 6.4 of the AD Agreement in the expiry review because the
Commission failed to disclose timely or sufficiently information regarding the revised production and
sales data of the complainant producers and the sampled producers, regarding the analogue country
selection procedure and the data submitted by some of them, and regarding the Community interest
questionnaire responses.
19

1. Inconsistency with Article 6.4 Leads to Inconsistency with Article 6.2

16. Contrary to Article 6.2 which pr ovides for "a fundamental due process" 20 requirement,
Article 6.4 requires the authority to disclose all info rmation that is (i) "relevant to the presentation of
their cases," (ii) "not confidential," and (iii) "used by the authorities. " According to Article 6.4, if
information satisfied the above three conditions, the authority must disclose it in a "timely" fashion.
Failure to meet the legal obligation to disclose information under Article 6.4 would result in the
failure to afford interested parties "a full opportunity for the defence of their interests." As such, a
"violation of Article 6.4 also would constitute the violation of Article 6.2."21

17. In this regard, while China's alleged incons istency of the Commission's certain non-disclosure
or delayed disclosure of certain information is rela ted to the expiry review, Article 11.4 provides that
the provisions of Article 6 regarding evidence a nd procedures also apply to sunset reviews under
Article 11.3. The panel in US – Oil Country Tubular Goods Sunset Reviews confirmed this
conclusion by stating that "Article 6.2 generally d eals with the right of interested parties to defend
their interests in an investigation and, by operation of Article 11.4, in a sunset review." 22 Therefore,
both Articles 6.2 and 6.4 are supposed to apply to expiry reviews.

2. The Legal Requirements of Disclosure of Information under Article 6.4

(a) The Source of Information Is Not Relevant to Article 6.4

18. As a preliminary matter, Japan would like to point out that none of conditions under
Article 6.4 address the source of the information, or the procedures through which an authority
obtains the information. So far as the information satisfies the above-mentioned conditions, no matter
who submits the information or how particular info rmation is obtained, such information must be
disclosed to interested parties in a timely fashion
23.

16 Panel Report, EC – Salmon (Norway), paras. 7.129-7.130 (footnotes omitted).
17 China FWS, para. 675.
18 China FWS, para. 676.
19 China FWS, paras. 667-668.
20 Panel Report, Guatemala – Cement II, para. 8.179; Panel Report, Mexico – Anti-Dumping Measures
on Rice, para. 8.179.
21 See Appellate Body Report, EC – Tube or Pipe Fittings, para. 149.
22 Panel Report, US – Oil Country Tubular Goods Sunset Reviews, para. 7.234.
23 See Panel Report, EC – Salmon (Norway), para. 7.775.

(b) Condition of "Relevant to the Presentation of Their Cases"

19. As the first condition, information must be "relevant to the presentation of their cases" to
trigger the disclosure obligation under Article 6.4. Since the term "their" in this provision indicates
the interested parties, the relevance of the informatio n must be viewed in light of interested parties,
not in light of whether the authority finds such information useful in its determination.
24 In that case,
the authority would not be able to know fully which information is relevant to an interested party's
case until it becomes aware of the party's argument. Moreover, to the extent that the authority
reviews and maintains the information in connec tion with an anti-dumping investigation, such
information may satisfy the first condition "relevant to the presentation of their cases".25

(c) Condition of "Not Confidential"

20. The second condition is that the information is "not confidential", as specifically defined in
Article 6.5. According to this provision, informati on, "which is by its nature confidential" or "which
is provided on a confidential basis" by the submitter, is outside of the scope of Article 6.4, and thus
would not be subject to the "timely" disclosure to interested parties requirement.
26 However, Japan
would like to note that where the party submitting information did not request confidential treatment
of the information, the authority must have suffi cient basis to find that such information is still
confidential "by nature". The mere possibility of confidentiality in this kind of case would not
provide a sufficient basis to withhold the information.27

(d) Condition of "Used by the Authorities"

21. The third condition is "that is used by the au thorities." The phrase "which is used", rather
than "which form the basis for the decision" as provided in Article 6.9, is significant. This difference
clarifies that information, on which an authority di d not base its decision and thus was not required to
disclose under Article 6.9, still falls within the Artic le 6.4's disclosure requirement. In other words,
the information that is required to be disclosed under Article 6.4 could be understood to be broader
than the one under Article 6.9. In this context, Japan agrees with the panel in EC – Salmon (Norway),
which states that "it seems clear to us that whether information is 'used' by the investigating authority
must be assessed by reference to whether it forms part of the information relevant to a particular issue
that is before the investigating authority at the time it makes its determination."
28

(e) Timeliness of Disclosure to Be Consistent with Article 6.4

22. If particular information satisfies the above th ree conditions, the authority must also give the
interested parties "timely opportunities" to see the information. Although the AD Agreement does not
define the meaning of the term "timely," Article 6.5 cl arifies that the timeliness is related to interested
parties' opportunity to prepare its presentation on the basis of this information.
29

3. Conclusion

23. Regarding the above China's claim, Japan r espectfully requests that the Panel review the
underlying facts of the individual items of informat ion in light of legal requirements as discussed
above.

24 Appellate Body Report, EC – Tube or Pipe Fittings, para. 145.
25 Panel Report, EC – Salmon (Norway), para. 7.769.
26 Panel Report, EC – Salmon (Norway), para. 7.773.
27 Panel Report, Guatemala – Cement II, para. 8.143.
28 Panel Report, EC – Salmon (Norway), para. 7.769.
29 Panel Report, EC – Salmon (Norway), para. 7.769.

ANNEX B-4

THE THIRD PARTY WRITTEN SUBMISSION
OF TURKEY

A. INTRODUCTION

1. Turkey thanks the Panel for giving the opport unity to present its views in this proceeding.
Turkey is not in the intention to present an opinion on the specific factual context of this dispute and
takes no position what so ever as to the defense and allegations presented by the parties on whether
the specific measure at issue is inconsistent to the subject provisions of the WTO Agreements.
Turkey wishes to contribute, by expressing its opinion on some systemic issues regarding the
interpretation and implementation of the subject legal texts.

2. The dispute between the European Union (her einafter referred to as "EU") and the People's
Republic of China (hereinafter referred to as "China") covers several issues regarding the application
of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade
(hereinafter referred to as "ADA"). However, the Republic of Turkey (hereinafter referred to as
"Turkey") has chosen to focus on three issues na mely individual treatment assessments, analogue
country selection and sampling.

B. SETTING A THRESHOLD IN ORDER TO PROVIDE FOR INDIVIDUAL TREATMENT

3. Article 6.10 of the ADA states that " The authorities, as a rule , determine an individual
margin of dumping for each known export er or producer concerned of the product under
investigation". Turkey understands individual treatment, i.e. calculation of individual dumping
margin for each known exporter/producer is a general rule. In line with the understandings of China
and the EU, Turkey also understands that the second sentence of Article 6.10, which is in regard to the
sampling process, is an exception to the general rule provided in the first sentence.

4. The legal question here is whether sampling is the sole exception to the general rule of IT, or
can Members require some conditions to be met in th eir domestic legislation in order to provide IT.
In their submissions the parties to this dispute have provided opposite views on this issue. While the
EU, in its submission asserts that Article 6.10 does not contain a strict rule requiring investigating
authorities to always determine dumping margins on an individual basis with only one exception (i.e
sampling), China argues that sampling is the sole ex ception to the IT rule, and therefore Members are
not allowed to import additional exceptions to Article 6.10 of the ADA.
1

5. Turkey is of the view that sampling may not be the sole exception to the general rule
envisaged in Article 6.10 of the ADA, because of the reasons explained in the following;

6. First of all, the ADA provides rules for economies operating under market economy
conditions. There are no specific rules or exceptio ns provided in the ADA for economies that are not
operating under market economy condi tions. Taking into account this structure of the ADA, Turkey
believes that it would not be appropriate to look for a non-market economy exception in Article 6.10
itself. For economies where costs and consequent ly prices (for both domestic and export sales) are
determined or affected significantly due to state intervention instead of being freely determined by

1 EU First Submission, paras. 80-82; China First Submission, para. 189.

market forces, it is expected that there will be exceptions to genera l rules of ADA on the calculations
of normal value and export price. In fact, paragr aph 2 of the Additional Article VI of the GATT 1994
and China's Accession Protocol supports this interpretation.

7. Paragraph 2 of the Additional Article VI of the GATT 1994 provides a special provision for
calculation of prices regarding countries that do not operate under full ma rket economy conditions.
This provision mentions that "It is recognized that, in the case of imports from a country which has a
complete or substantially complete monopoly of its trade and where all domestic prices are fixed by
the State, special difficulties may exist in de termining price comparability for the purposes of
paragraph 1, and in such cases importing contracting parties may find it necessary to take into
account the possibility that a strict comparison with domestic prices in such a country may not always
be appropriate."

8. In parallel with this ge neral provision, China's Working Party Report (WT/ACC/CHN/49) has
a similar paragraph particularly for the Chinese mark et. According to paragr aph 150 of the Report,
"China was continuing the process of transition towards a full market economy. Those members
noted that under those circumstances, in the case of imports of Chinese origin into a WTO Member,
special difficulties could exist in determining co st and price comparability in the context of anti-
dumping investigations and countervailing duty investi gations. Those members stated that in such
cases, the importing WTO Member might find it necessary to take into account the possibility that a
strict comparison with domestic costs and prices in China might not always be appropriate".

9. Taking into account the abovementioned paragraph, it is acknowledged by the WTO
Members that China is not operating in full market economy conditions yet and is still in a transition
process towards a full market economy. It is also understood that due to the special conditions, i.e.
state intervention, in China, both domestic and export sales prices are not freely determined by market
economy forces. Under these conditions it may be difficult to make a strict comparison with domestic
and export prices.

10. Paragraph 1 of Article 31 of the 1969 Vie nna Convention on the Law of Treaties states that
"A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the
terms of the treaty in their context and in the light of its object and purpose." (emphasis added).
When the object and purpose of paragraph 2 of the Additional Article VI of the GATT 1994 and
paragraph 150 of the Report are c onsidered in the light of their purposes and objects; it is reasonable
to understand that these paragraphs are included as an exception to the general rule of "strict
comparison with domestic prices" for counties that are not operating in full market economy
conditions. Therefore, accepting that export sales pr ices may not be determined by market forces as
well as domestics sales prices, without making dis tinction between these two types of sales in non-
market economy countries, is in conformity w ith the object and purpose of these two foregoing
paragraphs.

11. Second, taking into account the relevant case la w, it is hard to conclude that sampling is the
sole exception to the general rule of IT. In US - Corrosion Resistant Steel, the Appellate Body (AB)
stated that:

"The first sentence of Article 6.10 requires investigating authorities, "as a rule", to
determine an individual margin of dumping "for each known exporter or producer
concerned of the product under inves tigation"…..However, even in these
investigations, we have recognized that investigating authorities are not always
required to calculate separate dumping margins for each exporter or producer."
2

2 AB Report, US - Corrosion Resistant Steel Sunset Review, para. 154.

12. In addition, the panel in Korea - Certain Paper also stated that:

"Article 9.5 requires that the IA determine individual margins for exporters and
producers who did not export during the POI. …… Nevertheless, Article 9.5 as
context strongly suggests that the term "ex porter" in Article 6.10 should not be read
in a way to require an individual margin of dumping for each independent legal
entity under all circumstances."
3
13. It can be understood from the foregoing cases that the panel Korea - Certain Paper and the
AB did not find it inconsistent with Article 6.10 of the ADA to treat several distinct legal entities as a
single entity if the conditions require so.

14. Third, in its submission, the EU provi des couple of examples, where the preference
mentioned in Article 6.10, first sentence, may not apply.
4 If the Panel finds any of these examples as
an exception to the general rule in Article 6.10, fi rst sentence, then it should also accept that sampling
is not the only exception to the general rule a nd there could be other situations, including
circumstances where thresholds is set for individual treatment, that the investigating authorities may
not determine individual margin of dumping and a ccordingly, individual dumping duties for each
known exporter or producer.

15. Consequently, in the light of above explana tions, Turkey considers that a Member can legally
set out a threshold reflecting special circumstance s in terms of the variables affecting production,
sales and prices to provide IT under Article 6.10.

C. ANALOGUE COUNTRY SELECTION

16. Article 2.1 of the Anti-Dumping Agreement states that " For the purpose of this Agreement, a
product is to be considered as be ing dumped, i.e. introduced into the commerce of another country at
less than its normal value, if the export price of th e 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."

17. A plain interpretation of Article 2.1 clearly indicates that an investigating authority has to
work on two data groups (normal value and export price) to determine whether dumping is present for
the product under consideration. Accordingly, the in vestigating authority is legally obliged to make a
fair comparison based on the rules and standards stipulated in Article 2.4 of the Anti-Dumping
Agreement between normal value and export price.

18. Most of the time, the normal value is determined by looking at sales of the like product in the
ordinary course of trade in the domestic market of the exporting country. Ho wever, as envisaged in
Article 2.2 of the ADA, in some situations (e.g. part icular market situation), domestic prices and the
exporting prices do not permit a proper comparison. In order to overcome these difficulties, the ADA
provides an alternatives ways to find a comparable price, the purpose of which is to identify a normal
value. In fact, the term "comparable price" is used both in first and the second paragraph of the
Article 2 of the ADA.

19. Furthermore, Additional Article VI.2 of GA TT 1994 and paragraph 15(a) of the Protocol of
Accession of China (Accession Protocol) point out di fficulties in determining the comparable price
and permit to use a methodology that is not based on a strict comparison with domestic prices or costs
in China with the export prices.

3 Panel Report, Korea – Anti-Dumping Duties on Imports of Certain Paper from Indonesia,
para. 7.159.
4 EU First Submission, para. 86.

20. In this regard, Additional Article VI.2 of GATT 1994 states that:

"It is recognized that, in the case of imports from a country which has a complete or
substantially complete monopoly of its tr ade and where all domestic prices are fixed
by the State, special difficulties may exist in determining price comparability for the
purposes of paragraph 1, and in such cases importing contracting parties may find it
necessary to take into account the possibility that a strict comparison with domestic
prices in such a country may not always be appropriate."
21. In Addition, Paragraph 15(a) of the Acc ession Protocol of China to WTO provides that:

"In determining price comparability under Article VI of the GATT 1994 and the Anti-
Dumping Agreement, the importing WTO Me mber shall use either Chinese prices or
costs for the industry under investigation or a methodology that is not based on a
strict comparison with domestic prices or costs in China based on the following
rules:
(i) If the producers under investigation can clearly show that market economy
conditions prevail in the industry prod ucing the like produc t with regard to
the manufacture, production and sale of that product, the importing WTO
Member shall use Chinese prices or costs for the industry under investigation
in determining price comparability;
(ii) The importing WTO Member may use a methodology that is not based on a
strict comparison with domestic prices or costs in China if the producers
under investigation cannot clearly show that market economy conditions
prevail in the industry producing the like product with regard to
manufacture, production and sale of that product."
22. It is an undisputed fact that Ad. Article VI.2 of GATT 1994 together with paragraph 15(a) of
the Accession Protocol provide derogation from the provisions of the Anti-Dumping Agreement
regarding the determination of normal value. In this context a WTO member may use a methodology
that is not based on a strict comparison with domes tic prices or costs in China if the investigated
producers cannot clearly show that they are op erating in market economy conditions. Turkey
considers that selecting an analogue country is the most reasonable method for determining the
normal value when the investigated companies are not operating under market economy conditions.
Furthermore, from the submission of the Parties, Tu rkey understands that use of the analogue country
procedure is not disputed between the parties. What is disputed between the parties is the selection of
analogue country procedure and the selection of Brazil as an analogue country

23. Turkey would like to point that inves tigating authorities sometimes face difficulties in
selecting analogue country. Companies to which analogue county questionnaires are sent sometimes
may not co-operate with the investigating authorities. Even if they respond properly, verification of
the data is another problem that the investiga ting authorities have to face with. The responding
countries are mostly reluctant to open their data a nd premises for verification since they are not party
of the investigation.

24. Turkey would also like to emphasize that th ere is no clear-cut provision in the ADA regarding
the selection procedure of analogue country. In this regard, Turkey considers that to some extent
members have the flexibly to adopt their own rules and procedures on this issue.

25. The critical question here is whethe r the selected analogue country should be an appropriate
or the most appropriate country. Taking into account the difficulties regarding the selection of

analogue country and the fact that the rules and pr ocedures on this issue is not prescribed in the Anti-
Dumping Agreement, Turkey considers that the sta ndard applied in regard to the selection of the
analogue country should be "an appropriate country " standard, not "the mo st appropriate country"
standard. Therefore, if it can be determined that the selected country is proper in order to determine
the normal value, then the investigating authorities are not required to search for the most appropriate
country to select as analogue country. Turkey believes that although the level of economic
developments should be taken into account in determining the analogue country, this should not be
regarded as a mandatory condition for "an appropriate country" standard.

26. In this context, if Brazil is an appropriate country under the internal standards set forth by the
EU, there is no need to search for the more or most appropriate country , since the standard is "an
appropriate country" standard. However, Turk ey refrains from making comments on whether the
selection of Brazil is appropriate for the footwear i ndustry since it is the question of the concrete case.
Turkey would like to share its opinion about what the threshold question should be on this issue.

27. With regard to the arguments whether the "fair comparison principle" prescribed under
Article 2.4 applies to the selection procedure of the analogue country, Turkey considers that
Article 2.4 does not govern the analogue country selection process. In Turkey's view, the "fair
comparison principle" prescribed under Article 2.4 requires the authorities to compare the "normal
value" and "export price" in a fair manner. Howeve r this requirement is rela ted with the comparison
stage of these two prices and not related with the calculation stage of the normal value or the export
price. Since there is no comparison, there is no "fair comparison" requirement as well before the
stage of determining the normal value and export price. Howeve r, once the normal value and the
export price are determined, the investigating au thorities are bound by the "fair comparison" rule
prescribed under the Article 2.4 of the Anti-Dump ing Agreement. The analogue country selection
process is related with determining the normal value stage, not related with the comparison stage.

28. Consequently, Turkey considers that the fa ir comparison principle set out under Article 2.4
does not govern the calculation of normal value or expor t price, it just covers the stage of comparison
of these two prices. The determination of whether Br azil is an appropriate analogue country is not an
issue that can be argued in the context of fair comparison principle.

D. SAMPLING

29. Article 6.10 of the Anti-Dumping Agreement provides that:

"The authorities shall, as a rule, determin e an individual margin of dumping for each
known exporter or producer concerned of th e product under investigation. In cases
where the number of exporters, producers, importe rs or types of products involved is
so large as to make such a determinati on impracticable, the authorities may limit
their examination either to a reasonable num ber of interested parties or products by
using samples which are statistically valid on the basis of information available to the
authorities at the time of the selection, or to the largest percentage of the volume of
the exports from the country in question which can reasonably be investigated."
30. It is understood from the above mentioned article that while the general rule is to calculate
individual dumping margins for every known exporter/producer, sampling is an exception to that
general rule when the number of exporters/producers/ importers/types of products is too large to make
such an individual treatment.

31. China claims that by not examining the Ma rket Economy Treatment (MET) application of the
non-sampled companies, EU violated Article 6.10 of the Anti-Dumping Agreement. According to
China, an investigating authority has to evaluate separately all the MET applications, even if sampling
is recoursed and the companies in question are not included in the sampling process.

32. Turkey considers that this interpretation is incompatible with the spirit of the sampling
exception. When it is impractical to examine all the co-operated companies, by applying sampling the
investigating authorities have opportunity to exam ine only a limited group of exporters in order to
reach a determination in a timely manner on whether dumping exists.

33. Therefore once the sampling is applied, the investigating authorities make the examination of
whether dumping exists according to the data of the only sampled companies. This means that the
investigating authorities limit their examinati on only to a group of companies. The MET/IT
determinations constitute the part of this examination that is limited to group of sampled companies.
In other words the investigating authorities have to examine only the MET/IT application of the
companies that are included in the sample.

34. Especially, when a product in a fragmented i ndustry such as footwear is subject to an anti-
dumping investigation, it is actually not possibl e to examine all the co-operated companies'
applications since there may be hundreds of produ cers/exporters. That is the reason why sampling is
prescribed under the Article 6.10 as an exception to the individual treatment.

35. Consequently Turkey considers that the sampling rule prescribed under Article 6.10, which is
as an exception to the individual treatment principle, does not oblige the investigating authorities to
examine separately all the MET applications of th e companies which are not included in the sampling
process. Therefore, according to Turkey's view when sampling is recoursed, the investigating
authorities have to examine only the responses of the companies that are included in the sample
regardless of whether they applied for MET/IT.

E. CONCLUSION

36. Turkey appreciates this opportunity to presen t its views to the Panel. Turkey reserves the
right to make further comments during the first substantive meeting with the Panel.

ANNEX B-5

EXECUTIVE SUMMARY OF THE THIRD PARTY
WRITTEN SUBMISSION OF THE UNITED STATES

I. CHINA'S CLAIMS REGARDING ARTICLE 9(5) OF COUNCIL REGULATION
NO. 1225/2009

1. China argues that Article 9(5) of Council Regulation No. 1225/2009 ("Basic AD Regulation")
of the European Union is inconsistent as such with Article 6.10 and, as a consequence, with
Articles 9.2, 9.3, and 9.4 of the AD Agreement. The United States disagrees with China's legal
arguments because they are based on misundersta ndings of the relevant provisions of the AD
Agreement.

2. According to China, Article 6.10 of the AD Ag reement requires an investigating authority to
calculate an individual margin of dumping for ever y interested party that identifies itself as an
exporter or producer. China misunderstands the obligations found in Article 6.10 of the AD
Agreement. Article 6.10 requires that an investigat ing authority calculate an individual margin of
dumping in respect of each known "exporter" or "p roducer." Before assigning an individual dumping
margin to a particular firm, however, the investigatin g authority must decide whether that firm is an
"exporter" or "producer." The AD Agreement neith er defines "exporter" or "producer", nor sets out
criteria for the investigating authority to examine to determine whether a particular entity constitutes
an "exporter" or "producer." Therefore, there is nothing in the text of Article 6.10 that requires an
investigating authority to calculate an individual margin of dumping for each company solely on the
basis of the company's assertion that it is an exporte r or producer. Instead, an investigating authority
is permitted to conclude, based on the facts on the record, which entities constitute an individual
"producer" or "exporter" as a condition precedent to calculating an individual dumping margin. The
facts of a particular case may therefore support a finding that the nature of the relationship or
operations of two or more legally distinct entities ar e so closely connected th at the entities effectively
constitute a single "exporter" or "producer" within th e meaning of Article 6.10. The reasoning of the
panel in Korea – Paper directly supports this interpretation of Article 6.10 of the AD Agreement.

3. An inquiry into the relationship between companies and the reality of their respective
commercial activities is particularly relevant in the context of producers and exporters from a non-
market economy. During China's accession negotia tions, Members expressed concerns about the
influence of the government of China in the co mmercial practices and decisions of enterprises in
China. The Protocol of the Accession of the People's Republic of China ("Protocol") recognizes the
pervasiveness of government interference in the Chinese economy. The presumption under the
Protocol is that, absent a demonstration to the contrary by Chinese producers, government
interference will prevent market principles from fu nctioning in the Chinese industry manufacturing
the product under consideration. Given this presump tion of government interference, it would make
little sense for an investigating authority to assign an individual dumping margin to an exporting
company in China without first confirming, at the very least, that the company functions as an
exporter separate from and independent of influen ce by the government. For all these reasons, an
investigating authority may apply criteria to determ ine whether an individual company is an exporter
or producer without acting inconsistently with Article 6.10 of the AD Agreement.

4. China argues that Article 9(5) of the Basic AD Regulation is inconsistent with Articles 9.2,
9.3, and 9.4 of the AD Agreement because, with respect to those firms that do not qualify for
individual treatment, Article 9(5) prevents the Commission from imposing or applying an individual
anti-dumping duty for each exporter or producer that was part of the sample or provided the necessary
information to the investigating authority. The United States submits that China's argument is
premised on misunderstandings of Article 9 of the AD Agreement, and that China's interpretation of
Article 9 does not result in the obligation for which China argues.

5. Article 9 discusses the imposition of anti-dumping duties with respect to products, not
individual exporters or producers, and the concept of imposing anti-dumping duties on an individual
exporter or producer, as advanced by China, is f ound nowhere in Article 9 of the AD Agreement.
Furthermore, as in the case of its Article 6.10 clai m, China fails to recognize that the decision as to
whether a group of companies functions as a single entity is one that an investigating authority must
make before it can know how duties should be applied to those companies' imports. If it concludes
that multiple companies are closely related and f unction as a single entity, an investigating authority
may apply a single duty to all of those companies' imports, even under China's reading of Article 9.
Nothing in Article 9 prohibits such treatment; nor does Article 9 set out criteria for an investigating
authority to examine before concluding that a par ticular firm or group of firms constitutes a single
entity.

6. In any event, China's clai ms pursuant to Article 9 of the AD Agreement appear to be
dependent on its claims under Article 6.10. Fo r the reasons discussed above, China's arguments
pursuant to Article 6.10 of the AD Agreement ar e based on an incorrect understanding of that
provision. As a result, there is no basis to support China's consequential claims under Article 9 of the
AD Agreement.

7. China argues that the EU does not administer the provisions of Article 9(5) in a uniform,
impartial and reasonable manner in accordance with Article X:3(a) of the GATT 1994. However,
Article 9(5) does not appear to address the admini stration of any other legal instrument. Instead,
Article 9(5) appears to provide substantive rul es on how anti-dumping duties are to be imposed under
certain circumstances. The United States ther efore agrees with the EU that, under these
circumstances, Article 9(5) itself cannot be found to breach GATT Article X:3(a).

II. CHINA'S CLAIMS RELATING TO THE EU DETERMINATIONS OF INJURY AND
LIKELIHOOD OF INJURY

8. China has asserted that the provisions of Ar ticle 3 of the AD Agreement apply to so-called
sunset reviews under Article 11.3 of the AD Agreem ent. The Appellate Body has explained on two
occasions that the obligations set forth in Article 3 of the AD Agreement do not apply to likelihood-
of-injury determinations in sun set reviews conducted under Article 11.3 of the AD Agreement. As
the Appellate Body observed, the AD Agreement di stinguishes between "determinations of injury"
addressed in Article 3 and determinations of likeli hood of "continuation or recurrence . . . of injury",
addressed in Article 11.3. Article 11.3 contains no cross-references to Article 3 that would make
Article 3 provisions applicable to sunset reviews. Nor does Article 3 indicate that whenever the term
"injury" appears in the AD Agreement, a determ ination of injury must be made following the
provisions of Article 3. Of course, some of the factors and analyses called for by Article 3.1 may be
relevant in a sunset review conducted pursuant to Article 11.3. However, as the Appellate Body has
found, the necessity of considering such factors or conducting such analyses "in a given case results
from the requirement imposed by Article 11.3 - not Article 3."

9. China also claims that the EU acted inconsis tently with Article 3.1 of the AD Agreement.
While it takes no position on the merits of China's f actual allegations, the United States does maintain
that an investigating authority acts inconsistently with Article 3.1 of the AD Agreement when it limits

the universe of domestic producers from which it obtai ns information to complainants for purposes of
its examination of injury. As the Appellate Body has recognized, "an ‘objective examination' [under
Article 3.1] requires that the domestic industry, and the effects of dumped imports, be investigated in
an unbiased manner, without favouring the interests of any interested party, or group of interested
parties, in the investigation." An investigating au thority's inclusion of only complainant firms in its
examination of the domestic industry, particular ly when non-complainants have a meaningful
presence in the industry, would appear to show an ab initio selection bias that favours the domestic
industry and does not meet the requirement that the investigating authority conduct an objective
examination. It also would be inconsistent with the definition contained in Article 4.1 of the AD
Agreement for an investigating authority to lim it the domestic industry for purposes of the injury
analysis to complainant producers or to those pr oducers that have expressed support for the petition
solely on the basis of the producers' position regarding the anti-dumping application.

10. China claims that the EU acted inconsisten tly with Article 3.3 of the AD Agreement by
cumulating imports from China and Viet Nam. The Un ited States disagrees with the legal premise of
China's argument that an authority must establish that imports from differe nt countries have similar
volume and market share trends in order to demonstr ate that cumulation is "appropriate in light of the
conditions of competition between the imported products," as required by Article 3.3.

11. China makes a variety of claims that the EU's original injury determ ination was inconsistent
with the third sentence of Article 3.5 of the AD Agre ement. China appears to suggest that an injury
authority must attempt to measure the "magnitude" of injury attributable to every known factor
causing injury. Any such suggestion is inconsistent with the language of Article 3.5, as well as with
the reasoning of the Appellate Body with respect to that language. Article 3, while it requires
authorities to examine many quantitative factors in conducting an injury analysis, does not establish
any formula(s) for authorities to quantify injury, per se. Nor does it require authorities to attempt to
measure the magnitude of injury, aside from specifyi ng that an authority must find the injury to be
"material." Because the AD Agreement does not re quire any quantitative measure of the magnitude
of either any overall injury sustained by the domestic industry or the injury caused by dumped
imports, it necessarily does not require measures of the magnitude of injury caused by factors other
than dumped imports. Thus, there is simply no basi s in the text or context of Article 3 of the AD
Agreement for the obligation that China would seek to impose that authorities provide a "good-faith
estimate" of the magnitude of the injury caused by factors other than dumped imports.

12. China claims that the EU acted inconsiste ntly with Article 6.8 of the AD Agreement "by
failing to apply facts available . . . when faced w ith incorrect and misleading information from the
sampled European Union producers" in the expiry review. Even assuming arguendo that the
producers supplied "incorrect and misleading inform ation," China's claim is not supported by the
language of Article 6.8. The use of the word "m ay" in Article 6.8 indicates that, while authorities
have the ability to use facts available under appropriate circumstances, they are not required to do so.
If Article 6.8 were intended to impose a mandatory obligation on authorities, it would have used the
word "shall."

III. CHINA'S PROCEDURAL CLAIMS UNDER ARTICLE 6 OF THE AD AGREEMENT

13. China claims that the EU violated certain disclosure and procedural requirements found in
Article 6 of the AD Agreement. The United States agrees with China that Article 6.4 generally
requires that an investigating authority give interested parties access to all non-confidential
information that is submitted during an investigati on. Failure to provide such access would not only
be inconsistent with Article 6.4, but also Article 6.2, because without access to information described
in Article 6.4, an interested party is necessarily denied "a full opportunity for the defense of their
interests."

14. China claims that the EU acted inconsiste ntly with Article 6.1.1 of the AD Agreement by
providing less than 30 days for interested parti es to submit responses to MET and IT claim forms.
China appears to assume that the term " questionnaires" in Article 6.1.1 encompasses any request for
information made by an investigating authority, as a result of which an exporter or foreign producers
should be given at least 30 days to respond to every such request made in the course of an
investigation. However, as the panel in Egypt – Rebar explained, the context of Article 6.1.1 reveals
that the term "questionnaire" for purpos es of the AD Agreement refers to one particular request for
information made by the investigating authority. The original anti-dumping questionnaire in an
investigation is the single document contemplated by the term "the questionnaire" in paragraphs 6 and
7 of Annex I. The opportunity provided by an i nvestigating authority to permit Chinese companies to
claim market economy treatment or individual treatme nt is a precursor to the issuance of the actual
anti-dumping questionnaire, and therefore not subject to the obligations in Article 6.1.1. The
United States notes that, notwithstanding the Article 6.1.1 claim advanced by China in this dispute,
China's investigating authorities appear to rec ognize that the 30-day time period for reply does not
apply to every request for information made by an investigating authority. Article 12.1.1 of the SCM
Agreement is worded almost identically to Ar ticle 6.1.1 of the AD Agreement, setting out the
requirement of a minimum 30-day response period to questionnaires in CVD investigations. In a
recently completed countervailing duty investigation on grain-oriented electrical steel from the
United States, the Chinese investigating authorities issued multiple requests for information to the
U.S. Government following the original ques tionnaire, including new subsidy allegation and
supplemental questionnaires. For none of these requests for informati on, attached as Exhibit US-1,
did China provide an initial period of 30 days to respond.

15. China asserts that the EU acted inconsisten tly with Article 6.9 of the AD Agreement by
providing only three business days for parties to res pond to what China refers to as "the Additional
Final Disclosure Document" that the EU issued in its original injury investigation. However, because
Article 6.9 does not specify the manner in which authorities are to make disclosures, individual
authorities may use different means to implement the requirements of the provision. Some authorities
may make one single, massive disclosure to intere sted parties. Other authorities may make many
disclosures to interested parties during the course of an investigation; as a resu lt, such an authority's
final disclosure may be relatively modest in size and significance. The United States believes that
what constitutes a "sufficient time" for an interest ed party to defend its interests and respond to the
disclosure will depend on the size, significance, and nature of the disclosure.

IV. ARTICLE 17.6(I) OF THE AD AGR EEMENT DOES NOT IMPOSE OBLIGATIONS
ON WTO MEMBERS

16. China claims the EU acted inconsistently with its obligations under Article 17.6(i) of the AD
Agreement. The Panel should reject these claims, because Article 17.6(i) does not impose obligations
on WTO Members. As is clear from the text, Article 17.6(i) is addressed to panels – "the panel shall
determine." To interpret Article 17.6(i) as imposin g an obligation on Members is to read into that
provision words that are not there, something that may not be done under customary rules of
interpretation of public international law. Rather th an repeat the arguments of the EU on this issue in
its request for a preliminary ruling, the United States will make only one additional point. The
United States notes that prior to its report in US – Hot-Rolled Steel , which both China and the EU
discuss, the Appellate Body addressed this issue in Thailand – H-Beams and found that Article 17.6
does not impose obligations on WTO Members.

ANNEX B-6

THIRD PARTY WRITTEN SUBMISSION
OF VIET NAM

I. INTRODUCTION

1. Viet Nam welcomes this opportunity to presen t its views in these proceedings involving the
European Union – Anti-Dumping Measures on Certain Footwear from China. Viet Nam believes
these proceedings relate to the understanding of certain articles of the Anti-Dumping Agreement
(ADA) and the GATT 1994 in which Viet Nam has systemic interests.

2. In this third party submission, Viet Nam will focus on the following issues:

 (i) Whether Article 9.5 of the Regulati on No. 384/96 on anti-dumping measures against
imports from countries which are not member of the European Union (AD Basic
Regulation (amended and codified by Regula tion No. 1225/2009) is inconsistent with
the Anti-Dumping Agreement (ADA) and the GATT 1994;

 (ii) Whether selection of Brazil as the analo gue country is inconsistent with the ADA and
the GATT 1994;

 (iii) Whether anti-dumping duty on Chinese exports was not imposed and collected by the
European Union (EU) on a non-discriminatory basis.

II. WHETHER ARTICLE 9.5 OF THE AD BASIC REGULATION IS INCONSISTENT
WITH ADA AND THE GATT 1994

A. CLAIMS ON ARTICLE 9.5 OF THE AD BASIC REGULATION

3. China claims that Article 9.5, which states that companies concerned failed to meet Market
Economy Treatment (MET) are required to satisfy the Individual Treatment (IT) test provided therein,
violates Article(s) 6.10, 9.2, 9.3, 9.4, 12.2.2 of ADA, Article I.1 and Article X:3(a) of GATT 1994.

4. In its first written submission, the EU rebuts almost claims by China.

B. VIET NAM'S VIEWS ON VIOLATION OF ARTICLE 9.5 OF AD BASIC REGULATION

(i) Article 9.5 of the AD Basic Regulation is inconsistent with Article 6.10 of the ADA

5. Article 6.10 of ADA provides, "the authorities, as a rule, shall determine individual margins
of dumping for each known exporter or producer c oncerned of the product under investigation. In
cases where the number of exporters, producers, importers or types of products involved is so large
as to make such a determination impracticable, th e authorities may limit their examination either to a
reasonable number of interested parties or products by using samples which are statistically valid on
the basis of information available to the authorities at the time of the selection, or to the largest

percentage of the volume of the exports from the country in question which can reasonably be
investigated". (emphasis added)

6. It is noted that the Article 6.10 requires i nvestigating authorities to determine individual
margins of dumping for exporters or producers concer ned. The sole exception is sampling where the
number of exporters, producers, importers involved is so larg e as to make a determination
impracticable. There is no provision elsewhere in the ADA that exporters or producers concerned
have to satisfy additional conditi ons or requirements for enjoying individual margins of dumping,
which is a basis for individual duty.

7. However, under Article 9.5 of Basic AD Re gulation, the EU imposes a single anti-dumping
duty on all exporters/producers that fail to satis fy the Market-Economy-Treatment (MET) test unless
such exporters/producers prove, on the basis of posit ive evidence, they meet the additional conditions
laid down in Article 9.5 of EU Basic Regulation. Thus, the Article 9.5 of EU Basic Anti-Dumping
Regulation requires exporters and producers from non-market economy country to satisfy the
additional conditions in order to qualify for Individual Treatment (IT) is inconsistent with Article 6.10
of ADA.

(ii) Article 9.5 of the AD Basic Regulation is inconsistent with Article 9.2 of the ADA

8. Article 9.2 ADA states that "When an anti-dumping duty is imposed in respect of any product,
such anti-dumping duty shall be collected in the appropriate amounts in each case, on a
non-discriminatory basis on imports of such produc t from all sources found to be dumped and
causing injury, except as to imports from tho se sources from which price undertakings under the
terms of this Agreement have been accepted." (emphasis added)

9. It is in Viet Nam's views that Article 9.2 of the ADA requires the individualization of anti-
dumping duty based on i) in the appropriate amounts in each case and; ii) on non-discriminatory basis.
Article 9.5 of the AD Basic Regulation, however, pr ovides that individual duty shall be specified for
the exporters which can demonstrate to satisfy so -called IT requirements. These requirements are
considered as extra and discriminatory conditions for exporters or producers to be allocated individual
duty. Thus, imposing a country-wide anti- dumping duty on imported goods from non- market
economy countries that do not qualify for IT test unde r Article 9.5 of the EU Basic AD Regulation,
the Article 9.5 violates Article 9.2 of ADA.

(iii) Article 9.5 of AD Basic Regulation violates Article 9.3 of the ADA

10. The Article 9.3 of ADA clearly states a general principle that "the amount of the anti-dumping
duty shall not exceed the margin of dumping established under Article 2" (emphasis added).
Article 9.5 of the AD Basic Regulation, however, provides that EU will imposes a country-wide
average anti-dumping duty on all producers not qualif ying for IT. This application will necessarily
exceed the individual dumping margin of some of the exporters/ producers included in the average
duty calculation. Thus Article 9.5 EU Basic regulation violates Article 9.3 of ADA.

(iv) Article 9.5 of the AD Basic Regulation violates Article 9.4 of the ADA

11. Article 9.4 ADA provides that:

"When the authorities have limited their examination in accordance with the second
sentence of paragraph 10 of Article 6, any anti-dumping duty applied to imports from
exporters or producers not included in the examination shall not exceed:

 (i) the weighted average margin of dumping established with respect to the selected
exporters or producers or,

 (ii) where the liability for payment of anti- dumping duties is calculated on the basis of a
prospective normal value, the difference between the weighted average normal value of
the selected exporters or producers and the export prices of exporters or producers not
individually examined,

provided that the authorities shall disregard for the purpose of this paragraph any zero and de minimis
margins and margins established under the circumstances referred to in paragraph 8 of Article 6. The
authorities shall apply individual duties or normal values to imports from any exporter or producer not
included in the examination who has provided th e necessary information during the course of the
investigation, as provided for in subparagraph 10.2 of Article 6." (emphasis added)

12. However, under Article 9.5 of the AD Basic Regulation, dumping margin of
exporter/producers not qualifying for IT will not be calculated on basis of individual evidence of
exporters or producers. Thus, dumping margin of the sampled exporters or producers are not given,
the investigating authorities is unable to calculate a weighted-average dumping margin of all sampled
exporters or producers as stipulated in Article 2.4 ADA.

13. In addition, Article 9.4 of the ADA provides that, the authorities shall apply individual duties
or normal values to imports from any exporter or producer not included in the examination who has
provided the necessary information during the course of the investigation. But Article 9.5 of the AD
Basic Regulation provides that unless such exporters or producers prove that they meet the additional
conditions (IT criteria), exporters or producers shall not be applied individual duties. Therefore, it is
inconsistent with Article 9.4 of the ADA.

(v) Article I.1 of GATT 1994

14. Article I.1 of the GATT 1994 states the most-favoured-nation treatment that "any advantage,
favour, privilege or immunity gr anted by any contracting party to any product originating in or
destined for any other country s hall be accorded to immediately and unconditionally to the like
product originating in or destined for the territories of all other contracting parties" (emphasis
added). This provision is also applied, certainly, to anti-dumping measures.

15. Meanwhile, under the Article 9.5 of AD Basic Regulation, an exporter or producer failed to
meet IT criteria would be refused to enjoy individual duty. Article 9.5, therefore, obviously and
automatically gives a less favourable treatment to members not recognized by the EU as a market
economy. In the case that a member accepts th e concession to be recognized as a non-market
economy but not concession for a less favourable treatment, the Article 9.5 still violates the most-
favoured-nation treatment.

III. WHETHER SELECTION OF BRAZIL AS THE ANALOGUE COUNTRY IS
INCONSISTENT WITH ADA

A. CLAIMS ON SELECTION OF BRA ZIL AS THE ANALOGUE COUNTRY

16. China claims that the sele ction of Brazil as analogue country was taken on the basis of a
biased and not objective examination, thus contrary to Article 17.6(i) of the Anti-Dumping Agreement
and Article VI:1 of the GATT 1994.

17. In its response, the EU stated that in the process of selection of analogue country, Brazil is
considered as the best choice to establish normal value for determining of dumping margin for
Chinese exporters/producers.

B. VIET NAM'S VIEWS ON THE SELECTION OF BRAZIL AS ANALOGUE COUNTRY

18. It is noted that there existing different cond itions between China and Brazil in terms of socio-
economic developments and footw ear industry formation. Brazil has a higher level of economic
development than China and is one of the world's most protected footwear markets, with 35 per cent
import tariff on footwear and non-automatic licensing. Moreover, higher labour cost in the total cost
of production and other differences in cost structure between Brazil and China exacerbates this effect.

19. In addition, Article X:3 of the GATT 1994 stat es that measures of general application are to
be administered in an impartial, objective and unifor m manner. In this dispute, it would appear that
the application of anti-dumping measures, thr ough Regulation 1472/2006, was not objective or
impartial when selecting Brazil due to the enor mous differences in level of trade, production
capacities, labour standards, costs, transport fac ilities, etc. Thus, the analogue-country selection is,
arguably, inconsistent with Article X:3 of the GATT 1994.

IV. WHETHER ANTI-DUMPING DUTY ON CHINESE EXPORTS WAS NOT IMPOSED
AND COLLECTED BY THE EU ON A NON-DISCRIMINATORY BASIS

A. CLAIMS ON IMPOSITION AND COLLECTION OF ANTI-DUMPING DUTY ON A
DISCRIMINATORY BASIS

20. In its submission, China claims that the EU application of anti-dumping duties on Chinese
footwear products is a "Violation of Articles 3.1 and 9.2 of the Anti-Dumping Agreement because the
anti-dumping duty on Chinese exports was not imposed and collected by the EU on a non-
discriminatory basis as the duty rate established for China was higher than that for Viet Nam,
although both the dumping and injury margins found for Vietnamese exporters were higher than those
for Chinese exporters" (Claim III.16)

21. In its response, the EU stated that the "l esser duty" rule is applied in imposition of anti-
dumping duties on Chinese exports in the case of foot wear products (which also involved Vietnamese
exports). Due to the fact that it is a non-mandatory obligation bound by the Anti-Dumping
Agreement, claims of China seem to be groundless.

B. VIET NAM'S VIEWS

22. The 'lesser duty' principle is provided in Article 9.1 of the Anti-Dumping Agreement:

The decision whether or not to impo se an anti-dumping duty in cases where all
requirements for the imposition have been fulfilled, and the decision whether the
amount of the anti-dumping duty to be imposed shall be the full margin of dumping or
less, are decisions to be made by the authorities of the importing Member. It is
desirable that the imposition be permissive in the territory of all Members, and that
the duty be less than the margin if such lesser duty would be adequate to remove the
injury to the domestic industry. (emphasis added)
23. It is noted that even though application of this principle is encouraged by the WTO language
of "desirable that the imposition be permi ssive in the territory of all Members" (emphasis added) ,
application of this principle is not obliged to members of the WTO.

24. Consequently, a member may use the notion of injury in its lesser duty rules without thereby
incurring a new WTO obligation or extending an existing one. Therefore, it is groundless to claim
that either the lesser duty rule itself or methodology used in application of the rule is inconsistent with
the WTO regulations.