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Report of the Panel

TABLE OF CASES CITED IN THIS REPORT

Short TitleFull Case Title and Citation
Argentina – Ceramic Tiles Panel Report, Argentina – Definitive Anti‑Dumping Measures on Imports of Ceramic Floor Tiles from Italy, WT/DS189/R, adopted 5 November 2001, DSR 2001:XII, 6241
Argentina – Poultry Anti‑Dumping Duties Panel Report, Argentina – Definitive Anti‑Dumping Duties on Poultry from Brazil, WT/DS241/R, adopted 19 May 2003, DSR 2003:V, 1727
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327
Brazil – Aircraft Appellate Body Report, Brazil – Export Financing Programme for Aircraft, WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161
Brazil – Aircraft Panel Report, Brazil – Export Financing Programme for Aircraft, WT/DS46/R, adopted 20 August 1999, as modified by Appellate Body Report WT/DS46/AB/R, DSR 1999:III, 1221
Brazil – Desiccated Coconut Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut, WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167
Canada – Aircraft Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft, WT/DS70/R, adopted 20 August 1999, as upheld by Appellate Body Report WT/DS70/AB/R, DSR 1999:IV, 1443
Canada – Autos Appellate Body Report, Canada – Certain Measures Affecting the Automotive Industry, WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, DSR 2000:VI, 2985
China – Auto Parts Panel Reports, China – Measures Affecting Imports of Automobile Parts, WT/DS339/R, WT/DS340/R, WT/DS342/R and Add.1 and Add.2, adopted 12 January 2009, as upheld (WT/DS339/R) and as modified (WT/DS340/R, WT/DS342/R) by Appellate Body Reports WT/DS339/AB/R, WT/DS340/AB/R, WT/DS342/AB/R
China – Publications and Audiovisual Products Appellate Body Report, China –Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WT/DS363/AB/R, adopted 19 January 2010
Dominican Republic – Import and Sale of Cigarettes Panel Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/R, adopted 19 May 2005, as modified by Appellate Body Report WT/DS302/AB/R, DSR 2005:XV, 7425
EC – Asbestos Panel Report, European Communities – Measures Affecting Asbestos and Asbestos‑Containing Products, WT/DS135/R and Add.1, adopted 5 April 2001, as modified by Appellate Body Report WT/DS135/AB/R, DSR 2001:VIII, 3305
EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, 591
EC – Bananas III (US) Panel Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, Complaint by the United States, WT/DS27/R/USA, adopted 25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R, DSR 1997:II, 943
EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – US) Appellate Body Reports, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Second Recourse to Article 21.5 of the DSU by Ecuador,WT/DS27/AB/RW2/ECU, adopted 11 December 2008, and Corr.1 / European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 of the DSU by the United States, WT/DS27/AB/RW/USA and Corr.1, adopted 22 December 2008
EC – Bed Linen Appellate Body Report, European Communities – Anti‑Dumping Duties on Imports of Cotton‑Type Bed Linen from India, WT/DS141/AB/R, adopted 12 March 2001, DSR 2001:V, 2049
EC – Bed Linen Panel Report, European Communities – Anti‑Dumping Duties on Imports of Cotton‑Type Bed Linen from India, WT/DS141/R, adopted 12 March 2001, as modified by Appellate Body Report WT/DS141/AB/R, DSR 2001:VI, 2077
EC – Bed Linen
(Article 21.5 – India)
Appellate Body Report, European Communities – Anti‑Dumping Duties on Imports of Cotton‑Type Bed Linen from India – Recourse to Article 21.5 of the DSUby India, WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 965
EC – Bed Linen
(Article 21.5 – India)
Panel Report, European Communities – Anti‑Dumping Duties on Imports of Cotton‑Type Bed Linen from India – Recourse to Article 21.5 of the DSUby India, WT/DS141/RW, adopted 24 April 2003, as modified by Appellate Body Report WT/DS141/AB/RW, DSR 2003:IV, 1269
EC – Fasteners (China) Panel Report, European Communities – Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China, WT/DS397/R, circulated to WTO Members 3 December 2010 [appeal in progress]
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones) , WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, 135
EC – Salmon (Norway) Panel Report, European Communities – Anti‑Dumping Measure on Farmed Salmon from Norway, WT/DS337/R, adopted 15 January 2008, and Corr.1, DSR 2008:I, 3
EC – Tariff Preferences Appellate Body Report, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/AB/R, adopted 20 April 2004, DSR 2004:III, 925
EC – Tariff Preferences Panel Report, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/R, adopted 20 April 2004, as modified by Appellate Body Report WT/DS/246/AB/R, DSR 2004:III, 1009
EC – Tube or Pipe Fittings Appellate Body Report, European Communities – Anti‑Dumping Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/AB/R, adopted 18 August 2003, DSR 2003:VI, 2613
EC – Tube or Pipe Fittings Panel Report, European Communities – Anti‑Dumping Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/R, adopted 18 August 2003, as modified by Appellate Body Report WT/DS219/AB/R, DSR 2003:VII, 2701
Egypt – Steel Rebar Panel Report, Egypt – Definitive Anti‑Dumping Measures on Steel Rebar from Turkey, WT/DS211/R, adopted 1 October 2002, DSR 2002:VII, 2667
Guatemala – Cement II Panel Report, Guatemala – Definitive Anti‑Dumping Measures on Grey Portland Cement from Mexico, WT/DS156/R, adopted 17 November 2000, DSR 2000:XI, 5295
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, 9
Indonesia – Autos Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry, WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1 and 2, adopted 23 July 1998, and Corr. 3 and 4, DSR 1998:VI, 2201
Japan – Alcoholic
Beverages II
Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97
Korea – Certain Paper Panel Report, Korea – Anti‑Dumping Duties on Imports of Certain Paper from Indonesia, WT/DS312/R, adopted 28 November 2005, DSR 2005:XXII, 10637
Korea – Certain Paper (Article 21.5 – Indonesia) Panel Report, Korea – Anti‑Dumping Duties on Imports of Certain Paper from Indonesia – Recourse to Article 21.5 of the DSU by Indonesia, WT/DS312/RW, adopted 22 October 2007, DSR 2007:VIII, 3369
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, 3
Mexico – Anti‑Dumping Measures on Rice Appellate Body Report, Mexico – Definitive Anti‑Dumping Measures on Beef and Rice, Complaint with Respect to Rice, WT/DS295/AB/R, adopted 20 December 2005, DSR 2005:XXII, 10853
Mexico – Anti‑Dumping Measures on Rice Panel Report, Mexico – Definitive Anti‑Dumping Measures on Beef and Rice, Complaint with Respect to Rice, WT/DS295/R, adopted 20 December 2005, as modified by Appellate Body Report WT/DS295/AB/R, DSR 2005:XXIII, 11007
Mexico – Corn Syrup Panel Report, Mexico – Anti‑Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States, WT/DS132/R, adopted 24 February 2000, and Corr.1, DSR 2000:III, 1345
Mexico – Corn Syrup
(Article 21.5 – US)
Appellate Body Report, Mexico – Anti‑Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the DSUby the United States, WT/DS132/AB/RW, adopted 21 November 2001, DSR 2001:XIII, 6675
Mexico – Olive Oil Panel Report, Mexico – Definitive Countervailing Measures on Olive Oil from the European Communities, WT/DS341/R, adopted 21 October 2008, DSR 2008:IX, 3179
Mexico – Steel Pipes and Tubes Panel Report, Mexico – Anti‑Dumping Duties on Steel Pipes and Tubes from Guatemala, WT/DS331/R, adopted 24 July 2007, DSR 2007:IV, 1207
Thailand – Cigarettes (Philippines) Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines, WT/DS371/R, circulated to WTO Members 15 November 2010 [appeal in progress]
Thailand – H‑Beams Appellate Body Report, Thailand – Anti‑Dumping Duties on Angles, Shapes and Sections of Iron or Non‑Alloy Steel and H‑Beams from Poland, WT/DS122/AB/R, adopted 5 April 2001, DSR 2001:VII, 2701
Thailand – H‑Beams Panel Report, Thailand – Anti‑Dumping Duties on Angles, Shapes and Sections of Iron or Non‑Alloy Steel and H‑Beams from Poland, WT/DS122/R, adopted 5 April 2001, as modified by Appellate Body Report WT/DS122/AB/R, DSR 2001:VII, 2741
Turkey – Textiles Panel Report,Turkey – Restrictions on Imports of Textile and Clothing Products, WT/DS34/R, adopted 19 November 1999, as modified by Appellate Body Report WT/DS34/AB/R, DSR 1999:VI, 2363
US – Anti-Dumping and Countervailing Duties (China) Panel Report, United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, WT/DS379/R, adopted 25 March 2011, as modified by Appellate Body Report WT/DS379/AB/R
US – Anti‑Dumping Measures on Oil Country Tubular Goods Appellate Body Report, United States – Anti‑Dumping Measures on Oil Country Tubular Goods (OCTG) from Mexico, WT/DS282/AB/R, adopted 28 November 2005, DSR 2005:XX, 10127
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain Corrosion‑Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 3779
US – Certain EC Products Appellate Body Report, United States – Import Measures on Certain Products from the European Communities, WT/DS165/AB/R, adopted 10 January 2001, DSR 2001:I, 373
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and Application of Zeroing Methodology, WT/DS350/AB/R, adopted 19 February 2009
US – Corrosion‑Resistant Steel Sunset Review Appellate Body Report, United States – Sunset Review of Anti‑Dumping Duties on Corrosion‑Resistant Carbon Steel Flat Products from Japan, WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3
US – Corrosion‑Resistant Steel Sunset Review Panel Report, United States – Sunset Review of Anti‑Dumping Duties on Corrosion‑Resistant Carbon Steel Flat Products from Japan, WT/DS244/R, adopted 9 January 2004, as modified by Appellate Body Report WT/DS244/AB/R, DSR 2004:I, 85
US – DRAMS Panel Report, United States – Anti‑Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAMS) of One Megabit or Above from Korea, WT/DS99/R, adopted 19 March 1999, DSR 1999:II, 521
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross‑Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April 2005, DSR 2005:XII, 5663 (Corr.1, DSR 2006:XII, 5475)
US – Hot‑Rolled Steel Appellate Body Report, United States – Anti‑Dumping Measures on Certain Hot‑Rolled Steel Products from Japan, WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, 4697
US – Hot‑Rolled Steel Panel Report, United States – Anti‑Dumping Measures on Certain Hot‑Rolled Steel Products from Japan, WT/DS184/R, adopted 23 August 2001 modified by Appellate Body Report WT/DS184/AB/R, DSR 2001:X, 4769
US – Oil Country Tubular Goods Sunset Reviews Appellate Body Report, United States – Sunset Reviews of Anti‑Dumping Measures on Oil Country Tubular Goods from Argentina, WT/DS268/AB/R, adopted 17 December 2004, DSR 2004:VII, 3257
US – Oil Country Tubular Goods Sunset Reviews Panel Report, United States – Sunset Reviews of Anti‑Dumping Measures on Oil Country Tubular Goods from Argentina, WT/DS268/R and Corr.1, adopted 17 December 2004, as modified by Appellate Body Report WT/DS/268/AB/R, DSR 2004:VIII, 3421
US – Oil Country Tubular Goods Sunset Reviews
(Article 21.5 – Argentina)
Appellate Body Report, United States – Sunset Reviews of Anti‑Dumping Measures on Oil Country Tubular Goods from Argentina – Recourse to Article 21.5 of the DSU by Argentina, WT/DS268/AB/RW, adopted 11 May 2007, DSR 2007:IX, 3523
US – Oil Country Tubular Goods Sunset Reviews
(Article 21.5 – Argentina)
Panel Report, United States – Sunset Reviews of Anti‑Dumping Measures on Oil Country Tubular Goods from Argentina – Recourse to Article 21.5 of the DSU by Argentina, WT/DS268/RW, adopted 11 May 2007, as modified by Appellate Body Report WT/DS268/AB/RW, DSR 2007:IX‑X, 3609
US – Poultry (China) Panel Report, United States – Certain Measures Affecting Imports of Poultry from China, WT/DS392/R, adopted 25 October 2010
US – Softwood Lumber IV (Article 21.5 – Canada) Appellate Body Report, United States – Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada – Recourse by Canada to Article 21.5 of the DSU, WT/DS257/AB/RW, adopted 20 December 2005, DSR 2005:XXIII, 11357
US – Softwood Lumber V Panel Report, United States – Final Dumping Determination on Softwood Lumber from Canada, WT/DS264/R, adopted 31 August 2004, as modified by Appellate Body Report WT/DS264/AB/R, DSR 2004:V, 1937
US – Softwood Lumber V
(Article 21.5 – Canada)
Appellate Body Report, United States – Final Dumping Determination on Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada, WT/DS264/AB/RW, adopted 1 September 2006, DSR 2006:XII, 5087
US – Softwood Lumber V
(Article 21.5 –
Canada)
Panel Report, United States – Final Dumping Determination on Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada, WT/DS264/RW, adopted 1 September 2006, as reversed by Appellate Body Report WT/DS264/AB/RW, DSR 2006:XII, 5147
US – Softwood Lumber VIPanel Report, United States – Investigation of the International Trade Commission in Softwood Lumber from Canada, WT/DS277/R, adopted 26 April 2004, DSR 2004:VI, 2485
US – Softwood Lumber VI (Article 21.5 – Canada) Appellate Body Report, United States – Investigation of the International Trade Commission in Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada, WT/DS277/AB/RW, adopted 9 May 2006, and Corr.1, DSR 2006:XI, 4865
US – Stainless Steel (Mexico) Panel Report, United States – Final Anti‑Dumping Measures on Stainless Steel from Mexico, WT/DS344/R, adopted 20 May 2008, as modified by Appellate Body Report WT/DS344/AB/R, DSR 2008:II, 599
US – Steel Plate Panel Report, United States – Anti‑Dumping and Countervailing Measures on Steel Plate from India, WT/DS206/R and Corr.1, adopted 29 July 2002, DSR 2002:VI, 2073
US – Steel Safeguards Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R, WT/DS259/AB/R, adopted 10 December 2003, DSR 2003:VII, 3117
US – Tyres (China) Panel Report, United States – Measures Affecting Imports of Certain Passenger Vehicle and Light Truck Tyres from China, WT/DS399/R, circulated to WTO Members 13 December 2010 [appeal/adoption pending]
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton, WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, 3
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997, and Corr.1, DSR 1997:I, 323
US – Zeroing (EC) Appellate Body Report, United States – Laws, Regulations and Methodology for Calculating Dumping Margins (Zeroing) , WT/DS294/AB/R, adopted 9 May 2006, and Corr.1, DSR 2006:II, 417
US – Zeroing (EC)
(Article 21.5 – EC)
Appellate Body Report, United States – Laws, Regulations and Methodology for Calculating Dumping Margins (Zeroing) – Recourse to Article 21.5 of the DSU by the European Communities, WT/DS294/AB/RW and Corr.1, adopted 11 June 2009
US – Zeroing (Japan) Appellate Body Report, United States – Measures Relating to Zeroing and Sunset Reviews, WT/DS322/AB/R, adopted 23 January 2007, DSR 2007:I, 3
US – Zeroing (Japan) Panel Report, United States – Measures Relating to Zeroing and Sunset Reviews, WT/DS322/R, adopted 23 January 2007, as modified by Appellate Body Report WT/DS322/AB/R, DSR 2007:I, 97

GATT PANEL REPORTS

Short TitleFull Case Title and Citation
US – MFN Footwear GATT Panel Report, United States – Denial of Most-Favoured-Nation Treatment as to Non-Rubber Footwear from Brazil, DS18/R, adopted 19 June 1992, BISD 39S/128

TABLE OF ABBREVIATIONS USED IN THIS REPORT

AbbreviationFull Reference
AD Agreement Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Anti-Dumping Agreement)
Basic AD Regulation Council Regulation (EC) No. 1225/2009 of 30 November 2009
CEC European Confederation of the Footwear Industry
China's Accession Protocol Protocol on the Accession of the People's Republic of China, WT/L/432
China's Accession Working Party Report Report of the Working Party on the Accession of China, WT/ACC/CHN/49 and Corr.1
Commission Commission of the European Union, the EU investigating authority
Definitive Regulation Council Regulation (EC) No. 1472/2006 of 5 October 2006
EFA European Footwear Alliance
EUR Euro
GATT 1994 General Agreement on Tariffs and Trade 1994
IT Individual Treatment
MET Market Economy Treatment
MFN Most Favoured Nation
NME Non-Market Economy
PCN Product Control Number
Provisional Regulation Commission Regulation (EC) No. 553/2006 of 23 March 2006
Review Regulation Council Implementing Regulation (EU) No. 1294/2009 of 22 December 2009
SCM Agreement Agreement on Subsidies and Countervailing Measures
Second Ad Note to Article VI:1 of the GATT 1994 Second Ad Note to Paragraph 1 of Article VI of the GATT 1994, in Annex 1 of the GATT 1994
SPS Agreement Agreement on the Application of Sanitary and Phytosanitary Measures
STAF Special Technology Athletic Footwear
Vienna Convention Vienna Convention on the Law of Treaties
WTO Agreement Marrakesh Agreement Establishing the World Trade Organization

I. INTRODUCTION

A. Complaint of China

1.1.
On 4 February 2010, China requested consultations with the European Union pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU"), Article XXIII:1 of the General Agreement on Tariffs and Trade 1994 (the "GATT 1994"), and Article 17 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the "AD Agreement").1 The consultations concerned: (1) Article 9(5) of Council Regulation (EC) No. 384/96 on Protection against Dumped Imports from Countries not Members of the European Community, as amended; (2) Council Regulation (EC) No. 1472/2006 of 5 October 2006, imposing definitive anti-dumping duties and collecting definitively the provisional anti-dumping duties imposed on imports of certain footwear with uppers of leather from, inter alia, China; and (3) Council Implementing Regulation (EU) No. 1294/2009 of 22 December 2009, imposing definitive anti-dumping duties on imports of certain footwear with uppers of leather originating in, inter alia, China, as extended to imports of certain footwear with uppers of leather consigned from the Macao SAR, whether declared as originating in the Macao SAR or not, following an expiry review pursuant to Article 11(2) of Council Regulation (EC) No 384/96.
1.2.
China and the European Union held consultations on 31 March 2010. These consultations failed to resolve the dispute.
1.3.
On 8 April 2010, China requested the establishment of a panel pursuant to Articles 4 and 6 of the DSU, Article XXIII:2 of the GATT 1994, and Articles 17.4 and 17.5 of the AD Agreement.2

B. Establishment and composition of the Panel

1.4.
At its meeting on 18 May 2010, the Dispute Settlement Body ("DSB") established this Panel pursuant to the request of China in document WT/DS405/2, in accordance with Article 6 of the DSU.
1.5.
The Panel's terms of reference are the following:

"To examine, in the light of the relevant provisions of the covered agreements cited by the parties to the dispute, the matter referred to the DSB by China in document WT/DS405/2 and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements."

1.6.
On 23 June 2010 China requested the Director-General to determine the composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU. On 5 July 2010, the Director-General composed the Panel as follows:

Chairperson: Mr. Jose Antonio Buencamino

Members: Mr. Serge Fréchette

Mr. Donald Greenfield

1.7.
Australia, Brazil, Colombia, Japan, Turkey, United States and Viet Nam reserved their rights to participate in the Panel proceedings as third parties.3
1.8.
The Panel met with the parties to the dispute on 3-4 November 2010 and 25-26 January 2011, and with the third parties on 4 November 2010.
1.9.
The Panel submitted its interim report to the parties on 13 May 2011 and submitted its final report to the parties on 27 July 2011.

II. FACTUAL ASPECTS

2.1.
This dispute concerns three measures introduced by the European Union: (1) Article 9(5) of Council Regulation (EC) No. 384/96 on Protection against Dumped Imports from Countries not Members of the European Community, as amended, codified and replaced by Council Regulation (EC) No. 1225/2009 of 30 November 2009; (2) Council Implementing Regulation (EU) No. 1294/2009 of 22 December 2009, imposing a definitive anti-dumping duty on imports of certain footwear with uppers of leather originating in, inter alia, China, as extended to imports of certain footwear with uppers of leather consigned from the Macao SAR, whether declared as originating in the Macao SAR or not, following an expiry review pursuant to Article 11(2) of Council Regulation (EC) No 384/96; and (3) Council Regulation (EC) No. 1472/2006 of 5 October 2006, imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain footwear with uppers of leather originating in, inter alia, China.
2.2.
China makes "as such" claims with respect to the Basic AD Regulation concerning Article 9(5) thereof, the provision that deals with individual treatment of producers from countries that the European Union classifies as non-market economy ("NME") countries, including China, in anti-dumping investigations.4China's claims with respect to the Review and Definitive Regulations challenge numerous aspects of those measures and of the underlying proceedings. China also makes "as applied" claims concerning Article 9(5) of the Basic AD Regulation with respect to the Definitive Regulation.

III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS

A. China

3.1.
In its written submissions, China requested the Panel to find that:

(a) Article 9(5) of the Basic AD Regulation violates Articles 6.10, 9.2, 9.3, 9.4 and 18.4 of the AD Agreement; Articles I:1 and X:3(a) of the GATT 1994; and Article XVI:4 of the WTO Agreement;

(b) With respect to the Review Regulation, the European Union violated:

(i) Articles 2.1 and 2.4 of the AD Agreement and Article VI:1 of the GATT 1994 by precluding a fair comparison between the export price and the normal value on account of the analogue country selection procedure and the selection of Brazil as the analogue country, and by using the PCN methodology applied in the original investigation and suddenly reclassifying the footwear categories in the middle of the investigation;

(ii) Articles 3.1 and 17.6(i) of the AD Agreement because it failed to objectively examine, based on positive evidence, both the volume of the dumped imports and 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, as the European Union used different sampling procedures for Chinese exporters, EU importers, and non-complaining EU producers on the one hand, and complainant EU producers on the other hand;

(iii) Articles 3.1 and 17.6(i) of the AD Agreement, and Article VI:1 of the GATT 1994 because it failed to objectively examine, based on positive evidence, both the volume of the dumped imports and 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; and Article 6.10 of the AD Agreement, because:

- the European Union selected the EU producers' sample in the absence of requisite data which is normally solicited in a sampling form, is essential for the selection of the sample, and was requested from non-complainant EU producers who made themselves known;

- the EU producers' sample selected was neither statistically valid nor represented the largest percentage of volume that could reasonably be investigated and the European Union failed to cover the largest percentage of volume that could be investigated;

- the EU producers' sample included a producer that outsourced its entire production of the product concerned to a third country in the review investigation period; and

- the European Union used an incorrect product classification methodology and suddenly reclassified the footwear categories in the middle of the investigation.

(iv) Articles 3.1, 3.4 and 17.6(i) of the AD Agreement by failing to make an objective examination, on the basis of positive evidence, of the factors having a bearing on the state of the domestic industry because several key injury indicators were analysed on the basis of the data of the whole EU production, as termed by the European Union, that included data pertaining to EU producers not part of the EU industry;

(v) Articles 3.1, 3.5 and 17.6(i) of the AD Agreement because it failed to make an objective examination, on the basis of positive evidence, that dumped imports are, through the effects of dumping, causing injury; and because it failed to ensure that injury caused to the EU industry by other factors was not attributed to dumped imports;

(vi) Article 11.3 of the AD Agreement because its determination that expiry of the measure was likely to lead to a continuation of dumping and injury was based on determination of continued dumping and injury in violation of Articles 2.1, 2.4, 3.1, 3.4, 3.5, 6.8, 6.10 and 17.6(i) of the AD Agreement;

(vii) the following procedural obligations, throughout the investigation:

- Article 6.1.2 of the AD Agreement by failing to provide other interested parties prompt access to the information in the non-confidential questionnaire responses filed by sampled EU producers;

- Articles 6.2 and 6.4 of the AD Agreement by failing to provide timely opportunities for all interested parties to see all non-confidential information relevant to the defence of their interests concerning but not limited to sampling of EU producers, selection of the analogue country, and other procedural issues;

- Articles 6.5 and 6.5.1 of the AD Agreement because the European Union failed to ensure, among others, the disclosure of the names of the complainants; and the provision of summaries of confidential information relating to the EU industry and the sampled EU producers in the expiry review request and questionnaire responses respectively; and data used for selecting the sample of EU producers, or where provided, failed to ensure the provision by the EU industry and/or the sampled EU producers, of sufficiently detailed summaries to enable a reasonable understanding of the substance of that information;

- Articles 6.2 and 6.5.2 of the AD Agreement by failing to determine that the request for the confidentiality of the names of the complainants was not warranted; and by failing to reject the confidential information provided by the sampled EU producers, the non-confidential summaries of which were not provided;

- Articles 3.1 and 6.8 of the AD Agreement by failing to apply facts available when faced with incorrect and deficient information, including but not limited to the product classification information provided by sampled EU producers in the injury questionnaire responses;

- Article 12.2.2 of the AD Agreement by failing to provide sufficiently detailed explanations in the Review Regulation, regarding matters of fact and law and reasons which led to the extension of the measures; and of reasons which led to the acceptance or rejection of the arguments of the interested parties.

(viii) the European Union violated Article 17.6(i) of the AD Agreement because the analogue country selection procedure did not amount to a proper establishment of the facts and an unbiased and objective evaluation of those facts; and

(ix) in consequence, the European Union violated Articles 1 and 18.1 of the AD Agreement because an anti-dumping measure must be applied only under the circumstances provided for in Article VI of the GATT 1994 and in accordance with the provisions of the AD Agreement; and

(c) With respect to the Definitive Regulation, the European Union violated Articles 2.2.2, 2.4, 2.6, 3.1, 3.2, 3.3, 3.4, 3.5, 4.1, 6.1.1, 6.2, 6.4, 6.5, 6.5.1, 6.5.2, 6.9, 6.10, 6.10.2, 9.2, 9.3, 12.2.2 and 17.6(i) of the AD Agreement; Article VI:1 of the GATT 1994; Section 15(a) (ii) of China's Protocol of Accession; and Paragraphs 151(e) and (f) of the Report of the Working Party on the Accession of China.

3.2.
China also requests that the Panel reject the European Union's request for preliminary rulings with respect to any alleged failure on China's part to comply with Article 6.2 of the DSU, as well as with respect to the propriety of China's claims under Article 17.6(i) of the AD Agreement.
3.3.
In addition, concerning its "as such" claims with respect to Article 9(5) of the Basic AD Regulation, China requests that the Panel recommend that the DSB request the European Union to withdraw this measure.5 With respect to the Review Regulation and Definitive Regulation, China requests that the Panel recommend that the DSB request the European Union to bring these measures into conformity with its obligations under the AD Agreement and the GATT 1994. Furthermore, China requests that the Panel use its discretion under the second sentence of Article 19.1 of the DSU by suggesting ways in which the European Union could implement the recommendations and rulings of the DSB. More specifically, given the nature and scope of the numerous violations of the AD Agreement and the GATT 1994, China requests the Panel to suggest that the European Union (i) immediately repeal the Review Regulation and (ii) refund the anti-dumping duties that have been paid on imports of the product concerned from China.

B. European Union

3.4.
The European Union requests that the Panel make the following preliminary rulings:

(a) the Panel's terms of reference with respect to China's "as such" claims are limited to those specific aspects of the measure explicitly identified by China in its Panel Request, i.e. the imposition of anti-dumping duties on a country-wide basis or on an individual basis in the case of imports from non-market economies; and that any other issues, such as the individual determination of dumping margins, the calculation of those dumping margins, the level of anti-dumping duties, are outside the Panel's terms of reference;

(b) China's claims in items II.2, II.3, II.4, II.5, II.13, III.5, III.6 and III.20 in the Panel Request that are based on the alleged inconsistency of the challenged EU measures with Article 17.6(i) of the AD Agreement are outside the Panel's terms of reference;

(c) China's claims in items II.12 and III.19 in the Panel Request are outside the Panel's terms of reference since they do not satisfy the requirements of Article 6.2 of the DSU; and

(d) the references to profit margin and (in so far as it is implied) to the lesser duty rule, and to Article 9.1 of the AD Agreement, in Claim III.6 of the Panel Request are outside the Panel's terms of reference.

3.5.
In its written submissions, the European Union requested that the Panel reject China's claims in their entirety, finding instead that, with respect to each of them, the European Union acted consistently with all its obligations under the WTO Agreements.

IV. ARGUMENTS OF THE PARTIES

4.1.
The arguments of the parties, as set forth in the executive summaries of their submissions provided to the Panel, are attached to this Report as annexes (see List of Annexes, pages vi-vii).

V. ARGUMENTS OF THE THIRD PARTIES

5.1.
The arguments of the third parties, as set forth in the executive summaries of their submissions provided to the Panel, are attached to this Report as annexes (see List of Annexes, pages vi-vii).6

VI. interim review

A. Introduction

6.1.
On 13 May 2011, the Panel issued its Interim Report to the parties. On 27 May 2011, China and the European Union submitted written requests for review of precise aspects of the Interim Report. On 10 June 2011, China and the European Union submitted written comments on each other's requests for interim review. Neither party requested an additional meeting with the Panel.
6.2.
As a result of the interim review process, the numbering of footnotes in the Final Report has changed from the Interim Report. The text below refers to the footnote numbers in the Interim Report regarding which the parties requested review. Where we have made changes to a footnote in the Interim Report, a reference to the corresponding footnote number in the Final Report is included (in parentheses) for ease of reference. The numbering of paragraphs is unchanged. We have also corrected typographical and other non-substantive errors throughout the Report, including errors identified by the parties, which are not referred to specifically below. However, some "typographical error" corrections proposed by China were, in our view, editorial suggestions we considered unnecessary, and we have therefore not made them.
6.3.
In order to facilitate the understanding of the interim review comments and changes proposed, the following section is structured to follow the organization of the Final Report itself, with the review requests of the parties, and their comments, addressed sequentially.

B. General Comments

6.4.
With respect to claims regarding Council Regulation (EC) No. 1225/2009 (the "Basic AD Regulation") as such, the European Union stated that it considers that the Panel "entirely relied on the reasoning of an unadopted panel report without specifically addressing the specific facts and additional arguments made in these panel proceedings."7China did not comment on the European Union's observation.
6.5.
The European Union's observation is not formulated as a request for specific changes to the Interim Report. We recall that the claims and arguments with respect to Article 9(5) of the Basic AD Regulation as such in EC – Fasteners (China) were substantively largely the same as those presented by the same parties on the same issue in this dispute. Thus, with respect to China's claims relating to the Basic AD Regulation "as such", the specific measure at issue is exactly the same in this case as in EC – Fasteners (China) , China claimed violations of the same provisions of covered agreements in both disputes, and the parties' arguments in both cases are very similar. Given the identity of the measure, the claims and the parties, and the substantial similarity in the arguments, we carefully considered the report of the panel in EC – Fasteners (China) . However, we did not simply "entirely rel[y] on the reasoning of an unadopted panel report". Rather, as noted in the Interim Report, we were persuaded by that panel's reasoning to reach the same conclusions, and adopted that panel's analysis and conclusions with respect to the same issues and arguments presented by the same parties concerning the same measure. Thus, our objective assessment of China's claims and the parties' arguments was the same as that of the panel in EC – Fasteners (China) . In these circumstances, we see nothing to be gained, and a potential for confusion, were we to state our conclusions and analysis, which were the same as those of the panel in EC – Fasteners (China) , in different terms in this report. We have therefore taken the route of adopting that panel's analysis and conclusions as our own, with additional reasoning of our own when necessary to address arguments not made before that panel. When the same parties present the same claims and arguments concerning the same measure in two successive disputes, as here, if it finds the analysis and conclusions of the first panel persuasive and correct, we see no reason for the second panel to restate that analysis and conclusions. We are aware of no reasons that would preclude a panel from following such a course of action. We considered this approach to be appropriate in the unusual circumstances of this case, where the same measure was the subject of two successive disputes between the same parties within a short period of time, based on the same claims and largely the same arguments.

C. Specific Requests

6.6.
In addition to the specific requests discussed in more detail below, China made requests for modification of a number of paragraphs of the Interim Report, to more accurately reflect its arguments,8 which the European Union did not comment on or oppose. We have, in each instance, considered the requested modification based on our review of China's arguments as presented to the Panel, and have modified the following paragraphs as a result, albeit in some instances not in the precise terms requested by China: Paragraphs 7,171, 7,173, 7,182, 7,231, 7,302, Footnote 596 (now footnote 741), 7,407, 7,416, 7,497, 7,502, 7,505, 7,566, 7,587, 7,593, 7,608, 7,629, 7,823and7,855.
6.7.
Paragraph 2.2: China requests that the use of the expression "non-market economy" or "NME" to describe, inter alia, China, be qualified or a footnote be added in order to clarify that this is a classification assigned by the European Union, and that the use of this expression should not be taken as an indication that the Panel considers China to be a "non-market economy". China notes that this expression is not used in the AD Agreement, China's Protocol of Accession, or China's Working Party Report. China's request is with respect to paragraph 2.2, but China refers to the use of this expression "throughout the Interim Report", without proposing any other specific changes.9 The European Union did not comment on this request.
6.8.
We have made a change to Paragraph 2.2 of the Final Report to address China's request, albeit not in the precise terms proposed by China.
6.9.
Paragraph 3.1(c) : China requests that the Panel include Articles 1, 9.1, and 18.1 of the AD Agreement in the list of provisions claimed by China to be violated with respect to the Definitive Regulation. The European Union did not comment on this request.
6.10.
China previously made the same request in its comments on the Descriptive Part of the Report. Paragraph 3.1(c) of the Interim (and Final) Report reproduces China's request for findings and recommendations as set out in in its written submissions. In paragraph 1407 of its first written submission, China requested the Panel to find that the European Union violated a number of provisions expressly listed in that paragraph.10 Articles 1, 9.1, and 18.1 of the AD Agreement are not listed in that paragraph. In paragraph 1538 of its second written submission, China again requested the Panel to find that the European Union violated a number of provisions, and once more, Articles 1, 9.1 and 18.1 of the AD Agreement are not listed in that paragraph. In light of this, we did not make the change requested in response to China's comments on the Descriptive Part of the Report, and for the same reasons, have not made the requested changes now.
6.11.
Paragraph 7.36: China requests that the Panel amend the first sentence of this paragraph. China asserts that its argument differentiates between "explicit" and "implicit" obligations allegedly contained in Article 17.6(i) of the AD Agreement.11China also requests that the Panel amend the fifth sentence of this paragraph, asserting that it did not consider the question of "explicit 'obligation creation'", but argued that Article 17.6(i) of the AD Agreement "does impliedly impose obligations" on investigating authorities.12 The European Union requests that, should the Panel consider it appropriate to accept China's proposed changes, the Panel should rephrase the fourth sentence of this paragraph to better reflect the European Union's argument.13
6.12.
Both requests concern statements of the parties' own arguments regarding the obligations contained in Article 17.6(i) of the AD Agreement, as summarized in the course of our analysis. Having reviewed the requested changes, we have decided to modify this paragraph, albeit in slightly different terms from those proposed, to more accurately reflect the parties' arguments, as we understand them. We also added a sentence to the end of paragraph 7.37 to more clearly express our conclusion that a provision which establishes no obligations on an investigating authority cannot form the legal basis of a claim of violation of the AD Agreement.
6.13.
Paragraph 7.66: The European Union requests that the Panel modify this paragraph in order to more accurately describe the manner in which dumping margins are calculated.14China did not comment on this request.
6.14.
Given that the proposed modification is a description of the relevant provisions of the European Union's Basic AD Regulation, and reflects the operation of that Regulation as we understand it, we have modified this paragraph accordingly.
6.15.
Paragraphs 7,118 and 7,119: The European Union requests that these paragraphs be modified in order to more accurately describe the findings in the Review Regulation.15China did not comment on this request.
6.16.
Having reviewed the European Union's proposed modifications, we agree that they more accurately summarize the Review Regulation, and have therefore modified these paragraphs accordingly.
6.17.
Paragraph 7,124: China requests that the Panel modify this paragraph in order to better describe the involvement of the Chinese authorities in the discussions regarding the selection of the sample for dumping determinations.16 The European Union did not comment on this request.
6.18.
The Interim Report used the terminology of the Provisional Regulation, recital 57, in characterizing the actions of Chinese authorities regarding the selection of the sample of Chinese exporting producers. China's requested modification does not reflect the characterization of the Chinese authorities' actions set out in the Provisional Regulation. In light of this, we consider it appropriate, and have added a reference to the Provisional Regulation to clarify this in the Final Report. We have made no other changes to this paragraph in response to China's request.
6.19.
Paragraph 7,125: China requests that the Panel modify this paragraph in order to more accurately reflect its arguments and the factual record.17 The European Union did not comment on this request.
6.20.
As China's proposed changes accurately summarize the Definitive Regulation and reflect its arguments as presented to the Panel, we have modified this paragraph accordingly.
6.21.
Paragraph 7,146: Both parties requested review with respect to this paragraph. China states that it argued that granting at least some of the individual examination requests would not have been unduly burdensome and that it had presented prima facie evidence in that regard, but makes no specific request for modification of this paragraph.18 The European Union did not respond to China's comment.
6.22.
The European Union requests that the Panel amend this paragraph to reflect the European Union's understanding of the basis for the Panel's rejection of China's argument, which is that China failed to make its prima facie case.19China commented in response that the European Union's suggested amendment would render this paragraph incoherent for two reasons. The Panel would be making a summary finding with respect to China's argument that it has presented a prima facie case, and that the burden of proof shifted to the European Union, without any actual evaluation thereof. Moreover, the previous sentence in this paragraph, stating that it would inappropriate for the Panel to interfere in this manner in an anti-dumping investigation, would become pure dicta.20
6.23.
In support of its request, China reiterates the arguments it made during the proceeding. As we stated in paragraph 7,146 of the Interim Report, to the extent China is asserting that the European Union directly violated Article 6.10.2 of the AD Agreement by not examining the four Chinese producers who requested individual examination under Article 17(3) of the Basic AD Regulation, the Provisional and Definitive Regulations are clear that the Commission did consider the four individual examination requests received, and based on the criteria set forth in Article 6.10.2 of the AD Agreement declined to grant individual examinations to these requests.21 Insofar as China is arguing that it would not have been unduly burdensome to examine the individual examinations requested, we rejected China's argument, considering that even if this were true, it would be "entirely inappropriate for us to interfere in this manner in an investigating authority's conduct of anti-dumping investigations." Therefore, as we have addressed these arguments, we consider it unnecessary to make any changes to this paragraph based on China's comments.
6.24.
Turning to the European Union's request, we recall that paragraph 7,146 of the Interim Report states that "[t]o the extent China is arguing that it would not, in fact, have been unduly burdensome, and that the Commission could, and should, have allocated its available resources so as to enable it to undertake the individual examinations requested, we reject China's argument." Contrary to the European Union's view, this statement does not refer to whether China met its burden of proof in presenting a prima facie case of violation of Article 6.10.2 of the AD Agreement. As stated later in the same paragraph, "[e]ven assuming China is correct that the Commission had sufficient resources, and/or could have allocated its available resources differently, we consider that it would be entirely inappropriate for us to interfere in this manner in an investigating authority's conduct of anti-dumping investigations." It is thus clear that we do not agree with the European Union's understanding of the basis of our rejection of China's arguments, as we did not reject China's argument because China failed to present a prima facie case, but rather because even assuming China did so, it would not affect our conclusion. We therefore have made no change to this paragraph in response to the European Union's request.
6.25.
Paragraphs 7,152 and 7,336: The European Union requests that the Panel amend these paragraphs and footnote 215 (now footnote 356) to more accurately reflect its arguments.22 China contends that the addition of the term "automatic", as suggested by the European Union, is unnecessary, considering China's arguments.23
6.26.
Given that this request reflects the European Union's own arguments as presented to the Panel, we have modified these paragraphs and footnote 215 (now footnote 356) accordingly.
6.27.
Paragraph 7,178: China requests that the Panel modify this paragraph in order to accurately reflect the text of Article 2(7) (b) of the Basic AD Regulation.24 The European Union did not comment on this request.
6.28.
Given that the requested modification reflects the actual text of Article 2(7) (b) of the Basic AD Regulation, we have modified this paragraph accordingly.
6.29.
Paragraph 7,206: China requests that the Panel modify this paragraph in order to more accurately reflect its arguments.25 The European Union states that it does not understand what China intends by the expression "non-products concerned" in its proposed amended text.26
6.30.
Given that the requested modification reflects China's own arguments as presented to the Panel, we have modified this paragraph, albeit not in the precise terms proposed by China.
6.31.
Paragraph 7,208: China requests that the Panel modify this paragraph in order to more accurately reflect its arguments.27 The European Union considers that China's proposed amendment would insert a detailed account of what China asserted the European Union to have argued in its submissions, and states that it cannot see the useful purpose of such amendment, as the Interim Report gives an account of what the European Union argued.28
6.32.
The Interim and Final Reports summarize the arguments of the parties as we understand them, reflecting those points we consider most important, but obviously are not a complete statement of the sometimes voluminous arguments presented by the parties in their various written and oral submissions and answers to Panel questions. China proposes that we include in our description of its argument much of what it argued at paragraphs 1501-1505 and 1508-1509 of its second written submission, although it cites only paragraph 1501 of that submission in support of its request. Nonetheless, given that the requested modifications reflect China's own arguments, we have modified this paragraph, albeit not in the precise terms, and not to the extent, proposed by China.
6.33.
Paragraph 7,218: China requests that the Panel review the first and penultimate sentences of this paragraph, asserting that they do not correctly represent China's argument, but does not make any suggestions for modifications.29 The European Union notes that China makes a bald statement that sections of the Interim Report do not correctly represent China's arguments, and states that if China seeks amendment of the report, China should indicate what that amendment should be.30
6.34.
We have reviewed this paragraph, which is part of our analysis, in light of the portions of China's submissions cited in China's request for interim review. The sentences objected to by China accurately reflect our understanding of China's arguments, and nothing in the cited portions of China's submissions affects that understanding or our conclusions as set forth in this paragraph. We note that China made no specific proposal for modification, and we are satisfied with, and have therefore made no changes to, this paragraph.
6.35.
Paragraph 7,220: China requests that the Panel review the first sentence of this paragraph, considering that it does not correctly represent China's argument, but does not make any suggestions for modifications.31 The European Union did not comment on this request.
6.36.
We have reviewed this paragraph, which is part of our analysis, in light of the portions of China's submissions cited in China's request. The sentences objected to by China accurately reflect our understanding of China's arguments, and nothing in the cited portions of China's submissions undermines our understanding or our conclusions as set forth in this paragraph. We note that China made no specific proposal for modification, and we are satisfied with, and have therefore made no changes to, this paragraph.
6.37.
Paragraph 7,224: China requests that the Panel modify the last sentence of this paragraph in order to more accurately reflect its arguments.32 The European Union did not comment on this request.
6.38.
The last sentence of paragraph 7,224 states that the conclusion of the panel in Argentina – Poultry Anti-Dumping Duties that a lack of information from a company subject to the investigation, whether or not part of a limited examination, does not justify declining to determine an individual margin for that company, has no bearing on the question before us in this dispute. As the last sentence of paragraph 7,224 does not describe China's arguments, we fail to understand how it "does not correctly represent China's argument". However, we note that the text which China proposes be amended is actually the last sentence of paragraph 7,223. Assuming China is actually requesting that we modify that sentence, in the terms set out in its request for interim review, we note that China's request simply paraphrases language in Argentina – Poultry Anti-Dumping Duties which is quoted in paragraph 7,224. Moreover, the language China proposes we add to paragraph 7,223, which is part of our analysis, is already set out in paragraph 7,208, where China's arguments are described. The last sentence of paragraph 7,223 states that China relies on the Panel Report in Argentina – Poultry Anti-Dumping Duties in support of its position, without describing that position, which is what China proposes that we do. We consider it unnecessary, in the context of our analysis, to repeat the substance of China's position which is described elsewhere in the Final Report, and therefore have made no change to this paragraph.
6.39.
Footnote 416 (now footnote 558): China requests that the Panel delete the second sentence of footnote 416 (now footnote 558), referring in this regard to paragraphs 15-18 of its opening statement at the second meeting. In particular, China recalls its rejection of the view that compliance with Articles 2.1 and 2.4 of the AD Agreement would require something approaching a "distortion analysis".33 The European Union argues that in the passage China proposes be deleted, the Panel states its own view of the practical consequences of China's argument. In the European Union's view, the point the Panel makes is that "[i]n order not to behave with [] "complete disregard" [of the actual value which the proxy is meant to represent] the Member must have an estimation of "the actual value which the proxy is meant to represent"", a view the European Union considers appropriate.34
6.40.
In this footnote we address China's argument that ""in order to be considered to have reasonably exercised its discretion as to the actual mechanics/methodology of the process is, at a bare minimum, to not select a proxy value in complete disregard of the actual value which the proxy is meant to represent, and … that avoiding that could require as little as taking into account the level of economic development of the analogue country, which is quite clearly a goal which can be and is meaningfully pursued by many Members."35 We recognize that China did not argue that a "distortion analysis" was necessary in order to determine the extent of distortion. Nonetheless, we fail to see how an investigating authority could attempt to determine a proxy for the normal value in the terms proposed by China without actually determining, even if only to some extent, what domestic prices would have been but for the fact that the country in question is not a market economy. The sentences which China proposes be deleted accurately reflect our views in this regard, and we have therefore made no changes to this footnote in response to China's request.
6.41.
Paragraph 7,265: China asserts that there is a "tenuous relationship" between the Panel's conclusion that the fair comparison obligation does not "establish[] a general requirement of "fairness" which applies, inter alia, to the selection of an analogue country", and its rejection of the possibility that the fair comparison could inform or otherwise be implicated by any form of analogue country selection methodology, no matter how unreasonable. China requests that the Panel broaden its conclusion to indicate that, apart from not establishing a "general requirement of fairness", the analogue country selection necessarily falls out of the scope of Article 2.4 in such a manner that the Panel need not examine the facts of the particular case. In China's view, this would require the Panel to clarify whether it considers that no aspect of normal value calculation could preclude a fair comparison, or whether, even if that were a possibility, such preclusion would not be inconsistent with Article 2.4.36 The European Union did not comment on this request.
6.42.
We recall our conclusion that the fair comparison obligation in Article 2.4 of the AD Agreement does not establish a general requirement of ""fairness" which applies to the selection of an analogue country". However, we did not "categorical[ly] reject[] the possibility that the fair comparison could inform or otherwise be implicated by any form of analogue country selection methodology, no matter how unreasonable" as asserted by China.37 Consequently, we see no reason to broaden our conclusion in paragraph 7,265 as China requests. We considered and rejected China's argument that Article 2.4 establishes a general requirement of "fairness" which applies to the selection of an analogue country, and in our view, there is no need, in view of the claims and arguments in this dispute, to go beyond that conclusion in the manner requested by China. We therefore have made no changes to this paragraph in response to China's request.
6.43.
Paragraph 7,267: China requests that the Panel modify this paragraph to accurately reflect China's arguments.38 The European Union did not comment on this request.
6.44.
The first requested change reflects in large part the text of paragraph 409 of China's first written submission, and we have modified this paragraph, albeit not in the precise terms proposed by China. China also requests that the phrase "as well as domestic market prices" be deleted from paragraph 7,267, without any explanation for this proposed change. These words appear in paragraph 481 and footnote 218 of China's second written submission, as reflected in this paragraph. We have therefore made no change to this paragraph in response to this aspect of China's request.
6.45.
Footnote 434 (now footnote 576): China asserts that the reference to paragraph 484 of China's first written submission in this footnote is incorrect.39 The European Union did not comment on this assertion.
6.46.
We have reviewed the reference in question, and concluded that China is correct, and have therefore deleted this reference.
6.47.
Paragraph 7,283: China requests that the Panel add the phrase "and the fact that Chinese producers did not have the knowledge of the PCNs of the cooperating Brazilian producers" after the first comma, and add the word "any" after the word "claim", in the first sentence of this paragraph, in order to accurately reflect its arguments, referring in this regard to paragraphs 11 and 22 of its opening and closing oral statements at the second meeting with the Panel, respectively. Second, China requests that the Panel review its conclusions, without making any specific suggestions for modification, contending that (i) the adjustments that were made in the investigation are of a different nature and character, and were based on the data of the Brazilian producers, and the fact that such costs were not incurred by Chinese producers applied to all footwear irrespective of the PCNs; and (ii) the adjustments for children's shoes and for transport and insurance costs are not comparable to the adjustments concerning production processes and costs, time, technology and raw materials which are different as regards the divergent kinds of footwear classified under the same PCN. Finally, China requests that the Panel consider the issue addressed in China's argument that the Commission reclassified sports, sports-like and trekking footwear from PCN category "E" into PCN category "A", leading to the mixing of completely different footwear types, which automatically prevented a fair comparison as required by Article 2.4 of the AD Agreement.40 The European Union contends that the page references cited by China in support of the first aspect of its request are not correct, and asserts that the Panel has adequately addressed the matters referred to by China, and therefore no amendment is necessary.41
6.48.
With respect to the first aspect of China's request, as the European Union notes, the page references cited by China are incorrect. More importantly, the paragraph China proposes to modify sets forth our conclusions. In that context, we see no reason to expand the description of and reference to China's arguments, which are in any case set out in the second and third sentences of paragraph 7,269 and footnote 435 (now footnote 577) of the Final Report. However, we have inserted the word "any" before the word "adjustments" in the first sentence of footnote 435 (now footnote 577) to more accurately reflect China's argument in paragraph 28 of its closing statement at the second meeting with the Panel. With respect to the second aspect of China's request, this paragraph sets forth our conclusion that the use of a PCN system, even with broad categories, does not alter or shift the obligation on parties to demonstrate the need for an adjustment. The nature of the adjustments requested or made does not affect this conclusion. Clearly, in some circumstances the quality and quantity of evidence available to a party seeking to demonstrate the need for an adjustment may be less than in others, but this does not affect the Panel's conclusion. We therefore have made no changes in response to this aspect of China's request. Finally, with respect to the third aspect of China's request, to the extent that China is arguing that the Panel failed to address its argument regarding the Commission's unilateral reclassification of footwear, without seeking the cooperation of the Chinese exporting producers, we recall that China made no claim concerning the reclassification of certain footwear per se. Rather, China argued that the reclassification precluded the possibility of a fair comparison, in violation of Article 2.4, because it mixed different footwear types within a single PCN category.42 We recall that our analysis of China's claim addresses China's arguments regarding the allegedly overly-broad PCN system used by the European Union. The fact that one allegedly overly-broad PCN category was further broadened as a result of the reclassification of certain footwear does not affect our analysis or conclusion with respect to China's claim. We therefore have made no changes in response to this aspect of China's request.
6.49.
Paragraph 7,289: China requests that the Panel modify this paragraph in order to more accurately reflect its arguments.43 The European Union considers that no amendment is necessary.44
6.50.
Given that the requested modification reflects China's arguments as presented to the Panel, we have modified this paragraph accordingly.
6.51.
Paragraphs 7,299 and 7,300: The European Union requests that the Panel modify these two paragraphs, contending that they unfairly imply arbitrariness to the Commission's conduct in not calculating the cap.45China argues that the Panel refers to two distinct issues: (a) the absence of calculation of the cap for profits called for in Article 2.2.2(iii) of the AD Agreement; and (b) the lack of any attempt to do so. China considers that the report accurately describes the investigating authority's conduct during the investigation. China also considers that the failure to calculate the cap for profits called for in Article 2.2.2(iii) in itself is sufficient to show a violation of that provision, such that even without regard to the question of the nature of the European Union's "attempt", the undisputed fact that the European Union did not calculate the cap as called for in Article 2.2.2(iii) is sufficient grounds on which to find inconsistency with that provision.46
6.52.
Article 2.2.2(iii) of the AD Agreement provides that the amounts for profits and SG&A may be determined on the basis of "any other reasonable method, provided that the amount for profit" established pursuant to that method does not exceed the cap defined in that provision.47 Whether or not the method used to calculate the profit was reasonable per se does not affect the requirement that the amount for profit so established not exceed the cap, and does not excuse an investigating authority from satisfying that aspect of Article 2.2.2(iii). Given that there is no evidence that the Commission ever attempted to calculate the cap, and that the Commission did not explain why it did not calculate the cap, we consider that these paragraphs accurately describe our understanding of the facts of the investigation and accurately reflect our views, and therefore deny the European Union's request.
6.53.
Paragraphs 7,300 and 7,301, and footnotes 487 (now footnote 629) and 488 (now footnote 630): TheEuropean Union requests that the Panel modify these paragraphs. The European Union contends that the meaning of the words "the matter" in the third sentence of paragraph 7,300 is unclear, as the Panel could be referring to the issue of whether and how to apply the "cap", or to the issue of whether non-MET company data could be used in calculating the "cap". In either event, the European Union considers that the Panel's finding is not justifiable, asserting that China never argued that the Commission failed to consider the matter of the calculation of the "cap" in general, or in respect of the exclusion of non-MET company data. The European Union maintains that it indicated or implicitly asserted during the panel proceedings that the Commission had considered both the application of the cap, and the question of excluding non-MET data.48 The European Union contends that while panels are free to develop arguments not made by either party with respect to the correct interpretation of the covered agreements, panels cannot make new arguments as to why a measure is WTO inconsistent. The European Union considers that the Panel has not fully addressed the European Union's arguments with respect to the substantive question whether the Commission was justified in concluding that the cap was inapplicable, and requests that the Panel address the European Union's arguments as to why it was impossible to apply the cap in the circumstance of this case, since the Panel's finding in based on the consideration of this matter by the Commission. The European Union further asserts that the Panel cannot base its findings on an argument that was never raised by China, and requests that the Panel modify its findings accordingly. Finally, the European Union considers that, once it has revised the report as suggested by the European Union, the Panel need not address the European Union's argument based on the reasonableness of the amounts determined by the Commission for the SG&A and profit, and may exercise judicial economy in this regard.49
6.54.
China understands the Panel to have found that the European Union did not make any attempt to calculate the cap provided for in Article 2.2.2(iii) of the AD Agreement at the time it made its determination, which, if it had been done, would have included the possible use of data pertaining to other sampled footwear producers. China considers that, in this context, the European Union's comment on the meaning of the words "the matter" seems irrelevant. China asserts that it approached the Article 2.2.2 claim from various angles, arguing, inter alia, that the calculation of the cap itself and the sub-requirement that the benchmark should relate to "products of the same general category in the domestic market of the country of origin" are non-negotiable conditions precedent to the WTO-consistent use of the method at issue. Moreover, China asserts that it argued that the European Union failed to consider data from other sampled producers in order to calculate the cap under Article 2.2.2(iii), and that the European Union had ample opportunity to set out its arguments in this regard. China considers that the Panel does not accuse the European Union of "failing to consider the matter in general", but rather that it did not even attempt to calculate the cap called for in Article 2.2.2(iii). China understands the Panel to have concluded that a lack of information does not excuse the European Union from satisfying the requirement to calculate the cap, and thus the European Union violated Article 2.2.2(iii). China observes that, assuming its understanding is incorrect, the Panel's exercise of judicial economy on the "chapeau question" of reasonableness, in footnote 489 (now footnote 631), would no longer be justifiable to the extent that the resolution of that question would be essential to the determination that the European Union violated Article 2.2.2(iii).50
6.55.
In our consideration of China's claim concerning Article 2.2.2 of the AD Agreement, we concluded, as a matter of fact, that the Commission did not, and made no attempt to, calculate the cap called for in Article 2.2.2(iii). There is no explanation of why it failed to do so in the Definitive Regulation, or any indication that it considered calculation of the cap at all. Nothing in the European Union's request for interim review demonstrates otherwise. The fact that the Commission sought to use a "reasonable" method to determine the profits for Golden Step does not justify this failure. Given our finding concerning failure to calculate the cap, we continue to see no reason to address whether the method used by the Commission was otherwise reasonable. In our view, even if it were, this would not affect our conclusion as to the violation of Article 2.2.2(iii) in the failure to calculate the cap. However, we have amended paragraph 7,300 by replacing the word "matter" in the third sentence with the phrase "calculation of the cap" in order to clarify our views.
6.56.
Title (g) and Paragraphs 7,302 to 7,315: China requests that the Panel amend the phrasing in these sections to more accurately reflect the facts of the Definitive Regulation.51 The European Union did not comment on this request.
6.57.
China is correct that referring to "STAF above €7.50" is not the same as referring to "STAF of not less than €7.50". Given that the latter reflects the usage in the Definitive Regulation, we have modified these sections of the Final Report accordingly.
6.58.
Paragraph 7,303: China requests that the Panel modify this paragraph in order to more accurately reflect its arguments.52 The European Union notes that it believes that China intended to refer to Article 2.6 rather than to Article 6.2.53
6.59.
China has requested the inclusion of the phrase "based on the ordinary meaning of the word "product" and the context of Article 6.2" in this paragraph. As the European Union has suggested, this appears to be an error, and we believe that China intended to refer to Article 2.6, rather than Article 6.2. Assuming this to be the case, the requested modification reflects China's own arguments as presented to the Panel, and we have therefore modified this paragraph accordingly. However, to the extent that China may indeed have intended to refer to Article 6.2, we would deny China's request, as China has not previously referred to Article 6.2 in this context.
6.60.
Paragraph 7,342: China requests that the Panel modify this paragraph in order to more accurately reflect its claims.54 The European Union contends that China shifted its arguments during the course of the proceedings, and suggests that any modification to China's arguments should be in addition to the summary of China's arguments already in the Report, rather than a replacement thereof. The European Union states that, as a general principle, China's arguments should be summarised on the basis of China's submissions to the Panel, and not on the basis of how China rephrases them in its comments on the Interim Report.55 The European Union states that these comments also apply to China's requests with respect to paragraphs 7,343, 7,359, 7,360, 7,361, 7,367, and 7,369 of the Interim Report.
6.61.
The Interim Report summarizes the European Union's concerns with respect to the shifting focus of China's claims in paragraph 7,363, and sets out our understanding of this matter in paragraph 7,371 and footnote 615 (now footnote 760). Paragraph 7,342 introduces China's claims regarding the selection of the sample of EU producers in the context of the injury examination, and refers to both the claims concerning the expiry review, and those concerning the original investigation. Thus, we have maintained the reference in this paragraph to the original investigation. Otherwise, given that the requested modifications reflect China's own arguments as presented to the Panel, we have modified this paragraph to better reflect China's arguments as made during the panel proceeding, albeit not in the precise terms suggested. In doing so, we have not replaced the existing description of China's arguments, but added to it as appropriate.
6.62.
Paragraphs 7,343 and 7,344: China requests that the Panel modify these paragraphs in order to more accurately reflect China's arguments concerning claims II.2 and II.3(i).56 The European Union raised concerns with respect to this request, as noted above in paragraph 6.60, which we have taken into consideration.
6.63.
We understand, as China points out, that its claims II.2 and II.3(i) are independent claims. However, both claims concern alleged violations in the procedure to select the sample of the EU industry, and we considered it appropriate to examine them together to avoid excessive repetition and ensure clarity and consistency in our analysis of China's claims. We have reviewed the references China cites in support of its request to include a reference to "consent", and in our view, they do not support China's request. We note, however, that China's position in this regard is in any case set out in the description of China's arguments at paragraph 7,360, and examined in paragraph 7,370 of the Final Report. With respect to the rest of China's proposed modifications, given that they reflect China's own arguments as presented to the Panel, we have modified this paragraph, albeit not in the precise terms proposed by China. In doing so, we have not replaced the existing description of China's arguments, but added to it as appropriate.
6.64.
Paragraph 7,349 and footnote 574 (now footnote 719): The European Union requests that the Panel modify the second sentence of this paragraph in order to clarify the cross-reference between the explanations and arguments in the context of the expiry review and those referring to the original investigation, asserting that the second sentence of this paragraph and the footnote relate to the expiry review, while paragraph 7,349 as a whole refers to China's claim with respect to the selection of the sample in the original investigation.57 China does not believe that a reference to the analysis of the second part of claim III.5 is necessary, given that the Panel noted in footnote 562 (now footnote 704) that China's claim III.5 is analysed in two different sections of the report.58
6.65.
The European Union is correct that paragraph 7,349 as a whole refers to the original investigation. However, we recall that we divided our consideration of China's claim III.5 into two parts, and this section of our report addresses the first part, concerning the procedure for the selection of the sample of the EU industry. In this regard, footnote 573 (now footnote 718) cites the part of European Union's first written submission where it refers, in the context of the original investigation, to its arguments on this issue with respect to the expiry review. As we understand it, paragraphs 646 et seq. of the European Union's first written submission, referred to in its request for interim review, address the second part of China's claim III.5, which we address at paragraphs 7,406-7.463 of the Final Report, together with China's claims III.8 and II.4. As the European Union made no specific suggestions, it is not entirely clear what modifications it is seeking. However, we have amended paragraph 7,349 in order to clarify that we took into account the European Union's arguments concerning sample selection in the context of the expiry review in considering the first part of China's claim III.5, concerning the original investigation.
6.66.
Paragraph 7,359: China requests that the Panel modify this paragraph in order to more accurately reflect its arguments.59 The European Union raised concerns with respect to this request, as noted above in paragraph 6.60, which we have taken into consideration.
6.67.
Paragraph 7,359 is part of our evaluation of China's claims, and sets forth our understanding of the arguments and resolution of the claims. We see no reason to modify the text of this paragraph, which accurately reflects our understanding and views, to refer to China's arguments in different and more expansive terms. We therefore have made no changes to this paragraph in response to China's request.
6.68.
Paragraph 7,360: China requests that the Panel modify this paragraph, asserting that it has not claimed that the difference in the amount of information requested from the different groups demonstrates that the Commission was unfair.60 The European Union raised concerns with respect to this request, as noted above in paragraph 6.60, which we have taken into consideration.
6.69.
Paragraph 7,360 is part of our evaluation of China's claims, and sets forth our understanding of the arguments and resolution of the claims. We see no reason to modify the text of this paragraph, which reflects our understanding and views, to refer to China's arguments in different terms. We therefore have made no changes to this paragraph in response to China's request.
6.70.
Paragraph 7,361: China requests that the Panel review the first sentence of this paragraph, which, China contends, is an incorrect assessment of its claim and arguments. China also asserts that the references to China's written submissions in footnote 592 (now footnote 737) do not support the interpretation set out in this paragraph, but makes no specific proposals in this regard. In addition, China requests that the Panel modify the fourth and fifth sentences of this paragraph in order to more accurately reflect China's arguments.61 The European Union raised concerns with respect to this request, as noted above in paragraph 6.60, which we have taken into consideration.
6.71.
Although China has made no specific proposal for modification of the first sentence of this paragraph, as we understand it, China objects to the reference to "even-handed treatment". It is true that the cited portions of China's submissions do not expressly refer to "even-handed treatment". However, in its arguments to the Panel, China repeatedly referred to the notion of "even-handed treatment" with respect to the selection of the sample for the purpose of the injury assessment. Moreover, as discussed in paragraph 7,371 of the Final Report, China appears to have shifted the focus of its claim throughout the Panel proceedings.62 It is surprising that China seems now to suggest that this argument was never made and should not be reflected in the report. Thus, we deny China's request with respect to the first sentence, and in order to clarify the basis for our understanding of China's argument, we have modified footnote 592 (now footnote 737) to include references to China's submissions where it made arguments regarding "even-handed treatment" with respect to this claim. Regarding the proposed modification of the fourth sentence, paragraph 7,361 is part of our evaluation of China's claims, and sets forth our understanding of the arguments. It accurately reflects our understanding and conclusions, and we see no reason to modify the text of this paragraph to refer to China's arguments in different terms. We therefore have made no changes in response to this aspect of China's request. Regarding China's request that the Panel add a new sentence after the fourth sentence, China has not provided any reference to where in its submission China presented this argument, and we therefore have made no changes in response to this aspect of China's request. Finally, concerning the requested modification to the fifth sentence, we note that the point China suggests be included is clearly stated in the following sentence, and the accompanying footnote contains additional details in this regard. We therefore consider the proposed modification unnecessary, and have made no changes in response to this aspect of China's request.
6.72.
Paragraph 7,367: With reference to the last sentence of this paragraph, China states that it has not claimed that the same information should be solicited from all groups of interested parties, and that the crux is that the relevant information should be sought from all parties subject to sampling in an objective and unbiased manner, but makes no specific suggestion for modification.63 The European Union raised concerns with respect to this comment, as noted above in paragraph 6.60.
6.73.
We understand that China does not argue that the same information should be solicited from all interested parties, as reflected in paragraph 7,359 of the Final Report, which states that "China recognizes that each group of interested parties is required to provide different types and amounts of information for sampling purposes, and does not argue that 'the same information, or the same quantity of information is required to be sought from all sets/groups of interested parties'". In paragraph 7,367, however, we set forth our understanding of Article 3.1 of the AD Agreement, not China's arguments. In the absence of any specific request by China with respect to this paragraph, we see no reason to modify this paragraph and have made no changes to it.
6.74.
Paragraph 7,369: China requests that the Panel review the third sentence of this paragraph, asserting that its arguments are not correctly represented, referring in this regard to its response to Panel question 40, paragraphs 291-294. China also requests that the Panel review the fourth and seventh sentences of this paragraph, asserting that it demonstrated that the European Union did not possess the relevant information when the sample was selected.64 The European Union raised concerns with respect to this comment, as noted above in paragraph 6.60, which we have taken into consideration. In addition, the European Union contends that China attempts to re-argue its case and re-open issues to which the European Union already responded. The European Union requests that, to the extent that the Panel considers it necessary to grant China's request, the European Union's submissions on the issues raised be appropriately considered.65
6.75.
With respect to the third sentence of this paragraph, we have reviewed the references cited by China. In Panel question 40(b), we asked China whether "even-handed treatment" would require that information be sought even if a sample can be selected on the basis of "objective examination" of "positive evidence" already available to the investigating authority. In responding to this question, China stated that the question is premised on the assumption that "positive evidence" is already available to the investigating authority, the scenario posed by the question, and went on to state that the information available to the investigating authority should form the basis of the sample selection, provide the positive evidence necessary for sampling, and be credible and affirmative, and that the investigating authority should have the consent of the producers to be sampled.66 Despite its long answer and the statement that even-handedness is "complied with" if positive evidence, as described by China, is available to the investigating authority, China did not specifically answer the Panel's question. Paragraph 7,369 of the Final Report states that China's arguments suggest that, in order to be "even-handed", sampling forms must be sent to every interested party, regardless of whether the investigating authority already possesses what it considers to be sufficient information for the purposes of selecting a sample. We fail to see how China's response to Panel question 40(b) shows that that paragraph 7,369 does not correctly represent China's argument. In our view, the third sentence in paragraph 7,369 accurately reflects China's arguments that the establishment of the sample of all interested parties should be done in an even-handed manner, and that the European Union failed to do so, at least in part because it did not solicit the information requested in sampling forms from one group of interested parties, the complainant EU producers, while all other parties were required to complete detailed sampling forms in order to be considered for inclusion in the sample.67 Finally, we recall that paragraph 7,369 is part of our analysis of China's claim, and thus reflects our understanding of China's arguments and resolution of the claim. China has not pointed to any evidence that demonstrates that our understanding is incorrect. Therefore, we have not modified the third sentence of this paragraph in response to China's request.
6.76.
Concerning the fourth and seventh sentences of this paragraph, China requests that the Panel review these sentences "in the context of the facts of this case" asserting that it demonstrated that the Commission did not possess the relevant information concerning the pool of complainant EU producers when the sample was selected, but makes no specific suggestions for changes to the Interim Report. Paragraph 7,369 addresses whether the Article 3.1 requirement of "objective examination" entails "even-handed treatment" in the collection of information for purposes of selecting a sample, and concludes that Article 3.1 does not establish any particular methodology that should be used by the investigating authority to collect the information considered by the investigating authority necessary for the selection of the sample. We did not specifically address whether the Commission possessed the information it considered necessary in order to select the sample as a matter of fact. Rather, we addressed whether Article 3.1 would require the Commission to send sampling forms when it already possessed the necessary information, and concluded that it would not. China's arguments regarding the information allegedly not possessed by the Commission do not affect this finding. Finally, we recall that paragraph 7,369 is part of our analysis of China's claim, and thus reflects our understanding of China's arguments and resolution of the claim. Therefore, we have not modified the fifth and seventh sentences of this paragraph in response to China's request.
6.77.
Paragraph 7,370: China requests that the Panel review this paragraph with respect to whether consent to be sampled had been given by EU producers before the sample was selected.68 The European Union considers that China attempts to re-argue its case and re-open issues to which the European Union already responded. The European Union requests that, to the extent that the Panel considers it necessary to grant China's request, the European Union's submissions on the issues raised be appropriately considered.69
6.78.
In paragraph 7,370, we concluded that nothing in Article 3.1 of the AD Agreement requires that consent must be given by each company considered for selection of the sample, and that even if such a requirement could be implied, the very act of participating as complainants in an anti-dumping investigation suggests a willingness to be considered for inclusion in a sample. In our view, the most that can be concluded based on the facts and China's arguments is that the consent of the individual companies was communicated to the Commission on the same day the sample was selected, but not after the selection. As we found that individual consent by individual producers was not required, we consider that it is not necessary to make a factual finding as to the communication of individual companies' consent. Therefore, we have not modified this paragraph in response to China's request.
6.79.
Paragraph 7,378: China requests that the Panel modify this paragraph to more accurately reflect its arguments.70 The European Union did not comment on this request.
6.80.
At paragraph 657 of its second written submission, cited by China in support of its request, China argues that factors other than the volume of production, the main factor, "cannot take precedence over the obligation to establish the sample based on the 'largest percentage of volume' of production". In our view, this does not support the assertion that the European Union in fact "gave precedence" to criteria not found in Article 6.10, as set out in China's proposed modification. The assertion that the volume of production was the principal basis for the selection of the sample is already reflected in the previous sentence of paragraph 7,378, and we therefore see no reason to include it once more, as proposed by China. Therefore, we have not modified this paragraph in this regard in response to China's request.
6.81.
Paragraph 7,381: China requests that the Panel amend this paragraph to reflect that it reiterated that Article 6.10 provides a good contextual basis for determining the consistency of the sample with the general requirements of "positive evidence" and "objective examination" based on the European Union's assertions in two other disputes, EC – Fasteners (China) and EC – Salmon (Norway) .71 The European Union maintains that its statements made in other disputes should not be taken out of the context in which they were made and which was conveniently ignored by China.72
6.82.
In paragraph 7,381, which is part of our analysis, we addressed and rejected China's assertion that Article 6.10 of the AD Agreement provides a good contextual basis for determining the consistency of the sample with the requirements of "positive evidence" and "objective examination". In this context, we do not consider it necessary or relevant to consider what the European Union argued with respect to this matter in other WTO dispute settlement proceedings. Nor is the fact that China cited and relied on the European Union's assertions in other disputes relevant to our analysis and conclusion in this regard. Therefore, we have not modified this paragraph in response to China's request.
6.83.
Paragraph 7,383: China requests that the Panel amend this paragraph to more accurately reflect its arguments, stating that it disagrees with the Panel's statement that China's arguments concerning the violation of Article 3.1 in the context of its claim II.3(ii) are consequential and to the extent it made an independent claim under Article 3.1, its only argument was that the sample included a company that outsourced production.73 The European Union recalls that it responded to all arguments raised by China.74
6.84.
We note that, contrary to China's statement, we recognized at paragraph 7,383 of the Final Report that China made two arguments, one concerning the inclusion of a company that outsourced production during the relevant period, and the second concerning the small volume of production represented by the sample, in support of its position concerning the representativeness of the sample of the domestic industry, to the extent it made an independent claim under Article 3.1 in this regard. We considered and rejected both of these arguments in paragraphs 7,384 to 7,387 of the Interim Report. Second, we consider it clear from China's arguments to the Panel that its claims of violation of Article 3.1 of the AD Agreement and Article VI:1 of the GATT 1994 are consequential to the asserted violation of Article 6.10 of the AD Agreement. We note in this regard that China argued that "[i]t follows [from an inconsistency with Article 6.10] that the European Union's evaluation of injury to the domestic industry … was inconsistent with Articles 3.1 of the [AD Agreement] as well as Article VI:1 of the GATT 1994."75 In our view, China's submissions clearly identify these as consequential claims.76 In addition, the references provided by China do not support its request. Paragraphs 506-507 and 513-514 of China's first written submission do not address this issue, and paragraphs 658-670 of China's second written submission, when referring to the different claims, explain that some claims are consequential,77 or address the producer that outsourced its entire production, which we addressed in paragraph 7,384. We note that China did make a different independent claim of violation of Article 3.1, with respect to sampling for purposes of the examination of injury, which we addressed elsewhere in the Interim Report. However, this does not change the fact that, in the context of its claims and arguments concerning the representativeness of the sample of the domestic industry, the claim of violation of Article 3.1, as presented by China in its submissions to the Panel, is consequential to its claim of violation of Article 6.10. Finally, we note that China has made no specific suggestions as to proposed changes. Therefore, we have not modified this paragraph in response to China's request.
6.85.
Paragraph 7,384: China requests that the Panel modify this paragraph to more accurately reflect its arguments.78 With respect to this request, and China's requests concerning paragraphs 7,386, 7,424, and 7,425, the European Union states that, as a general principle, China's arguments should be understood and summarised on the basis of China's submissions made before the Panel, and not on the basis of how China rephrases them in its comments on the Interim Report, and urges the Panel to carefully review China's request and avoid making changes unsupported by China's submissions actually made in the course of the proceeding.79
6.86.
Given that the requested modification reflects China's own arguments as presented to the Panel, we have modified this paragraph, albeit, taking account of the European Union's comment, not in the precise terms suggested by China.
6.87.
Paragraph 7,386: China requests that the Panel modify this paragraph to more accurately reflect its arguments.80 As noted in paragraph 6.85 above, the European Union urges the Panel to carefully review China's request and avoid making changes unsupported by China's submissions during the course of the proceeding.81
6.88.
Given that the requested modification reflects China's own arguments as presented to the Panel, we have modified this paragraph, albeit, not in the precise terms suggested by China.
6.89.
Paragraph 7,424: China requests that the Panel modify this paragraph in order to more accurately reflect its arguments.82 As noted in paragraph 6.85 above, the European Union urges the Panel to carefully review China's request and avoid making changes unsupported by China's submissions during the course of the proceeding.83
6.90.
Given that the requested modification reflects China's own arguments as presented to the Panel, we have modified this paragraph, albeit, taking account of the European Union's comment, not in the precise terms suggested by China.
6.91.
Paragraph 7,425: China requests that the Panel modify this paragraph in order to more accurately reflect its arguments.84 As noted in paragraph 6.85 above, the European Union urges the Panel to carefully review China's request and avoid making changes unsupported by China's submissions during the course of the proceeding.85
6.92.
Given that the requested modification reflects China's own arguments as presented to the Panel, we have modified this paragraph, albeit, taking account of the European Union's comment, not in the precise terms suggested by China.
6.93.
Paragraph 7,428: China requests that the Panel modify this paragraph to more accurately reflect the facts, arguing that the Panel did not take into account the facts of the current case, notably the particularly unrepresentative and un-objective data sources used by the Commission for collecting the information regarding the macroeconomic injury indicators concerning the like product for the review investigation period and for cross-checking the information collected.86 The European Union considers that China attempts to re-argue its case and re-open issues to which the European Union already responded. To the extent that the Panel considers it necessary to grant China's request, the European Union requests that its submissions on the issues raised be appropriately considered.87
6.94.
China expresses disagreement with the conclusion in this paragraph, based on its own view of the facts, but makes no specific suggestions as to modifications. Nonetheless, we have carefully reviewed the facts referred to by China, and consider that paragraphs 7,424-7.425 correctly reflect our understanding of the facts. Our findings in paragraph 7,428 were obviously made with these facts in mind. China makes much of the alleged impossibility of verification of estimates and other information, and of the sources of information used by the Commission. However, as stated in this paragraph, we consider that it is normal to have flaws or gaps in the information obtained by an investigating authority in the context of its examination of injury. While imperfect information may require additional explanations of the facts found and the reasoning underlying the investigating authority's determinations, we see nothing in the AD Agreement that might preclude consideration of and reliance on such information. In addition, we recall that verification of information is not a formal requirement under the AD Agreement. Thus, we have made no changes to this paragraph in response to China's request.
6.95.
Paragraph 7,444: China asserts that the last sentence of this paragraph is incorrect in light of its answer to Panel question 92, in particular paragraph 550, but makes no specific request in this regard.88 The European Union considers that the Interim Report correctly describes China's arguments, and asserts that this paragraph merely observes that the European Union disregarded certain factors, but makes no arguments as to why the European Union should have done otherwise, and therefore no amendment is necessary.89
6.96.
We have carefully reviewed China's answer to Panel question 92. We recall our view that Article 3.4 of the AD Agreement does not refer to either sales values or market shares based on turnover, and that consideration of these factors is not required. China's answer to Panel question 92, including paragraph 550, discusses sales values and market shares based on turnover, but does not argue that the fact that the Commission did not consider these factors undermined the Commission's reasoning and conclusions based on the factors it did consider, or the injury determination as a whole, as we indicate in the last sentence of paragraph 7,444. Merely that China presented an argument supporting a different conclusion based on factors the Commission did not consider, i.e., sales value and market share based on turnover, does not demonstrate that consideration of those factors is required, or that a failure to consider them undermines the analysis that actually was undertaken. Thus, we have made no changes to this paragraph in response to China's request.
6.97.
Paragraph 7,484: The European Union requests that the Panel modify this paragraph in order to express what it understands to be the Panel's intention.90China did not comment on this request.
6.98.
Having considered the European Union's comment, we have modified this paragraph, albeit in different terms than proposed by the European Union, to more clearly express our views.
6.99.
Paragraph 7,501: China requests that the Panel review the penultimate sentence of this paragraph, asserting that it is incorrect. China refers in this regard to paragraphs 577-580 of its first written submission and evidence it proffered to show that EU producers were being injured by structural inefficiency. In addition, China asserts that it referred to specific recitals of the Review Regulation which, it asserts, contradicted the Commission's finding of no break in causal link on account of this factor, and provided additional evidence in its second written submission. China further requests that the Panel clarify what facts are referred to as not disputed by China.91 The European Union understands the Panel to be referring to evidence "that was not considered", and contends that general remarks about trade competition attributed to Commissioner Mandelson cannot seriously be regarded as "evidence" regarding the particular situation of the footwear industry.92
6.100.
We recall that China argued that EU producers were incapable of competing with increasing globalisation and were increasingly resorting to outsourcing or changing their business structure, due to their structural inefficiency, and presented evidence to support its view that such inefficiency is a result of the fact that the EU industry is comprised of very small-scale producers, employing a small number of workers, and of the European Union's high labour cost.93 We concluded that the Commission's conclusion in the Review Regulation, that lack of efficiency and structural problems in the industry did not break the link between the dumping and the injury, was reasonable, based on the facts, and a conclusion which could be reached by an unbiased and objective investigating authority. Nothing in China's arguments during the proceeding, or in its request for review, points to evidence that was not considered by the Commission in reaching its conclusion, or disagrees with the facts as stated by the Commission in the Review Regulation concerning this issue. It is these facts that we consider China did not dispute. We agree with the European Union that then-Commissioner Mandelson's statement is not directly relevant to this issue, as it does not refer to the footwear industry, but merely to "Asia's natural and legitimate low-cost advantages", which says nothing about the alleged structural inefficiency of the EU industry as a factor causing injury to the domestic industry. Based on the foregoing, we are satisfied that the penultimate sentence of this paragraph accurately reflects our views, and we have therefore made no change to it in response to China's request.
6.101.
Paragraph 7,504: The European Union suggests that the Panel modify this paragraph in order to more accurately reflect the Panel's apparent intention.94China did not comment on this request.
6.102.
Having considered the European Union's suggestion, we have modified this paragraph to more clearly express our views, albeit not in the precise terms proposed by the European Union.
6.103.
Paragraph 7,510: China requests that the Panel review the fourth sentence of this paragraph and the accompanying footnote 891 (now footnote 1038), asserting that the references in the footnote do not indicate that the Commission assessed the factor of high labour costs in the Review Regulation or otherwise.95 The European Union considers that the Panel's reference is to the explicit consideration of structural inefficiency in the recitals quoted by the Panel at paragraph 7,498, and thus, the European Union considers that the existing text is accurate.96
6.104.
We recall our view that "high labour cost" was raised in the context of one party's argument concerning the structural inefficiency of the EU production, and not as an independent "other factor", and was considered in the European Union's analysis of the alleged structural inefficiency of the EU industry, as set out at paragraphs 7,497-7.501 of the Interim Report. We consider our statement accurate. Nonetheless, in order to clarify the basis for our views, we have added a new footnote 1037, referring to recital 271 of the Review Regulation, where the issue of labour costs is addressed in the context of the alleged structural inefficiency of the EU industry.
6.105.
Paragraph 7,511: The European Union requests that the Panel modify this paragraph in order to more accurately reflect its arguments.97China did not comment on this request.
6.106.
The text as currently drafted more closely follows the phrasing of the European Union's argument in paragraph 345 of its first written submission, where it stated that "[o]utsourcing was detected, analysed, and fully taken into account in the injury analysis in the context of sampling", than does the European Union's proposed modification. We have therefore made no changes to this paragraph in response to the European Union's request.
6.107.
Paragraph 7,544: China requests that the Panel modify this paragraph in order to more accurately reflect its arguments.98 The European Union did not comment on this request.
6.108.
Not all of China's proposed modifications are cited to the submissions where the amendments it seeks can be substantiated as having been made during the proceedings before the Panel. Nonetheless, and in the absence of any objection from the European Union, we carefully reviewed the references given, and are satisfied that the requested modifications reflect China's arguments as presented to the Panel. We have therefore modified this paragraph, albeit not in the precise terms proposed by China.
6.109.
Paragraph 7,563: China requests that the Panel modify this paragraph to accurately reflect its arguments.99 The European Union did not comment on this request.
6.110.
China has not cited the submissions where the amendments it seeks can be substantiated as having been made during the proceedings before the Panel. Nonetheless, and in the absence of any objection from the European Union, we have reviewed China's arguments and are satisfied that the requested modifications reflect China's arguments as presented to the Panel. We have therefore modified this paragraph, albeit not in the precise terms proposed by China.
6.111.
Paragraph 7,615: China requests that the Panel modify this paragraph to better reflect its arguments, referring in this regard to paragraph 76 of its closing statement at the second meeting with the Panel.100 The European Union argues that the submission referred to by China does not contain evidence that the Commission's sample selection was irrevocable and, in any event, the closing statement at the second meeting is not an occasion on which evidence may be presented.101
6.112.
We note that although China's comment refers to paragraph 7,615 of the Interim Report, the text to which it proposes modifications is actually in paragraph 7,621 of the Interim Report. More importantly, we agree with the European Union that the submission cited by China contains no evidence that would substantiate China's assertion that the Commission's selection of the sample of EU producers was irrevocable. Indeed, the cited paragraph does not even refer to the alleged irrevocability of the Commission's sampling selection. We therefore continue to consider that while China has presented as an uncontested fact that the Commission's selection of the sample of EU producers was irrevocable, it has provided no evidence in support of this assertion, and therefore we have made no changes to either paragraph 7,615 or paragraph 7,621 in response to China's request.
6.113.
Paragraph 7,623: China requests that the Panel either delete or modify the third sentence of this paragraph, asserting that it is not correct, referring in this regard to paragraph 957 of its second written submission.102 The European Union notes that paragraph 957 of China's second written submission refers to the names of the selected companies and not to the number in each member State, which is the topic addressed by the Panel in this paragraph of its Report.103
6.114.
We share the European Union's understanding of paragraph 957 of China's second written submission. We therefore continue to consider that China has not explained how the "number" of the sampled companies from each member State was relevant to or considered by the Commission in its selection of the sample, and therefore have made no changes to this paragraph in response to China's request.
6.115.
Paragraph 7,630: China requests that the Panel review the third, fourth, and fifth sentences of this paragraph, contending that they misrepresent the facts and China's arguments, referring in this regard to paragraphs 966-967 of its second written submission where, China asserts, it specifically referred to instances in the Review Regulation showing that the European Union used the revised data.104 The European Union disagrees with China, and considers that the Panel's account of the situation is correct.105
6.116.
We have carefully reviewed paragraphs 966-967 of China's second written submission, and the parts of the Review Regulation referred to in these paragraphs, and do not agree that they demonstrate, as China asserts, that the Commission used the revised production and sales data of all the EU producers, the complainants, and all the sampled EU producers to determine the total production represented by the sample after the discovery that one sampled producer had discontinued production during the review investigation period. We therefore see no basis for China's contention that paragraph 7,630 of the Interim Report misrepresents the facts or the arguments of China, and have therefore made no changes to this paragraph in response to China's request.
6.117.
Paragraph 7,640: China requests that the Panel review or clarify the third sentence of this paragraph, asserting that the fundamental aim of the various provisions of Article 6 is to ensure that all interested parties have a full opportunity for the defense of their interests, and contending that if interested parties may not participate in the proceeding as and when they choose, Article 6.2 would be rendered nugatory and irrelevant. In light of the foregoing, China requests that the Panel review its conclusions as well.106 The European Union considers that the Panel's position regarding the participation of parties in the investigation is clearly established in the report, and gives no grounds for China's notion that the right of parties to defend their interests would be rendered nugatory or irrelevant.107
6.118.
Our statement in the third sentence of this paragraph is based on the report of the Appellate Body in US – Oil Country Tubular Goods Sunset Review, which states that Article 6.2 does not provide an "indefinite" right to parties to defend their interest, and does not extend so far "as to enable respondents to submit relevant evidence, attend hearings, or participate in the inquiry as and when they choose."108 However, to clarify the basis for our statement, we have included, in footnote 1127 (now footnote 1277) a cross-reference to paragraph 7,604 of the Interim Report, where the Appellate Body's report in US – Oil Country Tubular Goods Sunset Review is quoted and cited, and have added new footnotes 1249, 1269, and 1474 making the same reference.
6.119.
Paragraph 7,647: China requests that the Panel review its conclusion in this paragraph, asserting that it is not correct in light of its finding in paragraph 7,806.109 The European Union did not comment on this request.
6.120.
We note that while China's request refers to paragraph 7,647 of the Interim report, the text to which it refers is in paragraph 7,648. More importantly, we have reviewed our conclusion in paragraph 7,648, and conclude that as set forth, it is indeed inconsistent with the conclusion in paragraph 7,806. We have therefore reconsidered the parties' arguments in this regard. On the basis of that reconsideration, we conclude that China has not demonstrated that the European Union violated Articles 6.4 and 6.2 with respect to the PCN information of the producers referred to by China, because there is no evidence that interested parties requested to see the information of the producers at issue and were denied an opportunity to do so. We have therefore modified paragraph 7,648 of the Final Report to set out this different reasoning, rejecting China's claims under Articles 6.2 and 6.4, and made a conforming modification to paragraph 7,650 of the Final Report.
6.121.
Paragraph 7,693: China requests that the Panel revise the last sentence of this paragraph, which it considers to be incorrect in light of the first sentence of paragraph 7,697 of the Interim Report, and presents two alternative proposed modifications.110 The European Union considers that the second alternative proposed by China would radically change the Panel's conclusion, and that China has presented no basis for justifying such a change, but does not comment on China's first proposed modification.111
6.122.
Paragraph 7,693 of the Interim Report reflects the fact that, in the complaint and the accompanying letter, the CEC claimed confidential treatment and demonstrated good cause on behalf of the complainants and supporters. China does not dispute that the complaint and accompanying letter set forth a request for confidential treatment and demonstration of good cause by the CEC on behalf of the complainants and supporters. China does dispute that such a request and demonstration are a sufficient basis for granting confidential treatment, arguing that the supporters declared support for the complaint, but did not formally authorize the CEC to act on their behalf. Therefore, China asserts, the CEC was in fact acting only on behalf of complainants. The last sentence of paragraph 7,693 does not make a conclusion as to whether the CEC was empowered to act on behalf of supporters, but merely states the fact that the complaint and accompanying letter set forth a request for confidential treatment on behalf of, inter alia, the supporters of the complaint. We therefore consider that the last sentence of this paragraph accurately reflects the facts, and have made no change to this paragraph in response to China's request.
6.123.
Paragraph 7,694: China requests that the Panel revise the first and last sentences of this paragraph. According to China, these sentences are based on the factually incorrect premise that the CEC filed information on behalf of supporters, as the 36 declarations of support were filed by the "supporters" themselves in response to a request by the European Union, referring in this regard, to Exhibit CHN-108 and paragraph 773 of the European Union's first written submission.112 The European Union acknowledges that the 36 declarations of support referred to by China were submitted by the companies concerned to the Commission in response to enquiries by the Commission, but argues that the companies were giving their support to the complaint, which requested confidentiality for complainants and supporters.113
6.124.
Paragraph 7,694 of the Interim Report addresses China's argument with respect to the confidential treatment granted by the European Union to the names of the "complainants" and "sampled producers", not the confidential treatment accorded to the names of the 36 supporting producers. We thus fail to see the relevance of China's arguments and therefore have made no change to this paragraph in response to China's request.
6.125.
Footnote 1254: China disagrees with the footnote 1254 of the Interim Report, referring in this regard to paragraph 1331 of its first written submission, where it alleged that no meaningful summaries or no summaries at all were provided of the blanked out information in the non-confidential versions of these declarations of support, but does not make any specific request for modification.114 The European Union notes that should the Panel address the issue of non-confidential summaries, the confidential information in the support statements was summarised in the Note for the File of 6 July 2005, Exhibits CHN-108 and EU-16.115
6.126.
We have reviewed the arguments referred to by China, which indicate that China did contest the adequacy of the non-confidential versions of the 229 declarations of support. Indeed, we addressed China's arguments in this regard in paragraphs 7,722 and 7,732-7.735 of the Interim Report. We therefore have deleted footnote 1254, as it was incorrect. In order to clarify our findings in this regard, we have amended paragraph 7,735 of the Final Report by adding the following statement: "Having found no violation of Article 6.5, we consider that there is no basis for China's claim under Article 6.5.1, which we recall applies only with respect to confidential information provided by interested parties."
6.127.
Footnote 1277 (now footnote 1426): China considers it necessary to clarify that what the Panel refers to as "what appears to be the first page of these support forms" which "contains no data" is found on all ten support forms of the 36 producers that supported the complaint, and that what China refers to as the "deleted" information in the example in paragraph 1328 of its first written submission refers to the 229 declarations of support of producers on behalf of which the complaint was filed. China further clarifies that it included one example of these declarations, in Exhibit CHN-108, because all the other 228 pages are virtually identical, but remains at the Panel's disposal to provide a copy of the remaining 228 declarations of support, if necessary. However, China makes no specific request for modification of the Interim Report.116 The European Union notes that the reason given by China for not including all 229 declarations of support in Exhibit CHN-108 (i.e. because they were "virtually identical") is exactly the same as the reason for the Commission not including all 814 declarations in the non-confidential file.117
6.128.
Given that China has not requested any modification or amendment of the Report, we see no reason to make any changes in response to its comments. However, in order to clarify our reference to the example provided by China of the 229 declarations of support in Exhibit CHN-108, we have modified paragraph 7,734 and footnote 1277 (now footnote 1426).
6.129.
Paragraph 7,718: The European Union requests that the Panel modify its finding in the third sentence of this paragraph, noting that at paragraphs 7,693 et seq., the Panel found that the CEC's request for confidential treatment for those producers who filed the complaint, and who presented the statements of support, was justified.118China considers that the European Union misunderstands the scope of paragraph 7,718, which it asserts relates to the missing questionnaire response and not the missing declarations of support. In any event, China notes that the Panel's findings in paragraph 7,693 et seq. concern the showing of good cause in relation to the names of the companies and other such information, and do not apply to other information contained in the document the confidentiality of which is not necessary "in order to maintain the confidentiality of information accorded such treatment", and indeed, the document itself.119
6.130.
The third sentence of this paragraph sets out our conclusions with respect to the missing questionnaire response of one sampled EU producer, while the European Union's objection appears to refer to the declarations of support of the supporting producers. At paragraphs 7,693 et seq. of the Interim Report, we addressed the confidential treatment granted to the names of the EU producers, including the names of the supporting producers, and not the confidential treatment granted to the information contained in the questionnaire responses of the EU producers or the questionnaire responses themselves. Thus, in our view, the latter findings do not undermine the statement in the third sentence of paragraph 7,718 to which the European Union objects, and we have therefore made no change to this paragraph in response to the European Union's request.
6.131.
Paragraph 7,761: China requests that the Panel delete the phrase "which China does not contest" from the last sentence of this paragraph, referring in this regard to paragraphs 1068-1074 of its second written submission.120 The European Union asserts that nothing in the paragraphs cited by China contradicts the factual assertion by the CEC in the passage quoted by the Panel. Rather, these paragraphs address the kind of evidence that would be relevant to such an assertion.121
6.132.
While it is true that China contended that the alleged fear of retaliation was unreasonable, unfounded and untrue, it did not dispute the CEC's statement that certain EU producers had been "subject to severe pressure to stop cooperating in the investigation and to withdraw their support". Nor do the cited paragraphs of its second written submission demonstrate that this statement by the CEC was untrue or unfounded, or even address it. We therefore have made no changes to this paragraph in response to China's request.
6.133.
Paragraph 7,763: The European Union requests that the Panel modify this paragraph, asserting that although China included a claim under Article 6.5.1 in respect of the names of the complainants (and others), its arguments were exclusively directed at the eligibility of the names for confidential treatment, and never addressed the question whether, if those names were entitled to such treatment, the European Union had failed in its obligations under Article 6.5.1. In the absence of an accusation by China, the European Union contends that the Panel is not entitled to reach its own conclusions on the matter.122 China does not consider that the Panel's conclusion needs to be modified, arguing that the European Union erroneously asserts that China's arguments were "exclusively" directed at the eligibility of the names for confidential treatment. China contends that it argued the violation of Article 6.5.1 by the European Union in the context of the names of the complainants, and that the European Union addressed China's arguments in this regard.123
6.134.
It is true that China's arguments focused on whether the names of the EU producers could be treated as confidential. However, China clearly made a claim under Article 6.5.1 with respect to this information and presented arguments, although general, in support of its claim.124 We therefore have made no change to this paragraph in response to the European Union's request.
6.135.
Paragraph 7,771: The European Union requests that the Panel modify its finding regarding Article 6.5.1 in the fourth and fifth sentences of this paragraph. The European Union asserts that the CEC's statement that it "was acting on behalf of the producers of the product concerned representing 38% of the total EU 27 production" was a summary of the table at Annex 1 of the complaint, and also analysed the data, including the countries of origin and production quantities, that the companies had included in their support statements. Thus, the European Union contends, this statement also constitutes a summary of the information regarding countries of origin and company production figures in the confidential versions of the support statements. The European Union rejects China's argument that the summary should have contained "individual data of the complainants" or mention of the member States in which the complainants were located, noting that this is data which the Panel concluded were justifiably treated as confidential.125China argues that the European Union imports a kind of automatism in the application of Article 6.5.1 that is not permitted by the text of that Article.China argues that the mere fact that such data were held to be confidential by the Panel does not permit, as the European Union proposes, that it automatically implies that the European Union complied with its obligation under Article 6.5.1. China therefore does not consider that the European Union's argument merits a reconsideration of the issue by the Panel.126
6.136.
We recall that the information at issue concerns the answers provided by the applicants, their home countries, and a table regarding the standing of CEC, referred to in Annex 1 of the complaint. We found that the CEC's statement that "the CEC was acting on behalf of the producers of the product concerned representing 38% of the total EU 27 production" constituted a summary only of the confidential information in the table regarding the standing of the CEC, but not of the remainder of that information. The European Union now argues that the CEC's statement was also a summary of the information regarding the home countries and production figures, asserting that the table regarding the standing of CEC analysed the data, including home countries and production quantities, but has not pointed out where it made this argument during the proceedings before the Panel. Paragraph 445 of its first written submission, referred to by the European Union in this regard, states that the individual production volumes of the supporting producers were "effectively summarized in the Review Request", but does not refer to the answers provided by the applicants and their home countries, and does not indicate where in the request the summary of the individual production volumes of the supporting producers could be found. Moreover, while at paragraph 339 of its opening oral statement at the second meeting, the European Union stated that summarized information from the answers provided by the applicants "appears at various points" in the complaint, it did not indicate where in the complaint such summarization was provided. Regarding the home countries of the applicants, the European Union did not even argue that summarization of this information was provided. Based on the foregoing, we see no basis to revisit our conclusion, and therefore have made no changes to this paragraph in response to the European Union's request.
6.137.
Paragraph 7,785: The European Union requests that the Panel revisit the first, second, fourth and fifth sentences of this paragraph and modify its conclusions. The European Union argues first that its assertion that the four companies which completed standing forms were among the 196 supporters of the expiry review request was not contested by China, and the Panel was therefore not justified in reaching the conclusion in the first sentence that it could not "determine whether the four companies which completed the standing forms were among the 196 supporters of the expiry review request, as the European Union contends." The European Union contends that since this conclusion is the basis for the Panel's conclusion in the second sentence concerning the contents of the standing forms, that conclusion is also unjustified. The European Union disagrees with the Panel's finding in the fourth sentence that "it is not clear that [the information sought in the standing forms] would fall within the scope of information for which the need to protect their identities would establish good cause for confidential treatment, and the European Union has not asserted otherwise", maintains that it denied China's accusation that no request for confidentiality was made in respect of the information presented by companies in the "standing forms",127 and therefore argues that the issue of whether this information was entitled to confidential treatment is one that the Panel can and should decide. Finally, the European Union notes that it gave an explanation of the contents of this information, which China did not attempt to refute.128 The European Union therefore requests that the Panel review its conclusion that the European Union violated Article 6.5.129
6.138.
With respect to the European Union's first and second points, China contends that it is incorrect that China did not address the issue whether the four companies which completed the standing forms were amongst the 196 supporters, referring in this regard to paragraphs 644, 940 and 1077 of its second written submission, paragraph 100 of its closing statement at the second meeting with the Panel, and its response to Panel question 116, where it noted that interested parties were never provided any opportunity to see these standing forms and that the European Union provided no proof to show that indeed the standing forms were filed by "some" or four producers. Furthermore, referring to paragraph 100 of its closing statement at the second meeting with the Panel and its response to Panel question 116, China argues that it contested the European Union's assertion by stating that "China considers this to be patently incorrect. The EU's own Exhibit EU-20 shows that the information requested in the standing form was far more extensive than that provided in the declaration of support (see Exhibit CHN-30) ".130 With respect to the European Union's third point, China contends that it demonstrated that the information requested in the standing form was far more extensive than that provided in a declaration of support, and that the European Union did not refute or demonstrate that all information provided therein fell within the scope of the information for which confidential treatment was requested by the four companies in question. In addition, China argues that the references cited by the European Union do not contain any arguments and/or do not refute China's claims. Finally, China objects to the European Union's statement that China did not attempt to refute the European Union's explanation "of the contents of th[e] information [at issue]", noting that it did not have the opportunity to further comment and/or refute the European Union's comments on China's answers to questions from the Panel's second set of questions. In the alternative, China argues that if the Panel were to review its conclusion, it should also review its conclusion not making any additional findings as regards the violation of Article 6.5.1 by the European Union.131
6.139.
With respect to the European Union's first and second points, we recall that a party asserting a fact has the burden of providing proof thereof. In this case, the European Union has provided no evidence in support of its assertion that the four companies which completed standing forms were among the 196 supporters of the expiry review. Moreover, since it was for the European Union to substantiate its assertion of fact, we fail to see the relevance of the European Unions' contention that China allegedly did not contest this assertion. We therefore have made no change in response to the European Union's request regarding the first and second sentences of this paragraph, recalling that its request with respect to the second sentence is dependent on acceptance of its request with respect to the first sentence. Regarding the European Union's requests concerning the fourth and fifth sentences of this paragraph, we are of the view that the European Union has not established that confidential treatment was requested in respect of the information presented by the four companies in the standing forms concerned. While it is true that in its comments on China's response to Panel question 116, the European Union rejected China's claim that no request for confidentiality was made in respect of the information presented by companies in the "standing forms", nothing in these comments demonstrates that confidential treatment for this information was in fact requested and/or that this information "fall[s] within the scope of information for which the need to protect [the] identities [of these companies] would establish good cause for confidential treatment". We therefore have not made the changes to this paragraph requested by the European Union. However, we have modified the fourth sentence of paragraph 7,785 by replacing the word "asserted" with the word "demonstrated", so as to better reflect the basis for our conclusion.
6.140.
Paragraph 7,789: The European Union requests that the Panel review its conclusion in the second sentence of this paragraph. The European Union contends that the data in the standing forms were summarised in a Note for the File issued on 2 October 2008, Exhibit EU-19.132China argues that the European Union's request should be rejected. China notes that while the Panel's finding in paragraph 7,789 concerns the failure of the European Union to request a non-confidential summary of the information provided in the "declarations of support", the European Union's objection concerns the "standing forms". In addition, China alleges that paragraph 22 of the European Union's comments on China's response to Panel question 116 supports the Panel's findings. In fact, China argues, in that paragraph the European Union clearly stated that there were several questions, including among others concerning "production", that "in accordance with its usual practice, the Commission did not regard as capable of individual summarization". Further, China alleges that Exhibit EU-19 only provides aggregates figures and does not contain a non-confidential summary of the 2007 and January 2008 production data of the supporters and the names of their countries, or a statement of reasons as to why a non-confidential summary of this information was not possible.133
6.141.
We recall that the information at issue is certain information in the declarations of support, regarding the countries and production volume of the supporting producers for the year 2007 and 2008. However, the Note for the File dated 2 October 2008, to which the European Union refers, does not contain any summary of the countries and production volume data for the year 2008. Moreover, with respect to the production volume for the year 2007, the Note only provides an overall estimation of the total production in the European Union for this year. Thus, we have made no change to this paragraph, which accurately reflects our views, in response to the European Union's request.
6.142.
Paragraph 7,792: China requests that the Panel review its conclusion in this paragraph. China alleges that the Panel accepted the European Union's contention, in the absence of any evidence or proof, that the questions for which no answers were provided in the non-confidential version of the questionnaire responses of the sampled EU producers were also unanswered in the confidential version. China contends that the European Union made a passing statement in its response to question 59 that "in the vast majority of cases the entries in the confidential and non-confidential files are identical, or have differences…that are not significant", and considers that this is an insufficient basis for the Panel to accept the European Union's assertion as fact. China also argues that the Panel's statement that China had not demonstrated that the information it challenged was treated as confidential, and that there was no factual basis to conclude that the unanswered questions were treated as confidential, is not correct. China asserts in this regard that it provided the entire proof available to it on this issue, the non-confidential questionnaire responses, the detailed comments made by EFA and the Commission's response to EFA showing that pursuant to EFA's comments the complainant producers added additional information to the questions previously left blank. In addition, China alleges that the very fact that the European Union argued that "for information that is 'by nature' confidential, good cause is shown by establishing that the information falls into that category", makes clear that for all information considered confidential by nature, the European Union exempted the EU producers from requesting confidential treatment and automatically granted confidential treatment to such information. Moreover, referring to the European Union's response to Panel question 59, where the European Union explained that a general request for confidential treatment was made at the beginning of the non-confidential questionnaire response applied to all parts of the information considered confidential and therefore not disclosed in the subsequent non-confidential versions of the same response of the same company, China takes the view that this demonstrates that confidentiality was applied to the unanswered questions.134
6.143.
The European Union argues that in its response to Panel question 59, it first made a general statement about the instances listed in Exhibit CHN-65, and then examined the particular cases where substantive differences existed between the confidential and non-confidential documents. In addition, the European Union alleges that the evidence referred to by China, independently of whether it amounts to "the entire proof available to it", does not put in doubt the Panel's conclusion. With respect to China's second objection, the European Union points out that the development during the course of the investigation of the information supplied by parties was part of the normal process by which the Commission verifies and analyses the data supplied to it and was not, as China pretends, specifically the consequence of particular representations made by EFA.135
6.144.
Footnote 1378 of the Interim Report (now footnote 1528) to paragraph 7,792 makes clear that we considered the European Union's assertion that "in the majority of instances referred to by China, the confidential and non-confidential responses of the sampled EU producers were the same" and had no "evidentiary basis that would justify rejecting this assertion as untrue". We do not agree with China that we did not have a sufficient basis for accepting the European Union's assertion in this regard. The absence of any evidence to the contrary suffices, in our view, to accept this assertion. In any event, our conclusion, that there was "no factual basis on which to conclude that the [questions not answered in the questionnaire responses of the sampled EU producers were] accorded confidential treatment inconsistently with Article 6.5 of the AD Agreement", is mainly based on China's failure, as the complainant, to demonstrate that the information at issue was actually treated as confidential by the Commission. We therefore have made no change to paragraph 7,792 in response to China's request in this regard. With respect to China's second objection, we note that the arguments presented by China do not demonstrate that the information at issue was treated as confidential or that there was a factual basis for a conclusion that the unanswered questions were granted confidential treatment. First, with respect to the non-confidential questionnaire responses, we noted, in paragraph 7,792 of the Interim Report, that nothing in these responses indicates that confidential treatment of information was requested and granted with respect to the blank answers at issue. Moreover, concerning the alleged comments made by EFA and the Commission's response to EFA showing that pursuant to EFA's comments the complainants added additional information to the questions previously left blank, we note that China has not shown where in its submissions such arguments were made, nor does China indicate where in the record such comments/response can be found. Similarly, while China now argues that certain statements/responses of the European Union show that confidential treatment was applied to the unanswered questions, it made no such arguments previously. We have therefore made no changes to paragraph 7,792 in response to China's request in this regard.
6.145.
Footnote 1379 (now footnote 1529): The European Union requests that the Panel modify its finding regarding Article 6.5 in the fourth sentence of this footnote. The European Union argues that by the very act of presenting a non-confidential summary of the data, the producer at issue was implicitly invoking confidentiality. Moreover, the European Union alleges that, as it stated in paragraph 195 of its answer to Panel question 59, it had an established practice of regarding sales data as by nature entitled to confidentiality, and therefore did not require parties to justify this treatment.136 China considers that "implicit invoking of a confidentiality rule by providing non-confidential data" cannot replace the explicit requirement to demonstrate "good cause" in Article 6.5, and therefore the European Union's argument that the European Union recognizes this information as confidential by nature is irrelevant. In addition, China asserts that the European Union never argued that its legislation or "established practice" pre-defines the information at issue as information which is confidential by nature, but merely claimed that "the EU regards such data as 'by nature confidential', given their character", which statement cannot be equated to "established practice". Furthermore, China alleges that nowhere in EU legislation or the "Guides for the preparation of questionnaires", is it stated that this information is confidential by nature, and the fact that other producers requested confidential treatment for this information establishes this point. China also argues that even if the European Union were to indicate that the "Guides" for the preparation of the questionnaire constitute evidence of its practice, the European Union made it clear that at least in the review investigation the "Guides" were not issued to the EU producers.137
6.146.
We recall that Article 6.5 of the AD Agreement requires that good cause be shown for confidential treatment of information which is by nature confidential, as well as for confidential treatment of information which is submitted on a confidential basis. We therefore fail to see any legal basis for or relevance of the European Union's contention that "by the very act of presenting a non-confidential summary of the data the producer at issue was implicitly invoking the confidentiality rule" in the absence of a showing of good cause, which the European Union does not assert was made. Moreover, nothing in paragraph 195 of the European Union's answer to Panel question 59 indicates that the European Union had an established practice which defines in advance that certain information, and specifically the information at issue here, will be treated as "by nature confidential" by the Commission such that coming within that category will suffice to satisfy the good cause requirement. This is further confirmed, as China notes, by the fact that at least one other producer, referred to in paragraph 195 of the European Union's answer to Panel question 59, requested confidential treatment for the information concerned. We therefore have made no change to our finding regarding Article 6.5 in footnote 1379 (now footnote 1529) in response to the European Union's request.
6.147.
Paragraph 7,806: The European Union requests that the Panel modify its finding regarding Article 6.5 in this paragraph. The European Union disagrees with the Panel's view that the "European Union has not established that its legislation or practice defines in advance the categories of information that the Commission will treat as 'by nature confidential'". In this regard, the European Union argues the "Guide for the preparation of the non-confidential version of Union Producers Questionnaire", Exhibit CHN-55, and paragraph 227 of its answer to Panel question 73 demonstrate that at the time of the expiry review at issue it had an established set of practices regarding what information would be regarded as by nature confidential. The European Union notes that the topics addressed in the "Guide" include all those considered by the Panel in paragraph 7,806 - sales prices, profit/loss/selling and expenses, and PCN information - and adds that its answer to Panel question 73 makes clear that such practice was not confined to EU producers' information.138 China disagrees with the European Union's contention that at the time of the expiry review its practice mentioned in the "Guide" defined the information at issue to be considered "by nature confidential". China contends that the European Union never argued in the course of this proceeding that the "Guides" were issued to the analogue country producers, provided no evidence with respect to the existence of its alleged practice or that it was made known to analogue country producers in advance that the information at issue would be considered confidential by nature. In any event, China argues that the European Union has made it clear that the "Guides" did not exist at the time the analogue country producers completed the questionnaire responses and the analogue country producers were not made known that such information would be treated as confidential by nature. Furthermore, China notes that Exhibit CHN-55 states that PCN information is not information that is "confidential by nature", and profit and loss information is also not confidential by nature when the company involved is a publicly listed entity.139
6.148.
In our view, nothing in the European Union's answer to Panel question 59, or in Exhibit CHN-55, demonstrates that, at the time of the expiry review at issue, the European Union had in place an established practice regarding what information would be regarded as by nature confidential and/or granted confidential treatment. On the contrary, in its answer to this question, the European Union makes clear that Exhibit CHN-55 (entitled "Guide for the preparation of the non-confidential version of Union Producers Questionnaire") is a "guide for Commission case-handlers in setting-up the non-confidential file". Moreover, at paragraph 317 of its oral statement at the second meeting, the European Union clarified that the "very title of the guides ('for the preparation', and not 'for the completion', of questionnaires) indicates that they are primarily intended for Commission staff, even if parts are sometimes made available to companies". Thus, it is clear to us that this document is mainly directed to Commission staff, and does not establish a practice by which parties (as opposed to Commission staff) in an anti-dumping investigation would know in advance what information would be treated as confidential. We therefore reject the European Union's argument that this "Guide" demonstrates that at the time of the expiry review at issue the European Union had an established practice regarding what information would be regarded as by nature confidential. In any event, we note that this Guide addresses the questionnaire responses of EU producers and not the questionnaire responses of the analogue country producer responses at issue in paragraph 7,806. The European Union argues that it made clear that its alleged practice was not confined to EU producers' information. However, in its answer to Panel question 73 the European Union refers to "parallel guides" for "exporters and importers" but provides no evidence in this regard. In addition, the European Union itself recognized that copies of these guides "are sometimes made available to interested parties" and "there is no established procedure in this respect".140 We therefore have made no change to our conclusion in paragraph 7,806 in response to the European Union's request.
6.149.
Paragraph 7,829: China requests that the Panel modify the first sentence of this paragraph to reflect that the Panel Report in EC – Salmon (Norway) was first referred to by the European Union in support of its own position.141 The European Union did not comment on this request.
6.150.
Paragraph 7,829 is part of our analysis of the parties' claims and arguments. While it is true that the European Union first referred to the Panel Report in EC – Salmon (Norway) in support of its position in responding to China's arguments, it is also true that China, in addressing the European Union's response, itself relied on that same report in support of its position. We do not see the relevance of the sequence in which the parties relied on that report, and consider that the first sentence of this paragraph is accurate, and therefore have made no change to it in response to China's request.
6.151.
Paragraph 7,891: China requests that the Panel revise or delete the phrase "and China makes no arguments in this regard" in the second sentence of this paragraph in order to more accurately reflect China's arguments, referring in this regard to paragraph 1529 of its second written submission.142 The European Union did not comment on this request.
6.152.
Paragraph 7,891 states that China made no arguments regarding how the number of MET/IT responses received could be material to the investigating authority or be considered to have led to the imposition of the anti-dumping duty. Nothing in paragraph 1529 of China's second written submission refers to how the number of MET questionnaires received could be material to the investigating authority, or considered to have led to the imposition of the anti-dumping duty, the point as to which this paragraph states that China made no argument. We have modified this paragraph in order to clarify our views, but have not otherwise changed it in response to China's request.
6.153.
Paragraph 7,924: The European Union requests that the Panel modify this paragraph in order to more accurately express what it understands to be the Panel's intention.143China did not comment on this request.
6.154.
We agree that the European Union's proposed modification better expresses our view, and have modified this paragraph accordingly.

VII. findings

A. introduction

7.1.
This dispute concerns three measures introduced by the European Union: (1) Article 9(5) of Council Regulation (EC) No. 1225/2009 on Protection against Dumped Imports from Countries not Members of the European Community (the "Basic AD Regulation"); (2) Council Implementing Regulation (EU) No. 1294/2009 of 22 December 2009 maintaining the definitive anti-dumping duties on imports of certain footwear with uppers of leather originating inter alia in China following an expiry review (the "Review Regulation"); and (3) Council Regulation (EC) No. 1472/2006 of 5 October 2006 imposing definitive anti-dumping duties on imports of certain footwear with uppers of leather originating inter alia in China (the "Definitive Regulation"). China's claims with regard to Council Regulation No. 1225/2009 challenge that measure "as such", while its claims in connection with Council Regulations Nos. 1294/2009 and 1472/2006 challenge the specifics of those measures, and include, with respect to the Definitive Regulation, aspects of the Basic AD Regulation "as applied". China's claims pertain to various provisions of the Anti-Dumping Agreement ("AD Agreement"), the GATT 1994 and the Marrakesh Agreement Establishing the World Trade Organization (the "WTO Agreement") as well as the Protocol on the Accession of the People's Republic of China144 ("China's Accession Protocol"), and the Report of the Working Party on the Accession of China145 ("China's Accession Working Party Report").
7.2.
The European Union raised a number of preliminary issues in its request for a preliminary ruling and in its written submissions. The European Union contends that many of the claims addressed in China's panel request and written submissions are not within the Panel's terms of reference either because they were not subject to consultations, because they were not identified at all in China's panel request, or because they were not identified in the panel request consistently with the requirements of Article 6.2 of the DSU. Further, the European Union contends that all claims made by China under Article 17.6(i) of the AD Agreement are not before the Panel, as this provision does not impose a self-standing obligation on Members and therefore it cannot be subject of a claim by a party, and that none of China's Article 17.6(i) claims satisfy the requirements of Article 6.2 of the DSU. Finally, the European Union contends that China fails to make a prima facie case with regard to some claims addressed in its written submissions. We address the European Union's request for a preliminary ruling below, before considering the substantive issues in dispute.

B. relevant principles regarding standard of review, treaty interpretation and burden of proof

7.3.
While the parties have not raised questions concerning these matters per se, they have each referred to them in the course of their submissions. We set out below the framework that we will apply in these proceedings with respect to the standard of review, treaty interpretation and burden of proof.

1. Standard of Review

7.4.
Article 11 of the DSU provides the standard of review for WTO panels in general. Article 11 imposes upon panels a comprehensive obligation to make an "objective assessment of the matter", an obligation which embraces all aspects of a panel's examination of the "matter", both factual and legal.146
7.5.
Article 17.6 of the AD Agreement, which sets forth the special standard of review applicable to disputes under the AD Agreement, provides:

"(i) in its assessment of the facts of the matter, the panel shall determine whether the authorities' establishment of the facts was properand whether their evaluation of those facts was unbiased and objective. If the establishment of the facts was proper and the evaluation was unbiased and objective, even though the panel might have reached a different conclusion, the evaluation shall not be overturned;

(ii) the panel shall interpret the relevant provisions of the Agreement in accordance with customary rules of interpretation of public international law. Where the panel finds that a relevant provision of the Agreement admits of more than one permissible interpretation, the panel shall find the authorities' measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations."

Taken together, Article 11 of the DSU and Article 17.6 of the AD Agreement establish the standard of review we must apply with respect to both the factual and the legal aspects of the present dispute.

7.6.
The Appellate Body has clarified a panel's standard of review of the facts pursuant to the above provisions in the following terms:

"It is well established that a panel must neither conduct a de novo review nor simply defer to the conclusions of the national authority. A panel's examination of those conclusions must be critical and searching, and be based on the information contained in the record and the explanations given by the authority in its published report. A panel must examine whether, in the light of the evidence on the record, the conclusions reached by the investigating authority are reasoned and adequate. What is 'adequate' will inevitably depend on the facts and circumstances of the case and the particular claims made, but several general lines of inquiry are likely to be relevant. The panel's scrutiny should test whether the reasoning of the authority is coherent and internally consistent. The panel must undertake an in-depth examination of whether the explanations given disclose how the investigating authority treated the facts and evidence in the record and whether there was positive evidence before it to support the inferences made and conclusions reached by it. The panel must examine whether the explanations provided demonstrate that the investigating authority took proper account of the complexities of the data before it, and that it explained why it rejected or discounted alternative explanations and interpretations of the record evidence. A panel must be open to the possibility that the explanations given by the authority are not reasoned or adequate in the light of other plausible alternative explanations, and must take care not to assume itself the role of initial trier of facts, nor to be passive by 'simply accept[ing] the conclusions of the competent authorities.'"147

The Appellate Body has also clarified the relationship between Article 11 of the DSU and Article 17.6(i) of the AD Agreement:

"In considering Article 17.6(i) of the Anti-Dumping Agreement, it is important to bear in mind the different roles of panels and investigating authorities. Investigating authorities are charged, under the Anti-Dumping Agreement, with making factual determinations relevant to their overall determination of dumping and injury. Under Article 17.6(i), the task of panels is simply to review the investigating authorities' "establishment" and "evaluation" of the facts. To that end, Article 17.6(i) requires panels to make an "assessment of the facts ". The language of this phrase reflects closely the obligation imposed on panels under Article 11 of the DSU to make an "objective assessment of the facts ". Thus the text of both provisions requires panels to "assess" the facts and this, in our view, clearly necessitates an active review or examination of the pertinent facts. Article 17.6(i) of the Anti-Dumping Agreement does not expressly state that panels are obliged to make an assessment of the facts which is "objective". However, it is inconceivable that Article 17.6(i) should require anything other than that panels make an objective "assessment of the facts of the matter". In this respect, we see no "conflict" between Article 17.6(i) of the Anti-Dumping Agreement and Article 11 of the DSU."148

7.7.
Therefore, with respect to the challenged anti-dumping measures at issue here, that is, the Review Regulation and the Definitive Regulation, we may find disputed aspects to be consistent with the AD Agreement if we find that the EU investigating authority, the Commission of the European Union ("Commission"), established the facts properly and evaluated them in an unbiased and objective manner, and that the determinations in question were based on a permissible interpretation of the relevant treaty provisions.149 Pursuant to Article 17.5(ii) of the AD Agreement, in our assessment of the matter, we must base our examination upon "the facts made available in conformity with appropriate domestic procedures to the authorities of the importing Member." We will not undertake a de novo review of the evidence before the Commission during the proceedings, and if we find that the establishment of the facts by the Commission was proper and the evaluation was unbiased and objective, we will not substitute our own judgement for that of the Commission, even though we might have made a different determination were we examining the evidence that was before the investigating authority ourselves.

2. Rules of Treaty Interpretation

7.8.
Article 3.2 of the DSU provides that the dispute settlement system serves to clarify the provisions of the covered agreements "in accordance with customary rules of interpretation of public international law". It is generally accepted that these customary rules are reflected in Articles 31-32 of the Vienna Convention on the Law of Treaties("Vienna Convention") . Article 31(1) of the Vienna Convention provides:

"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."

A number of reports address the application of the Vienna Convention provisions on treaty interpretation in dispute settlement in the WTO. It is clear that interpretation must be based above all on the text of the treaty,150 but that the context of the treaty also plays a role. It is also well-established that these principles of interpretation "neither require nor condone the imputation into a treaty of words that are not there or the importation into a treaty of concepts that were not intended."151 Furthermore, panels "must be guided by the rules of treaty interpretation set out in the Vienna Convention, and must not add to or diminish rights and obligations provided in the WTO Agreement."152

7.9.
As noted above, Article 17.6(ii) of the AD Agreement sets forth a special provision concerning the interpretation of the AD Agreement.153 The Appellate Body has addressed the relationship between Article 17.6(ii) of the AD Agreement and the DSU, stating:

"The first sentence of Article 17.6(ii), echoing closely Article 3.2 of the DSU, states that panels 'shall' interpret the provisions of the AD Agreement 'in accordance with customary rules of interpretation of public international law.' Such customary rules are embodied in Articles 31 and 32 of the ViennaConvention on the Law of Treaties ('Vienna Convention'). Clearly, this aspect of Article 17.6(ii) involves no 'conflict' with the DSU but, rather, confirms that the usual rules of treaty interpretation under the DSU also apply to the AD Agreement. …

The second sentence of Article 17.6(ii) … presupposes that application of the rules of treaty interpretation in Articles 31 and 32 of the Vienna Convention could give rise to, at least, two interpretations of some provisions of the AD Agreement, which, under that Convention, would both be 'permissible interpretations.' In that event, a measure is deemed to be in conformity with the AD Agreement 'if it rests upon one of those permissible interpretations."154

Thus, under the AD Agreement, a panel is to follow the same rules of treaty interpretation as in any other dispute when considering the interpretation of provisions of the AD Agreement. The difference is that Article 17.6(ii) provides explicitly that if the panel reviewing an anti-dumping measure finds more than one permissible interpretation of a provision of the AD Agreement, the panel may uphold a measure that rests on one of those interpretations.

3. Burden of Proof

7.10.
The general principles applicable to burden of proof in WTO dispute settlement require that a party claiming a violation of a provision of the WTO Agreement by another Member assert and prove its claim.155 China, as the complaining party in this dispute, must therefore make a prima facie case of violation of the relevant provisions of the WTO agreements it cites, which the European Union must refute. We note, however, that it is generally for each party asserting a fact, whether complainant or respondent, to provide proof thereof.156 In this respect, therefore, it is for the European Union to provide evidence of the facts which it asserts.
7.11.
The amount and type of evidence required to establish a presumption that what is asserted is true "will necessarily vary from measure to measure, provision to provision, and case to case."157 Nevertheless, we also recall that "a prima facie case is one which, in the absence of effective refutation by the defending party, requires a panel, as a matter of law, to rule in favour of the complaining party presenting the prima facie case."158 In this dispute, European Union has asserted that, with respect to a number of its claims, China has failed to make a prima facie case. Should we agree, we need not analyse such claims further, but will dismiss them.

C. request for a preliminary ruling by the european union

7.12.
The European Union submitted a request for a preliminary ruling on 22 July 2010, objecting to a number of China's claims on various grounds. Specifically, the European Union asserts that China's "as such" claims against Article 9(5) of the Council Regulation No. 1225/2009 do not meet the requirements of, in particular, Article 6.2 of the DSU. Next, the European Union asserts that China's claims based on Article 17.6(i) of the AD Agreement fail to satisfy requirements of Article 6.2 of the DSU. Third, the European Union contends that certain of China's claims are not within the Panel's terms of reference because the claim was not identified sufficiently clearly in China's panel request, as required by Article 6.2 of the DSU. Finally, the European Union argues that certain of China's claims are not within the Panel's terms of reference because there were no consultations with respect to them.159 China responds by arguing that all the challenged claims are in fact properly before the Panel and within its terms of reference. Although we did not issue a ruling on the European Union's request during the course of the dispute, we consider it appropriate to dispose of the issues raised by that request before turning to the substantive claims in dispute.
7.13.
We recall that it is the complaining Member's panel request that determines the terms of reference of a WTO panel. Article 6.2 of the DSU provides, in relevant part:

"The request for the establishment of a panel shall be made in writing. It shall indicate whether consultations were held, identifythe specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly." (emphasis added)

Together, the measures and claims identified in the panel request constitute the "matter referred to the DSB", which forms the basis for a panel's terms of reference under Article 7.1 of the DSU. It is important that the panel request be sufficiently clear for two reasons. First, it defines the jurisdiction of the panel, since only the claims raised in the panel request fall within the panel's terms of reference. Second, it serves the due process objective of notifying the parties and potential third parties of the nature of a complainant's case.160 In order to ensure that these objectives are met, a panel must examine the panel request "to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU".161 The Appellate Body has observed that such compliance must be demonstrated on the basis of the text of the panel request read as a whole.162

7.14.
Thus, with respect to the European Union's argument that certain claims raised by China were not identified in its panel request consistently with the requirements of Article 6.2 of the DSU, we will consider the text of China's panel request with respect to each claim objected to, and decide whether it is set forth consistently with Article 6.2. Clearly, at a minimum, the panel request must cite the relevant provision(s) of the AD Agreement or other covered agreement in connection with the measure(s) alleged to be in violation of that provision.163 The more complex question is whether the panel request contains "abrief summary of the legal basis of the complaint sufficient to present the problem clearly".
7.15.
The Appellate Body report in Korea – Dairy offers guidance as to how a panel should address the issue of whether a panel request provides "a brief summary of the legal basis of the complaint sufficient to present the problem clearly" in accordance with Article 6.2 of the DSU. First, the issue is to be resolved on a case-by-case basis.164 Second, the panel must examine the panel request very carefully to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU.165 Third, the panel should take into account the nature of the particular provision at issue –i.e. where the Articles listed establish not one single, distinct obligation, but rather multiple obligations, the mere listing of treaty Articles may not satisfy the standard of Article 6.2.166 The panel in EC – Fasteners (China) observed that this standard required it

"in each instance, to consider the text of China's panel request to determine whether it identifies the specific measure, and provides a brief summary of the legal basis of the complaint, and potentially whether the European Union has been prejudiced by the formulation of the panel request. Moreover, as stated by the Appellate Body, compliance with the requirements of Article 6.2 of the DSU must be demonstrated on the basis of the text of the panel request read as a whole, and defects in the panel request cannot be cured in the subsequent submissions of the parties."167

Based on the foregoing, we consider each aspect of the European Union's request for a preliminary ruling in turn below.

1. China's "as such" claims against Article 9(5) of Council Regulation No. 1225/2009

7.16.
The European Union argues that China's "as such" claims regarding Article 9(5) of the Basic AD Regulation do not satisfy the requirements of, in particular, Article 6.2 of the DSU. The European Union contends that Article 9(5) of the Basic AD Regulation relates to the imposition of anti-dumping duties, and thus, the only issue which results from this provision is the imposition of anti-dumping duties on a country-wide basis or on an individual basis if certain criteria are met in the case of imports from non-market economy countries. For the European Union, since the meaning and content of the provision are clear on its face, the Panel should assess the consistency of the measure "as such" on that basis alone.168
7.17.
Turning to China's claims, according to the European Union, China described the matter in its panel request in a

"very specific and narrow manner, (i) by reference to a legal provision (i.e. Article 9(5) of Council Regulation No. 1225/2009; and (ii) with respect to a very precise aspect contained therein (i.e. the imposition of a single anti-dumping duty for the supplying country concerned and the imposition of an individual anti-dumping duty for suppliers fulfilling certain criteria in case of imports from non-market economy countries."169

The European Union asserts that, in the absence of any references to other matters or use of broader terminology in China's panel request, the measure at issue is strictly limited to the specified provision, and the specific aspects, identified by China. Therefore, the European Union asks that the panel find that its terms of reference are limited to those aspects of the measure explicitly identified by China, and anything beyond that question is outside its terms of reference.170 The European Union considers that other topics, such as "individual treatment" or the "individual treatment regime or practice" of the European Union, or how dumping margins are calculated in cases of non-market economy countries, or any alleged "EU practice" on that subject, were not identified by China, and are thus outside the Panel's terms of reference.171

7.18.
In addition, the European Union argues that China's panel request does not satisfy the requirements of Article 6.2 of the DSU because it does not present the problem clearly, and therefore its claims under Articles 6.10, 9.3 and 9.4 of the AD Agreement and Article X:3(a) of the GATT 1994 are not properly before the Panel.172 According to the European Union, China failed to "plainly connect" the challenged measure with the provisions of the covered agreements claimed to have been infringed.173 In this regard, the European Union argues that China conflates issues with respect to the imposition of anti-dumping duties, dealt with by the challenged measure, and issues of the determination of an individual margin of dumping, addressed in Article 6.10 of the AD Agreement, but not, in the European Union's view, by Article 9(5) of the Basic AD Regulation. Similarly, the European Union asserts that Article 9(5) of the Basic AD Regulation does not address how dumping margins are calculated, or the proper level of anti-dumping duties, which is the subject of Article 9.3 of the AD Agreement. The European Union notes that Article 9(5) of the Basic AD Regulation applies regardless of the use of sampling, while China makes a claim under Article 9.4 of the AD Agreement, which applies in cases where sampling has been used. Finally, the European Union asserts that it fails to see the connection between the measure at issue in the context of an as such claim, and Article X:3(a) of the GATT 1994, which requires that the administration of a Member's laws, regulations, decisions and rulings be uniform, impartial and reasonable, but does not apply to those laws, regulations, decisions and rulings themselves.174
7.19.
China considers the European Union's "limited" description of the measure to be erroneous. China maintains that it is not challenging "the imposition of a single anti-dumping duty for the supplying country concerned and the imposition of an individual duty for suppliers fulfilling certain criteria in case of imports from non-market economy countries", as asserted by the European Union. Rather, its challenge concerns Article 9(5) of the Basic AD Regulation. China considers that assessing whether a measure is sufficiently identified for purposes of Article 6.2 does not require a substantive inquiry as to the precise contents of the measure at issue. China maintains that its panel request provides the gist of the measure at issue, and the inconsistency with the provisions of covered agreements at issue. Moreover, China contends that its panel request does, in fact, use broader terminology in identifying the nature of the measure and the alleged inconsistency with provisions of the AD Agreement, such that, read as a whole, it is clear that China challenges all aspects of Article 9(5), including the determination of individual dumping margins, which China considers an aspect of the measure.175
7.20.
China considers that the European Union's preliminary ruling request conflates the substantive issues in dispute with the procedural requirements of Article 6.2 of the DSU, based on its erroneous understanding of Article 9(5) of the Basic AD Regulation. For China, the meaning and operation of the provisions are matters of substance, addressed in China's first written submission. Moreover, China considers that the European Union's preliminary ruling request conflates claims and arguments, noting that while Article 6.2 requires claims to be specified in the panel request, arguments, including arguments explaining how the challenged measures infringe the provisions of the covered agreements invoked, are to be set out in the complaining party's first written submission. Finally, China contends that the European Union has failed to establish that its ability to defend itself in the context of these claims was prejudiced, despite that this must be taken into account in determining whether a panel request satisfies Article 6.2 of the DSU.176
7.21.
This is not the first time these same questions have been considered in WTO dispute settlement. The recent report of the panel in EC – Fasteners(China) addressed these same questions concerning the scope of its terms of reference, raised by the European Union, objecting to China's substantively identical claims against the same measure, Article 9(5) of the Basic AD Regulation.177 Nothing in the European Union's arguments in this case leads us to conclude that a different outcome from that reached by the panel in EC – Fasteners(China) is warranted in this case.178
7.22.
The EC – Fasteners (China) panel concluded that these claims were within its terms of reference. That panel noted that the premise for the European Union's objection with respect to China's claims under Articles 6.10, 9.3 and 9.4 of the AD Agreement was the allegation that the specific measure at issue, Article 9(5) of the Basic AD Regulation, addresses only the imposition of anti-dumping duties whereas the three provisions of the AD Agreement cited by China concern the calculation of dumping margins. The panel considered that China was correct in asserting that the European Union confused the identification of the claims in the panel request with the arguments that are to be developed in the subsequent panel proceedings. In this regard, the panel found it relevant and persuasive that the European Union dedicated significant portions of its substantive arguments regarding these three claims to demonstrating that Article 9(5) of the Basic AD Regulation does not concern the calculation of dumping margins and therefore does not fall within the scope of the obligations set forth under these three provisions. The panel concluded that:

"it is clear to [the panel] that whether Article 9(5) of the Basic AD Regulation is limited to the imposition of dumping duties, or also relates to the calculation of dumping margins or the establishment of the level of anti-dumping duties, is a disputed matter that must be resolved as part of the substance of this case, rather than a matter to be assumed in the context of resolving a preliminary objection.223

233 We note that we do not mean to suggest that we agree with European Union's characterization of China's claims as concerning the calculation of dumping margins, but that even assuming this to be the case, the scope of Article 9(5) of the Basic AD Regulation is not so clear as to preclude us from considering them."179

7.23.
Both parties have submitted substantially the same arguments on this preliminary ruling request in this case. Like the panel in EC – Fasteners (China) , we consider that the European Union's preliminary objection goes to a question of substance, that must be decided on the basis of the arguments of the parties. We do not consider that the import of Article 9(5) of the Basic AD Regulation is so clear on its face as to allow us to grant the European Union's request for a preliminary ruling. We therefore deny that request with respect to these three claims, and conclude that they are within our terms of reference.
7.24.
With regard to China's claim under Article X:3(a) of the GATT 1994, the European Union made substantially the same objection in EC – Fasteners (China) , asserting that there is no connection between the specific measure at issue, i.e. Article 9(5) of the Basic AD Regulation, and the obligations set out under Article X:3(a) of the GATT 1994. The European Union's objections, and China's response, are substantially the same in this case. According to the European Union, "China's Panel Request fails to explain how the "provisions" of Article 9(5) of Council Regulation No. 1225/2009 are not administered in a uniform, impartial and reasonable manner."180 Here too, the panel in EC – Fasteners(China) took the view that the European Union confused the identification of a claim with the arguments presented in support of a claim. The European Union maintains that the obligation set out under Article X:3(a) of the GATT 1994 cannot apply to laws, regulations, decisions and rulings themselves, but only to their administration. Like the panel in EC – Fasteners (China) , we recall that, for purposes of Article 6.2 of the DSU, what is important is whether a claim is described sufficiently clearly in the panel request so that the respondent is informed of the nature of the claim and can begin to prepare its defence. Whether the description of the claim makes legal sense is something to be scrutinized by the panel in the course of the dispute settlement proceedings, on the basis of the arguments developed by the parties and the evidence presented. We note that China's panel request, on page 2, last tiret, clearly identifies a claim under Article X:3(a) of the GATT 1994 with respect to Article 9(5) of the Basic AD Regulation. Therefore, we are of the view that China's claim under Article X:3(a) of the GATT 1994 with respect to Article 9(5) of the Basic AD Regulation is within our terms of reference, and deny the European Union's request for a preliminary ruling in this regard.

2. China's claims based on Article 17.6(i) of the AD Agreement

7.25.
China raises eight claims of violation of Article 17.6(i) of the AD Agreement, concerning different aspects of the Review Regulation and the Definitive Regulation.181 China makes separate arguments with respect to each of these claims. The European Union objects to China's claims under Article 17.6(i), arguing that these claims do not comply with the requirements of Article 6.2 of the DSU, and requests the Panel to rule that these claims are outside the its terms of reference.182

(a) Arguments of the parties

(i) China

7.26.
China argues that Article 17.6(i) of the AD Agreement implicitly imposes an obligation on investigating authorities in anti-dumping cases to properly establish facts, and to evaluate those facts in an unbiased and objective manner.183 China asserts that Article 17.6(i) incorporates in the AD Agreement broad standards of general applicability with respect to all factual determinations made by investigating authorities throughout anti-dumping investigations. In China's view, Article 17.6(i) is the "sole source of the concepts of 'proper establishment of the facts' and 'unbiase[d]ness' [and as such] should not only be regarded as imposing an obligation, but imposing one of substance beyond that otherwise contained in the Anti-Dumping Agreement."184 The claims China raises under Article 17.6(i) fall into two distinct groups.185 The first group comprises claims involving an alleged violation of Article 17.6(i) together with an alleged violation of another provision of the AD Agreement that has "some sort of fairness or due process language [] built into it."186 With respect to these claims, China contends that the issue is whether "the concepts of 'bias' and 'proper establishment of facts' contain[] any substance beyond that already contained in, for example, the 'positive evidence' and 'objective examination' language contained in Article 3.1" of the AD Agreement.187 The second group of claims comprises alleged violations of Article 17.6(i) independent of any claims of violation of Article 3.1.188 With respect to this group, China argues that the issue is the relationship between Article 17.6(i) and "those parts of an investigation not arising under a provision [of the AD Agreement] with some sort of fairness or due process language already explicitly built into it, such as the analogue country selection process or the determination of whether an exporter or industry qualifies for 'Market Economy Treatment'".189 China maintains that the "resolution of the second question is one of first impression for the Panel"190.
7.27.
China contends that if the Panel finds that the Commission did not meet the broad standards which China posits are established by Article 17.6(i), the Panel must conclude "that the 'regulations at issue' are 'inconsistent' with [Article 17.6(i) ] of the Anti-Dumping Agreement." China believes that claiming direct violation of Article 17.6(i) is preferable to either "bootstrapping those claims onto the substantive provisions... or hoping that the panel raises the issue sua sponte." China asserts that the former would lead to difficulties associated with aspects of an investigation which are subject to the standard established by Article 17.6(i), but do not have precisely corresponding provisions in the AD Agreement, while the latter is undesirable from a practical standpoint.191

(ii) European Union

7.28.
The European Union requests the Panel to rule, as a preliminary matter, that China's claims invoking Article 17.6(i) of the AD Agreement are not within its terms of reference, because they do not comply with the requirement of Article 6.2 of the DSU to provide certain information in a manner "sufficient to present the problem clearly", for two reasons.
7.29.
First, the European Union argues that Article 17.6(i) of the AD Agreement imposes obligations solely upon panels, and does not establish any self-standing and separate obligations on WTO Members. The European Union asserts that Article 17.6(i), like Article 11 of the DSU, establishes a standard of review to be applied by panels, and therefore cannot create additional obligations to WTO Members.192 The European Union contends that because China's panel request merely lists Article 17.6(i), its claims under that Article do not comply with the requirement of Article 6.2 of the DSU to provide certain information in a manner "sufficient to present the problem clearly", due to the "unequivocal" language of Article 17.6(i), establishing obligations solely on panels and not on WTO Members. Second, the European Union asserts that even assuming, arguendo, that Article 17.6(i) did impose certain obligations on WTO Members, China's claims based on Article 17.6(i) would still not comply with the requirements of Article 6.2 of the DSU. In this context, the European Union contends that taking into account the text and context of Article 17.6(i), obligations arising from this provision would likely have to be multiple and "in the case of complex legal provisions involving multiple obligations, it is not enough to merely list a legal provision to satisfy the requirements of Article 6.2 DSU." Therefore, the European Union argues that by merely listing the provision in its panel request, without identifying which of the legal obligations allegedly imposed by Article 17.6(i) was allegedly violated by equally insufficiently identified specific parts of certain EU measures, China failed to "provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly".193 The European Union asserts that China misunderstands Article 17.6(i) of the AD Agreement, and that China attempts to rewrite the AD Agreement. In addition, the European Union argues that China did not rebut the arguments presented by the European Union in its request for a preliminary ruling.194
7.30.
In its written submissions, in addition to referring to the arguments in its request for a preliminary ruling, the European Union addresses certain of China's Article 17.6(i) claims more specifically.195 Regarding China's claim of violation of Article 17.6(i) of the AD Agreement in the analogue country selection procedure, the European Union argues that China ignores the distinction between the "establishment" and the "evaluation" of facts made by Article 17.6(i). According to the European Union, "the process of soliciting information from potential analogue country producers is quite obviously one of establishing the facts, but China unconcernedly accuses the European Union of 'biased' behaviour in this respect [which could only be associated to the evaluation of facts]."196 In addition, the European Union suggests that, with respect to those of China's allegations of violations of Article 17.6(i) not associated with claims of violation of Article 3.1 of the AD Agreement, it may be that China's concern is not provided for in the AD Agreement. The European Union contends that this "does not mean that Article 17.6(i) should be given the role of a catch-all provision for such situations, it merely means that such situations are not regulated by the Anti-Dumping Agreement and, hence, the WTO Members are not bound by any particular disciplines in that respect"197. The European Union concludes that "China is seeking something what the drafters [of the AD Agreement] did not provide for." Finally, the European Union notes that, were the Panel to conclude that Article 17.6(i) applies to some, but not necessarily all situations which could be considered unfair, this would potentially limit any "fairness" obligations inherent in other provisions of the AD Agreement, an outcome it considers the drafters did not intend.198

(b) Arguments of third parties

(i) Brazil

7.31.
Brazil takes the view that Article 17.6(i) "defines the level of deference panels should afford to WTO Members' determinations under other provisions of the ADA", and therefore establishes obligations "solely upon panels, in the course of their assessment of the conduct of IAs during the investigation." Brazil asserts that the obligation to conduct assessments in an unbiased and objective manner imposed on investigating authorities is found in other provisions of the AD Agreement, such as Article 3.1 of the AD Agreement. Finally, Brazil notes that Article 17.6(i) is a procedural rule that deals with WTO consultations and dispute settlement, and only comes into play after the investigating authority's determinations have been taken and the investigation concluded.199

(ii) Colombia

7.32.
Colombia considers that, based on WTO jurisprudence, Article 17.6(i) of the AD Agreement cannot be interpreted to establish additional or indirect obligations on investigating authorities. Colombia submits that the only obligations on WTO Members regarding anti-dumping investigations are those set out in substantive provisions, such as Articles 3.1 and 11.3 of the AD Agreement. Colombia concludes that Article 17.6(i) is limited to clarifying the standard of review to be applied by WTO panels in assessing claims under the AD Agreement.200

(iii) Japan

7.33.
Japan submits that Article 17.6(i) of the AD Agreement "primarily sets out rules applicable to panels" and "does not impose any obligations directly on the [investigating] authorities."201

(iv) United States

7.34.
The United States asserts that Article 17.6(i) of the AD Agreement does not impose obligations on WTO Members, and to "interpret Article 17.6(i) as imposing an obligation on [WTO] 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."202 Accordingly, the United States takes the view that it is not possible, through the use of customary rules of treaty interpretation, to interpret the AD Agreement as containing a fairness standard of general application,203 nor to interpret Article 17.6(i) as imposing "indirect obligations" on investigating authorities.204 The United States submits that China seeks to create an additional obligation on investigating authorities through the revision of the text of the AD Agreement.

(c) Evaluation by the Panel

7.35.
Article 17.6 of the AD Agreement provides, in pertinent part:

"In examining the matter referred to in paragraph 5:

(i) in its assessment of the facts of the matter, the panel shall determine whether the authorities' establishment of the facts was proper and whether their evaluation of those facts was unbiased and objective. If the establishment of the facts was proper and the evaluation was unbiased and objective, even though the panel might have reached a different conclusion, the evaluation shall not be overturned;"

Article 17.6(i) of the AD Agreement is generally understood as an aspect of the "separate" standard of review to be applied by panels in disputes arising under the AD Agreement, specifically in the consideration of the investigating authority's establishment and evaluation of facts.205 This provision appears in the section of the AD Agreement entitled "Consultation and Dispute Settlement", and thus is applicable during panel proceedings. The standard of review in Article 17.6(i) places obligations directly, and in our view exclusively, on a panel in the context of its resolution of an anti-dumping dispute, providing that if the panel concludes that the establishment of the facts by the investigating authority was proper, and the evaluation of such facts was unbiased and objective, the evaluation of the investigating authority shall not be overturned by the panel.206

7.36.
China asserts that because, in its view, the Appellate Body has held that Article 17.6(i) of the AD Agreement explicitly imposes an obligation on panels to overturn an establishment or evaluation of the facts in certain situations,207 this provision also necessarily and impliedly imposes certain obligations on the investigating authority in the conduct of an anti-dumping investigation, specifically, to properly establish facts, and to evaluate those facts in an unbiased and objective manner. In China's view, another Member can directly challenge all factual determinations in an anti-dumping investigation in dispute settlement under Article 17.6(i), independent of any claim of violation of any other provision of the AD Agreement. The European Union disagrees, and asks the Panel to rule, as a preliminary matter, that China's claims alleging violations of Article 17.6(i) are not within its terms of reference. As we understand it, the European Union's objection comprises two aspects, a substantive aspect, arguing that Article 17.6(i) does not impose any obligations on WTO Members, but only on panels, and that this provision cannot be interpreted as an independent legal basis of a claim, and a procedural aspect, arguing that China failed to state its claims under Article 17.6(i) with sufficient clarity to satisfy Article 6.2 of the DSU.208 China asserts that the question whether Article 17.6(i) of the AD Agreement impliedly imposes obligations on WTO Members is "an issue of first impression for the Panel"209, at least with respect to the relationship between the broad standards allegedly established by Article 17.6(i) and "those parts of investigation not arising under a provision with some sort of fairness or due process language already explicitly built into it".210 However, China refers to the Appellate Body Report in US – Hot‑Rolled Steel to support its views, seeming to suggest that the issue has been considered in WTO dispute settlement.211
7.37.
We consider that the text of Article 17.6(i) of the AD Agreement is clear on its face, and only creates obligations on panels and not on investigating authorities of WTO Members in the conduct of anti-dumping investigations. As discussed above, the customary rules of public international law we are to apply in this dispute establish that treaty provisions shall be interpreted in good faith in accordance with the ordinary meaning given to the terms of the treaty taking into account their context, object and purpose.212 The ordinary meaning of the text of Article 17.6(i) – "the panel shall determine" – is clear, and is specifically and exclusively directed at the actions of panels. There is no suggestion in the text of this provision that it also applies to the actions of WTO Members in general, or to specific aspects of the conduct of anti-dumping investigations by their investigating authorities. Moreover, Article 17 of the AD Agreement is entitled "Consultation and Dispute Settlement", and establishes special rules for the conduct of dispute settlement in the case of anti-dumping measures. This context further supports our view that the provision is directed solely at the actions of panels. It is in our view noteworthy that, where Article 17 is directed at the actions of WTO Members, this is clear from the text itself, as in Articles 17.2, 17.3, and 17.4 of the AD Agreement.213 In addition, Article 17.5 of the AD Agreement relates exclusively to the actions of the Dispute Settlement Body ("DSB") in establishing a panel in an anti-dumping dispute.214 Similarly, Article 17.6 refers only to the actions of panels in their resolution of an anti-dumping dispute. Our understanding of the meaning of Article 17.6(i) applies equally to the two distinct groups of claims identified by China215, that is, alleged violations of Article 17.6(i) where there is also an alleged violation of another provision of the AD Agreement that already contains some sort of fairness or due process language built into it, and alleged violations of Article 17.6(i) alone. It seems clear to us that a provision of the AD Agreement which does not impose obligations on investigating authorities of WTO Members in the conduct of anti-dumping investigations cannot establish an independent legal basis for a claim of violation of the AD Agreement by the investigating authority.
7.38.
China's position ignores the ordinary meaning of Article 17.6(i) in its immediate context. The legitimate expectations of WTO Members are reflected in the text of the covered agreements themselves.216 In our view, to interpret this provision as China argues would impose obligations on WTO Members that were not agreed upon during the negotiation of the AD Agreement, inconsistently with the well-established view that the principles of treaty interpretation in WTO dispute settlement "neither require nor condone the imputation into a treaty of words that are not there or the importation into a treaty of concepts that were not intended".217 To accept China's interpretation would also be inconsistent with Article 3.2 of the DSU, as in our view it would "add to or diminish the rights and obligations provided in the [AD Agreement]", and would be an improper application of the interpretative principles of the Vienna Convention.
7.39.
We note that no previous panel or Appellate Body report has ever found a WTO Member to have acted inconsistently with Article 17.6(i) of the AD Agreement. WTO reports regarding Article 17.6(i) in general address the relationship between this provision and the standard of review set forth in Article 11 of the DSU, concluding that there is no conflict between the two provisions.218
7.40.
We recognize that the panel in Egypt – Steel Rebar considered whether a claim of violation of Article 17.6(i) of the AD Agreement was properly presented by Turkey. However, the panel was not required to decide on the admissibility of such a claim, since it dismissed the purported claim of violation of Article 17.6(i) as being outside its terms of reference, due to the absence of any explicit citation of this provision in Turkey's request for the establishment of a panel. Nevertheless, the panel stated that:

"Furthermore, while, given our dismissal of this claim on procedural grounds, we need not rule on whether a violation of Article 17.6(i) can be the subject of a claim by a party in a dispute, we have considerable doubts in this regard. What is clear nevertheless, and in any case, is that Article 17.6(i) lays down the standard which a panel has to apply in examining the matter referred to it in terms of Article 17.5 of the AD Agreement. As such, we are of course bound by it in our consideration of the claims in this dispute."219

In Thailand – H‑Beams, the Appellate Body addressed Articles 17.5, 17.6, and 3.1 of the AD Agreement, stating:

"Articles 17.5 and 17.6 clarify the powers of review of a panel established under the Anti-Dumping Agreement. These provisions place limiting obligations on a panel, with respect to the review of the establishment and evaluation of facts by the investigating authority. Unlike Article 3.1, these provisions do not place obligations on WTO Members. Further, while the obligations in Article 3.1 apply to all injury determinations undertaken by Members, those in Articles 17.5 and 17.6 apply only when an injury determination is examined by a WTO panel. The obligations in Articles 17.5 and 17.6 are distinct from those in Article 3.1."220

Although it is true, as China argues,221 that the Appellate Body in Thailand – H‑Beams focused on the relationship between Articles 3.1, 17.5 and 17.6 of the AD Agreement, this passage reinforces our understanding of the nature of the obligations under Article 17.6(i) of the AD Agreement as affecting exclusively the actions of panels, and not those of investigating authorities of WTO Members in the conduct of anti-dumping investigations.

7.41.
China cites the Appellate Body Report in US – Hot‑Rolled Steel in support of its assertion that Article 17.6(i) of the AD Agreement imposes obligations on investigating authorities.222 We do not agree with China's reading of this report. In the passage of the report relied upon by China, the Appellate Body stated:

"In considering Article 17.6(i) of the Anti-Dumping Agreement, it is important to bear in mind the different roles of panels and investigating authorities. Investigating authorities are charged, under the Anti-Dumping Agreement, with making factual determinations relevant to their overall determination of dumping and injury. Under Article 17.6(i), the task of panels is simply to review the investigating authorities' "establishment" and "evaluation" of the facts. To that end, Article 17.6(i) requires panels to make an "assessment of the facts ". The language of this phrase reflects closely the obligation imposed on panels under Article 11 of the DSU to make an "objective assessment of the facts "....

Although the text of Article 17.6(i) is couched in terms of an obligation on panels – panels "shall" make these determinations – the provision, at the same time, in effect defines when investigating authorities can be considered to have acted inconsistently with the Anti-Dumping Agreement in the course of their "establishment" and "evaluation" of the relevant facts. In other words, Article 17.6(i) sets forth the appropriate standard to be applied by panels in examining the WTO-consistency of the investigating authorities' establishment and evaluation of the facts under other provisions of the Anti-Dumping Agreement. Thus, panels must assess if the establishment of the facts by the investigating authorities was proper and if the evaluation of those facts by those authorities was unbiased and objective."223

We understand the Appellate Body in this passage to be discussing the relationship between the standard of review established by Article 17.6(i) and that defined by Article 11 of the DSU.224 This understanding is bolstered by the fact that this section of the Appellate Body Report is under the heading "Article 17.6 of the Anti-Dumping Agreement and Article 11 of the DSU: Standard of Review". In our view, it is clear that the Appellate Body made no findings suggesting that Article 17.6(i) imposes obligations on investigating authorities. On the contrary, the Appellate Body stressed the different roles of panels and investigating authorities, and indicated in the quoted passage that Article 17.6(i) only contains obligations for panels when assessing determinations taken by investigating authorities.

7.42.
Finally, China seeks support for its interpretation of Article 17.6(i) of the AD Agreement in the Appellate Body Report in Australia – Salmon.225 In that case, the Appellate Body stated that although the Agreement on the Application of Sanitary and Phytosanitary Measures ("SPS Agreement") does not contain an explicit provision obliging WTO Members to determine the appropriate level of protection, such an obligation is implicit in several provisions of that agreement.226 The Appellate Body concluded that "[i]t would obviously be wrong to interpret the SPS Agreement in a way that would render nugatory entire Articles or paragraphs of Articles of this Agreement and allow Members to escape from their obligations under this Agreement."227 China draws a parallel with Australia – Salmon to read an impliedobligation on investigating authorities arising from Article 17.6(i) 's explicit obligations on panels, arguing that such "implied obligation would be necessary to ensure the utility of the explicit obligation."228
7.43.
We fail to see how the Appellate Body's statement in Australia – Salmon is relevant to this case. There are numerous factual and legal differences between this dispute and Australia – Salmon. Importantly, in Australia – Salmon, the Appellate Body found that certain provisions of the SPS Agreement presupposed that a certain action or decision – in that case the determination of the appropriate level of protection – would be taken by a Member, otherwise "it would clearly be impossible to examine" whether that Member was complying with its obligations under the SPS Agreement.229 China has not shown how or why the obligation it asserts Article 17.6(i) of the AD Agreement implicitly imposes on investigating authorities would be necessary to render operational the obligation explicitly imposed by this provision on WTO panels.Nor is any such explanation evident to us. Indeed, in our view, a WTO panel is entirely capable of fulfilling its obligations under Article 17.6(i) in the absence of any implicit obligation on investigating authorities such as proposed by China.
7.44.
Based on the foregoing, we conclude that Article 17.6(i) of the AD Agreement does not impose any obligations on the investigating authorities of WTO Members in anti-dumping investigations that could be the subject of a finding of violation, and we therefore dismiss all of China's claims of violation of Article 17.6(i) of the AD Agreement.230

3. China's claims against Council Regulations Nos. 1294/2009 and 1472/2006

(a) Alleged lack of specificity

7.45.
The European Union also objects to China's claim II.5, with respect to the determination of causation in the Review Regulation, asserting that China's panel request does not present the problem clearly as required under Article 6.2 of the DSU. The European Union notes that in the panel request with respect to this claim, China sets out the relevant text of Article 3.5 of the AD Agreement, and asserts that the Review Regulation fails to respect the obligations established by that provision. The European Union considers this insufficiently specific to comply with Article 6.2 of the DSU. The European Union contends that the extent to which this claim lacks specificity is apparent from a comparison with the parallel claim III.9, concerning the determination of causation of injury in the Definitive Regulation, where China sets out specific grounds, for example, the export performance of EU producers, and changes in the pattern of consumption, as the basis of its claim.231
7.46.
The European Union also objects to China's claims II.12 and III.19, alleging violations of Article 12.2.2 of the AD Agreement with respect to the adequacy of the explanation of the determinations in the expiry review and original determination. In the panel request, China claims that the Commission violated Article 12.2.2 by failing to give reasons for their decisions, including reasons for the acceptance or rejection of arguments made to them. The European Union asserts that China's panel request gives no indication of how or where this failure arises, simply repeating the text of the Article. The European Union notes that the Regulations at issue in this case are long and complex, and a mere reference to one or the other of the Regulations as a whole is inadequate to satisfy the Article 6.2 requirement to identify the relevant measure with sufficient specificity. Moreover, the European Union asserts that the Article 12.2.2 obligations apply to virtually all aspects of the findings and determinations of the EU authorities in the two proceedings at issue. While China's claims thus potentially cover virtually every element of the Regulations, they give no indication as to which China intends to pursue in the dispute. For the European Union, this demonstrates a failure to identify the measure "with sufficient particularity to indicate the nature of the measure and the gist of what is at issue".232
7.47.
China argues first that the European Union appears to be requesting that the Panel exclude several of China's key substantive and procedural claims on the basis that China did not cite the page numbers or paragraphs in the Definitive and Review Regulations, which the European Union itself wrote.233 China asserts that the Regulations at issue are "quite easily navigable", and that matching China's claims with the relevant sections of the Regulations "would take only a small fraction of the amount of time" the European Union expended in requesting preliminary rulings with respect to these claims.234
7.48.
China notes that panels and the Appellate Body have concluded that the mere listing of provisions can be sufficient to provide a brief summary of the legal basis of a complaint, and asserts that with respect to its claim II.5, its panel request goes beyond a mere listing to describe how the measure violates the provision. China contends that the European Union seems to be suggesting that China either phrase the legal basis on which it is attacking a measure in its own words, or else discuss its actual arguments with respect to the claim, and asserts that neither is required by Article 6.2 of the DSU. China contends that while this might not always be the case, in the context of an anti-dumping investigation, the gist of what is at issue should be clear – in this case, "the European Union's determination of causation, the non-attribution requirement, and the objectivity of the investigating authority with respect to those issues". To require anything further would, in China's view, require "an exposition of China's actual arguments, which... is certainly not necessary." Moreover, China asserts that a panel request may be clarified by reference to the complaining party's first written submission, and that the European Union has failed to demonstrate prejudice.235
7.49.
China states that it considers many sections of the Regulations at issue to be in violation of Article 12.2.2, and that it expects the Panel to consider each of them, but asserts that the most appropriate place to specify which precise parts of the Regulations violate this provision is in its first written submission. China considers that the permissibility of consulting the complaining party's first written submission for the purpose of clarifying claims made is especially pertinent with respect to this sort of claim. Finally, China notes that with respect to these claims, the European Union has neither asserted prejudice nor offered supporting particulars.236
7.50.
With respect to these objections, we have carefully considered the terms of China's panel request. We note that, contrary to China's contention, the panel request with respect to Article 3.5 does not indicate in what respect the Review Regulation is considered inconsistent with Article 3.5, but merely repeats the text of the provision. China asserts that it is "of no consequence" that the language in the panel request "happens to be the same language found in the text of the provision". China concedes that a party cannot cure a defective panel request in a first written submission, but asserts that, to the extent that its panel request may be lacking in specificity, its first written submission expands on the claims set out in the panel request, and sets out the precise arguments to which the European Union will have to respond.237 In this respect, China relies on the Appellate Body's ruling in US – Carbon Steel, that "in considering the sufficiency of a panel request, submissions and statements made during the course of the panel proceedings, in particular the first written submission of the complaining party, may be consulted in order to confirm the meaning of the words used in the panel request and as part of the assessment of whether the ability of the respondent to defend itself was prejudiced."238 Similarly, with respect to the claims under Article 12.2.2, there is no indication whatsoever as to what aspects of the Regulations are alleged by China to be inconsistent with the requirements of that Article, as the panel request simply contains an excerpt from the text of the Article, and alleges a violation thereof. We consider that China's panel request is extremely cursory, and could have been drafted more explicitly in this regard. Nonetheless, when viewed in light of China's first written submission, which does set out more specifically the particulars of China's claims in the arguments made, we conclude that it nonetheless suffices, albeit barely, to give the European Union the gist of what is at stake in the panel request. We therefore deny the European Union's request for a preliminary ruling with respect to claims II.5, II.12 and III.19 and conclude that they are within our terms of reference.

(b) Alleged lack of consultations

7.51.
The European Union also raises a preliminary objection based on an alleged lack of consultations. The European Union asserts that China's claim III.6, concerning the calculation of the profit margin in the context of the lesser duty determination, is outside this Panel's terms of reference because it was not subject to consultations.239 This claim reads as follows:

"Articles 3.1, 3.2, 9.1 and 17.6(i) of the Anti-Dumping Agreement as the EU failed to objectively examine, based on positive evidence, 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 because:...

the EU inappropriately established the profit margin for the EU industry."240

The European Union notes that the request for consultations addresses the profit margin in paragraphs 2.6 and 2.8, which state, respectively:

"Articles 3.1, 3.2 and 17.6(i) of the Anti-Dumping Agreement as the EU failed to objectively examine, based on positive evidence, 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 because the EU's underselling calculation was based on a very low quantity of exports of the sampled Chinese exporting producers; the EU wrongly calculated the underselling margin by applying a volume-based reduction ratio to the originally calculated price-based margin and by allocating the non-injurious import value in relation to import values for a period outside the investigation period."

"Articles 3.1 and 3.4 of the Anti-Dumping Agreement as the EU failed to objectively examine, based on positive evidence, 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 because several key injury indicators were analysed on the basis of the data of the whole EU production and not on the data of the sampled EU producers or EU industry; and the EU inappropriately established the profit margin for the EU industry."241

7.52.
According to the European Union, by incorporating Article 9.1 of the AD Agreement in its request for establishment, when that provision is not mentioned in the request for consultations, China has "radically changed the nature of this claim".242 The European Union argues that paragraph 2.6 of the request for consultations relates to the issue of injury, but the reference to Article 9.1 coupled with the specific mention of the profit margin in the panel request suggests that China is attempting to include the European Union's implementation of the lesser duty principle, which is an entirely different issue, and arises only after the determination of injury has been made. For the European Union, merely that an issue, such as price undercutting, may be considered in both the injury and lesser duty contexts does not mean that they are not different, such that a request for consultations with respect to one justifies a request for establishment with respect to a claim concerning the other.243
7.53.
China notes that the exclusion of claims from the terms of reference of a panel based on a difference between the panel request and the request for consultations is rare in WTO jurisprudence.244 China points out that the difference in this case is the addition of Article 9.1 with the injury claims, which it asserts is a "logical extension of the original claim", asserting that "Article 3 deals with the determination of the extent (if any) of injury, and Article 9.1 calls for a determination of the duty on the basis of the injury determination made on the basis of Article 3."245 China points out that that all but one of the cases relied on by the European Union deal with the question of changing the measures in dispute, and did not result in the exclusion of the challenged measures from the terms of reference. Even in the one case concerning a change in the claims, the panel did not find the change to justify finding the disputed claim outside its terms of reference.246 China contends that the additional considerations in its claim III.6 should be determined to have "naturally evolved" from the analogous claim in the request for consultations.247
7.54.
This portion of the European Union's terms of reference objections raises the question of the relationship between a complaining party's request for consultations and the panel's terms of reference. We recall that the DSU does not contain a provision that directly addresses this issue. Article 4 of the DSU, entitled "Consultations", provides in relevant part:

"4.Any request for consultations shall be submitted in writing and shall give the reasons for the request, including identification of the measures at issue and an indication of the legal basis for the complaint....

7. If the consultations fail to settle a dispute within 60 days after the date of receipt of the request for consultations, the complaining party may request the establishment of a panel. The complaining party may request a panel during the 60-day period if the consulting parties jointly consider that consultations have failed to settle the dispute." (emphasis added)

Article 17 of the AD Agreement also contains provisions regarding consultations between WTO Members in disputes under that Agreement, providing in relevant part:

"17.1Except as otherwise provided herein, the Dispute Settlement Understanding is applicable to consultations and the settlement of disputes under this Agreement....

17.3 If any Member considers that any benefit accruing to it, directly or indirectly, under this Agreement is being nullified or impaired, or that the achievement of any objective is being impeded, by another Member or Members, it may, with a view to reaching a mutually satisfactory resolution of the matter, request in writing consultations with the Member or Members in question. Each Member shall afford sympathetic consideration to any request from another Member for consultation.

17.4 If the Member that requested consultations considers that the consultations pursuant to paragraph 3 have failed to achieve a mutually agreed solution, and if final action has been taken by the administering authorities of the importing Member to levy definitive anti‑dumping duties or to accept price undertakings, it may refer the matter to the Dispute Settlement Body ("DSB")." (emphasis added)

7.55.
Thus, Article 4.4 of the DSU provides that a request for consultations has to identify the measures at issue and indicate the legal basis of the complaint, and Article 4.7 of the DSU, in turn, stipulates that if parties fail to settle the dispute within 60 days from the receipt of the consultations request, the complaining party may request the establishment of a panel. Article 17.1 of the AD Agreement states that the DSU applies to the consultations and the settlement of disputes that arise under the AD Agreement. Article 17.3 of the AD Agreement provides that if a Member considers that any benefit accruing to it, directly or indirectly, under the AD Agreement is nullified or impaired, or that the achievement of any objective is impeded by another Member, it may request consultations with the Member concerned. Article 17.4 states that if parties fail to settle the dispute through consultations, the complaining Member may refer the matter to the DSB to seek the establishment of a panel. Finally, Article 17.5 provides that the DSB would, in such a situation, establish a panel to resolve the dispute.
7.56.
However, in our view it is clear that none of these provisions supports the proposition that a complaining Member is precluded from identifying in its panel request claims not identified in its request for consultations. Article 6.2 of the DSU requires that a panel request mention whether consultations were held, but it does not say that the scope of the request for consultations also determines the scope of the subsequent panel request. Article 17.4 provides that "the matter" may be referred to the DSB, but does not say that the scope of the consultations defines that "matter".
7.57.
The effect of a complaining Member's request for consultations on a panel's terms of reference has been discussed extensively in prior reports. In Canada – Aircraft, for instance, the respondent argued that certain claims raised with respect to measures that were not identified in the complaining Member's request for consultations fell outside the panel's terms of reference. The panel rejected this argument. The panel underlined the fact that a panel's terms of reference were determined by the complaining Member's panel request, adding that as long as the request for consultations and the panel request concerned the same "dispute", the claims raised in the panel request would fall within its terms of reference even if they were not raised in the request for consultations. In the panel's view, "this approach [sought] to preserve due process while also recognising that the "matter" on which consultations are requested [would] not necessarily be identical to the "matter" identified in the request for establishment of a panel."248 It follows from this reasoning that the scope of a request for consultations and that of a panel request do not have to be identical. The panel's findings on this particular issue were not appealed.
7.58.
A similar issue arose in Brazil – Aircraft. The respondent in that case argued that certain subsidy programmes not identified in the complainant's request for consultations were not within the panel's terms of reference, even though they were identified in the panel request. The panel noted that under the DSU, the terms of reference of a WTO panel were determined by the complaining Member's panel request, not its request for consultations. While acknowledging the importance of the consultations in terms of clarifying the situation between the parties to the dispute, the panel nevertheless reasoned that "to limit the scope of the panel proceedings to the identical matter with respect to which consultations were held could undermine the effectiveness of the panel process."249 According to the panel:

"[A] panel may consider whether consultations have been held with respect to a "dispute", and that a preliminary objection may properly be sustained if a party can establish that the required consultations had not been held with respect to a dispute. We do not believe, however, that either Article 4.7 of the DSU or Article 4.4 of the SCM Agreement requires a precise identity between the matter with respect to which consultations were held and that with respect to which establishment of a panel was requested."250

On appeal, the Appellate Body agreed with the panel's reasoning:

"We do not believe, however, that Articles 4 and 6 of the DSU, or paragraphs 1 to 4 of Article 4 of the SCM Agreement, require a precise and exact identity between the specific measures that were the subject of consultations and the specific measures identified in the request for the establishment of a panel. As stated by the Panel, "[o]ne purpose of consultations, as set forth in Article 4.3 of the SCM Agreement, is to 'clarify the facts of the situation', and it can be expected that information obtained during the course of consultations may enable the complainant to focus the scope of the matter with respect to which it seeks establishment of a panel." We are confident that the specific measures at issue in this case are the Brazilian export subsidies for regional aircraft under PROEX. Consultations were held by the parties on these subsidies, and it is these same subsidies that were referred to the DSB for the establishment of a panel. We emphasize that the regulatory instruments that came into effect in 1997 and 1998 did not change the essence of the export subsidies for regional aircraft under PROEX."251

7.59.
More recently, the Appellate Body, in US – Upland Cotton underlined the importance of not inappropriately limiting the scope of the dispute on the basis of the request for consultations, observing:

"As long as the complaining party does not expand the scope of the dispute, we hesitate to impose too rigid a standard for the "precise and exact identity" between the scope of consultations and the request for the establishment of a panel, as this would substitute the request for consultations for the panel request. According to Article 7 of the DSU, it is the request for the establishment of a panel that governs its terms of reference, unless the parties agree otherwise."252

7.60.
In Mexico – Anti-Dumping Measures on Rice, the respondent argued that the complainant had broadened the scope of the legal basis of the complaint in the panel request compared with the request for consultations and asked the panel to find that the claims associated with the new legal provisions cited in the panel request were outside the panel's terms of reference. The panel declined the request on the following grounds:

"In our view, the fact that certain provisions were added to the list of alleged violations in the request for establishment compared to the request for consultations is a consequence of the consultation process which serves the purpose of clarifying the facts of the situation enabling the complainant to focus the scope of the matter with respect to which it seeks the establishment of a panel. It does not mean that no consultations were held on the matter, as the only difference between the request for consultations and the request for establishment consists of the fact that a number of closely related legal provisions alleged to have been violated were added. The measures remained the same and so did the legal basis for the complaint, as is evident from the narrative provided in the request for establishment. In our view, consultations were thus held on the matter on which the establishment of a Panel was requested. We therefore reject Mexico's request in this respect."253

The Appellate Body upheld the panel's findings in this regard. The Appellate Body recalled its previous findings on this issue and pointed out that the reasoning of prior reports regarding the difference between the scope of the request for consultations and the panel request with respect to the specific measures at issue equally applied to the difference between these two documents with respect to the legal basis of the complaint. The Appellate Body emphasised that the role of consultations was to allow the exchange of information necessary to refine the contours of the dispute, as a result of which the complaining Member might reformulate its claims in its panel request. According to the Appellate Body:

"[It] is not necessary that the provisions referred to in the request for consultations be identical to those set out in the panel request, provided that the "legal basis" in the panel request may reasonably be said to have evolved from the "legal basis" that formed the subject of consultations. In other words, the addition of provisions must not have the effect of changing the essence of the complaint."254

7.61.
Based on the foregoing, we also conclude that there does not have to be precise identity between China's request for consultations and its panel request either with regard to the specific measures at issue or with regard to the legal basis of the complaint. As long as the request for consultations and the panel request concern "the same matter" or, put differently, as long as the legal basis of the panel request "may reasonably be said to have evolved from the legal basis identified in the request for consultations", a claim, even if not specifically identified in the request for consultations, may be found to have been properly identified in the panel request and within the scope of the request for consultations, and therefore within a panel's terms of reference. In our view, that is the situation in this case. We therefore deny the European Union's request for a preliminary ruling, and conclude that China's claim III.6, concerning the calculation of the profit margin in the context of the lesser duty determination, is within our terms of reference.

D. claims regarding council regulation 1225/2009 (the basic ad regulation) "as such"

7.62.
In this section of our report, we address China's claims asserting that Article 9(5) of the Basic AD Regulation is inconsistent with various provisions of the AD Agreement, GATT 1994, and the WTO Agreement. Before doing, so, however, we set forth below our understanding with respect to the operation of relevant provisions of the Basic AD Regulation.

1. Relevant Provisions of the Basic AD Regulation

7.63.
Council Regulation 1225/2009, the Basic AD Regulation, is the currently-in-force EU legislative instrument that lays down the substantive and procedural requirements pertaining to anti-dumping investigations in the European Union. Article 2 of the Basic AD Regulation addresses the determination of dumping, including the determination of normal value. The basic rules set out in Article 2(1) -(6) for the determination of normal value essentially replicate the provisions of Article 2.2 of the AD Agreement, and apply to investigations of allegedly dumped imports from market economy countries, whether or not Members of the WTO. Paragraph 7 of Article 2 contains specific rules on the determination of normal value in investigations of allegedly dumped imports from non-market economies ("NMEs"). It treats NMEs in two distinct categories, and establishes different rules for the determination of normal value for these two categories of NME:

· Paragraph 7(a) provides that, "[i]n the case of imports from non-market economy countries [including Albania, Armenia, Azerbaijan, Belarus, Georgia, North Korea, Kyrgyzstan, Moldova, Mongolia, Tajikistan, Turkmenistan and Uzbekistan], normal value shall be determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries, including the Community, or where those are not possible, on any other reasonable basis, including the price actually paid or payable in the Community for the like product, duly adjusted if necessary to include a reasonable profit margin."

· Paragraph 7(b) provides that, "[i]n anti-dumping investigations concerning imports from the People's Republic of China, Vietnam and Kazakhstan and any non-market-economy country which is a member of the WTO at the date of the initiation of the investigation, normal value shall be determined in accordance with paragraphs 1 to 6, if it is shown, on the basis of properly substantiated claims by one or more producers subject to the investigation and in accordance with the criteria and procedures set out in subparagraph (c), that market economy conditions prevail for this producer or producers in respect of the manufacture and sale of the like product concerned. When this is not the case, the rules set out under subparagraph (a) shall apply."

Paragraph 7(c) sets out the criteria on the basis of which a foreign producer/exporter in a country falling within the category defined by paragraph 7(b), in this case China, may make a claim, in writing, providing evidence that it operates under market economy conditions.255 If successful, such a producer/exporter will be treated under the first option in paragraph 7(b). That is, if successful, the determination of normal value for such a producer will be made in accordance with the rules applicable to market economy countries, as set out in Articles 2(1) – 2(6) of the Basic AD Regulation. There are no claims in this dispute with respect to the market economy test per se, either as such, or as applied in the original investigation or the expiry review.

7.64.
The subject of China's "as such" claims is paragraph 5 of Article 9 of the Basic AD Regulation, which explains the modalities with regard to the imposition of anti-dumping duties. It reads, in relevant part:

"An anti-dumping duty shall be imposed in the appropriate amounts in each case, on a non-discriminatory basis on imports of a product from all sources found to be dumped and causing injury, except for imports from those sources from which undertakings... have been accepted. The Regulation imposing the duty shall specify the duty for each supplier or, if that is impracticable, and in general where Article 2(7) (a) applies, the supplying country concerned." (emphasis added)

Thus, Article 9(5) sets out two circumstances in which a duty for each supplier will not be specified: (1) where it is impracticable to name each supplier, and (2) in general, where Article 2(7) (a) of the Basic AD Regulation applies – that is, where normal value is determined "on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries, including the Community, or where those are not possible, on any other reasonable basis, including the price actually paid or payable in the Community for the like product, duly adjusted if necessary to include a reasonable profit margin." In these cases, the regulation imposing the duty will specify a duty rate for the "supplying country concerned" rather than for "each supplier". In other words, a single "country-wide" duty rate will be specified, rather than an individual duty rate for "each supplier".

7.65.
Nonetheless, pursuant to Article 9(5) of the Basic AD Regulation, the Commission will specify an individual duty rate in investigations where Article 2(7) (a) applies for producers/exporters who can demonstrate that they satisfy all of the following criteria:

"(a) in the case of wholly or partly foreign owned firms or joint ventures, exporters are free to repatriate capital and profits;

(b) export prices and quantities, and conditions and terms of sale are freely determined;

(c) the majority of the shares belong to private persons; state officials appearing on the board of directors or holding key management positions shall either be in minority or it must be demonstrated that the company is nonetheless sufficiently independent from State interference;

(d) exchange rate conversions are carried out at the market rate; and

(e) State interference is not such as to permit circumvention of measures if individual exporters are given different rates of duty."

These criteria are referred to as the "individual treatment" ("IT") test. If a producer/exporter in an investigation where a single country-wide duty rate is specified under Article 9(5) of the Basic AD Regulation demonstrates that it satisfies these conditions, the Commission will specify an individual duty rate for that producer/exporter. Producers/exporters who do not satisfy the IT test will be subject to the country-wide duty rate.

7.66.
In sum, for a Chinese producer/exporter subject to an anti-dumping investigation in the European Union, the following are the possibilities with respect to the determination of normal value and the imposition of duty:

· If the producer/exporter fulfils the market economy conditions, that is, if it can demonstrate that it operates under market economy principles, then under Article 2(7) (b), its normal value will be determined on the same basis as for producers in market economies, under paragraphs (1) -(6) of Article 2. A dumping margin for that producer/exporter will be calculated by comparing that normal value to the export prices of that producer/exporter, and an individual duty rate will be applied to that producer/exporter.

· If the producer/exporter fails to fulfil the market economy conditions, then its normal value will be determined, pursuant to Article 2(7) (a), on the basis of an alternative method (typically based on prices in an analogue third country). Whether an individual duty rate is specified for it, based on a comparison of the producer/exporter's own export sales with the normal value determined, will depend on whether the producer/exporter requests and is granted IT.

o If the producer/exporter makes a request for IT and demonstrates that it satisfies the five criteria set out in Article 9(5) of the Basic AD Regulation, the producer/exporter will have an individual duty rate, calculated on the basis of its own export prices, specified for it.

o Otherwise, the producer/exporter will be subject to a country-wide duty rate based on the normal value determined. The determination of the export price used to calculate that countrywide duty rate will depend on the level of cooperation on the part of the non-IT exporters altogether. If the level of cooperation is high, i.e. if the cooperating non-IT exporters account for close to 100 per cent of all exports, the export price will be based on a weighted average of the actual price of all export transactions effected by these exporters. If, however, the level of cooperation is low, i.e. if the non-IT exporters account for significantly less than 100 per cent of all exports, the Commission will resort to facts available to complete the missing information. The selection of the facts available will depend on the gravity of non-cooperation and may include statistical import data.

2. Claims I.1, I.2, I.3 and I.4 - Alleged violation of Articles 6.10, 9.2, 9.3 and 9.4 of the AD Agreement

(a) Arguments of the parties

7.67.
China argues that Article 6.10 of the AD Agreement requires investigating authorities in principle to calculate an individual margin of dumping for each exporter/producer of the allegedly dumped imports. Exceptionally, it allows the use of a sample where the number of exporters, producers, importers or types of products involved is high. For China, the text and context of Article 6.10 make clear that this is the sole exception to the mandatory rule of calculating an individual dumping margin for each known exporter or producer. China argues that Article 9(5) of the Basic AD Regulation creates an additional exception to the general rule of calculating an individual dumping margin for each known producer or exporter. China recognizes that Article 9(5) refers to the imposition of anti-dumping duties, but contends that, "logically the determination of an individual anti-dumping duty presupposes the determination of an individual dumping margin."256 Given that the determination of dumping margins and anti-dumping duties are loosely linked, China considers that, effectively, whether an exporter/producer qualifies for IT under Article 9(5) determines whether an individual margin will be calculated for it, since only after the determination of such an individual margin can an individual dumping duty be applied to it. By providing that producers/exporters from NMEs will be subject to a country-wide margin of dumping unless they satisfy the criteria in that provision, China asserts that Article 9(5) therefore violates Article 6.10 of the AD Agreement as such.257
7.68.
Assuming this claim is within the Panel's terms of reference, the European Union contends that Article 9(5) of the Basic AD Regulation is not inconsistent with Article 6.10 of the AD Agreement. The European Union begins its argument by detailing the basic rationale behind Article 9(5) of the Basic AD Regulation, which in the European Union's view reflects, in the case of NMEs, the concept that "the imposition of anti-dumping measures primarily aim at addressing the actual source of price discrimination".258 The European Union explains that, in its view, in a NME, the State, in view of its control over the means of production and intervention in the economy, can be considered as one supplier whose dumping behaviour can be identified and addressed under the AD Agreement. For the European Union, in view of State control over international trade in a NME, it would not be relevant to name exporting companies which do not act independently from the State, as they collectively constitute a single supplier, the State. Moreover, the European Union contends that application of a single duty is necessary to avoid circumvention of anti-dumping measures by channelling exports through the supplier with the lowest duty rate. The European Union next explains that it is entitled to treat China as a non-market economy, inter alia by applying Article 9(5) of the Basic AD Regulation. The European Union contends that Article 6.10 of the AD Agreement cannot be interpreted to mean that sampling is the only exception to the general principle of calculating an individual margin for each producer involved in an investigation.259 In this regard, the European Union asserts that the panel in Korea – Certain Paper established the principle that Article 6.10 permits an investigating authority to treat two or more separate legal entities as a single supplier and determine an individual margin of dumping for that supplier.260
7.69.
According to the European Union, Article 9(5) of the Basic AD Regulation allows the EU authorities to identify the source of dumping in investigations involving NMEs, i.e. the State as supplier, or independent suppliers.261 The European Union considers that, in the context of a NME, it is entitled to presume State control of international trade, and therefore the fact that the burden rests on NME exporters/producers to demonstrate that they satisfy the conditions in Article 9(5) of the Basic AD Regulation is justified.262 The European Union reiterates its view that Article 9(5) of the Basic AD Regulation does not relate to the determination of dumping margins, but merely addresses this threshold question.263
7.70.
China argues that Article 9.2 of the AD Agreement clearly establishes that an individual anti-dumping duty has to be established for each producer/exporter, that would be the appropriate duty amount for that producer/exporter.264 For China, the requirement to specifically name the suppliers, read together with Article 6.10, establishes that the duty must be established on an individual basis for each producer/exporter except where it is impracticable to do so because of the large number of producers/exporters involved. Moreover, China considers that the context of Article 9.2, referring in this regard to Article 9 as a whole, Article 6.10, and Articles 9.4 and 9.5 in particular, lends support to the view that the dumping margin and the anti-dumping duty are each to be established on an individual basis. China contends that Article 9.2 does not allow for automatic imposition of duty on a country-wide basis for producers who fail to satisfy the criteria of Article 9(5) of the Basic AD Regulation, and Article 9(5) of the Basic AD Regulation is therefore inconsistent with Article 9.2 of the AD Agreement.265 China asserts that, by not determining the duty on an individual basis and imposing a country-wide duty, the European Union fails to collect duties in "appropriate amounts" as required by Article 9.2 of the AD Agreement.266
7.71.
The European Unioncontends that Article 9.2 of the AD Agreement does not require an anti-dumping duty to be company-specific, but merely that the suppliers be "named". Thus, for the European Union, Article 9(5) of the Basic AD Regulation does not fall within the scope of that Article. Moreover, the European Union contends that "appropriate amounts" in the context of Article 9.2 refers to the "proper" amount, which may be calculated for the State as one supplier in an investigation involving a NME. In the European Union's view, Article 9.2 permits the imposition of duties on a country-wide basis in the case of imports from NMEs, so long as the duty does not exceed the "appropriate" amount calculated for the "source" or supplier of the imports, the State. In any event, the European Union reiterates that sampling is not the only circumstance in which investigating authorities can depart from the general principle of Article 6.10, first sentence. The European Union contends that the term "impracticable" in the third sentence of Article 9.2 is not a mirror to the situation of a large number of suppliers provided for in Article 6.10, but rather implies that investigating authorities can specify a duty for the supplying country where individual duties would be ineffective, not feasible or not suited for being used for a particular purpose, which in the European Union's view includes a situation where the specification of duties per supplier would render those duties ineffective, that is, without effect on the source of the price discrimination.267
7.72.
With respect to its claim under Article 9.3 of the AD Agreement, China recalls that Chinese producers who do not qualify for IT under EU law are assigned a margin of dumping calculated on a country-wide basis. China asserts that this country-wide margin, based on a comparison of the normal value calculated for the analogue country with a weighted average of export prices of all cooperating Chinese producers, as opposed to those of the individual producers, is not calculated consistently with Article 2 of the AD Agreement. According to China, a duty based on such a margin is, in turn, inconsistent with Article 9.3, as it will result in the collection of duty from some exporting producers which exceeds their proper dumping margin.268
7.73.
As an initial matter, the European Unioncontends that China's claim under Article 9.3 of the AD Agreement is dependent on a finding that Article 9(5) of the Basic AD Regulation infringes Article 9.2, and to some extent, Article 6.10 of the AD Agreement as such. Since the European Union considers that these claims must fail, it asserts that China's Article 9.3 claim should also be rejected. Nonetheless, the European Union asserts that since non-IT suppliers are part of the single entity, the State, and their export prices are used to calculate the dumping margin of the State, the manner in which the dumping margin is calculated for the State does not differ from the manner in which the European Union calculates dumping margins for related companies, and both are consistent with the AD Agreement.269
7.74.
China asserts that, to the extent that it applies to investigations in which sampling is used, Article 9(5) of the Basic AD Regulation is inconsistent with Article 9.4 of the AD Agreement for two reasons. First, the duty rate calculated for non-sampled cooperating producers will reflect the weighted average of the margins calculated for the sampled producers which, to the extent those sampled producers were not granted IT, will be inconsistent with Article 2 of the AD Agreement. Second, China asserts that the last sentence of Article 9.4 of the AD Agreement establishes an unqualified obligation to apply individual duties to any producer individually examined under Article 6.10.2 of the AD Agreement. However, Article 9(5) subjects the right to an individual duty to the fulfilment of additional conditions. Thus, producers examined individually under the EU provision implementing Article 6.10.2 of the AD Agreement will only be assessed an individual duty if they satisfy Article 9(5) of the Basic AD Regulation.270
7.75.
As an initial matter, the European Union contends that China's claim under Article 9.4 of the AD Agreement is entirely dependent on its claims under Articles 6.10 and 9.2 of the AD Agreement. The European Union asserts that, since Article 9(5) of the Basic AD Regulation is not inconsistent with the obligations set forth under those two provisions, China's claim under Article 9.4 of the AD Agreement should also be rejected. In any event, the European Union asserts that China's claim is wrong as a matter of fact, since it ignores that the dumping margin is calculated for the supplier, the State, and where a sample is involved, the duty imposed on non-sampled cooperating suppliers does not exceed the weighted average dumping margins for both sampled MET/IT suppliers and the intermediate results found for non-IT suppliers.271

(b) Arguments of third parties

(i) Brazil

7.76.
Brazil argues that the methodology used to calculate dumping margins set out in Articles 2 and 6.10 of the AD Agreement, as well as the exceptions to that methodology, only apply where prices and costs are established according to market-economy rules. Brazil considers that exceptional regimes could apply to the determination of normal value and export price in investigations targeting NMEs, and that the investigating authority enjoys a certain degree of discretion in establishing its methodology for the calculation of the dumping margin in the case of NME countries, and in establishing the criteria that exporters from NME countries must fulfil in order to be receive market economy treatment. Brazil also considers that WTO Members are not prevented from treating legal entities located in NME countries collectively as a single producer/exporter for the purposes of dumping determinations. For Brazil, whether or not a particular company should be classified as a distinct company or as a single producer/exporter in conjunction with other companies under Article 6.10 of the AD Agreement largely depends on the facts in each case. Brazil asserts that, in NMEs, single-exporter treatment is all the more justified. Brazil asserts that what matters is how the European Union's provision is applied in practice, and asks the Panel to assess whether the EU legislation and relevant administrative practice provide adequate opportunities and clear rules for Chinese exporters to show whether they are operating independently from the state in respect of a finite number of clear criteria, and whether, on this basis, they may be entitled to obtain an individual dumping margin.272 Brazil also asserts that Article 9 of the AD Agreement does not establish that authorities must impose individual duties on each company, nor does it prevent the authorities from considering closely related companies as a single entity for the purposes of dumping margin determination. Brazil considers that a violation of Article 9.2 of the AD Agreement is entirely dependent on a violation of Article 9.3, and that an anti-dumping duty that is in conformity with Article 9.3 is necessarily "appropriate" within the meaning of Article 9.2. Brazil asserts that, since the margin of dumping and the appropriate amount of anti-dumping duty can only be determined after the decision on whether or not companies may be regarded as single entities for dumping margin determination purposes, it would be illogical to conclude that not establishing individual duties for companies which are found to operate as a single exporter is incompatible with Article 9 of the AD Agreement.273

(ii) Colombia

7.77.
Colombia recalls that the Contracting Parties to the GATT 1947 identified the difficulties of imposing anti-dumping duties on products from non-market economy countries arising from the difficulty in determining the normal value of goods not produced under market conditions. Colombia notes in this regard the Second Ad Note to Paragraph 1 of Article VI of the GATT 1994, in Annex 1 of the GATT 1994 ("Second Ad Note to Article VI:1 of the GATT 1994"), which is reflected in Article 2.7 of the AD Agreement. Colombia thus considers that WTO Members may use 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.274 Colombia invites the Panel to determine if in the particular circumstances of the case, the differential treatment that the European Union grants to China and other countries, given that those countries do not have a market economy, is allowed under Article 2.7 of the AD Agreement and the second Ad Note to Article VI:1 of the GATT 1994.

(iii) Japan

7.78.
Japan takes the view that the only exception to the mandatory rule of individual dumping margins established in the first sentence of Article 6.10 of the AD Agreement is that set out in the second sentence, i.e. where the number of known exporters or producers is so large as not to allow for individual calculations. However, Japan notes that neither this nor any other provision of the AD Agreement sets forth any explicit criteria to identify an exporter or a producer. Japan considers that the importing Member has a certain amount of discretion to define the meaning of these terms. Japan notes, in this regard, the report of the panel in Korea – Certain Paper, and asserts that, depending on the particular facts of a given case, the authority may find that a group of multiple legal entities constitutes a single exporter. However, Japan distinguishes this question from the obligation to determine an individual margin of dumping for the exporter. Once the authority determines what constitutes an "exporter", Japan considers that the obligation to determine individual margins of dumping applies with respect to the exporters so identified, and individual margins of dumping for such exporters must be calculated unless the exception in the second sentence of Article 6.10 applies. Japan notes that Article 9(5) of the Basic AD Regulation appears to set criteria to identify individual exporters in the context of investigations involving non-market economies. Japan does not take any position whether the specific criteria set forth in Article 9(5) of the Basic AD Regulation would be consistent with Article 6.10 of the AD Agreement, and requests that the Panel carefully review how the criteria in Article 9(5) of the Basic AD Regulation function in antidumping investigations in light the mandatory rule and exception in Article 6.10.275

(iv) Turkey

7.79.
Turkey takes the view that, under the first sentence of Article 6.10 of the AD Agreement, individual treatment is a general rule, and the second sentence of Article 6.10 is an exception to the general rule allowed where sampling is used. Turkey considers that sampling may not be the sole exception to the general rule envisaged in Article 6.10 of the AD Agreement. According to Turkey, the AD Agreement contains rules for economies operating under market economy conditions. Given that there are no specific rules or exceptions provided in the AD Agreement for economies that are not operating under market economy conditions, Turkey believes that it would not be appropriate to look for a non-market economy exception in Article 6.10 itself. However, Turkey considers it is expected that there will be exceptions to the general rules on the calculation of normal value and export price for NMEs, referring in this regard to the second Ad Note to Article VI:1 of the GATT 1994 and China's Accession Protocol. In Turkey's view, it is acknowledged by WTO Members that China is not operating under full market economy conditions yet, and both domestic and export sales prices are not freely determined by market economy forces, and it is therefore reasonable to disregard export sales prices as well as domestic sales prices. Moreover, Turkey considers that previous panel and Appellate Body reports demonstrate that it is not inconsistent with Article 6.10 of the AD Agreement to treat distinct legal entities as a single entity if the conditions so require. Turkey also considers that sampling is not the only exception to the general rule in Article 6.10, first sentence, and there could be other situations, including circumstances where thresholds are set for individual treatment, in which the investigating authorities may not determine individual margin of dumping and accordingly, individual anti-dumping duties for each known exporter or producer. Consequently, Turkey considers that a Member can legally set out a threshold reflecting special circumstances in terms of the variables affecting production, sales and prices to provide IT under Article 6.10.276

(v) United States

7.80.
The United States disagrees with China's claim that Article 9(5) of the Basic AD Regulation is inconsistent as such with Articles 6.10, 9.2, 9.3, and 9.4 of the AD Agreement, considering China's legal arguments to be based on misunderstandings of the relevant provisions of the AD Agreement. The United States considers that the general requirement in Article 6.10 for an investigating authority to calculate an individual margin of dumping applies only in respect of each known "exporter" or "producer," and thus, the investigating authority must first decide whether a particular firm is an "exporter" or "producer." For the United States, since the AD Agreement does not define exporter or producer or set out criteria for determining whether a particular entity constitutes an exporter or producer, an investigating authority is permitted to conclude, based on the facts, which entities constitute an individual producer or exporter as a condition precedent to calculating an individual dumping margin, including establishing which factors may be relevant to making that determination. For the United States, consideration of 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. The United States does not, however, agree with the European Union that the economic realities of firms in NMEs provide an additional exception to the first sentence of Article 6.10, but considers this part of the investigating authority's task in determining the exporters and producers for which it must generally determine an individual margin. The United States submits that, to the extent that Article 9(5) of the Basic AD Regulation is a mechanism for the investigating authority to examine the relationship between firms, that mechanism would not appear to be inconsistent with Article 6.10, but rather would be critical to assist the investigating authority in complying with the general rule in Article 6.10 to calculate a single margin of dumping for every known exporter or producer. The United States contends that, given the influence of the government of China in the commercial practices and decisions of enterprises in China, it would make little sense for an investigating authority to assign an individual dumping margin to an exporting company in China without first confirming that the company functions as an exporter separate from and independent of influence by the government, so as to prevent possible shifting of export activities between production facilities and companies that may be legally distinct, in order to avoid anti-dumping duties. Thus, the United States concludes that an investigating authority may apply criteria to determine whether an individual company is an exporter or producer without acting inconsistently with Article 6.10 of the AD Agreement. The United States also submits that China's interpretation of Article 9 is incorrect. Furthermore, for the United States, 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, and if it concludes that multiple companies are closely related and function 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. In any event, the United States considers that China's claims pursuant to Article 9 of the AD Agreement appear to be dependent on its claims under Article 6.10, which it maintains are based on an incorrect understanding of that provision, and thus provide no basis for China's consequential claims under Article 9 of the AD Agreement.277

(vi) Viet Nam

7.81.
Viet Nam considers that the sole exception to the rule of Article 6.10 of the AD Agreement requiring investigating authorities to determine individual margins of dumping for exporters or producers concerned is sampling where the number of exporters, producers and /or importers involved is so large as to make a determination impracticable. Viet Nam asserts that Article 9(5) of the Basic AD Regulation requires exporters and producers from non-market economy country to satisfy additional conditions in order to qualify for Individual Treatment (IT), and is therefore inconsistent with Article 6.10 of AD Agreement. It is Viet Nam's view that Article 9(5) of the Basic AD Regulation only provides for individual duties for exporters which satisfy the IT requirements, which Viet Nam considers extra and discriminatory conditions, and is thus in violation of Article 9.2 of the AD Agreement, which Viet Nam maintains requires individual anti-dumping duties. Viet Nam considers that country-wide anti-dumping duties on non-IT exporters will necessarily exceed the individual dumping margin of some of the exporters/ producers included in the average duty calculation, in violation of Article 9.3 of the AD Agreement. Viet Nam maintains that, because under Article 9(5) of the Basic AD Regulation, the dumping margin for exporter/producers not qualifying for IT will not be calculated on basis of individual evidence of exporters or producers, the investigating authorities are unable to calculate a weighted-average dumping margin of all sampled exporters or producers as stipulated in Article 9.4 of the AD Agreement. In addition, Viet Nam asserts that, by establishing additional conditions before individual duties will be applied, Article 9(5) of the Basic AD Regulation is inconsistent with Article 9.4 of the AD Agreement, which provides that the authorities shall apply individual duties to imports from any exporter or producer not included in the examination who has provided the necessary information during the course of the investigation.278

(c) Evaluation by the Panel

7.82.
We begin by noting that these same claims were recently considered by the panel in EC –Fasteners (China) , a dispute between these same parties, in which the parties made substantially the same arguments as those summarized above. The final report of the panel in that dispute was issued to the parties on 29 September 2010, and circulated to WTO Members and the public on 3 December 2010, that is, in sufficient time for the parties to consider the findings of that panel in formulating and presenting their arguments to us.279 Indeed, in its second written submission, China explicitly relied upon those findings in its arguments concerning these claims.280 That report is presently before the Appellate Body as the subject of an appeal and cross-appeal by the parties.281 A decision in that appellate proceeding is not expected before we issue our final report in this dispute to the parties. The European Union stated, at our second meeting, that only "adopted" panel reports are binding and create legitimate expectations among Members, and suggested that we consider waiting for any Appellate Body report on this issue, in order to take such a report into account before issuing our interim report in the present case, asserting that this would not cause an undue delay in this Panel's proceedings, and would ensure that our findings effectively contribute to a prompt settlement of this dispute.282 Subsequently, after the appeal had been filed, the European Union requested in writing that we delay issuance of our interim report until after the Appellate Body had ruled in the appeal in EC – Fasteners (China) .283 China opposed the European Union's request.284 We denied the European Union's request.285
7.83.
While we recognize that the unadopted report of a panel does not bind the parties, we nonetheless consider that we may take it into account in our own deliberations, and, to the extent we find the analysis, reasoning, and conclusions of that report persuasive on the issues before us, may follow it. In our view, this is a more effective and efficient course of action than to await a decision from the Appellate Body, particularly where, as here, the appeal proceedings have been delayed at the joint request of the parties, and the complainant objects to delay.286 Thus, we have considered carefully the views of the panel in EC – Fasteners (China) in our deliberations on the dispute before us. As discussed in more detail below, we find that panel's analysis and reasoning persuasive on the issues arising in our consideration of China's "as such" claims with respect to Article 9(5) of the Basic AD Regulation, and have therefore largely adopted its reasoning and conclusions as our own in this dispute.
7.84.
We begin by noting the disagreement between the parties as to the scope and operation of Article 9(5) of the Basic AD Regulation. The European Union asserts that Article 9(5) of the Basic AD Regulation deals with the imposition of anti-dumping duties, and does not concern the calculation of dumping margins at all. China, on the other hand, considers that Article 9(5) is not limited to determining whether individual NME producers will receive individual anti-dumping duties, but also governs whether individual dumping margins will be determined. Looking at the provision as a whole, we agree with China in this respect. We note that, conceptually, the imposition of an individual anti-dumping duty must logically be preceded by the calculation of an individual dumping margin. It seems clear to us that no other provision of EU legislation or regulation governs whether or not an individual dumping margin will be determined for individual producers/exporters, and the European Union has not argued otherwise. Given the link between the calculation of a dumping margin and the imposition of an anti-dumping duty, it seems to us that, normally, an investigating authority would calculate a dumping margin and impose an anti-dumping duty on the same basis. That is, an individual anti-dumping duty would, and could, only be imposed if an individual dumping margin were previously calculated. Thus, we consider that whether or not the Commission will calculate individual dumping margins for individual producers/exporters in an investigation involving a NME is resolved exclusively through the operation of Article 9(5) of the Basic AD Regulation. The fact that the provision refers specifically only to the imposition of anti-dumping duties does not affect our views in this regard.