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Report of the Panel

CASES CITED IN THIS REPORT

Short titleFull case title and citation
Argentina – Import Measures Appellate Body Reports, Argentina – Measures Affecting the Importation of Goods, WT/DS438/AB/R / WT/DS444/AB/R / WT/DS445/AB/R, adopted 26 January 2015
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, p. 1727
Australia – Apples Appellate Body Report, Australia – Measures Affecting the Importation of Apples from New Zealand, WT/DS367/AB/R, adopted 17 December 2010, DSR 2010:V, p. 2175
Canada – Welded Pipe Panel Report, Canada – Anti-Dumping Measures on Imports of Certain Carbon Steel Welded Pipe from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, WT/DS482/R and Add.1, adopted 25 January 2017
Chile – Price Band System Appellate Body Report, Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products, WT/DS207/AB/R, adopted 23 October 2002, DSR 2002:VIII, p. 3045 (Corr.1, DSR 2006:XII, p. 5473)
China – Broiler Products Panel Report, China - Anti-Dumping and Countervailing Duty Measures on Broiler Products from the United States, WT/DS427/R and Add.1, adopted 25 September 2013, DSR 2013:IV, p. 1041
China – GOES Appellate Body Report, China – Countervailing and Anti-Dumping Duties on Grain Oriented Flat-Rolled Electrical Steel from the United States, WT/DS414/AB/R, adopted 16 November 2012, DSR 2012:XII, p. 6251
China – GOES Panel Report, China – Countervailing and Anti-Dumping Duties on Grain Oriented Flat-Rolled Electrical Steel from the United States, WT/DS414/R and Add.1, adopted 16 November 2012, upheld by Appellate Body Report WT/DS414/AB/R, DSR 2012:XII, p. 6369
China – HP-SSST (Japan) / China – HP-SSST (EU) Appellate Body Reports, China – Measures Imposing Anti-Dumping Duties on High-Performance Stainless Steel Seamless Tubes ("HP-SSST") from Japan / China – Measures Imposing Anti-Dumping Duties on High-Performance Stainless Steel Seamless Tubes ("HP-SSST") from the European Union, WT/DS454/AB/R and Add.1 / WT/DS460/AB/R and Add.1, adopted 28 October 2015
China – HP-SSST (Japan) / China – HP-SSST (EU) Panel Reports, China – Measures Imposing Anti‑Dumping Duties on High-Performance Stainless Steel Seamless Tubes ("HP‑SSST") from Japan / China – Measures Imposing Anti-Dumping Duties on High-Performance Stainless Steel Seamless Tubes ("HP‑SSST") from the European Union, WT/DS454/R and Add.1 / WT/DS460/R, Add.1 and Corr.1, adopted 28 October 2015, as modified by Appellate Body Reports WT/DS454/AB/R / WT/DS460/AB/R
China – Raw Materials Appellate Body Reports, China – Measures Related to the Exportation of Various Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, adopted 22 February 2012, DSR 2012:VII, p. 3295
China – Raw Materials Panel Reports, China – Measures Related to the Exportation of Various Raw Materials, WT/DS394/R, Add.1 and Corr.1 / WT/DS395/R, Add.1 and Corr.1 / WT/DS398/R, Add.1 and Corr.1, adopted 22 February 2012, as modified by Appellate Body Reports WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, DSR 2012:VII, p. 3501
China – X-Ray Equipment Panel Report, China – Definitive Anti-Dumping Duties on X-Ray Security Inspection Equipment from the European Union, WT/DS425/R and Add.1, adopted 24 April 2013, DSR 2013:III, p. 659
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, p. 2077
EC – Chicken Cuts Appellate Body Report, EuropeanCommunities – Customs Classification of Frozen Boneless Chicken Cuts, WT/DS269/AB/R, WT/DS286/AB/R, adopted 27 September 2005, and Corr.1, DSR 2005:XIX, p. 9157
EC – Fasteners (China) Appellate Body Report, European Communities – Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China, WT/DS397/AB/R, adopted 28 July 2011, DSR 2011:VII, p. 3995
EC – Fasteners (China) (Article 21.5 – China) Appellate Body Report, European Communities – Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China – Recourse to Article 21.5 of the DSU by China, WT/DS397/AB/RW and Add.1, adopted 12 February 2016
EC – Fasteners (China) (Article 21.5 – China) Panel Report, European Communities – Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China – Recourse to Article 21.5 of the DSU by China, WT/DS397/RW and Add.1, adopted 12 February 2016, as modified by Appellate Body Report WT/DS397/AB/RW
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, p. 135
EC – IT Products Panel Reports, European Communities and its member States – Tariff Treatment of Certain Information Technology Products, WT/DS375/R / WT/DS376/R / WT/DS377/R, adopted 21 September 2010, DSR 2010:III, p. 933
EC – Salmon (Norway) Panel Report, European Communities – Anti-Dumping Measure on Farmed Salmon from Norway, WT/DS337/R, adopted 15 January 2008, and Corr.1, DSR 2008:I, p. 3
EC – Selected Customs Matters Appellate Body Report, European Communities – Selected Customs Matters, WT/DS315/AB/R, adopted 11 December 2006, DSR 2006:IX, p. 3791
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, p. 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, p. 2701
EC and certain member States – Large Civil Aircraft Appellate Body Report, European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R, adopted 1 June 2011, DSR 2011:I, p. 7
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, p. 2667
EU – Biodiesel (Argentina) Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/AB/R and Add.1, adopted 26 October 2016
EU – Biodiesel (Argentina) Panel Report, European Union – Anti-Dumping Measures on Biodiesel from Argentina, WT/DS473/R and Add.1, adopted 26 October 2016, as modified by Appellate Body Report WT/DS473/AB/R
EU – Footwear (China) Panel Report, European Union – Anti-Dumping Measures on Certain Footwear from China, WT/DS405/R, adopted 22 February 2012, DSR 2012:IX, p. 4585
Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding Portland Cement from Mexico, WT/DS60/AB/R, adopted 25 November 1998, DSR 1998:IX, p. 3767
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, p. 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, p. 9
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, p. 3
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, p. 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, p. 11007
Mexico – Corn Syrup (Article 21.5 – US) Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the DSUby the United States, WT/DS132/AB/RW, adopted 21 November 2001, DSR 2001:XIII, p. 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, p. 3179
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, p. 2741
US – Anti-Dumping and Countervailing Duties (China) Appellate Body Report, United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, WT/DS379/AB/R, adopted 25 March 2011, DSR 2011:V, p. 2869
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, p. 3779
US – Carbon Steel (India) Appellate Body Report, United States – Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India, WT/DS436/AB/R, adopted 19 December 2014, DSR 2014:V, p. 1727
US – Carbon Steel (India) Panel Report, United States – Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India, WT/DS436/R and Add.1, adopted 19 December 2014, as modified by Appellate Body Report WT/DS436/AB/R, DSR 2014:VI, p. 2189
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and Application of Zeroing Methodology, WT/DS350/AB/R, adopted 19 February 2009, DSR 2009:III, p. 1291
US – Countervailing Duty Investigation on DRAMS Appellate Body Report, United States – Countervailing Duty Investigation on Dynamic Random Access Memory Semiconductors (DRAMS) from Korea, WT/DS296/AB/R, adopted 20 July 2005, DSR 2005:XVI, p. 8131
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, p. 4697
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia, WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX, p. 4051
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, p. 3257
US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina) Panel Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from Argentina– Recourse to Article 21.5 of the DSU by Argentina, WT/DS268/RW, adopted 11 May 2007, as modified by Appellate Body Report WT/DS268/AB/RW, DSR 2007:IX, p. 3609
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, p. 4865
US – Upland Cotton Panel Report, United States – Subsidies on Upland Cotton, WT/DS267/R, Add.1 to Add.3 and Corr.1, adopted 21 March 2005, as modified by Appellate Body Report WT/DS267/AB/R, DSR 2005:II, p. 299
US – Washing Machines Panel Report, United States – Anti-Dumping and Countervailing Measures on Large Residential Washers from Korea, WT/DS464/R and Add.1, adopted 26 September 2016, as modified by Appellate Body Report WT/DS464/AB/R
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997, and Corr.1, DSR 1997:I, p. 323
US – Zeroing (Japan) (Article 21.5 – Japan) Appellate Body Report, United States – Measures Relating to Zeroing and Sunset Reviews – Recourse to Article 21.5 of the DSU by Japan, WT/DS322/AB/RW, adopted 31 August 2009, DSR 2009:VIII, p. 3441

ABBREVIATIONS

AbbreviationDescription
Anti-Dumping Agreement Agreement on Implementation of Article VI of the GATT 1994
BCI Business Confidential Information
CV Constructed value
CV profit The amount for profit used in constructed normal value
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
GATT 1994 General Agreement on Tariffs and Trade 1994
OCTG Oil country tubular goods
POI Period of investigation
SG&A Sales, general, and administrative expenses
USCIT United States Court of International Trade
USDOC United States Department of Commerce
Vienna Convention Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 1155 UNTS 331; 8 International Legal Materials 679
WTO World Trade Organization
WTO Agreement Marrakesh Agreement Establishing the World Trade Organization

1 INTRODUCTION

1.1 COMPLAINT BY KOREA

1.1.
On 22 December 2014, Korea requested consultations with the United States pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994), and Article 17 of the Agreement on Implementation of Article VI of the GATT 1994 (Anti-Dumping Agreement) with respect to the measures and claims set out below.1
1.2.
Consultations were held on 21 January 2015, but failed to resolve the dispute.

1.2 PANEL ESTABLISHMENT AND COMPOSITION

1.3.
On 23 February 2015, Korea requested the establishment of a panel pursuant to Articles 4.7 and 6 of the DSU, Article XXIII of the GATT 1994, and Article 17.4 of the Anti-Dumping Agreement with standard terms of reference.2 At its meeting on 25 March 2015, the Dispute Settlement Body (DSB) established a panel pursuant to the request of Korea, in accordance with Article 6 of the DSU.3
1.4.
The Panel's terms of reference are the following:

To examine, in the light of the relevant provisions of the covered agreements cited by the parties to the dispute, the matter referred to the DSB by Korea in document WT/DS488/5 and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements.4

1.5.
Following the agreement of the parties, the Panel was composed on 13 July 2015 as follows5:

Chairperson: Mr John Adank

Members: Mr Abd El Rahman Ezz El Din Fawzy

Mr Gustav Brink

1.6.
On 5 September 2016, the Chairperson informed the Chairman of the DSB that, in light of his appointment as Director of the Legal Affairs Division of the WTO Secretariat, he had decided to resign forthwith from the Panel. Following the resignation of the Chairperson, the parties on 15 September 2016 agreed on the appointment of a new Chairperson. Accordingly, the composition of the Panel is as follows6:

Chairperson: Mr Crawford Falconer

Members: Mr Abd El Rahman Ezz El Din Fawzy

Mr Gustav Brink

1.7.
Canada, China, the European Union, India, Mexico, the Russian Federation, and Turkey notified their interest in participating in the Panel proceedings as third parties.7

1.3 PANEL PROCEEDINGS

1.3.1 General

1.8.
After consultation with the parties, the Panel adopted its Working Procedures8 and timetable on 30 October 2015. The timetable was revised during the course of the panel proceeding in light of subsequent developments.9
1.9.
The Panel began its work on this dispute later than it would have wished due to staff constraints in the WTO Secretariat. The Panel held a first substantive meeting with the parties on 20-21 July 2016. A session with the third parties took place on 21 July 2016. Following a delay as a result of the need to appoint a new Chairperson, the Panel held a second substantive meeting with the parties on 2-3 November 2016. On 16 December 2016, the Panel issued the descriptive part of its Report to the parties. The Panel issued its Interim Report to the parties on 5 April 2017. The Panel issued its Final Report to the parties on 10 May 2017.

1.3.2 Additional working procedures on Business Confidential Information (BCI)

1.10.
After consultation with the parties, the Panel adopted, on 30 October 2015, additional working procedures for the protection of BCI.10

2 FACTUAL ASPECTS

2.1 THE MEASURES AT ISSUE

2.1.
Korea challenges the "laws, regulations, administrative procedures and other measures"11 through which the United States maintains a "viability test" in anti-dumping investigations, administrative reviews, and other segments of anti-dumping proceedings as such, and as applied in the investigation initiated on 29 July 2013 which is at issue in this dispute (underlying investigation).12
2.2.
Further, Korea challenges certain aspects of the final anti-dumping measure imposed by the United States on imports of oil country tubular goods (OCTG) from Korea following a final determination of dumping by the United States Department of Commerce (USDOC) in the underlying investigation.13 Korea also challenges certain conduct of the USDOC during the course of the underlying investigation.
2.3.
In addition, Korea challenges the USDOC's determination dated 22 February 2016 in a remand proceeding (remand determination), which was issued while this dispute was pending before the Panel.14 The remand proceeding was undertaken by the USDOC following a decision by the United States Court of International Trade (USCIT) on review of the same USDOC final determination of dumping challenged by Korea in this dispute. The USCIT found certain aspects of that determination to be contrary to US laws and regulations, and remanded that determination to the USDOC, directing it to reconsider those aspects of the determination that were found to be contrary to US laws and regulations.

3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS

3.1.
Korea requests the Panel to find as follows15:

a. With respect to the "viability test":

i. the "viability test" is inconsistent with Article 2.2 of the Anti-Dumping Agreement as such because it imposes a rigid quantitative test under which a third-country market is automatically disqualified as a comparison market for determining normal value if the respondents' sales to that market are less than 5% of its export sales volume to the United States; and

ii. the USDOC acted inconsistently with Article 2.2 of the Anti-Dumping Agreement by applying the "viability test" in the underlying investigation and disqualifying the respondents' sales to third-country markets in determining the normal value only because the volume of these sales constituted less than 5% of the volume of respondents' export sales to the United States.

b. With respect to the USDOC's determination of dumping in the underlying investigation:

i. the USDOC acted inconsistently with the chapeau of Article 2.2.2 of the Anti‑Dumping Agreement because it did not use actual data of the respondents to calculate the respondents' constructed value (CV) profit rate16, although the respondents' actual home market and third-country market profit data was available on the record of the investigation;

ii. the USDOC acted inconsistently with Articles 2.2.2(i) and (iii) of the Anti-Dumping Agreement because it interpreted and applied "same general category of products" in an impermissibly narrow manner such that it was not broader than its definition of "like products";

iii. the USDOC acted inconsistently with Article 2.2.2(iii) of the Anti-Dumping Agreement because it failed to calculate a "profit cap" as required by that Article. By failing to calculate a profit cap, the USDOC also failed to ensure that the CV profit was "reasonable" as required under Article 2.2;

iv. the USDOC acted inconsistently with Article 2.2.2(iii) of the Anti-Dumping Agreement because the use of Tenaris as a source of CV profit data did not constitute a "reasonable method" and did not reflect the profit normally realized by other exporters or producers on sales of products in the domestic market of the country of origin;

v. the USDOC acted inconsistently with Article 2.4 of the Anti-Dumping Agreement because it did not make a fair comparison between the export price and the normal value as a result of the failure to make due allowances for significant differences between the Korean respondents and Tenaris that affected price comparability;

vi. the USDOC acted inconsistently with Article 2.3 of the Anti-Dumping Agreement by improperly disregarding NEXTEEL's export prices to the Customer17 without a proper finding of "association" or "compensatory agreement", and without conducting any assessment of whether those prices were "unreliable";

vii. the USDOC acted inconsistently with Article 2.2.1.1 of the Anti-Dumping Agreement because it did not calculate NEXTEEL's costs on the basis of the records kept by NEXTEEL, based on an erroneous determination that NEXTEEL was associated with its supplier, when NEXTEEL's cost records satisfied the requirements of this provision; and

viii. the USDOC acted inconsistently with Article 12.2.2 of the Anti-Dumping Agreement because the final determination in the underlying investigation did not contain all relevant information on the reasons that led to the imposition of anti-dumping duties. In particular, the final determination did not provide sufficient or reasoned explanations regarding the USDOC's improperly narrow definition of "same general category", its selection of the Tenaris financial statements as a CV profit data source, and its finding of affiliation between NEXTEEL and its supplier and customer, especially in light of opposing evidence presented by the Korean respondents.

c. With respect to the proceedings in the underlying investigation:

i. the USDOC acted inconsistently with Articles 6.2, 6.4, and 6.9 of the Anti-Dumping Agreement by failing to make a determination regarding the placement of the Tenaris financial data on the record until its final determination, when it was too late for the Korean respondents to prepare presentations based on that data and to defend their interests regarding an issue that was relevant to the USDOC's dumping margin determinations for the Korean respondents;

ii. the USDOC acted inconsistently with Articles 6.4 and 6.9 of the Anti-Dumping Agreement by failing to disclose several letters that it had received from various government and industry representatives until immediately before the deadline for interested parties to submit their final presentations to the USDOC, depriving the Korean respondents of sufficient opportunity to defend their interests; and

iii. the USDOC acted inconsistently with Articles 6.10 and 6.10.2 of the Anti-Dumping Agreement because the USDOC provided no reasonable basis to conclude that it only had resources to examine two mandatory respondents and provided no reasoned explanation for why it was unable to examine any voluntary respondents.

d. In addition, Korea requests the Panel to find that the United States failed to comply with its obligations under Article I of the GATT 1994 because the USDOC's treatment of Korean respondents vis-à-vis respondents in other parallel OCTG investigations resulted in an advantage to OCTG products from other countries that was not extended immediately and unconditionally to OCTG produced in Korea. Furthermore, Korea requests the Panel to find that the USDOC's conduct was inconsistent with Article X:3(a) of the GATT 1994 because the USDOC's administration of laws, regulations, decisions, and rulings was not uniform, impartial, or reasonable.

e. Korea requests that, as a consequence of the findings requested above, the Panel find that the United States has acted inconsistently with Articles 1, 9.3, and 18.4 of the Anti‑Dumping Agreement, Article VI of the GATT 1994, and Article XVI:4 of the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement).

f. With respect to the USDOC's remand determination, Korea requests the Panel to find that:

i. the USDOC acted inconsistently with the chapeau of Article 2.2.2 of the Anti‑Dumping Agreement because it did not use actual data pertaining to the sales of the like product in the ordinary course of trade;

ii. the USDOC acted inconsistently with Article 2.2.2(i) and (iii) of the Anti-Dumping Agreement because it relied on an impermissibly narrow definition of the "same general category of products";

iii. the USDOC acted inconsistently with Article 2.2.2(iii) of the Anti-Dumping Agreement because by determining the profit rates of the Korean respondents on the basis of the profits earned by Tenaris and OAO TMK, which had no production or sales of OCTG in Korea, it failed to use a "reasonable" method to calculate the profit rates of the Korean respondents;

iv. the USDOC acted inconsistently with Article 2.2.2(iii) of the Anti-Dumping Agreement because it calculated a profit cap based on the average of the profit rates in the 2012 financial statement of Tenaris and the profit rates of OAO TMK; and

v. the USDOC acted inconsistently with Article 2.4 of the Anti-Dumping Agreement because instead of rejecting the Tenaris financial data or accounting for the differences between Tenaris and the Korean respondents, the USDOC averaged the Tenaris profit rate with that of another foreign producer that suffered from the same flaws as Tenaris.

3.2.
Korea further requests, pursuant to Article 19.1 of the DSU that the Panel recommend that the United States bring its measures into conformity with the Anti-Dumping Agreement, the GATT 1994, and the WTO Agreement.
3.3.
The United States asserts that the USDOC remand determination challenged by Korea is outside the Panel's terms of reference. The United States requests the Panel to reject Korea's claims in this dispute in their entirety.

4 ARGUMENTS OF THE PARTIES

4.1.
The arguments of the parties are reflected in their executive summaries, provided to the Panel in accordance with paragraph 19 of the Working Procedures adopted by the Panel (see Annexes B-1 to B-4 and C-1 to C-4).

5 ARGUMENTS OF THE THIRD PARTIES

5.1.
The arguments of China, the European Union, and Turkey are reflected in their executive summaries, provided in accordance with paragraph 20 of the Working Procedures adopted by the Panel (see Annexes D-1 to D-3). Canada, India, Mexico, and the Russian Federation did not submit written or oral arguments to the Panel.

6 INTERIM REVIEW

6.1.
On 5 April 2017, the Panel issued its Interim Report to the parties. On 19 April 2017, Korea and the United States each submitted written requests for the Panel to review precise aspects of the Interim Report. Neither party requested an interim review meeting. On 27 April 2017, both parties submitted comments on the other party's requests for review.
6.2.
The parties' requests made at the interim review stage as well as the Panel's discussion and disposition of those requests are set out in Annex F-1.

7 FINDINGS

7.1 GENERAL PRINCIPLES REGARDING TREATY INTERPRETATION, THE STANDARD OF REVIEW, AND BURDEN OF PROOF

7.1.1 Treaty interpretation

7.1.
Article 3.2 of the DSU provides that the WTO dispute settlement system serves to clarify the existing provisions of the covered agreements "in accordance with customary rules of interpretation of public international law". Article 17.6(ii) of the Anti-Dumping Agreement similarly requires panels to interpret that Agreement's provisions in accordance with the customary rules of interpretation of public international law.18 It is generally accepted that the principles codified in Articles 31 and 32 of the Vienna Convention on the Law of Treaties are such customary rules.

7.1.2 Standard of review

7.2.
Article 11 of the DSU provides, in relevant part, that:

[A] panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements.

In addition, Article 17.6 of the Anti-Dumping Agreement sets forth the special standard of review applicable to disputes under the Anti-Dumping Agreement:

(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;

(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.

Thus, Article 11 of the DSU and Article 17.6 of the Anti-Dumping Agreement together establish the standard of review we will apply with respect to both the factual and the legal aspects of the present dispute.

7.3.
The Appellate Body has explained that where a panel is reviewing an investigating authority's determination, the "objective assessment" standard in Article 11 of the DSU requires a panel to review whether the authority has provided a reasoned and adequate explanation as to: (a) how the evidence on the record supported their factual findings; and (b) how those factual findings support the overall determination.19 In the context of Article 17.6(i) of the Anti‑Dumping Agreement, the Appellate Body has explained that while the text of this provision is couched in terms of an obligation on a panel, in effect it defines when an investigating authority can be considered to have acted inconsistently with the Anti-Dumping Agreement in the course of its "establishment" and "evaluation" of the relevant facts.20 Therefore, a panel must assess if the establishment of the facts by the investigating authority was proper and if the evaluation of those facts by that authority was unbiased and objective.21 If these broad standards have not been met, a panel must hold the investigating authority's establishment or evaluation of the facts to be inconsistent with the Anti-Dumping Agreement.22
7.4.
In reviewing an investigating authority's determination, a panel should not conduct a de novo review of the evidence, nor substitute its judgment for that of the investigating authority. A panel must limit its examination to the evidence that was before the investigating authority during the course of the investigation23 and must take into account all such evidence submitted by the parties to the dispute.24 At the same time, a panel must not simply defer to the conclusions of the investigating authority; a panel's examination of those conclusions must be "in-depth" and "critical and searching".25
7.5.
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".26

7.1.3 Burden of proof

7.6.
The general principles applicable to the allocation of the burden of proof in WTO dispute settlement require that a party claiming a violation of a provision of a WTO Agreement must assert and prove its claim.27 Therefore, as the complaining party in this proceeding, Korea bears the burden of demonstrating that the challenged aspects of the measures at issue are inconsistent with the Anti-Dumping Agreement. The Appellate Body has stated that a complaining party will satisfy its burden when it establishes a prima facie case, namely a case 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.28 Finally, it is generally for each party asserting a fact to provide proof thereof.29

7.2 WHETHER THE "VIABILITY TEST" IS INCONSISTENT WITH ARTICLE 2.2 OF THE ANTI-DUMPING AGREEMENT

7.7.
US law provides that where domestic market sales cannot be used to determine normal value, third-country export sales of the foreign like product can be used for this purpose, subject to certain conditions.30 One of these conditions, which we refer to as the "viability test", is set out in 19 U.S.C. §1677b(a)(1)(B)(ii), and provides that third-country export sales of the foreign like product can be used for determining normal value if such sales are 5% or more of the quantity or value of sales of the subject merchandise to or in the United States.31 Korea refers to this requirement under the "viability test" as the "minimum quantitative threshold".
7.8.
Korea brings two claims regarding the "viability test" under Article 2.2 of the Anti-Dumping Agreement. First, it contends that Article 2.2 of the Anti-Dumping Agreement, unlike the "viability test" provided for under US law, does not stipulate that an investigating authority may use third‑country export sales to determine the normal value only when such a minimum quantitative threshold is met. Korea claims that the existence of such a threshold in US law under the "viability test", which is not found in the Anti-Dumping Agreement, renders the "viability test" "as such" inconsistent with Article 2.2. Second, Korea claims that the "viability test" was inconsistent with Article 2.2 "as applied" in the underlying investigation.
7.9.
In the underlying investigation, the USDOC, after concluding that neither HYSCO nor NEXTEEL had a viable home market32, found in its final determination, on the basis of application of the "viability test", that neither HYSCO nor NEXTEEL had a viable third-country market during the period of investigation (POI), and therefore proceeded to determine normal value on the basis of constructed normal value.33

7.2.1 Provision at issue

7.10.
Article 2.2 reads:

When there are no sales of the like product in the ordinary course of trade in the domestic market of the exporting country or when, because of the particular market situation or the low volume of the sales in the domestic market of the exporting country[*], such sales do not permit a proper comparison, the margin of dumping shall be determined by comparison with a comparable price of the like product when exported to an appropriate third country, provided that this price is representative, or with the cost of production in the country of origin plus a reasonable amount for administrative, selling and general costs and for profits.

[*fn original] Sales of the like product destined for consumption in the domestic market of the exporting country shall normally be considered a sufficient quantity for the determination of the normal value if such sales constitute 5 per cent or more of the sales of the product under consideration to the importing Member, provided that a lower ratio should be acceptable where the evidence demonstrates that domestic sales at such lower ratio are nonetheless of sufficient magnitude to provide for a proper comparison.

7.2.2 Whether the "viability test" is as such inconsistent with Article 2.2 of the Anti‑Dumping Agreement

7.2.2.1 Main arguments of the parties

7.11.
Korea argues that the minimum quantitative threshold for use of third-country sales in determining normal value in US law is an additional requirement not contemplated in the Anti‑Dumping Agreement and is therefore inconsistent with Article 2.2.34 According to Korea, the existence of a choice between the use of constructed normal value and third-country sales to determine normal value does not absolve the United States of its obligation to ensure that its laws, regulations, and administrative procedures relating to each of these methods are consistent with Article 2.2.35
7.12.
The United States contends that because the use of third-country sales as a method to determine normal value is itself optional, Article 2.2 permits Members to use their own internal criteria to decide whether to use that method or not.36 The United States submits that even if Article 2.2 did not permit an investigating authority to set its own criteria, the term "appropriate third country" in the provision allows the authority to select a suitable third country for purposes of normal value determination by reference to indices such as volume of sales.37

7.2.2.2 Main arguments of third parties

7.13.
The European Union submits that an investigating authority's discretion to opt for either third-country sales prices or constructed normal value in determining normal value under Article 2.2 is contextually informed by footnote 2. Further, the absence of a sufficient volume of exports of the like product to an appropriate third country could justify a finding that the price of those exports was not "representative".38

7.2.2.3 Evaluation by the Panel

7.14.
The main issue before us is whether the fulfilment of a minimum quantitative threshold as a condition for use of third-country sales to determine normal value is inconsistent with Article 2.2 of the Anti-Dumping Agreement.
7.15.
We begin our analysis by considering the requirements of Article 2.2. The text of Article 2.2 makes it clear that a choice exists between the use of third-country sales and constructed normal value for the determination of normal value. Article 2.2 provides that where certain circumstances set out in the provision preclude the use of home market sales in determining normal value, "the margin of dumping shall be determined by comparison with a comparable price of the like product when exported to an appropriate third country, provided that this price is representative or with the cost of production in the country of origin plus a reasonable amount for administrative, selling and general costs and for profits".39 The use of the word "or", in the relevant part of Article 2.2, implies that Members have a choice between third-country export prices and the constructed normal value for purposes of normal value determination. The dictionary meaning of "or" is "introducing the second of two, or all but the first or only the last of several, alternatives".40 Article 2.2 is therefore clearly intended to provide Members with alternatives to home market sales prices for normal value determination to ensure that an anti-dumping investigation can be completed. In this regard, the Appellate Body has stated that where normal value cannot be determined on the basis of home market sales, Article 2.2 specifies two "alternative bases" for calculation of normal value.41
7.16.
That there is a free choice between the two methods is confirmed by the language of Article VI:1(b) of the GATT 1994, which provides an option between "either" the highest comparable price for the like product for export to any third country in the ordinary course of trade "or" the cost of production of the product in the country of origin plus a reasonable addition for selling cost and profit. We note that the parties agree that Article 2.2 allows Members a choice between the two alternate methods and that there is no hierarchy between the two options.42
7.17.
While Korea agrees that Members have a choice between the two methods and that no hierarchy exists between them, it contends that the criteria for making that choice are already set out in Article 2.2 and cannot be altered or added to.43 The United States argues, on the other hand, that even if Article 2.2 did not permit a Member to set its own criteria, the term "appropriate third country" in the provision allows it to select a suitable third country for purposes of normal value determination.44
7.18.
We disagree with Korea that the criteria for choosing between the two methods are set out in Article 2.2. Article 2.2 sets out the criteria for use of either of the two methods. However, criteria for the use of the two methods are not the same as criteria for choosing between those two methods. In the process of arriving at a choice between the two methods, an investigating authority will assess the criteria for use of the methods to see if they can be satisfied. That will show whether either or both of the two methods can be used, but will not necessarily determine which to use. In providing for a choice, Article 2.2 neither expressly limits nor directs how the authority should reach that choice. Thus, the authority is free to choose which method to usebased on its own criteria, should it choose to have them. Therefore, we consider that Article 2.2 does not preclude an investigating authority from establishing its own criteria for choosing which method to use.
7.19.
Should a Member decide to use third-country export prices as normal value, the criteria for use of third-country sales in Article 2.2, requiring use of a "comparable" price of the like product exported to an "appropriate" third country, which price must be "representative", must be satisfied. However, this does not affect an investigating authority's freedom to choose whether or not to use third-country sales as a basis for determining normal value. Moreover, Article 2.2 does not require that Members explain the basis of their choice between the two methods.
7.20.
We therefore find that Article 2.2 does not impose any limitation on criteria that a Member may establish for deciding whether to use one or the other of the alternative methods and that the imposition of the 5% threshold as a criterion for use of third-country sales in US law is thus not inconsistent "as such" with Article 2.2 of the Anti-Dumping Agreement.45

7.2.3 Whether the "viability test" as applied in the underlying investigation is inconsistent with Article 2.2 of the Anti-Dumping Agreement

7.2.3.1 Main arguments of the parties

7.21.
Korea's principal arguments are set out below:

a. The USDOC automatically excluded from consideration the Korean respondents' third‑country market sales that did not meet the 5% threshold without any regard to whether the prices of these sales were representative in accordance with Article 2.2 of the Anti‑Dumping Agreement.46

b. Moreover, the USDOC's questionnaire deprived Korean respondents of the opportunity to submit third-country sales data or describe its third-country market sales based on a rigid application of the "viability test".47

7.22.
The United States contends that Article 2.2 does not require the use of third-country sales where the conditions for use of constructed normal value as a method for determining normal value are satisfied. It further argues that Article 2.2 does not require that an investigating authority use or seek third-country sales data. In any event, the USDOC did not prohibit respondents from submitting data and no evidence exists that the USDOC would have refused third-country sales data had it been submitted.48

7.2.3.2 Evaluation by the Panel

7.23.
Article 2.2 does not impose any obligation on a Member to examine whether a respondent's third-country export prices are representative if it has opted to use constructed normal value to determine normal value. If a Member has decided not to use third-country exports to determine normal value for a particular reason, including because it does not consider that market to be viable, nothing in Article 2.2 requires it to nonetheless assess whether all the conditions for use of that method set out in the provision are fulfilled.
7.24.
As discussed under paragraphs 7.15-7.19 above, the use of third-country sales as a method to determine normal value is optional and a Member may choose, for its own reasons, to not use it. We have found that the "viability test" is not, as such, inconsistent with Article 2.2. Therefore, we find that the USDOC in applying that test in the underlying investigation and concluding on the basis of that application that it would not use third-country sales for determining normal value, did not act inconsistently with Article 2.2.

7.2.4 Conclusion

7.25.
For the foregoing reasons, we find that Korea has not established that the "viability test" is inconsistent with Article 2.2 of the Anti-Dumping Agreement, either as such, or as applied in the underlying investigation.

7.3 WHETHER THE USDOC'S DETERMINATION OF PROFIT RATES FOR THE KOREAN RESPONDENTS IN THE FINAL AND REMAND DETERMINATIONS IS INCONSISTENT WITH ARTICLES 2.2.2 AND 2.4 OF THE ANTI-DUMPING AGREEMENT

7.26.
In its first written submission, Korea claimed that the USDOC's profit rate determination in the final determination in the underlying investigation was inconsistent with the chapeau of Articles 2.2.2, 2.2.2(i), and 2.2.2(iii) of the Anti-Dumping Agreement. Korea also claimed that the USDOC's failure to make adjustments to the profit rates of the Korean respondents in this determination resulted in a violation of Article 2.4 of the Anti-Dumping Agreement.
7.27.
This final determination was challenged before the US Court of International Trade (USCIT), which issued a remand order directing the USDOC to, inter alia, reconsider certain aspects of its profit rate determination in the underlying investigation.49 The USDOC initiated a remand investigation pursuant to this order, and on 22 February 2016 (that is, after Korea had already filed its panel request and its first written submission in these proceedings) issued its remand determination.50 This determination was affirmed by the USCIT in August 2016. The profit rate for the Korean respondents was reduced from 26.11% in the final determination to 16.24% in the remand determination due to revisions in the methodology used to determine this profit rate.51
7.28.
Korea considers this remand determination to be within our terms of reference, and the USDOC's profit rate determination therein to be inconsistent with the chapeau of Articles 2.2.2, 2.2.2(i), 2.2.2(iii), and 2.4 of the Anti-Dumping Agreement. The United States argues, for the reasons set out below, that the remand determination is outside our terms of reference, and asks us to make no rulings in this regard.
7.29.
In our evaluation of Korea's claims regarding the USDOC's final and remand determinations of profit rates, we will first address Korea's claims with respect to the final determination. Then, we will examine whether the remand determination falls within our terms of reference. Only if we find that it does will we proceed to address Korea's claims regarding this determination.

7.3.1 Provisions at issue

7.30.
Article 2.2.2 of the Anti-Dumping Agreement provides:

For the purpose of paragraph 2, the amounts for administrative, selling and general costs and for profits shall be based on actual data pertaining to production and sales in the ordinary course of trade of the like product by the exporter or producer under investigation. When such amounts cannot be determined on this basis, the amounts may be determined on the basis of:

(i) the actual amounts incurred and realized by the exporter or producer in question in respect of production and sales in the domestic market of the country of origin of the same general category of products;

(ii) the weighted average of the actual amounts incurred and realized by other exporters or producers subject to investigation in respect of production and sales of the like product in the domestic market of the country of origin;

(iii) any other reasonable method, provided that the amount for profit so established shall not exceed the profit normally realized by other exporters or producers on sales of products of the same general category in the domestic market of the country of origin.

7.31.
Article 2.4 of the Anti-Dumping Agreement provides:

A fair comparison shall be made between the export price and the normal value. This comparison shall be made at the same level of trade, normally at the ex‑factory level, and in respect of sales made at as nearly as possible the same time. Due allowance shall be made in each case, on its merits, for differences which affect price comparability, including differences in conditions and terms of sale, taxation, levels of trade, quantities, physical characteristics, and any other differences which are also demonstrated to affect price comparability.[*] In the cases referred to in paragraph 3, allowances for costs, including duties and taxes, incurred between importation and resale, and for profits accruing, should also be made. If in these cases price comparability has been affected, the authorities shall establish the normal value at a level of trade equivalent to the level of trade of the constructed export price, or shall make due allowance as warranted under this paragraph. The authorities shall indicate to the parties in question what information is necessary to ensure a fair comparison and shall not impose an unreasonable burden of proof on those parties.

[*fn original] It is understood that some of the above factors may overlap, and authorities shall ensure that they do not duplicate adjustments that have been already made under this provision.

7.3.2 USDOC's profit rate determination in the underlying investigation

7.32.
In the underlying investigation, the USDOC constructed the normal value of the Korean respondents based on their cost of production. In doing so, it determined the profit rate for these respondents using the profit data of a surrogate company, Tenaris, rather than the profit data of the Korean respondents whose normal value was being constructed. Korea claims that the USDOC's rejection of the profit data of the Korean respondents and its use of the profit data of Tenaris were inconsistent with Article 2.2.2 of the Anti-Dumping Agreement, and specifically that the USDOC acted inconsistently with the following requirements set out in that provision:

a. The chapeau of Article 2.2.2 because:

i. the USDOC had actual data on record pertaining to profits realized by the Korean respondents on home market sales of the like product but failed to use it; and

ii. the USDOC had actual data on record pertaining to profits realized by the Korean respondents on third-country sales of the like product but again failed to use it.

b. Articles 2.2.2(i) and 2.2.2(iii) because the USDOC applied an impermissibly narrow interpretation of the term "same general category of products" which affected its ability to determine profits on the basis of these provisions.

c. Article 2.2.2(iii) because the USDOC failed to calculate a profit cap and also because its use of the Tenaris profit data to determine the profit for the Korean respondents was not a "reasonable method" within the meaning of that provision.

d. Article 2.2 because as a consequence of its failure to determine profits consistently with Article 2.2.2(iii), the USDOC failed to ensure that the profit amount used in constructing normal value was a "reasonable amount".

e. Article 2.4 because the USDOC, having decided to use the Tenaris profit rate for constructing the Korean respondents' normal value, failed to make due allowance for the difference between that constructed normal value, which reflected the Tenaris profit rate, and the export price, which reflected the Korean respondents' own profit rates, and make appropriate adjustment.

7.33.
The United States rejects Korea's claims.

7.3.2.1 Whether the USDOC's failure to use "actual data" as a CV profit source is inconsistent with Article 2.2.2

7.3.2.1.1 Main arguments of the parties

7.34.
Korea's main arguments are set out below:

a. Low volume of sales is not a valid reason under the chapeau of Article 2.2.2 for an investigating authority to refuse to use the respondents' actual data to determine CV profit.52 Therefore, the USDOC applied an improper basis for disregarding the Korean respondents' actual data.

b. Moreover, the USDOC had access to actual profit data pertaining to the like product from both the respondents' home market and third-country market sales. Only when this actual data is not available would the USDOC be able to use one of the alternative methods provided under the subparagraphs of Article 2.2.2 to determine the CV profit.53

7.35.
The main arguments of the United Statesare as follows:

a. Neither of the two Korean respondents had a viable home or third-country market during the period of investigation, as a result of which their home and third-country market sales could not serve as a basis for normal value determination, including with respect to the CV profit.54

b. In addition, actual profit data pertaining to sales in the ordinary course of trade of the like product in the domestic market required to determine the CV profit did not exist in the record of the investigation at issue.55

c. The chapeau of Article 2.2.2 does not obligate an investigating authority to consider third-country sales for purposes of determining CV profit.56

7.3.2.1.2 Main arguments of third parties

7.36.
The European Unionsubmits that the USDOC was entitled to use one of the three alternative methods provided in subparagraphs (i)-(iii) of Article 2.2.2 to the extent that it first ascertained that actual sales, general, and administrative expenses (SG&A) and profit data for sales in the ordinary course of trade did not exist for the exporters and the like products under investigation.57

7.3.2.1.3 Evaluation by the Panel

7.37.
The chapeau of Article 2.2.2 of the Anti-Dumping Agreement requires that, in constructing normal value, the amounts for profits determined for an exporter or producer be based on "actual data pertaining to production and sales in the ordinary course of trade of the like product". Only when the profit amounts "cannot be determined on this basis" is an investigating authority permitted to determine profit amounts on the basis of the alternative methods set out in Articles 2.2.2(i)-(iii) of the Agreement. In the underlying investigation, the USDOC concluded that it could not establish the CV profit amounts for the Korean respondents on the basis of their "actual data pertaining to production and sales in the ordinary course of trade of the like product", i.e. OCTG. The USDOC reached this conclusion based on its determination that the Korean respondents had no viable home market sales of the like product. Korea claims that the USDOC's failure to use the Korean respondents' "actual data" as the basis for determining CV profit is inconsistent with the chapeau of Article 2.2.2. The United States disagrees with Korea, and contends that the USDOC had a proper basis for not using the respondents' actual data for determining CV profit amounts. The issue before us is whether the USDOC acted inconsistently with the chapeau of Article 2.2.2 because it did not use the Korean respondents' "actual data" pertaining to production and sales of the like product in the ordinary course of trade in either their domestic or third-country markets, as the basis for determining their CV profit.
7.38.
In addressing this issue, we will consider the following:

a. whether the USDOC was permitted to reject the actual data pertaining to the Korean respondents' domestic market sales of the like product during the period of investigation, because these sales were made in "low volumes";

b. whether there was, in the USDOC's record in the underlying investigation, actual profit data pertaining to the respondents' domestic market sales of the like product; and

c. whether the use of the word "profits" in the chapeau of Article 2.2.2 suggests that when an exporter makes a loss rather than a profit on domestic sales of the like product, the data pertaining to such losses, even if "actual", need not be considered by the investigating authority.

7.3.2.1.3.1 The USDOC's rejection of actual data pertaining to the Korean respondents' domestic market sales of the like product during the period of investigation because these sales were made in "low volumes"

7.39.
The chapeau of Article 2.2.2 does not contain any explicit textual limitation on the use of actual data pertaining to sales made in low volumes as a basis for CV profit determination. The chapeau reads as follows:

For the purpose of paragraph 2, the amounts for administrative, selling and general costs and for profits shall be based on actual data pertaining to production and sales in the ordinary course of trade of the like product by the exporter or producer under investigation.

It is clear from the use of the word "shall" that the investigating authority is required to base the CV profit on actual data pertaining to production and sales in the ordinary course of trade of the like product, assuming such data exists. There is nothing in the text to the effect that if those sales were made in low volumes, an investigating authority is permitted to disregard them as a basis for CV profit, provided such sales were made in the ordinary course of trade.

7.40.
The Appellate Body in EC – Tube or Pipe Fittings reached a similar conclusion. The issue before the Appellate Body in that case was whether an investigating authority must exclude data from low-volume sales when determining the amounts for SG&A and profits under the chapeau of Article 2.2.2, having disregarded such low-volume sales for normal value determination under Article 2.2. The Appellate Body found that:

[I]t is meaningful for the interpretation of Article 2.2.2 that Article 2.2 specifically identifies low-volume sales in addition to sales outside the ordinary course of trade. In contrast to Article 2.2, the chapeau of Article 2.2.2 explicitly excludes only sales outside the ordinary course of trade. The absence of any qualifying language related to low volumes in Article 2.2.2 implies that an exception for low-volume sales should not be read into Article 2.2.2.58

Thus, the Appellate Body concluded that a requirement that low-volume sales be disregarded as a basis for determining SG&A and profits cannot be read into the text of Article 2.2.2.59

7.41.
The United States contends that the findings in EC – Tube or Pipe Fittings are inapplicable to this dispute because the issue before the Appellate Body in that case was whether an investigating authority mustexclude data pertaining to low-volume sales when determining the amounts for SG&A and profits under the chapeau of Article 2.2.2. We understand the United States to argue that the issue in this dispute, in contrast, is whether an investigating authority must include,or perhaps may exclude, data pertaining to low-volume sales when determining the amounts for profit under the chapeau of Article 2.2.2. However, the United States' argument in this regard is contrary to the Appellate Body's clear statement in EC – Tube or Pipe Fittings that if actual profit data for sales in the ordinary course of trade exist for the exporter and the like product under investigation, an investigating authority must use that data in constructing normal value, and it may not construct normal value by reference to different data or by using an alternative method.60 We therefore disagree with the United States, and consider the Appellate Body's findings in EC – Tube or Pipe Fittings clearly relevant to the issue before us.
7.42.
We note that the panel in EC – Salmon (Norway) also addressed the question of whether an investigating authority must include data pertaining to low-volume sales when determining the amounts for profit under the chapeau of Article 2.2.2. The facts in EC – Salmon(Norway)are similar to those in the instant dispute. In that case, the European Community had excluded data pertaining to domestic sales made in low volumes when determining the profit for constructed normal value. The issue before the panel was whether that exclusion was consistent with the chapeau of Article 2.2.2.61 The panel in that case, agreeing with the views of the Appellate Body in EC – Tube or Pipe Fittings, concluded that it was not.62
7.43.
The United States also argues that the Appellate Body in EC – Tube or Pipe Fittings did not explain why low-volume sales in the domestic market are rejected as a basis for normal value determination because they do not permit proper comparison, but data derived from the same sales should be accepted for purposes of CV profit determination under Article 2.2.2.63 It further argues that the Appellate Body did not address why data from low-volume sales, found not to permit a proper comparison in the context of Article 2.2, could nonetheless achieve the objective of permitting a proper comparison in the context of Article 2.2.2.64
7.44.
We recognize the logic behind the United States' argument. We understand the United States to argue that the price pertaining to sales made in low-volumes in the domestic market is discarded for purposes of normal value determination under Article 2.2 because it is considered to not permit a proper comparison with the export price. To require that data from the same sales be used to determine CV profit and SG&A under Article 2.2.2 for purposes of constructing normal value would seem to reintroduce the same improper comparison through the constructed normal value. This is, in terms of overall coherence of Article 2, somewhat perplexing. But this does not allow an interpretation that does not fully comport with the express language of Article 2.2.2.
7.45.
Under Article 2.2, upon the identification of low-volume sales, an investigating authority is required to either construct normal value or use third-country export prices as normal value. Therefore, the identification of low-volume sales serves as a trigger for an investigating authority to use an alternative to the price of those sales for normal value determination but not necessarily to exclude the components of the price pertaining to those sales from that determination. If an investigating authority opts to construct normal value, nothing in Article 2.2 suggests that it is required to, or may, exclude data derived from the rejected low-volume sales from that construction. Further, Article 2.2.2 requires that only sales that are in the ordinary course of trade be used as a basis for CV profit determination. Thus, only data from such sales, even if in low volumes, can be used in constructing normal value. Therefore, what is discarded for normal value determination under Article 2.2 is the price of low-volume sales but what is accepted for purposes of normal value construction under Article 2.2.2 is the amount for profit and SG&A on those low‑volume sales that are in the ordinary course of trade.
7.46.
To the extent that low-volume sales might be considered to generate a normal value that will not permit proper comparison with the export price, excluding data from such sales that are not in the ordinary course of trade as a basis for CV profit and SG&A determination under the chapeau of Article 2.2.2 addresses, at least in part, the overall coherence issue referred to above.
7.47.
Thus, while we see the general logic behind the United States' argument, we cannot, in light of prior Appellate Body and panel findings read out of the text of the chapeau that the CV profit has to be based on the respondents' actual data for sales of the like product in the ordinary course of trade, even if those sales were made in low volumes. We thus conclude that the chapeau of Article 2.2.2 did not permit the USDOC to reject the actual data pertaining to the Korean respondents' domestic market sales of the like product in the period of investigation because these sales were made in low volumes.

7.3.2.1.3.2 Alleged lack of actual profit data pertaining to the respondents' domestic market sales of the like product, in the USDOC's record in the underlying investigation

7.48.
The United States argues that the USDOC was unable to use the preferred method set out in the chapeau of Article 2.2.2 to determine CV profit, as actual data pertaining to the Korean respondents' sales in the ordinary course of trade of the like product was not in the record of the investigation at issue. In particular, the United States maintains that the actual profit data pertaining to the respondents' domestic market sales that was on the record did not relate to the like product, OCTG.65
7.49.
As a threshold matter, we note that neither in the USDOC's final determination nor in its preliminary determination is there any reference to this alleged lack of relevant data as a reason for its inability to use the preferred method for CV profit determination. The USDOC attributed its inability to determine CV profit using the preferred method exclusively to the absence of a "viable home or third-country market".66
7.50.
The USDOC's findings on the absence of a viable domestic or third-country market in its final determination cite the Korean respondents' questionnaire responses.67 In these questionnaire responses, the respondents, HYSCO and NEXTEEL, acknowledge that they do not have viable markets, but also clearly state that they have made "some sales of the foreign like product in the home market during the POI".68
7.51.
In support of its assertion regarding the unavailability of actual profit data for the like product, the United States refers to certain sales verification reports in which the respondents are reported to have stated that the products they sold in the home market were not sold as OCTG.69 However, neither the preliminary nor final determinations contain any conclusions drawn by the USDOC regarding availability of data for the like product on the basis of those reported statements. On the contrary, in its preliminary determination, the USDOC states that:

In order to determine whether there was a sufficient volume of sales in the home market to serve as a viable basis for calculating NV, we compared HYSCO's and NEXTEEL's volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise, in accordance with section 773(a)(1)(B) of the Act. For both HYSCO and NEXTEEL, we found that the aggregate volume of U.S. sales, and, thus, HYSCO's and NEXTEEL's sales in the home market were not viable.70

7.52.
This finding also formed the basis of the USDOC's decision, in its final determination, to not use the preferred method to determine CV profit.71 The United States has not identified any finding in the USDOC's preliminary or final determinations that HYSCO and NEXTEEL made no sales of the like product in the home market, and further that it was because of the absence of data pertaining to sales of the like product in the home market that the USDOC had rejected the preferred method as a basis for determining CV profit.72 We therefore dismiss, as ex post rationalization, the United States' argument that the USDOC could not use the preferred method to determine CV profit because the record did not contain any data pertaining to sales of the like product in the home market.73
7.53.
In light of this and given the mandatory nature of the obligation in the chapeau of Article 2.2.2 to use actual data as a basis for CV profit, we conclude that if unavailability of the data for the like product was a reason for the USDOC's inability to use that method, it should have set out that reason in its determination.

7.3.2.1.3.3 Rejection of data showing [[***]] in determining the amounts for "profits" for constructed normal value

7.54.
The United States argues that the USDOC was unable to use the respondents' actual data as a basis for CV profit because their sales of "non-prime OCTG" in the domestic market were made at a [[***]] and [[***]] cannot form the basis for CV profit under the chapeau of Article 2.2.2.74
7.55.
As noted in paragraph 7.49, in its final determination the USDOC attributed its inability to determine CV profit using the preferred method exclusively to the absence of a "viable home or third-country market".75 We find no mention in the USDOC's findings of the [[***]]-making nature of the respondents' domestic sales as a reason for its inability to use the preferred method. The record also does not reflect a determination by the USDOC that the Korean respondents' sales of "non-prime OCTG" in the domestic market were made at a [[***]]. We understand the United States to argue, in response to our specific question76 in this regard, that having already rejected the Korean respondents' actual data pertaining to their home market sales as a basis for CV profit determination because those sales were not viable, the USDOC was not required to determine whether that data could not be used for CV profit determination on other grounds.77 However, as noted above, the United States has argued in these proceedings that it did not determine CV profit based on the Korean respondents' actual data pertaining to home market sales because these sales were made at a [[***]]. We therefore must determine if this reasoning was used by the USDOC in the underlying investigation or is ex post rationalization by the United States in these proceedings. The United States has not identified where in its determination the USDOC relied on this conclusion as a reason for not using the preferred method to calculate CV profit. We therefore reject this justification offered by the United States as ex post rationalization.
7.56.
Based on the foregoing reasons, we find that the United States has not offered any valid justification for the USDOC's failure to use the respondents' actual data pertaining to the respondents' domestic market sales as a basis for CV profit. We therefore conclude that in failing to use the preferred method as basis for CV profit calculation, the United States acted inconsistently with its obligations under the chapeau of Article 2.2.2.
7.57.
Having already concluded that the USDOC had no basis to reject the "actual data" pertaining to domestic sales of the like product in the ordinary course of trade, we do not find it necessary to resolve the question whether the USDOC should have determined CV profit on the basis of the profit derived by the Korean respondents from third-country markets in order to comply with the chapeau of Article 2.2.2. We, therefore, exercise judicial economy on this claim.

7.3.2.1.4 Conclusion

7.58.
For the foregoing reasons, we find that the United States acted inconsistently with its obligations under the chapeau of Article 2.2.2 because:

a. The lack of viable home market sales is not a permissible ground for rejecting the Korean respondents' actual data as a basis for determination of CV profit;

b. Nothing in the USDOC's determinations indicates that it rejected the Korean respondents' actual data because there were no domestic sales of the like product; and

c. Nothing in the USDOC's determinations indicates that it rejected the Korean respondents' actual data because the respondents made a [[***]] rather than a profit.

7.59.
We exercise judicial economy of Korea's claim that the USDOC acted inconsistently with the chapeau of Article 2.2.2 because it did not use actual data of the respondents to determine its CV profit rate although the respondents' third-country market profit data was available on the record of the underlying investigation.

7.3.2.2 Whether the USDOC's interpretation and application of "same general category of products" was inconsistent with Articles 2.2.2(i) and 2.2.2(iii)

7.3.2.2.1 Main arguments of the parties

7.60.
Korea argues that the USDOC erroneously interpreted and applied the term "same general category of products" so narrowly that it did not consider non-OCTG products, such as line pipe and standard pipe, as falling within the "same general category" as OCTG.78 Based on this narrow interpretation, the USDOC rejected Article 2.2.2(i) as a basis to calculate CV profit and also determined that it could not calculate a profit cap under Article 2.2.2(iii).79
7.61.
In response, the United States contends that the USDOC defined "same general category of products" more broadly than "like product" so as to include drill pipe and OCTG that fell outside the scope of the investigation such as stainless steel tubular products.80

7.3.2.2.2 Main arguments of third parties

7.62.
The European Unionsubmits that while Article 2.2.2 does not provide any elaboration as to the definition of "the same general category of products", its chapeau and overall structure provide guidance in this regard.81 It notes that the panel in Thailand – H-Beams found that where the preferred method in the chapeau cannot be used for purposes of determining an amount for profit in the constructed normal value on the basis of actual data of the exporter or producer under investigation for the like product, subparagraphs (i) and (ii) respectively provide for the database to be broadened, either as to the product (i.e. the same general category of products produced by the producer or exporter in question) or as to the producer (i.e. other producers or exporters subject to investigation in respect of the like product), but not both. The European Union maintains that the Thailand – H-Beams panel confirmed that the intention of these provisions is to obtain results that approximate, as closely as possible, the price of the like product in the ordinary course of trade in the domestic market of the exporting country.

7.3.2.2.3 Evaluation by the Panel

7.63.
Article 2.2.2(i) of the Anti-Dumping Agreement provides for profit rate determination on the basis of the actual amounts incurred and realized by the exporter or producer in question in respect of production and sales in the domestic market of the country of origin of the"same general category of products". Article 2.2.2(iii) provides for profit rate determination on the basis of any other reasonable method, provided that the amount for profit so established shall not exceed the "profit cap", which is the profit normally realized by other exporters or producers on sales of "products of the same general category" in the domestic market of the country of origin. Therefore, in order to make a profit determination under Article 2.2.2(i) or to calculate a profit cap under Article 2.2.2(iii), an investigating authority must determine which products fall within the same general category of products.
7.64.
In the underlying investigation, the USDOC found that non-OCTG pipe products manufactured by the Korean producers, such as line pipe and standard pipe, were not in the same general category of products as the product under consideration, OCTG. The USDOC stated that it could therefore not determine the CV profit rate for the Korean respondent HYSCO using actual amounts incurred by that producer in respect of production and sales in the domestic market of the country of origin of the same general category of products, as provided for in Article 2.2.2(i).82 In addition, the USDOC determined that it could not calculate the profit cap called for in Article 2.2.2(iii) because it did not have domestic market profit data for other exporters and producers of products of the same general category in Korea.83
7.65.
Korea challenges the USDOC's definition of the same general category of products in the underlying investigation, asserting that the USDOC's focus on down hole applications as the defining factor of products constituting the same general category of products as OCTG resulted in a definition that is narrower than the USDOC's definition of the foreign like product.84 Therefore, a product that is a like product, based on the USDOC's definition of the foreign like product, could be excluded from the same general category of products. The United States disagrees with Korea, and asserts that the USDOC defined the same general category of products more broadly, rather than more narrowly, than the like product. The issue before us therefore is whether the USDOC properly determined the scope of the relevant "same general category of products", and thus whether its conclusions were consistent with its obligations under Articles 2.2.2(i) and (iii).
7.66.
We note that there is no definition of the term "same general category of products" in Article 2.2.2(i) or (iii) of the Anti-Dumping Agreement. However, as previous panels have noted, and as both parties agree, the scope of the same general category of products must be understood to be broader, not narrower than that of the like product, as defined by the investigating authority.85 We agree with this conclusion, which is consistent with our own views in this regard.
7.67.
Bearing in mind this understanding, we turn to examine how the USDOC defined the same general category of products in the underlying investigation. We note that the USDOC defined the same general category of products by reference to the functionality of the foreign like product. In particular, in its final determination, the USDOC stated that:

While we do not consider line pipe and standard pipe to be in the same general category of products as OCTG, we do find that the general category of products that encompass the subject casing and tubing would not be limited to just the foreign like product. Rather it would include other tubular products that go into the exploration and production of oil and gas. These would be products that would exhibit the same fundamental characteristics for down hole applications, and they would include subject OCTG, non-scope OCTG such as stainless steel tubular products, and drill pipes.86

7.68.
The USDOC thus defined products in the same general category as the like product as those exhibiting "the same fundamental characteristics for down hole applications" as the foreign like product i.e. tubular products that are used in the exploration and production of oil and gas. However, as the United States has confirmed in these proceedings, the USDOC's definition of the foreign like product is co-extensive with the definition of the product under consideration in the underlying investigation, and the product under consideration definition itself is not limited to pipe products that can be used for down hole applications.87 The USDOC defined the product under consideration as follows:

The merchandise covered by the investigations is certain oil country tubular goods ("OCTG"), which are hollow steel products of circular cross-section, including oil well casing and tubing, of iron (other than cast iron) or steel (both carbon and alloy), whether seamless or welded, regardless of end finish (e.g., whether or not plain end, threaded, or threaded and coupled) whether or not conforming to American Petroleum Institute ("API") or non-API specifications, whether finished (including limited service OCTG products) or unfinished (including green tubes and limited service OCTG products), whether or not thread protectors are attached. The scope of the investigations also covers OCTG coupling stock.

Excluded from the scope of the investigations are: casing or tubing containing 10.5 percent or more by weight of chromium; drill pipe; unattached couplings; and unattached thread protectors.88

7.69.
Thus, the product under consideration as defined by the USDOC, and by implication, the foreign like product which is co-extensive with that definition, do not incorporate any express limitation based on whether the pipe products in question can be used for down hole applications. Based on the foregoing, we conclude that the USDOC's record shows that the foreign like product was not limited to pipe products that could be used for down hole applications. However, the same general category of products, as defined by the USDOC, does incorporate such a limitation.89
7.70.
Our conclusion is confirmed by the clarification provided by the USDOC itself in a parallel investigation of OCTG from Ukraine, which was initiated based on the same petition as the underlying investigation.90 The definition of the product under consideration in that investigation was identical to that in the underlying investigation, and included "reject" products that cannot be used in oil and gas well applications. The USDOC clarified the scope of the product under consideration in the Ukraine investigation as follows:

[T]he plain language of the scope of the investigation indicates that a failure to meet the requirements for OCTG applications does not render merchandise outside the scope, provided that merchandise meets the physical characteristics described in the scope. The scope specifically states that certain OCTG is included "whether or not conforming to…API or non-API specifications …". We also note that the scope of the investigation includes unfinished OCTG (including green tubes) which is "prime" merchandise which cannot be used in OCTG applications until it undergoes additional processing. Taken together, the scope language clearly covers a variety of goods produced as OCTG which may not currently meet established OCTG specifications for use in OCTG-specific applications. On this basis, we find that, whether or not Interpipe's merchandise failed inspection and therefore did not meet API specifications, it was still produced as OCTG, entered the United States as OCTG and is still OCTG, even if identified as damaged or otherwise unusable as prime merchandise.91

The USDOC further stated that:

While it is reasonable to assume that use of OCTG in oil and gas well applications is the primary intended purpose of OCTG, the scope does not limit or otherwise require that goods manufactured as OCTG be used in that capacity in order to be considered subject merchandise.92

There is no dispute between the parties that pipe products that fail to meet the "requirements for OCTG applications" or products which do not "currently meet established OCTG specifications for use in OCTG-specific applications" cannot be used for down hole applications.

7.71.
As noted, in our view, the foreign like product was not limited to pipe products that could be used for down hole applications, which understanding is confirmed by the clarification from the Ukraine investigation which shows that pipe products that could not be used for down hole applications were within the definition of the product under consideration, and by implication, the foreign like product.
7.72.
We recall our view that the same general category of products includes the like product, and, as both parties also agree, is broader than the like product.93 Therefore, if the like product is not limited to pipe products used for down hole applications, the same general category of products, which is broader than and includes the like product, cannot be limited to pipe products used for down hole applications. In other words, the same general category of products cannot exclude pipe products that do not exhibit the same fundamental characteristics for down hole applications and are not used for down hole applications. Yet, the USDOC excluded such products from the same general category of products in the underlying investigation. We therefore conclude that the USDOC defined the same general category of products more narrowly than it defined the like product by excluding from the definition of the same general category those pipe products not used for down hole applications that fell within the definition of the like product.
7.73.
The United States attempts to distinguish the USDOC's clarification in the Ukraine OCTG investigation by noting that the pipe products that were the subject of that clarification were sold to the US market as OCTG and therefore came within the scope of the investigation. In contrast, the pipe products sold by the Korean respondents in Korea were "not sold as OCTG" and for that reason were not within the scope of the investigation. Therefore, the USDOC did not define the same general category of products more narrowly than the like product.94 We consider it irrelevant that the pipe products sold by the Korean respondents in Korea were not sold as OCTG, given that the USDOC's definition of the product under consideration (which we recall was the same for both investigations) is not limited to products that are "sold as OCTG". We therefore reject this argument from the United States.
7.74.
Based on the definition of the product under consideration in the underlying investigation, as well as the USDOC's clarification of that same definition in the parallel investigation of OCTG from Ukraine, and the fact that the United States has acknowledged that the product under consideration is co-extensive with the like product, we find that the USDOC defined the same general category of products more narrowly than the like product.
7.75.
For the foregoing reasons, we conclude that having relied on an impermissibly narrow definition of the "same general category of products" as the basis for not calculating CV profit under Article 2.2.2(i) and for not calculating the profit cap under Article 2.2.2(iii), the USDOC acted inconsistently with its obligations under those provisions. In particular, we find that the United States acted inconsistently with its obligations under Articles 2.2.2(i) and (iii) because the USDOC defined the same general category of products more narrowly than the like product by excluding OCTG not used for down hole applications, which was part of the like product as defined by the USDOC. Thus, the USDOC had no proper basis for its conclusions that the methods under Article 2.2.2(i) could not be used, and that the profit cap called for in Article 2.2.2(iii) could not be calculated.

7.3.2.3 Whether the USDOC's use of profit data from the Tenaris financial statements in constructing normal value was a "reasonable method" within the meaning of Article 2.2.2(iii)

7.3.2.3.1 Main arguments of the parties

7.76.
Korea maintains that:

a. It is impermissible to calculate a dumping margin by comparing an export price to a normal value which predominantly represents the profit of enterprises, such as Tenaris, that do not operate in the exporting country.95

b. Further, subparagraphs (i)-(iii) of Article 2.2.2 are intended to approximate the price of the like product in the ordinary course of trade in the domestic market of the exporting country.96

c. The USDOC relied on the profit rate of Tenaris despite the existence on the record of various CV profit sources that originated from the exporting country, Korea.97

d. The profit of Tenaris is fundamentally not comparable with profits realized by the Korean respondents.98

7.77.
The United Statescontends that:

a. The USDOC's use of the Tenaris financial statements to calculate CV profit resulted from a reasoned consideration of the evidence before it. The CV profit it calculated was "rationally directed at approximating what the profit of a producer of the like product would have been if the like product had been sold in the ordinary course of trade in the domestic market of the exporting country".99

b. The average profit experience of Tenaris is representative of OCTG sales across a broad range of different geographic markets as it sells OCTG in significant quantities and in virtually every market in which OCTG is sold.100

c. In any case, Article 2.2 expressly permits the use of sales that are destined for consumption in markets other than the exporting country in determining normal value. In addition, Article 2.2.2(iii) does not limit the use of "any reasonable method" to a particular country or market.101

d. Moreover, Article 2.2.2 recognizes that where data specific to the product under consideration and the exporting country is unavailable, an investigating authority needs to find a reasonable proxy from data available in the record.102

e. Korea's request for establishment of a panel does not include a claim that the USDOC's use of the Tenaris profit data as a basis for CV profit determination does not constitute a reasonable method within the meaning of Article 2.2.2(iii).103

7.3.2.3.2 Main arguments of third parties

7.78.
The European Union submits that while the Anti-Dumping Agreement does not define the exact scope of what constitutes a "reasonable method" under Article 2.2.2, the intention of the subparagraphs under Article 2.2.2 is to obtain results that approximate as closely as possible the price of the like product in the ordinary course of trade in the domestic market of the exporting country.104
7.79.
Turkey doubts whether the use of the profit data of a non-Korean corporation, that had neither production nor sales in the Korean market, is consistent with Article 2.2.2(iii).105 Further, it considers that the profit cap is a means to test the reasonability of the method employed under Article 2.2.2(iii).106

7.3.2.3.3 Evaluation by the Panel

7.80.
Before we can examine the merits of Korea's claim that the USDOC's determination of CV profit based on the Tenaris profit data does not constitute a "reasonable method" under Article 2.2.2(iii), we will ascertain whether Korea's panel request includes that claim, and that it therefore falls within our terms of reference and the scope of this dispute.107 On its face, Korea's panel request does not set out any express reference to a claim that the USDOC's determination of CV profit based on the Tenaris profit data does not constitute a "reasonable method" under Article 2.2.2(iii). Korea's considers that this claim nevertheless falls within our terms of reference.
7.81.
Article 6.2 of the DSU requires, in relevant part, that the panel request "provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly". The panel request must therefore identify, by way of a brief summary, the "legal basis of the complaint" and that summary must be "sufficient to present the problem clearly".
7.82.
The question before us is whether Korea's panel request sets out the requisite "legal basis of the complaint" with respect to the claim at issue. We consider it clearly established that a panel request contains "a brief summary of the legal basis of the complaint" if it: (a) identifies the legal provision which allegedly has been violated; and (b) clearly specifies how or why that provision has been violated in terms of the obligations set out in therein.108 If the provision allegedly violated contains multiple obligations, the specific obligation that has allegedly been violated must be clear on the face of the panel request.109 Further, the compliance of a panel request with Article 6.2 must be determined on the merits of each case, considering the panel request as a whole, and in the light of attendant circumstances.110
7.83.
Bearing these principles in mind, we turn to examine whether Korea's panel request satisfies the requirements of Article 6.2 with respect to the claim at issue. The panel request states, in relevant part:

II. USDOC'S CALCULATION OF CONSTRUCTED VALUE ("CV") PROFIT

Korea considers the USDOC's calculation of constructed value ("CV") profit in its anti‑dumping investigation of Oil Country Tubular Goods from Korea, which was based on information contained in the financial statements of Tenaris SA (a global producer incorporated under the laws of Luxembourg with no record of sales or production in the Korean home market), to be inconsistent with the following provisions of the Anti‑Dumping Agreement:

3. Articles 2.2.2(i) and 2.2.2(iii) because the USDOC applied an impermissibly narrow interpretation of the term "same general category of products." The USDOC's application of the term "same general category of products" resulted in a scope of products that was essentially identical to the scope of the term "like product."

4. Article 2.2.2(iii) because the USDOC declined to examine whether the profit rate that it calculated exceeded "the profit normally realized by other exporters or producers on sales of products of the same general category in the domestic market of the country of origin," and it did not provide any legal basis for disregarding this requirement.

5. Article 2.2 because the USDOC did not take any steps to ensure that its calculated CV profit was "reasonable." In fact, the CV profit that the USDOC calculated far exceeded all other potential CV profit rates on the record, including the profit margins that U.S. producers earned on their sales of OCTG in the United States.111

7.84.
We find that Korea's request for establishment of a panel does not set out a claim that the USDOC's determination of CV profit based on the Tenaris profit data does not constitute a "reasonable method" under Article 2.2.2(iii). We reach this conclusion based on the following considerations:

a. Korea's panel request does not expressly state that the USDOC acted inconsistently with Article 2.2.2(iii) because it did not determine the CV profit on the basis of any other "reasonable method", within the meaning of that provision. The requirements of due process and orderly procedure dictate that claims must be stated explicitly and clearly in WTO dispute settlement. This is the only way that the panel, other parties, and third parties will understand that a specific claim has been made, be aware of its dimensions, and have an adequate opportunity to address and respond to it.112

b. Korea's panel request does expressly state claims on the violation of the profit cap requirement in Article 2.2.2(iii) and the "reasonable amount for profit" requirement in Article 2.2, but does not refer to the "reasonable method" obligation in Article 2.2.2(iii). We consider that, as previous panels have found, the requirement that the CV profit be determined on the basis of a "reasonable method" is a separate and distinct obligation in Article 2.2.2(iii).113 We are of the view that a claim alleging violation of that independent obligation should therefore have been separately set out in Korea's panel request.114

7.85.
Korea maintains that the panel request contains the claim at issue, and makes two main arguments in this regard. First, Korea contends that paragraphs II.3 and II.4 of its panel request, read together with the chapeau of paragraph II, set out that claim consistent with the requirements of Article 6.2 of the DSU. Korea asserts that paragraphs II.3 and II.4 identify Article 2.2.2(iii) as the relevant provision against which it alleges a violation. In particular, it contends that paragraph II.4 explains that the USDOC's manner of determining profit is inconsistent with Article 2.2.2(iii), while the chapeau of paragraph II further indicates that the profit so determined is inconsistent with Article 2.2.2(iii) because it was based on information in the Tenaris financial statements.115 Korea cites findings by the Appellate Body and prior panels, in support of its argument that a panel request must be construed "as a whole" and not in isolation.116 It notes, in particular, that the panel in Mexico – Anti-Dumping Measures on Rice found that the "accompanying narrative" and the provisions of the Anti-Dumping Agreement identified in the panel request made it clear what the claim being raised was.117
7.86.
We disagree with Korea that the claim at issue can be inferred from its panel request, even when read as a whole. We do not agree that it can be inferred from paragraphs II.3 and II.4 of Korea's panel request read together with the chapeau of paragraph II that it is the "reasonable method" obligation under Article 2.2.2(iii) that has allegedly been violated.
7.87.
Korea argues that paragraph II.3 of its panel request, read together with the chapeau of section II, sets forth a claim that the USDOC's calculation of CV profit, based on the Tenaris financial statements, was inconsistent with Articles 2.2.2(i) and (iii) because the USDOC interpreted and applied an impermissibly narrow definition of the same general category of products. Korea also argues that paragraph II.4, read together with the chapeau of Section II, sets forth a claim that the USDOC's calculation of CV profit, based on the Tenaris financial statements, was inconsistent with Article 2.2.2(iii) because the USDOC did not examine whether the profit rate it had calculated exceeded "the profit normally realized by other exporters or producers on sales of products of the same general category in the domestic market of the country of origin".
7.88.
The legal basis for the alleged inconsistency of the USDOC's CV profit determination with Article 2.2.2(iii), set out in the panel request, is two-fold. In paragraph II.3, Korea identifies the USDOC's narrow interpretation and application of the definition of the "same general category of products", and in paragraph II.4, it identifies the USDOC's failure to examine whether the profit calculated exceeded the profit cap. Nowhere in its panel request does Korea identify the legal basis for an alleged inconsistency with Article 2.2.2(iii) as the USDOC's failure to determine the CV profit on the basis of a "reasonable method" within the meaning of that provision. As noted above118, the obligation that the CV profit be determined using a "reasonable method" is a separate obligation under Article 2.2.2(iii). Thus, if an inconsistency with that obligation is alleged, it must be clearly, if not expressly, set out in the panel request.119 As Korea failed to clearly or expressly set out the alleged violation in its panel request, we conclude that Korea's panel request does not set out a claim alleging that the USDOC acted inconsistently with the "reasonable method" obligation in Article 2.2.2(iii).
7.89.
Second, Korea argues that its claim under the "reasonable method" obligation of Article 2.2.2(iii) is covered by the claim under Article 2.2 set out in paragraph II.5 of its panel request.120 In paragraph II.5, Korea contends that the USDOC's determination of CV profit was inconsistent with Article 2.2 because the USDOC did not take any steps to ensure that the CV profit it determined was "reasonable". We understand Korea to argue that this claim under Article 2.2 covers its asserted claim under the "reasonable method" obligation of Article 2.2.2(iii), because use of a "reasonable method" is one of the "steps" under Article 2.2.2 to ensure the reasonableness of the CV profit determined for purposes of Article 2.2.121
7.90.
We are not persuaded that Korea's claim under Article 2.2 can be understood to cover a claim alleging inconsistency with the "reasonable method" obligation of Article 2.2.2(iii). In our view, a failure to comply with the "reasonable method" obligation is not the only error that could lead to the determination of an amount of profit that is not "reasonable" under Article 2.2. For instance, failure to act consistently with the chapeau of Article 2.2.2, Articles 2.2.2(i) and 2.2.2(ii), as well as with the profit cap obligation in Article 2.2.2(iii), could equally have led to the same result. Thus, a claim under Article 2.2 does not imply a claim under the "reasonable method" obligation of Article 2.2.2(iii), and nothing in Korea's panel request gives rise to such an implication. Korea's panel request does not state, in connection with the claim under Article 2.2, that the CV profit determined by the USDOC was not "reasonable" because the method used by the USDOC to determine that profit did not constitute a "reasonable method".122 Indeed, it does not mention the method by which that profit was determined at all.
7.91.
Korea's panel request also does not suggest that the claim under Article 2.2 covered claims pertaining to inappropriate application of all methods for CV profit determination set out under Article 2.2.2, such that a claim pertaining to the "reasonable method" under Article 2.2.2(iii) was necessarily covered as one among those methods. Indeed, the fact that Korea's panel request enumerated claims pertaining to the inappropriate application of certain methods for CV profit determination under Article 2.2.2, separately from its claim under Article 2.2, but omitted any reference to the "reasonable method" obligation of Article 2.2.2(iii), supports our view that its claim under Article 2.2 does not cover claims pertaining to inappropriate application of all methods for CV profit determination set out under Article 2.2.2 and, in particular, does not cover a claim pertaining to the "reasonable method" obligation of Article 2.2.2(iii).123
7.92.
We therefore conclude that the reference to "reasonable amount of profit" in Article 2.2 does not suffice to persuade us that a claim challenging the reasonableness of the amount of profit determined covers a purported claim concerning the reasonable method requirement in Article 2.2.2(iii). We find that this claim is simply not specified in Korea's panel request, and therefore, Korea's allegation of inconsistency with the "reasonable method" obligation under Article 2.2.2(iii) is not properly before us.
7.93.
Korea further argues that the United States has not demonstrated any prejudice arising from Korea's panel request and would likely not have objected to the claim at issue had the Panel not raised a question in this regard during the second substantive meeting.124
7.94.
We recall that we have an obligation to decide on issues concerning our jurisdiction, even if the parties to the dispute remain silent on those issues and if necessary, on our own motion, in order to satisfy ourselves that we have authority to proceed.125 We consider that even if the United States had not objected to Korea's claim, it would still have been appropriate for us to determine whether we had jurisdiction to address and dispose of the claim at issue, regardless of whether or not there was any evidence of prejudice to the United States. We therefore reject Korea's argument in this regard.
7.95.
Considering that the "reasonable method" obligation in Article 2.2.2(iii) is a separate and distinct obligation in that provision and that Korea has failed to properly allege a violation of that obligation in its panel request, we find that Korea's panel request does not include a claim that the USDOC acted inconsistently with that obligation. We therefore, reject as falling outside our jurisdiction, Korea's claim that the USDOC's use of profit data from the Tenaris financial statements in constructing normal value is not a "reasonable method" within the meaning of Article 2.2.2(iii).

7.3.2.4 Whether the USDOC acted inconsistently with Article 2.2.2(iii) and Article 2.2 by failing to calculate and apply a profit cap

7.3.2.4.1 Main arguments of the parties

7.96.
Korea's principal arguments are set out below:

a. The USDOC's failure to calculate and apply a profit cap constitutes a per se violation of Article 2.2.2(iii).126 That failure also contravenes Article 2.2 of the Anti-Dumping Agreement as that provision imposes an obligation to calculate a "reasonable amount for profits".127

b. Assuming that unavailability of data constitutes a valid justification for failing to calculate and apply a profit cap, the USDOC's determination that it was unable to calculate a profit cap would still be inconsistent with Article 2.2.2(iii) because it is premised on an impermissibly narrow definition of the "same general category of products".128

7.97.
The United States contends that:

a. The data required for calculation of the profit cap under Article 2.2.2(iii) was not available as there were no sales of products of the same general category in Korea.129

b. Further, Article 2.2.2(iii) does not always require the calculation of a profit cap.130

7.3.2.4.2 Main arguments of third parties

7.98.
The European Unionsubmits that the application of a "profit cap" is a mandatory requirement whenever an investigating authority determines to use "any other reasonable method" under Article 2.2.2(iii). The presence of the profit cap in subparagraph (iii) and the absence of any cap in subparagraphs (i) and (ii) demonstrate that there is an additional element in subparagraph (iii) that needs to be satisfied.131
7.99.
Turkey submits that an investigating authority is expected under Article 2.2.2 to determine the "reasonable amount" for profit as required under Article 2.2.132

7.3.2.4.3 Evaluation by the Panel

7.100.
In its final determination, the USDOC found that it could not calculate the profit cap called for in Article 2.2.2(iii) because it did not have domestic market profit data for other exporters and producers of the same general category of products in Korea.133 The principal legal issue before us is whether the USDOC's failure to calculate and apply a profit cap is inconsistent with Article 2.2.2(iii) and Article 2.2 of the Anti-Dumping Agreement.
7.101.
The text of Article 2.2.2(iii) makes it clear that the determination of the profit cap is mandatory. When the CV profit cannot be determined using the preferred method set out in the chapeau of Article 2.2.2, subparagraph (iii) allows the use of "any other reasonable method" for determining the amount of profit, provided that the amount determined does not exceed the profit cap, which is "the profit normally realized by other exporters or producers on sales of products of the same general category in the domestic market of the country of origin".
7.102.
The mandatory nature of the obligation to determine and apply a profit cap flows from the use of the imperative "shall not" in Article 2.2.2(iii). In addition, previous panels have found that both conditions, "any other reasonable method" and the profit cap, must be fulfilled in order for the determination of an amount for profit to be consistent with Article 2.2.2(iii).134
7.103.
The United States contends that the USDOC examined whether there were producers who sold products of the same general category in the domestic market whose data might have been used to calculate the profit cap.135 However, no such data existed in the record, and it was therefore unable to calculate the profit cap.136
7.104.
We understand the situation that the United States presents as one in which the USDOC attempted to calculate the profit cap but was unable to do so because it lacked data pertaining to sales of products of the same general category in the domestic market. We recall, however, that we have concluded137 in this dispute that the USDOC wrongly defined the "same general category of products" more narrowly than the like product in the underlying investigation. Based on that same conclusion, we consider that the USDOC's finding that it did not have profit data pertaining to sales of the same general category of products was similarly erroneous. This was because the USDOC's conclusion that it lacked data was premised on an erroneous definition of the same general category of products. Therefore, even assuming that a lack of data might otherwise justify failure to calculate and apply a profit cap, the USDOC's failure to do so in the underlying investigation is not justified. We therefore find that by failing to calculate and apply a profit cap, which is mandatory under Article 2.2.2(iii), in the underlying investigation, the USDOC acted inconsistently with its obligations under that provision.
7.105.
Korea also argues that the USDOC's failure to calculate a profit cap is inconsistent with Article 2.2 of the Anti-Dumping Agreement, which imposes an obligation to calculate a "reasonable amount" for profits.138
7.106.
The text of Article 2.2.2 indicates that the preferred and alternative methods set out in its chapeau and subparagraphs (i)-(iii), respectively, are used for purposes of determining "a reasonable amount" for SG&A and for profits within the meaning of Article 2.2 of the Anti-Dumping Agreement. This is clear from the use of the phrase "[f]or the purpose of paragraph 2" in the chapeau of Article 2.2.2. Previous panels have found that the methods set out in Article 2.2.2, including the use of "any other reasonable method" subject to a profit cap under subparagraph (iii) of that provision, are outlined for purposes of fulfilling this obligation under Article 2.2.139 We agree with that conclusion.
7.107.
In light of the foregoing, we conclude that if the methods under Article 2.2.2 are not properly applied, the resulting profit amount would no longer be reasonable under Article 2.2. We therefore find that in the absence of a profit cap, the profit that the USDOC determined was not a "reasonable amount" within the meaning of Article 2.2 of the Anti-Dumping Agreement.
7.108.
We find that the United States acted inconsistently with its obligations under Article 2.2.2(iii) because:

a. It failed to calculate and apply a profit cap, which is mandatory under that provision.

b. The USDOC's determination that no profit data pertaining to the same general category of products was available cannot justify its failure to calculate and apply the profit cap, as it erroneously defined the same general category of products.

7.109.
We also conclude that the USDOC's failure to calculate a profit cap led it to act inconsistently with its obligation under Article 2.2 of the Anti-Dumping Agreement to use a "reasonable amount for profits" in the construction of normal value for the Korean respondents in the underlying investigation.

7.3.2.5 Whether the USDOC acted inconsistently with Article 2.4 of the Anti-Dumping Agreement by failing to make due allowance for differences in the profit rates reflected in the constructed normal value and the export price

7.110.
Korea contends that because the USDOC used the profit rate of Tenaris in constructing the normal value of the Korean respondents, their constructed normal value reflected the Tenaris profit rate, while their export price reflected their own profit rate. In Korea's view, this difference in the constructed normal value and the export price of the Korean respondents affected price comparability, and the USDOC should have made due allowance, by making appropriate adjustments. Korea asserts that by failing to do, the USDOC acted inconsistently with Article 2.4 of the Anti-Dumping Agreement.

7.3.2.5.1 Main arguments of the parties

7.111.
Korea argues that the profit rate of Tenaris was not comparable to that of the two Korean respondents because: first, Tenaris focused on the premium segment of the OCTG market, whereas the Korean respondents participated in the low-grade end of the market; second, Tenaris's scale of operations was far bigger than that of the Korean respondents; and third, Tenaris and the two Korean respondents operated at different levels of trade. Therefore, in Korea's view, the USDOC should have attempted to make adjustments to the 26.11% profit rate of Tenaris, which was used in the constructed normal value determined for the Korean respondents.140
7.112.
Korea acknowledges that the Korean respondents did not make a specific request to the USDOC seeking adjustments to the normal value or export price based on this difference in profit rates.141 However, Korea notes that because the USDOC did not make an affirmative determination that it would use the Tenaris profit rate until it issued its final determination, the Korean respondents did not know that the USDOC would use this profit rate.142 Thus, they could not request such an adjustment.
7.113.
The United States contends that the profit component of a constructed normal value is not a difference that affects price comparability, and hence is not relevant to the fair comparison obligation under Article 2.4.143 The United States also disputes the three grounds advanced by Korea as to why the profit rate of Tenaris was not comparable to that of the Korean respondents.144 Finally, the United States submits that the respondents in the underlying investigation never requested the USDOC to make any adjustments between the constructed normal value and the export price, and notes that an investigating authority does not have an obligation to accept unsubstantiated requests for adjustments between the normal value and the export price.145

7.3.2.5.2 Evaluation by the Panel

7.114.
Korea asserts that there was a "massive disparity" in the profit rate recorded by Tenaris and that recorded by the Korean respondents, with the Tenaris profit rate being much higher than that of these respondents.146 Korea alleges that this disparity was attributable to the inherent differences between Tenaris and these respondents, which are noted in paragraph 7,111 above.147 Thus, in Korea's view, having decided to use the Tenaris profit rate in constructing the normal value, the USDOC should have made due allowance for this difference between the constructed normal value, which reflected Tenaris's high profit rate, and the export price, which reflected the Korean respondents' own, lower profit rates. In particular, Korea argues that the USDOC should have attempted to adjust the 26.11% profit rate of Tenaris used in the constructed normal value.148
7.115.
In this regard, we have already found that the USDOC acted inconsistently with:

a. the chapeau of Article 2.2.2 of the Anti-Dumping Agreement by failing to determine the Korean respondents' profit rate on the basis of their actual data pertaining to production and sales of the like product in the ordinary course of trade;

b. Article 2.2.2(i) and (iii) of the Anti-Dumping Agreement by incorrectly defining the "same general category of products"; and

c. Article 2.2.2(iii) of the Anti-Dumping Agreement by failing to calculate a profit cap.

7.116.
It follows, from these findings, that the USDOC did not determine the profit rate of the Korean respondents in a manner consistent with its obligations under the Anti-Dumping Agreement in constructing normal value. We do not find it necessary to decide whether the USDOC should have made adjustments to a CV profit rate that was itself determined in a manner inconsistent with US obligations under the Anti-Dumping Agreement. Hence, we exercise judicial economy with respect to Korea's Article 2.4 claim.149

7.3.2.6 Conclusions

7.117.
For the foregoing reasons, we find that the USDOC acted inconsistently with the chapeau and subparagraphs (i) and (iii) of Article 2.2.2 and with Article 2.2 of the Anti-Dumping Agreement in constructing normal value in the underlying investigation. We exercise judicial economy with respect to Korea's claim under Article 2.4 of the Anti-Dumping Agreement.

7.3.3 The USDOC's profit rate determination in the remand investigation

7.118.
Korea expressed its intent to challenge the USDOC's remand determination at the first substantive meeting and particularly in its closing statement at that meeting, but it did not identify the claims that it intended to make with respect to the remand determination.150 Korea identified some of these claims in its second written submission and the others in its opening statement at the second substantive meeting.
7.119.
In its second written submission, Korea claimed that the USDOC's profit rate determination in the remand investigation (new profit rate determination) was inconsistent with:

a. the chapeau of Article 2.2.2 of the Anti-Dumping Agreement because the USDOC refused to use actual data pertaining to the sales of the like product in the ordinary course of trade;

b. Articles 2.2.2(i) and (iii) of the Anti-Dumping Agreement because the USDOC relied on an impermissibly narrow definition of the "same general category of products"; and

c. Article 2.2.2(iii) of the Anti-Dumping Agreement because the USDOC calculated a profit cap based on the average of the profit rates in the 2012 financial statement of Tenaris and the profit rates of a Russian producer/exporter of OCTG, namely, OAO TMK.

7.120.
In its opening statement at the second substantive meeting, Korea claimed that the USDOC's new profit rate determination was also inconsistent with Article 2.2.2(iii) of the Anti‑Dumping Agreement because the USDOC did not determine the CV profit rate on the basis of a reasonable method, as required by this provision.151 In addition, Korea claimed that the USDOC acted inconsistently with Article 2.4 of the Anti-Dumping Agreement in the remand investigation by failing to make adjustments to this CV profit rate.152 As indicated above, we will address these claims only if we find the remand determination, and Korea's claims with respect to it, to be within our terms of reference. We therefore turn first to the parties' arguments on this fundamental question of our jurisdiction.

7.3.3.1 Main arguments of the parties with respect to the Panel's jurisdiction

7.121.
Korea notes that measures enacted subsequent to panel establishment may, in certain circumstances, fall within a panel's terms of reference, and states that considering the close nexus between this remand determination and the final determination expressly identified in its panel request, the USDOC's remand determination, which was issued after this Panel was established, is within our terms of reference.153 Further, Korea asserts that the remand determination is covered by its panel request because that request challenges "[a]ny related measure" in the proceeding entitled Oil Country Tubular Goods from the Republic of Korea, including the anti-dumping investigation itself as well as "all administrative reviews, new shipper reviews, changed circumstances reviews, sunset reviews, and other segments of the proceeding". These references, in Korea's view, are broad enough to cover the remand determination.
7.122.
The United States submits that we cannot rule on the remand determination because it was not in existence at the time this Panel was established, and was not subject to consultations between the parties.154 In addition, the United States asserts that Korea's claims with respect to the remand determination are wholly new claims, considering the differences in the methodologies used by the USDOC to determine the CV profit rate in the final determination and in the remand determination.155

7.3.3.2 Evaluation by the Panel

7.123.
In accordance with Article 7.1 of the DSU, and as set out in paragraph 1.4 above, our terms of reference require us to examine the "matter referred to the DSB" by Korea in its panel request. Article 6.2 of the DSU, which sets out the requirements applicable to panel requests, states that such a request shall:

[I]ndicate whether consultations were held, identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly.

Thus, Article 6.2 imposes two distinct requirements: first, to identify the specific measures at issue, and second, to provide a brief summary of the legal basis of the complaint, or the claims.156 It is well-established that these two elements, the measure(s) and the claim(s) together, comprise the "matter referred to the DSB".157 Therefore, if we conclude either that the USDOC's remand determination falls outside the scope of the specific measures identified in Korea's panel request, or that Korea's claims with respect to the remand determination differ from the legal basis of the complaint set out in that request, we will find that Korea's claims regarding this determination fall outside the "matter referred to the DSB" and thus, outside our terms of reference. In addressing these issues, we are mindful that fulfilment of the two requirements set out in Article 6.2 is not a mere formality.158 Instead, these requirements serve a two-fold purpose of forming the basis of a panel's terms of reference and of ensuring due process by informing the respondent and third parties of the matter brought before a panel.159

7.124.
We commence our analysis by considering whether the remand determination is covered as a specific measure at issue in Korea's panel request. If we find that it is not, then we will have no jurisdiction to examine the USDOC's remand determination, and it will be unnecessary to examine whether we also lack jurisdiction because Korea's claims with respect to this determination differ from the legal basis of the complaint that it set out in its panel request.160
7.125.
In deciding whether the remand determination is covered as a specific measure at issue by Korea's panel request we have to resolve two issues. First, whether the remand determination can be challenged in these panel proceedings even though it did not exist at the time this Panel was established. Second, whether the following italicised text in Korea's panel request is broad enough to cover the remand determination as a specific measure at issue even though the request makes no express reference to it161:

Any related measure in the proceeding entitled Oil Country Tubular Goods from the Republic of Korea, including the anti-dumping investigation itself as well as all administrative reviews, new shipper reviews, changed circumstances reviews, sunset reviews, and other segments of the proceeding.162

7.126.
We recall that the use of the term "specific measures at issue" in Article 6.2 of the DSU suggests that, as a general rule, the measures falling within a panel's terms of reference must be measures that were in existence at the time of panel establishment.163 However, there are exceptions to this general rule.164 In particular, the Appellate Body recognized in EC – Chicken Cuts, that in certain limited circumstances, measures that were not in existence at panel establishment may be found to fall within a panel's terms of reference.165 One such circumstance is when a measure that comes into existence after panel establishment amends the original measure, but does not change its essence.166 In that case, the amended measure will fall within the panel's terms of reference, provided the panel request is broad enough to cover that determination.
7.127.
Korea argues that the remand determination is within our terms of reference because it supplemented and reaffirmed the final determination of the USDOC and did not change its essence.167 Korea considers the situation here to be analogous to that in US – Washing Machines, where the panel found a remand determination issued after panel establishment to be within its terms of reference because it supplemented and reaffirmed the original determination.168
7.128.
We will examine the relation between the remand determination and the final determination to determine whether the remand determination changes the essence of the final determination.169 If we find that it does, we will conclude that the remand determination falls outside our terms of reference.
7.129.
We recall that in the final determination the USDOC determined CV profit of 26.11% based on the Tenaris financial statements. Further, the USDOC concluded that it could not calculate a profit cap, consistent with Article 2.2.2(iii) of the Anti-Dumping Agreement, because the Korean exporters or producers made no sales of products of the same general category in the domestic market. The USCIT, in its remand order, directed the USDOC to reconsider certain aspects of the CV profit rate calculation used in the dumping margin analysis in the final determination.170
7.130.
The USDOC initiated a remand investigation pursuant to that order, where it re-opened the record to allow all interested parties to submit new factual information and comments on the issue of CV profit, and interested parties did submit such information and comments.171 In its evaluation of the evidence, the USDOC172:

a. using a different methodology, determined a CV profit rate of 16.24% based on an average of profit rates in the 2012 financial statements of Tenaris and a Russian company OAO TMK;

b. unlike the final determination, the USDOC calculated a profit cap on the basis of "facts available", taking into account the profits earned by Tenaris and OAO TMK in the global market and calculating the profit cap as the average of those profit rates; and

c. provided further explanation regarding the factors that the USDOC considered in reaching its determination regarding the scope of the products that were in the same general category of products as OCTG.

7.131.
Based on the above, it is clear that:

a. the factual evidence on the USDOC's record in the remand investigation insofar as the issue of CV profit rate is concerned is not the same as that in the underlying investigation, as it includes additional evidence and comments provided by interested parties173;

b. the USDOC's evaluation of that evidence in the remand investigation, and in particular, the methodology used to determine the CV profit rate and the calculation of a profit cap, differed from the underlying investigation174; and

c. the USDOC's explanation regarding the factors that it considered in reaching its determination regarding the scope of the same general category of products is not the same as in the underlying investigation as it provides additional explanation beyond that in the underlying investigation.175

7.132.
These changes in the evidentiary record and in the USDOC's evaluation of that record and consequent determinations in our view show that the remand determination changed the essence of the USDOC's final determination. We do not consider that the remand determination can be said to retain the essence of the final determination simply because the USDOC reached the same ultimate conclusions, albeit at different rates, as to the existence of dumping as it did in the final determination.176 We recall that a determination of the existence of dumping requires a calculation which must be based on the evidence before the investigating authority, and carried out consistently with the requirements of the Anti-Dumping Agreement. Where, as here, the underlying facts and the methodology used in the determination of normal value are different, resulting in different margins of dumping, we do not agree that the essence of the original determination is unchanged.
7.133.
Therefore, we do not consider that the references in Korea's panel request, including that to "[a]ny related measure" or "other segments of the proceeding" permit it to challenge the USDOC's remand determination, because that determination changes the essence of the final determination expressly identified in Korea's panel request. Hence, we consider it unnecessary to decide whether these phrases were broad yet sufficiently precise to cover the remand determination as a specific measure at issue.177 In sum, we conclude that the remand determination falls outside the specific measures at issue covered by Korea's panel request, and thus outside our terms of reference.
7.134.
For the foregoing reasons, we conclude that we have no jurisdiction to examine Korea's claims with respect to the remand determination. Moreover, we do not find it necessary to decide whether we also lack jurisdiction to address Korea's claims regarding this determination because: (a) Korea brings new claims that are different from the legal basis of the complaint that it set out in its panel request178; and (b) the remand determination was not subject to consultations between the parties.

7.4 WHETHER THE USDOC'S DECISION TO CONSTRUCT NEXTEEL'S EXPORT PRICE WAS INCONSISTENT WITH ARTICLE 2.3 OF THE ANTI-DUMPING AGREEMENT

7.135.
Under US law, the USDOC is permitted to reject the transaction export price and instead construct the export price where the exporter or foreign producer's export sales are to an affiliated purchaser.179 In the underlying investigation, the USDOC concluded that NEXTEEL was affiliated with the following three entities, which we refer to collectively, together with NEXTEEL, as the "concerned entities":

a. POSCO, which supplied NEXTEEL with steel coils used in the production of OCTG180;

b. [[***]], a [[***]] that purchased OCTG from NEXTEEL, and in which [[***]] (Company A)181; and

c. [[***]], the [[***]] US affiliate of [[***]], through which Company A exported OCTG produced by NEXTEEL to US customers (Company B182).183

7.136.
Both parties agree that through this conclusion of affiliation under US law, the USDOC in effect sought to find "association … between the exporter and the importer or a third party", within the meaning of Article 2.3 of the Anti-Dumping Agreement.184 Having found association between the concerned entities, the USDOC rejected the transaction export price of NEXTEEL to Company A and constructed the export price instead.185
7.137.
Korea argues that in doing so, the USDOC acted inconsistently with Article 2.3 because, first, the USDOC's association determination was not one that an unbiased and objective investigating authority could have reached on the basis of the record evidence, and thus, the USDOC constructed the export price without making a proper determination of association between the concerned entities.186 Second, in Korea's view, even where association exists, an investigating authority is in addition required to determine whether the export price is actually unreliable because of such association, as the export price may be reliable even in such cases.187 But the USDOC failed to make such a determination.

7.4.1 Provision at issue

7.138.
Article 2.3 of the Anti-Dumping Agreement reads:

In cases where there is no export price or where it appears to the authorities concerned that the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported products are first resold to an independent buyer, or if the products are not resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as the authorities may determine.

7.4.2 Factual background

7.139.
The USDOC addressed whether there was association between the concerned entities through an examination of affiliation under US law, which specifies that affiliation exists between "[a]ny person who controls any other person and such other person".188 In turn, a person shall be considered to control another person "if the person is legally or operationally in a position to exercise restraint or direction over the other person".189 The USDOC first examined whether NEXTEEL was affiliated with POSCO under US law, by examining whether POSCO was legally or operationally in a position to exercise restraint or direction, i.e. control over NEXTEEL.
7.140.
The USDOC explained that in its analysis, it would first consider whether these two entities had a close supplier relationship, considering POSCO's status as a supplier of steel coils to NEXTEEL.190 The threshold issue in finding whether there was such a close supplier relation was whether either the buyer, i.e. NEXTEEL or the supplier, i.e. POSCO, was reliant on the other.191 Further, if such reliance existed, the USDOC would consider whether one of the parties was in a position to exercise direction or restraint over the other.192 However, the USDOC would not find affiliation on this basis unless the relationship between the entities had the potential to affect decisions concerning the production, pricing or cost of the subject merchandise or foreign like product, i.e. OCTG.193 Having set out the criteria that it would apply in examining whether NEXTEEL and POSCO were affiliated, the USDOC proceeded to evaluate the record evidence to determine whether these criteria were met, and concluded, for the reasons described in paragraphs 7,152-7.153 below, that NEXTEEL and POSCO were affiliated with each other.
7.141.
The USDOC then turned to examine whether NEXTEEL was affiliated with Company A and Company B. The USDOC noted that Company A was a [[***]] of POSCO.194 The USDOC also found that Company B was [[***]] by Company A.195 The USDOC did not separately examine whether Company A and Company B were in a position to exercise restraint or direction over NEXTEEL. Instead, having already concluded that NEXTEEL was affiliated with POSCO, the USDOC concluded that NEXTEEL was also affiliated with these two entities in which [[***]]. Thus, the USDOC concluded that there was association between the concerned entities.

7.4.3 Main arguments of the parties

7.142.
Korea asserts that Article 2.3 of the Anti-Dumping Agreement requires an investigating authority to meet two cumulative requirements before it is permitted to construct the export price, both of which the USDOC failed to meet. First, the USDOC constructed the export price without making a proper association determination, contrary to its obligations under Article 2.3. Second, the USDOC "mechanically conclu[ded]" that because of association between the concerned entities, NEXTEEL's export price to Company A was unreliable.196 That is, it did not affirmatively determine whether or not NEXTEEL's export price was actually unreliable, which Korea maintains is required under Article 2.3. In this regard, Korea states that NEXTEEL submitted evidence to the USDOC showing that its export price was reliable notwithstanding any association between the concerned entities, but the USDOC ignored this evidence.197
7.143.
The United Statesrejects both arguments. First, the United States argues that the USDOC made a proper finding of association, based on the record evidence. Second, noting that Article 2.3 of the Anti-Dumping Agreement provides that it should "appear[]" to the investigating authority that the export price is unreliable because of association, the United States asserts that this means that once an investigating authority properly finds association, it may take the view that the export price is unreliable because of that association, without a separate determination that the export price is actually unreliable.198

7.4.4 Main arguments of the third parties

7.144.
The European Union submits that association itself could be a sufficient basis under Article 2.3 to construct the export price, and that this provision does not impose an additional obligation to determine whether the export price is actually unreliable because of such association.199 However, if the evidence on record shows that an export price is reliable despite association, an unbiased and objective investigating authority would be required to take that evidence into account.200

7.4.5 Evaluation by the Panel

7.145.
We will commence our analysis by considering the nature of obligations imposed by Article 2.3 of the Anti-Dumping Agreement on an investigating authority. Then, we will examine whether that provision, as we understand it, was complied with by the USDOC in the underlying investigation.
7.146.
Article 2.3 permits an investigating authority to disregard the transaction export price and construct the export price where, inter alia, "it appears to the authorities concerned that the export price is unreliable because of association" between the exporter and the importer or a third party. In our view, it is clear that an investigating authority must have grounds for the view that there is association. If there is no association, the export price cannot appear to be unreliable to the investigating authority "because of" association.201
7.147.
While it is clear that the appearance of unreliability must be because of association, the text of Article 2.3 does not require any "determination", let alone a determination as to the reliability of the export price. If such a determination had been intended, in our view Article 2.3 would have been drafted differently, to require, for example, that the investigating authority determine or demonstrate that the export price is unreliable because of association. Instead, it provides that export price may be constructed where it "appears to the authorities" that the export price is unreliable. The verb "appear" has different definitions but we find the definition "seem to the mind, be perceived as, be considered" to be the most appropriate in respect of the text of Article 2.3.202 The adjective "unreliable" is defined as "not reliable".203 "Reliable" in turn is defined as "in which reliance or confidence may be put, trustworthy".204 Thus to us, the use of the terms "appear to the authorities" and "unreliable" in Article 2.3 denotes a situation in which, because of the association at issue, the investigating authority perceives the export price not to be trustworthy. Of course, an investigating authority must have grounds for this view: it is always obliged to establish facts properly and evaluate them in an unbiased and objective manner. Nothing in our understanding of Article 2.3 would suggest, however, any separate requirement to make a "determination" as to the reliability of the export price.
7.148.
It is also clear, in our view, that Article 2.3 does not allow an investigating authority to construct export price whenever there is association. If that were the case, we would again have expected Article 2.3 to have been drafted differently, to require, for instance, that an investigating authority may construct the export price where there is association.205 An investigating authority could not simply ignore evidence before it suggesting that the export price is reliable notwithstanding association and go on to construct the export price without considering such evidence. As noted above, an investigating authority has an obligation to establish facts properly and evaluate them in an unbiased and objective manner, which entails the consideration of relevant evidence on the issues before it.206
7.149.
Korea argues that, in the underlying investigation, the USDOC erred in finding association between the concerned entities, and ignored evidence presented by NEXTEEL showing that its export price to Company A was reliable notwithstanding the USDOC's finding of association. Therefore, we must consider both the finding of association, and whether the evidence to which Korea refers is relevant to the question of the reliability of the export price in the circumstances of the underlying investigation, such that the USDOC's failure to consider it undermines its decision to construct the export price. Specifically, we will address the following two questions:

a. Whether the USDOC's conclusion of association between the concerned entities was inconsistent with Article 2.3.

b. Whether the USDOC erred in not considering evidence of the reliability of NEXTEEL's export price.

7.4.5.1 Whether the USDOC's conclusion of association between the concerned entities was inconsistent with Article 2.3

7.4.5.1.1 Meaning of "association" under Article 2.3

7.150.
Article 2.3 does not define association. The dictionary definitions of "association" include "action of joining or uniting for a common purpose; the state of being so joined".207 These definitions are not limiting, and thus "association" may arise from formal legal ties or far less structured and non-binding relationships. But it is clear from the overall context of Article 2.3 that the remedy for the appearance of unreliability resulting from association provided for in that Article is the construction of the export price on the basis of the price at which the exported merchandise is first resold to an independent buyer. This strongly suggests that a lack of independent action is central to the nature of "association" and gives rise to the problem Article 2.3 seeks to remedy.
7.151.
"Independent" is defined as "not subject to the authority or control of any person, country, etc.; free to act as one pleases, autonomous".208 Thus, for purposes of Article 2.3, association may be understood to mean a lack of autonomy to act as one pleases or the presence of authority or control over a person. Therefore, we consider that, at a minimum, there may be association for purposes of Article 2.3 where an exporter and the importer or a third party do not act independently of one another. Based on this understanding, a situation in which export sales are between associated entities, as opposed to independent entities, may constitute the problem Article 2.3 seeks to remedy: the appearance of unreliability of export price resulting from association. In considering the USDOC's conclusion of affiliation in the underlying investigation, we will consider whether it was consistent with this understanding of association.

7.4.5.1.2 The USDOC's conclusions regarding association

7.152.
In the underlying investigation, the USDOC reached its conclusions regarding association on the basis of US law provisions governing a finding of affiliation, which under US law is based on control. The basis of these conclusions is described in paragraphs 7,139-7.141 above. In examining whether NEXTEEL was affiliated with POSCO based on the evidence before it, the USDOC made the following intermediate factual findings:

a. POSCO supplied NEXTEEL with "virtually all" of the steel coil, the main input used in the production of OCTG, used by NEXTEEL209;

i. [[***]]% of the steel coil purchased by NEXTEEL during the POI was from POSCO;

ii. [[***]]% of steel coils consumed by NEXTEEL during the POI was from POSCO; and

iii. Steel coils sourced from POSCO accounted for [[***]]% of NEXTEEL's total cost for manufacturing OCTG.

b. [[***]] to NEXTEEL related to the production of OCTG210;

c. [[***]] of NEXTEEL's US sales were made through [[***]]211;

d. POSCO had a history of working closely on-site with NEXTEEL departments and providing marketing assistance and other promotional activities for the benefit of NEXTEEL.212 POSCO continued to provide marketing support to NEXTEEL during the POI, and POSCO and NEXTEEL shared technology and market information pertaining to OCTG.213

7.153.
On the basis of these factual findings the USDOC reached the following overall conclusion regarding the relationship between POSCO and NEXTEEL214:

The combination of [POSCO's] involvement on both the production and sales side creates a unique situation where POSCO is operationally in a position to exercise restraint or direction over NEXTEEL in a manner that affects the pricing, production, and sale of OCTG. Being in a position both to establish the primary input cost and [[***]] enables POSCO to influence the cost of inputs and additionally to [[***]]. The preamble to the [USDOC's] regulations states that section 771(3) of the [US Tariff] Act, which refers to a person being "in a position to exercise restraint or direction," focuses the [USDOC] on the ability to exercise "control" rather than the actuality of control over specific transactions. In this case, by playing the role [[***]] supplier and, [[***]] POSCO is in a rather unique position to exercise restraint or control over NEXTEEL.

7.154.
In addition, as stated above, the USDOC concluded that NEXTEEL was affiliated with Company A and Company B because of POSCO's [[***]].
7.155.
In reviewing the USDOC's finding of affiliation, which served as its conclusion regarding association between the concerned entities for purposes of Article 2.3, we recall that pursuant to our standard of review, we must examine whether, in light of the evidence and arguments before it, the conclusions reached by the USDOC are such as could be reached by an unbiased and objective investigating authority.215 Further, considering that the USDOC's overall conclusion was based on several intermediate factual findings, not only must we examine each of these findings, to the extent necessary, but we must also consider whether these findings, taken as a whole, supported the USDOC's overall conclusion.216 This means that even were we to conclude that an intermediate factual finding or a particular piece of evidence might not, viewed in isolation, support the USDOC's overall conclusion, if taken as whole, they support that conclusion, we must uphold it.
7.156.
Korea contends that in reaching its intermediate factual findings, the USDOC ignored alternative explanations of the record evidence, as well as other evidence which undermined these findings. In particular, Korea argues that:

a. in examining the extent to which NEXTEEL sourced its steel coil supply from POSCO, the USDOC failed to consider that NEXTEEL had alternative sources from which it purchased and consumed steel coils during the POI. The USDOC also drew improper inferences from the nature of the services provided by [[***]] to NEXTEEL during the production process of OCTG;

b. the USDOC failed to consider evidence regarding marketing and technology collaboration between NEXTEEL and POSCO that undermined its findings; and

c. the USDOC failed to consider that the volume of NEXTEEL's US sales through Company A and Company B was on the [[***]].

Korea also questions the linkage between the intermediate factual findings and the overall conclusion reached by the USDOC. We will examine each of these arguments below.

7.157.
In addition, Korea contends that the USDOC acted inconsistently with the relevant US law provisions governing findings of affiliation based on control.217 Korea asserts that such a violation of US law led to a violation of Article 2.3 of the Anti-Dumping Agreement in this case, because having decided to find association under Article 2.3 on the basis of US law, the USDOC was required to comply with the requirements of US law.218 Thus, Korea essentially requests us to determine whether the USDOC's conclusion regarding association or affiliation was consistent with US law.
7.158.
As a panel established under the DSU, our role is to determine the consistency of the United States' measures with its obligations under, in this instance, Article 2.3 of the Anti-Dumping Agreement and not under US law. It is not our role, nor are we competent, to review the consistency of the USDOC's findings with governing US law. Therefore, it would be entirely inappropriate for us to review whether the USDOC complied with US law in its examination of affiliation based on control, and we will not do so. At the same time, however, we must consider the consistency of the United States' measure with Article 2.3 on the basis of the conclusions reached by the USDOC. We may not engage in a de novo review of the evidence and arguments that were before the USDOC to determine whether it could have found association under Article 2.3 on some other basis than that on which it reached its conclusions.
7.159.
Keeping these considerations in mind, we will proceed in the following manner: We will first review the USDOC's intermediate factual findings, and whether taken as a whole, these findings support the USDOC's overall conclusion regarding affiliation. Then, we will examine whether this overall conclusion was a sufficient basis for a conclusion that there was association between the concerned entities within the meaning of Article 2.3 of the Anti-Dumping Agreement.219

7.4.5.1.2.1 NEXTEEL's purchases and consumption of steel coils during the POI and USDOC's inferences based on the nature of services provided by [[***]] to NEXTEEL during the production process of OCTG

7.160.
In the underlying investigation, the USDOC considered the role of POSCO in the production of OCTG by NEXTEEL. The USDOC noted that POSCO supplied NEXTEEL with "virtually all" of the steel coils used to produce OCTG and that steel coils purchased from other sources were negligible.220 Further, the USDOC found that [[***]] to NEXTEEL related to the production of OCTG.
7.161.
Korea argues that the USDOC failed to consider submissions made by NEXTEEL that it had alternative sources of supply available to it, and that it had, in fact, used steel coils sourced from other suppliers during the period of investigation.221 The United States notes, and the record confirms, that the USDOC did not ignore this evidence, but nonetheless found that POSCO accounted for [[***]]% of NEXTEEL's consumption of steel coils in the POI and [[***]]% of its total POI purchases of steel coils.222 As stated above, the USDOC did not conclude that POSCO supplied NEXTEEL with all steel coils used in the production of OCTG223, and the evidence does support the finding that the USDOC did make.224 Thus, the USDOC did not ignore evidence or arguments before it.

7.4.5.1.2.2 Marketing and technology collaboration between POSCO and NEXTEEL

7.162.
The USDOC found that POSCO had a history of working closely with NEXTEEL, providing marketing assistance and conducting other promotional activities for NEXTEEL's benefit.225 The USDOC also found that POSCO continued to provide marketing support to NEXTEEL and both companies shared technology and market information pertaining to OCTG.226 The USDOC relied on evidence furnished by the domestic industry in making this finding.227
7.163.
That evidence relates to technical consulting provided by POSCO to NEXTEEL, technical checks provided by POSCO on finished products, joint development of new materials and POSCO's takeover of NEXTEEL's overseas public relations campaign, as well as NEXTEEL's acknowledgement that "mutual cooperation" between NEXTEEL and POSCO boosted its competitiveness, and would continue in the future.228 In addition, a [[***]] between NEXTEEL and POSCO provides for [[*** 229]].230 Korea does not question the reliability of this evidence in these proceedings.
7.164.
Korea argues that the evidence relied on by the USDOC could not have supported the USDOC's intermediate factual finding of marketing and technology collaboration between NEXTEEL and POSCO, and that the USDOC ignored evidence other than these that could have undermined its conclusions regarding association.231 First, Korea notes that the record evidence showed that POSCO shared technology and market information pertaining to OCTG with other companies with which it did business, and that instances of such cooperation were not exclusive between POSCO and NEXTEEL but in line with normal supplier-customer relations, and asserts that this evidence was not considered by the USDOC in its analysis.232
7.165.
Korea essentially argues that evidence of marketing and technology collaboration between NEXTEEL and POSCO could have probative value only if these two entities had an exclusive collaborative relationship. We find nothing in the notion of association as we understand it for purposes of Article 2.3 that would suggest that the lack of an exclusive relationship means that the evidence is not probative on the question of association or cannot support the inferences drawn by the USDOC on the basis of this evidence. Indeed, an exporter may have associations with multiple entities, in which case, the relationship between the exporter and any one of those entities will not be exclusive. Yet, that relationship may nonetheless suffice to show association for purposes of Article 2.3.
7.166.
Second, Korea notes that the [[***]] was not [[***]] and there were no [[***]] agreements between POSCO and NEXTEEL.233 Korea has failed to explain why the fact that an agreement regarding various aspects of the relations between two companies is not [[***]] demonstrates that it is not relevant to the question of association between those companies. Indeed, as we understand it, association for purposes of Article 2.3 can exist without any formal agreement, much less a [[***]] agreement. Accordingly, we are not persuaded that an objective and unbiased investigating authority could not have found, on the basis of the evidence in question, that there was marketing and technological collaboration between NEXTEEL and POSCO with respect to OCTG, or that these two entities did not act independently of each other in the production and sale of OCTG.

7.4.5.1.2.3 [[***]] in US sales through Company A and Company B234

7.167.
The USDOC found that [[***]].235 However, Korea notes that NEXTEEL's US sales through Company A and Company B [[***]] throughout the POI.236 In particular, while in the first half of POI, NEXTEEL sold [[***]] of its OCTG, by volume, through Company A and B, that percentage [[***]] to [[***]] in the second half of POI.237 Korea argues that the [[***]] proportion of sales through these entities contradicts the notion that NEXTEEL was controlled by Company A and Company B.
7.168.
The USDOC recognized that the proportion of NEXTEEL's sales through Company A and Company B [[***]] during the POI in its evaluation238:

[W]e note that while POSCO's [[***]] the Department must make its decision regarding affiliation and its impact for purposes of sales and cost based on the POI, the period of time being examined.

7.169.
Thus it is clear that the USDOC did consider this issue. However, we recall the USDOC's conclusion that POSCO was in a position to [[***]] and that by playing the role of [[***]] supplier and [[***]] Company A [[***]] POSCO was in a position to exercise restraint or direction over NEXTEEL was based, in part, on the fact that POSCO through Company A and Company B sold a [[***]] of finished products to the United States.239 While a more thorough discussion of whether the [[***]] in sales through these entities at the end of the POI affected its view that POSCO was in a position to exercise restraint or direction over NEXTEEL would have been desirable, the USDOC's assessment was based on the data for the POI. During the entire POI the volume of exports to the United States that NEXTEEL made through Company A and Company B was a [[***]][[***]], notwithstanding the [[***]] at the end of the POI.

7.4.5.1.2.4 The USDOC's overall conclusion of association within the meaning of Article 2.3

7.170.
Korea has failed to demonstrate that the evidence relied on by the USDOC did not support its intermediate factual findings. The question that we now turn to is whether the USDOC's overall conclusion of affiliation between the concerned entities was reasonably based on these intermediate factual findings and whether this conclusion sufficed to demonstrate "association" between the exporter and the importer or a third party, within the meaning of Article 2.3 of the Anti-Dumping Agreement.
7.171.
We recall that the USDOC's overall conclusion, as set out in paragraph 7,153 was that there was affiliation based on control between NEXTEEL and POSCO because:

a. The combination of POSCO's involvement on both the production and sales side created a unique situation where POSCO was operationally in a position to exercise restraint or direction over NEXTEEL in a manner that affected the pricing, production, and sale of OCTG.

b. Being in a position to establish the primary input cost and [[***]] enabled POSCO to influence the cost of inputs and additionally to [[***]].

c. By playing the role [[***]] supplier and [[***]] POSCO was in a rather unique position to exercise restraint or control over NEXTEEL.

7.172.
The USDOC also concluded that there was affiliation between NEXTEEL, Company A, and Company B because of POSCO's [[***]].
7.173.
We recall that the USDOC reached this conclusion based on: (a) undisputed evidence of marketing and technology collaboration between POSCO and NEXTEEL, including through a [[***]] that [[***]]; and (b) evidence of POSCO's direct and indirect involvement in NEXTEEL's production and sale of OCTG. We recall our view that where the exporter and the importer or a third party are joined or united for a common purpose, this may suggest that they do not act independently of one another, but are instead, dependent on each other, and thus are associated within the meaning of Article 2.3 of the Anti-Dumping Agreement. We consider that the USDOC's overall conclusion of affiliation between POSCO and NEXTEEL sufficed to demonstrate that they were joined or united for a common purpose, and thus there was "association" between the exporter and the importer or a third party, within the meaning of Article 2.3 of the Anti-Dumping Agreement.
7.174.
We further consider that the USDOC's conclusion of affiliation between NEXTEEL and Company A and B sufficed to demonstrate that they were joined or united for a common purpose, and thus there was "association" between the exporter and the importer or a third party, within the meaning of Article 2.3 of the Anti-Dumping Agreement. It remains undisputed that POSCO had [[***]] and [[***]]. Indeed, in its questionnaire response before the USDOC, Company B stated that it was [[***]].240 Because these entities were [[***]] of POSCO, we consider that the conclusion of association between NEXTEEL and POSCO sufficed as a basis to find that these entities, like POSCO, did not act independently of NEXTEEL.
7.175.
Therefore, we consider that the USDOC's conclusions regarding the relationship between the concerned entities were supported by the evidence, and sufficed to satisfy the requirement of Article 2.3 that there be association between the exporter and the importer or a third party.

7.4.5.2 Whether the USDOC erred in not considering evidence allegedly pertaining to the reliability of the export price

7.176.
During the underlying investigation, NEXTEEL presented evidence to the USDOC, which Korea alleges showed that NEXTEEL's export price was reliable despite association between the concerned entities:

a. evidence that NEXTEEL's relationship with both POSCO and its relationship with the Company A predated the relationship between POSCO and Company A;

b. sales agreement between NEXTEEL, Company A and a US customer that predated POSCO's affiliation with Company A, and the terms of which remained unchanged since POSCO [[***]], and even into the POI;

c. Company A testified that [[***]] was not directly or indirectly involved in the sales negotiation or sale of OCTG between NEXTEEL and Company A; and

d. NEXTEEL's sales through Company A [[***]] throughout the period of investigation, demonstrating that neither POSCO nor Company A was in a position to control NEXTEEL's sales.

Korea argues that the USDOC erred in ignoring this evidence.

7.177.
Considering that NEXTEEL's relationship with POSCO, Company A, and Company B predated POSCO's [[***]] in Company A, and [[***]] in Company B, in Korea's view, there was no effect on NEXTEEL's export price.241 The United States disagrees with Korea's assertion, stating that because NEXTEEL's export price to Company A was set on a short-term basis, this export price was not set on terms that existed prior to POSCO's [[***]] in Company A and Company B.242 The record supports the United States' assertion in this regard.
7.178.
First, the sales agreement between NEXTEEL, Company A, and a US customer cited by Korea does not state [[***]], but rather provides for [[***]]. This shows that the export price during the POI was not set on terms that existed prior to POSCO's affiliation with Company A or Company B. This is further confirmed by Company A's questionnaire response243:

[[***]]

7.179.
Thus, while the sale agreement appears to predate the affiliation between POSCO and Company A, the export price during the POI was not based on the terms in that agreement, but on a [[***.]]244 Therefore, we are of the view that NEXTEEL's export price to Company A could have appeared unreliable to the investigating authority, without a separate evaluation of the timing of NEXTEEL's relationship with POSCO, Company A, and Company B.
7.180.
In addition, during the underlying investigation, Company A testified that [[***]] was not directly or indirectly involved in the sales negotiations or sale of OCTG between NEXTEEL and Company A. However, we recall that [[***]] had an [[***]] in Company A, and the USDOC found that Company A and Company B were affiliated with NEXTEEL on this basis. Considering that Company A and Company B were affiliated with NEXTEEL, we consider that NEXTEEL's export price to Company A could have appeared unreliable to the investigating authority, without a separate evaluation of whether [[***]] was involved, directly or indirectly, in the export sales made by NEXTEEL.
7.181.
Finally, Korea refers to the fact that NEXTEEL's sales of OCTG through Company A [[***]] in the POI. We have already found above that the USDOC considered this fact in finding affiliation. It is not clear, however, and Korea has not shown, the relevance of this fact to the reliability of NEXTEEL's export prices.
7.182.
Therefore, we consider that Korea has not demonstrated that the USDOC erred in not considering evidence allegedly showing that the export price was reliable notwithstanding the association between NEXTEEL, POSCO, and the concerned entities.

7.4.6 Conclusion

7.183.
For the foregoing reasons, we find that Korea has not demonstrated that the USDOC acted inconsistently with Article 2.3 of the Anti-Dumping Agreement in the underlying investigation.

7.5 WHETHER THE USDOC'S DECISION TO REJECT THE PRICE AT WHICH NEXTEEL PURCHASED STEEL COILS FROM POSCO WAS INCONSISTENT WITH ARTICLE 2.2.1.1 OF THE ANTI-DUMPING AGREEMENT

7.184.
In constructing the normal value for NEXTEEL on the basis of its cost of production, the USDOC rejected the price that NEXTEEL paid to POSCO for the principal input, steel coils (NEXTEEL's steel coil purchase price), on the ground that NEXTEEL and POSCO were affiliated entities. Korea contends that the USDOC's rejection of this price, reflected in NEXTEEL's records, on the ground that these records did not "reasonably reflect the costs associated with the production and sale" of OCTG, was inconsistent with Article 2.2.1.1 of the Anti‑Dumping Agreement.245

7.5.1 Provision at issue

7.185.
Article 2.2.1.1 reads, in part, as follows:

For the purpose of paragraph 2, costs shall normally be calculated on the basis of records kept by the exporter or producer under investigation, provided that such records are in accordance with the generally accepted accounting principles of the exporting country and reasonably reflect the costs associated with the production and sale of the product under consideration.

7.5.2 Factual background

7.186.
As discussed above, in the underlying investigation, the USDOC found that POSCO was affiliated with NEXTEEL. To consider whether, in this situation, NEXTEEL's steel coil purchase price should be used in constructing normal value, the USDOC calculated the weighted-average price of POSCO's steel coil sales to unaffiliated customers246, and compared NEXTEEL's steel coil purchase prices (transfer prices) with POSCO's cost of production of OCTG and with the prices at which POSCO sold this product to unaffiliated customers.247
7.187.
The USDOC found that the transfer prices of all [[***]] examined grades of steel coils were above POSCO's corresponding cost of production.248 However, it found that POSCO had sold [[***]] of the [[***]] examined grades to unaffiliated customers at prices that were [[***]] than the corresponding transfer price to NEXTEEL.249 The USDOC used the prices of these [[***]] grades to the unaffiliated customers in constructing the normal value of NEXTEEL, rather than NEXTEEL's steel coil purchase price.250

7.5.3 Main arguments of the parties

7.188.
Korea argues that the USDOC acted inconsistently with Article 2.2.1.1 by rejecting NEXTEEL's steel coil purchase price because: (a) the USDOC's finding of affiliation between NEXTEEL and POSCO was erroneous; and (b) there was no evidence on the record of the underlying investigation indicating that NEXTEEL's records did not reasonably reflect the costs associated with production and sale of OCTG. In this regard, Korea acknowledges that the USDOC examined NEXTEEL's steel coil purchase price to assess whether it was an arm's length price. However, Korea contends that in considering whether a producer's records reasonably reflect the costs associated with production and sale of the product under consideration, an investigating authority is required to assess whether the producer's records are reliable, and not whether the costs reflected in those records are reliable.251 In Korea's view, the USDOC did not examine, as part of this arm's length test, whether NEXTEEL's records were reliable, and thus had no proper basis under Article 2.2.1.1 to reject NEXTEEL's steel coil purchase price.
7.189.
The United States contends that the USDOC disregarded NEXTEEL's steel coil purchase price because NEXTEEL's records did not reasonably reflect the costs associated with production and sale of OCTG.252 The United States notes that the USDOC reached this conclusion based on: (a) a proper finding of affiliation; as well as (b) an arm's length test which compared NEXTEEL's steel coil purchase price with POSCO's cost of production and POSCO's steel coil sales price to other unaffiliated customers. The United States asserts that this provided a sufficient basis under Article 2.2.1.1 to reject NEXTEEL's steel coil purchase price.

7.5.4 Main arguments of the third parties

7.190.
The European Union argues that the use of the term "normally" in Article 2.2.1.1 means that an investigating authority is permitted to depart from the norm, which is to calculate costs based on the exporter or producer's records provided the two express conditions provided in this Article are met.253 However, the investigating authority must explain why it departed from this norm.254

7.5.5 Evaluation by the Panel

7.191.
The issue before us is whether the USDOC's rejection of NEXTEEL's steel coil purchase price, on the ground that NEXTEEL's records did not "reasonably reflect the costs associated with production and sale of" OCTG, was consistent with Article 2.2.1.1 of the Anti-Dumping Agreement. Korea presents two main arguments in support of its claim. First, the USDOC's finding of affiliation between POSCO and NEXTEEL was not proper and hence did not provide a basis under Article 2.2.1.1 to disregard NEXTEEL's steel coil purchase price. Second, even assuming this finding of affiliation was proper, there was still no basis under Article 2.2.1.1 to reject this price because NEXTEEL's records reasonably reflected costs associated with the production and sale of the product under consideration. The United States disagrees with both arguments presented by Korea.255
7.192.
We begin by noting that nothing in Article 2.2.1.1 sets out any criteria or consideration for determining whether the "records kept by the exporter or producer under investigation … reasonably reflect the costs associated with the production and sale of the product under consideration". It certainly does not address questions of affiliation among companies. The issue before us with respect to this claim is thus not whether the USDOC's finding of affiliation was consistent with Article 2.2.1.1, but whether its rejection of NEXTEEL's steel coil purchase price on the ground that its records did not reasonably reflect the costs associated with production and sale of OCTG was consistent with that provision. Indeed, Korea appears to recognize that there is no basis for concluding that the USDOC's affiliation finding was inconsistent with Article 2.2.1.1, as it makes no argument in this regard. Instead, Korea argues that because the USDOC's finding of affiliation between NEXTEEL and POSCO was inconsistent with Article 2.3 of the Anti-Dumping Agreement, it could not provide a basis under Article 2.2.1.1 to reject NEXTEEL's steel coils purchase price.256
7.193.
We have already concluded above that the USDOC's conclusion on affiliation was sufficient with respect to the requirements of Article 2.3 of the Anti-Dumping Agreement regarding association. Korea makes no other argument under Article 2.2.1.1 challenging the USDOC's finding of affiliation, and thus there is no basis for us to find error in USDOC's conclusion that, as affiliated companies, NEXTEEL and POSCO did not have an independent buyer-supplier relationship. The issue that we have to consider is whether the USDOC acted inconsistently with Article 2.2.1.1 when it disregarded the price at which NEXTEEL purchased steel coils from POSCO based on its findings that (a) POSCO was an associated supplier; and (b) the price at which POSCO sold [[***]] grades of steel coils to NEXTEEL was [[***]] than the price at which it sold them to non-affiliated customers.
7.194.
Article 2.2.1.1 does not permit an investigating authority to disregard an exporter's or producer's record costs because it considers such costs to be unreasonable or to not be a cost that the exporter or producer would incur under normal circumstances.257 In EU – Biodiesel (Argentina), the panel and Appellate Body recognized that the focus of this condition is on the exporter's or producer's records and on whether these records reasonably reflect the costs incurred by the exporter or producer.258 The focus is not on whether the reported costs are themselves reasonable.259
7.195.
However, the issue in this case is whether an investigating authority is permitted to disregard the price reflected in an exporter's or producer's records for the purchase of an input from an associated or non-independent supplier, when this price is found to be [[***]] that supplier's arm's length prices. In other words, is an investigating authority permitted to conclude, in such a circumstance, that the exporter's or producer's records do not "reasonably reflect" the cost associated with production and sale of the product under consideration? While the panel and Appellate Body reports in EU – Biodiesel(Argentina) are relevant to our consideration, this issue was not raised in that dispute, and has not been directly addressed in any previous case.
7.196.
The Appellate Body in EU – Biodiesel(Argentina) clarified that the phrase "reasonably reflect" means that the records of the exporter or producer must suitably and sufficiently correspond to or reproduce the costs that have a genuinerelationship with the production and sale of the specific product under consideration.260 The panel in EU – Biodiesel (Argentina),noting that the ordinary meaning of "reflect" is "to reproduce, esp. faithfully or accurately; to depict" and the ordinary meaning of "reasonable", the adjective underlying the adverb "reasonably" which modifies the verb "reflect", is "rational or sensible, in accordance with reason, and fair and acceptable in amount", found that the requirement that the records reasonably reflect the incurred costs means that the records "must depict all the costs [the producer] has incurred in a manner that is – within acceptable limits – accurate and reliable".261
7.197.
However, this does not mean that the figures reported in an exporter's or producer's records must be accepted for purposes of constructing normal value without further consideration in all cases. Both the panel and the Appellate Body in EU – Biodiesel(Argentina) recognized that if the prices recorded in an exporter's or producer's records do not reflect arm's length prices, an investigating authority may find that the records, insofar as those prices are concerned, do not "reasonably reflect" the costs associated with production and sale of the product under consideration.262 In such a situation, the investigating authority would be entitled to disregard those prices when determining the exporter's or producer's cost of production. Thus, we consider that when the transactions between the exporter or producer and an associated or non‑independent entity are found not to be at arm's length, the costs reflected in the exporter's or producer's records cannot be said to be "accurate or reliable" or "suitably and sufficiently correspond" to, i.e. reasonably reflect, the costs associated with production and sale of the product under consideration.
7.198.
To examine whether such transactions are or are not at arm's length, and therefore whether the reported prices should be used in constructing normal value, an investigating authority would have to examine the transactions in question. This is what the USDOC did in the underlying investigation. The USDOC calculated the weighted-average price of POSCO's steel coil sales to unaffiliated customers, and compared NEXTEEL's steel coil purchase prices (transfer prices) with POSCO's cost of production of OCTG and with the prices at which POSCO sold steel coils to unaffiliated customers. The USDOC found that the prices of [[***]] grades of steel coils purchased by NEXTEEL from POSCO were [[***]] the prices at which POSCO sold these grades of steel coils to other non-affiliated customers. In our view, it was not unreasonable for the USDOC to conclude that NEXTEEL's steel coil purchases were not at arm's length prices, and therefore that NEXTEEL's records did not reasonably reflect the costs associated with the production and sale of OCTG within the meaning of Article 2.2.1.1. In this regard, we note that Korea does not dispute that an investigating authority may conduct an arm's length test in this context.263 However, Korea asserts that an arm's length test cannot be used to assess whether the costs reflected in the exporter or producer's records reflect some "hypothetical costs" which the investigating authority considers to be more reasonable than the costs actually incurred by the producer or exporter.264 We agree. As discussed above, the enquiry under Article 2.2.1.1 is not whether costs reported in the producer or exporter's records are reasonable. But this is not the question the USDOC was addressing in this case. In the underlying investigation, the USDOC did not compare NEXTEEL's steel coils purchase price with some "hypothetical" reasonable cost or price. Instead, the USDOC compared the actual price at which POSCO sold steel coils to NEXTEEL with the actual price at which POSCO sold steel coils to non-affiliated customers, and concluded that the former was [[***]] the latter.
7.199.
In light of the above, we conclude that the USDOC did not act inconsistently with Article 2.2.1.1 in the underlying investigation when it rejected the price at which NEXTEEL purchased [[***]] grades of steel coils from POSCO that were found to be [[***]] POSCO's arm's length prices to non-affiliated customers.265
7.200.
For the foregoing reasons, we conclude that the USDOC did not act inconsistently with the second condition in Article 2.2.1.1 in concluding that NEXTEEL's records did not reasonably reflect the costs associated with production and sale of OCTG, and rejecting NEXTEEL's steel coil purchase price for purposes of constructing normal value.

7.6 WHETHER THE USDOC ACTED INCONSISTENTLY WITH ARTICLES 6.2, 6.4, AND 6.9 OF THE ANTI‑DUMPING AGREEMENT

7.201.
As discussed above, in its final determination in the underlying investigation, the USDOC determined the CV profit for the Korean respondents on the basis of the Tenaris profit data. It did not, however, make known to interested parties that it had accepted that data on the record or that it had relied on that data for purposes of CV profit determination until the final determination.
7.202.
On 17 June 2014, one day before the deadline to submit case briefs in the underlying investigation, the USDOC posted to the record266 a letter signed by 57 US Senators dated 15 May 2014. On 23 June 2014, the same day as the deadline to submit rebuttal briefs, the USDOC posted to the record a letter signed by 155 Members of the US House of Representatives dated 10 June 2014.267 These letters, as well as other letters from US lawmakers, local government leaders, and industry representatives and memoranda to the file describing phone calls and meetings with US lawmakers and industry representatives, set out concerns regarding the USDOC's preliminary determination and the impact of OCTG imports on the domestic market in the United States.268 We refer collectively to these letters and memoranda as the "communications".
7.203.
Korea makes the following claims under Articles 6.2, 6.4, and 6.9 of the Anti-Dumping Agreement:

a. The USDOC acted inconsistently with Articles 6.2, 6.4, and 6.9 in not disclosing, until its final determination, its decision to accept the Tenaris financial data on the record of the underlying investigation; and

b. The USDOC acted inconsistently with Articles 6.4 and 6.9 of the Anti-Dumping Agreement in not posting to the record certain communications in a timely manner.

7.6.1 Provisions at issue

7.204.
Article 6.2 of the Anti-Dumping Agreement provides:

Throughout the anti-dumping investigation all interested parties shall have a full opportunity for the defence of their interests. To this end, the authorities shall, on request, provide opportunities for all interested parties to meet those parties with adverse interests, so that opposing views may be presented and rebuttal arguments offered. Provision of such opportunities must take account of the need to preserve confidentiality and of the convenience to the parties. There shall be no obligation on any party to attend a meeting, and failure to do so shall not be prejudicial to that party's case. Interested parties shall also have the right, on justification, to present other information orally.

7.205.
Article 6.4 of the Anti-Dumping Agreement provides:

The authorities shall whenever practicable provide timely opportunities for all interested parties to see all information that is relevant to the presentation of their cases, that is not confidential as defined in paragraph 5, and that is used by the authorities in an anti-dumping investigation, and to prepare presentations on the basis of this information.

7.206.
Article 6.9 of the Anti-Dumping Agreement provides:

The authorities shall, before a final determination is made, inform all interested parties of the essential facts under consideration which form the basis for the decision whether to apply definitive measures. Such disclosure should take place in sufficient time for the parties to defend their interests.

7.6.2 Whether the USDOC acted inconsistently with Articles 6.2, 6.4, and 6.9 in connection with the Tenaris financial statements

7.6.2.1 Main arguments of the parties

7.207.
Korea's main arguments are as follows:

a. The USDOC did not afford Korean respondents an opportunity to present evidence in defence of their interests under Article 6.2 because they had no notification from the USDOC that the Tenaris financial statements submitted by U.S. Steel, which Korean respondents contended were submitted untimely, were properly on the record.269

b. The Tenaris financial statements constitute "relevant" information under Article 6.4, and the USDOC failed to notify the Korean respondents of its decision to accept the Tenaris financial data and failed to provide the Korean respondents with any opportunity to prepare presentations regarding such data, inconsistently with Article 6.4.270

c. Finally, the USDOC's decision to accept the Tenaris financial statements on the record constitutes an "essential fact" which was not disclosed in sufficient time before the final determination, inconsistently with Article 6.9. In addition, the USDOC's reliance on the Tenaris financial statements was an essential fact that was not disclosed to interested parties in sufficient time before the final determination, inconsistently with Article 6.9.271

7.208.
The United States argues that:

a. The Korean respondents had the opportunity, which they utilized, to challenge the Tenaris financial data. They submitted written arguments against its use on several occasions, as well as oral arguments at the USDOC hearing.272 Therefore, the USDOC provided Korean respondents a full opportunity to defend their interests under Article 6.2.

b. The USDOC did notify the respondents, in its preliminary determination, that it had accepted the Tenaris financial data and examined it as one of three possible options for CV profit. In addition, all interested parties had access to the Tenaris financial statements once U.S. Steel filed the information on the record, four months before the final determination.273 Therefore, the Korean respondents did see all the information, which was relevant to the presentation of their case, and were able to, and did, prepare presentations responding to it in accordance with Article 6.4.274

c. Korea's allegations that "whether the USDOC would accept the placement of the Tenaris financial statements on the record" and the "USDOC's reliance on the financial statements" were essential facts conflate "essential facts" with an investigating authority's deliberations and conclusions.275 Article 6.9 does not require an authority to disclose its reasoning or conclusions. Therefore, the USDOC was not required to inform the respondents that it had chosen to accept the financial statements submitted by the petitioners or that it would rely on the information in those statements.276

7.6.2.2 Main arguments of third parties

7.209.
The European Union makes the following arguments:

a. Whether an investigating authority's decision to accept a party's submission into the record could, in itself, be considered "information" within the meaning of Article 6.4, is questionable.277 Whether an investigating authority's decisions pertaining to the formation of the record could, in themselves be considered as "essential facts" is also questionable. A document which formed the basis for the profit rate calculation would, however, set out "essential facts".278

b. Where the authority's decision shifts significantly between the preliminary and final determinations due to the submission of new essential facts, it may not suffice that such facts are on the record of the investigation, but the investigating authority's reliance on them may need to be additionally disclosed.279

7.6.2.3 Evaluation by the Panel

7.210.
For purposes of its preliminary determination, the USDOC had considered determining the CV profit on the basis of the Tenaris profit data as one of several options. However, it did not do so for two reasons: (a) the Tenaris data did not relate to production or sales of OCTG in the home market; and (b) it was based on a research paper the accuracy of which was questionable. Ultimately, in its preliminary determination, the USDOC determined CV profit for HYSCO based on sales of non-OCTG pipe products in Korea, and for NEXTEEL using the audited financial statements of six Korean OCTG producers.280 The USDOC noted in the preliminary determination that it intended to continue exploring other possible options for determining CV profit for both respondents.281
7.211.
After the preliminary determination, the USDOC issued a supplemental questionnaire to NEXTEEL282, to which NEXTEEL submitted a response. Subsequently, the petitioner in the underlying investigation, U.S. Steel, made a submission under 19 C.F.R. § 351,301(c)(1)(v), purportedly to rebut, clarify, or correct factual information contained in that questionnaire response. U.S. Steel's submission included Tenaris's audited financial statements.283 In response, NEXTEEL requested the USDOC to remove the Tenaris financial data from the record, asserting that it had been filed past the deadline for such submissions.284 The USDOC did not respond separately to that request, but in its final determination noted that the Tenaris financial statements were properly on the record and went on to determine the CV profit, for both HYSCO and NEXTEEL, on the basis of that data.285
7.212.
The principal legal issue before us is whether the USDOC, in not disclosing its acceptance of the Tenaris financial statements on the record until its final determination, failed to:

a. provide a full opportunity for respondents to defend their interests in accordance with Article 6.2;

b. provide timely opportunities for Korean respondents to see all non-confidential information relevant to the presentation of their cases and to prepare presentations on the basis of this information in accordance with Article 6.4; and

c. disclose "essential facts under consideration which form the basis for the decision whether to apply definitive measures" in a timely manner in accordance with Article 6.9.

7.6.2.3.1 Whether the USDOC acted inconsistently with Article 6.2 in not disclosing, until its final determination, that it had accepted the Tenaris financial statements on the record

7.213.
Korea argues that the USDOC's failure to notify its acceptance of the Tenaris financial statements on the record until the final determination precluded the Korean respondents from: (a) launching a "full-scale argument"286; and (b) submitting factual information rebutting the content of those statements287, and thus denied them the opportunity to defend their interests under Article 6.2.
7.214.
Article 6.2 of the Anti-Dumping Agreement provides, in relevant part, that "throughout the anti-dumping investigation all interested parties shall have a full opportunity for the defence of their interests". It is understood that while Article 6.2 imposes a general duty on an investigating authority to ensure that interested parties have a full opportunity throughout an anti-dumping investigation for the defence of their interests, it does not give specific guidance on the type of procedural steps an investigating authority should take in ensuring the rights of interested parties.288
7.215.
We are not persuaded that because USDOC did not disclose its acceptance of the Tenaris financial statements on the record until the final determination, the Korean respondents were prevented from launching a "full-scale argument".289 The record shows that the Korean respondents did, in fact, make several submissions commenting on the substantive aspects of the Tenaris profit data and arguing against its use in determining CV profit.290 Thus, it is clear that the Korean respondents were aware of the data in question, did have opportunities to present arguments against its use as a basis for CV profit determination, and did make use of those opportunities.
7.216.
Korea also contends that without notice of an affirmative decision by the USDOC that the Tenaris data was properly on the record, the Korean respondents were not "permitted to" submit factual information to support their arguments against the use of that data as a basis for CV profit determination.291 In particular, Korea asserts that the Korean respondents could not make factual submissions in response to the Tenaris financial statements (rebuttal facts) because those statements were submitted in contravention of the governing relevant USDOC regulation, 19 C.F.R. § 351,301. Korea contends that even though U.S. Steel stated that it was submitting the Tenaris financial statements under 19 C.F.R. § 351,301(c)(1)(v), the submission was not consistent with the requirements of that provision because it did not "rebut, clarify or correct" factual information in NEXTEEL's Supplemental Questionnaire Response.292
7.217.
The facts on the record of these proceedings do not support Korea's assertion that the Korean respondents were precluded from presenting rebuttal facts unless the USDOC notified them of its acceptance of those statements on the record. We are also not persuaded that the Korean respondents were prevented from presenting rebuttal facts because the Tenaris statements were submitted in contravention of the governing relevant USDOC regulation. As described above, after the preliminary determination, the USDOC issued a supplemental questionnaire to NEXTEEL293, in reply to which NEXTEEL submitted its response. The United States relies on US regulation 19 C.F.R. § 351,301(c)(1)(v). That regulation provides that an interested party, other than the original submitter of a supplemental questionnaire response – here U.S. Steel – has one opportunity to submit factual information to rebut, clarify, or correct factual information contained in that questionnaire response within a specified time-frame. Korea has not pointed to any other conditions for such a submission in this regulation.
7.218.
The regulation further provides that the original submitter of the supplemental questionnaire response – here NEXTEEL – has one opportunity to submit a sur-rebuttal containing factual information to rebut, clarify, or correct the interested party's rebuttal, clarification, or correction to its supplemental questionnaire response, within seven days of the filing of such a rebuttal, clarification, or correction. Again, Korea has not pointed to any other conditions for such a submission in this regulation. U.S. Steel submitted the Tenaris financial statements under 19 C.F.R. § 351,301(c)(1)(v), purporting to rebut, clarify, or correct factual information contained in NEXTEEL's Supplemental Questionnaire Response.294 As we understand it, NEXTEEL, as the original submitter of the supplemental questionnaire response, could have submitted rebuttal facts. NEXTEEL did not do so.295
7.219.
Korea does not dispute the United States' description of the operation of 19 C.F.R. § 351,301(c)(1)(v). Rather, Korea argues that NEXTEEL did not file a sur-rebuttal because the Tenaris financial statements did not constitute rebuttal information under 19 C.F.R. § 351,301(c)(1)(v) and the provision for sur-rebuttal was therefore, not applicable.296 We are not convinced by Korea's argument. Whether or not the Tenaris financial statements were submitted consistently with the governing regulation was a decision for the USDOC to make in its capacity as investigating authority, and not for NEXTEEL. NEXTEEL did, in fact, object to the U.S. Steel submission as inconsistent with the governing regulation. However, Korea has not shown that anything in the USDOC regulation requires that, having chosen to object to the Tenaris statements' submission, NEXTEEL was thereby automatically precluded from also responding to the substance of those statements. Apparently, it was their choice to await a decision on that objection, which was not forthcoming from the USDOC, rather than seek to make their own sur‑rebuttal submission. Pending a decision, NEXTEEL, even if it believed that the Tenaris financial statements should be rejected, was not, in any formal sense, prevented from taking the opportunity to counter the contents of that submission, without prejudice to its objections to the USDOC's acceptance of those statements. Moreover, even if the USDOC erred in not responding to NEXTEEL's objection, a question which is outside our purview, we fail to see how NEXTEEL was precluded from at least attempting to file a sur-rebuttal.
7.220.
Korea further argues that NEXTEEL did not file a sur-rebuttal under 19 C.F.R351,301(c)(1)(v) because to do so would have amounted to acknowledging that the Tenaris financial statements constituted rebuttal information under that provision and were therefore on the record.297 Korea has failed to explain how NEXTEEL was precluded from filing a sur-rebuttal and stating that its submission did not amount to an acknowledgement that the Tenaris financial statements had been properly submitted. We agree with the United States that NEXTEEL could have requested that the USDOC reject the U.S. Steel submission because it was improperly submitted while, at the same time arguing in the alternative that the USDOC should accept the sur-rebuttal information should it decide to accept the U.S. Steel submission.298 In this regard, we recall that Article 6.2 requires that an investigating authority provide opportunities for interested parties to defend their interests. We consider the fact that NEXTEEL did not act to defend its own interests in the underlying investigation cannot be equated with a failure by the USDOC to provide opportunities to interested parties to defend their interests.299
7.221.
Korea also argues that 19 C.F.R. § 351,301(c)(1)(v) permitted only the submitter of the original factual information to submit rebuttal facts, and therefore only NEXTEEL, and not HYSCO, would have been able to submit such rebuttal facts under these regulations.300 The United States submits that HYSCO and other Korean respondents could also have filed such rebuttal facts "generally" under 19 C.F.R. § 351,301.301 Korea denies that HYSCO and other Korean respondents had an opportunity to submit rebuttals under the relevant provisions because 19 C.F.R. § 351,301 only permits parties to present arguments that the record is deficient, and does not permit parties to submit unsolicited factual information.302
7.222.
We recall, however, that Korea's claim under Article 6.2 does not raise the question whether the USDOC regulation in question, 19 C.F.R. § 351,301, prevented Korean respondents from making factual submissions to rebut the Tenaris financial statements. Rather, Korea's claim is that the absence of a USDOC notification of its acceptance of those statements on the record until its final determinationprevented them from doing so. Korea has pointed to no specific evidence to show that NEXTEEL, or for that matter, any other Korean respondent, was prevented from filing sur-rebuttal evidence in response to the submission of the Tenaris financial statements only because the USDOC had not notified its acceptance of the Tenaris data on the record. In particular, Korea has not identified any US laws or procedures or any specific requirement imposed by the USDOC in the underlying investigation that made the filing of rebuttal facts by the Korean respondents conditional upon prior notification by the USDOC of its acceptance of the Tenaris financial statements on the record. Korea has also failed to identify any instance in the course of the underlying investigation where the USDOC declined to accept rebuttal facts from the Korean respondents by invoking 19 C.F.R. § 351,301 or any other provision of US domestic law, or for that matter, even without invoking any legal provision.
7.223.
As Korea has failed to demonstrate that the USDOC's failure to notify the Korean respondents that it had accepted the Tenaris financial statements on the record until its final determination prevented the Korean respondents from launching a "full‑scale argument" and submitting rebuttal facts, we conclude that Korea has failed to establish that the USDOC acted inconsistently with Article 6.2 in this regard.

7.6.2.3.2 Whether the USDOC acted inconsistently with Article 6.4 in not disclosing, until its final determination, that it had accepted the Tenaris financial statements on the record and that it was using those statements in determining CV profit

7.224.
As we understand it, Korea's claim under Article 6.4 is that, because the Korean respondents were not informed that the USDOC had accepted the Tenaris financial statements on the record until the final determination, they were not provided a timely opportunity to prepare presentations on the basis of the fact that the Tenaris financial statements were being used by the USDOC.303
7.225.
Article 6.4 requires an investigating authority to provide interested parties timely opportunities to see all non-confidential information that is relevant to the presentation of their cases and that is used by that authority in the anti-dumping investigation, and to prepare presentations on the basis of this information. We see nothing in Article 6.4 that would suggest that an investigating authority must "inform" interested parties of procedural decisions to accept and/or use certain information in the anti-dumping investigation. In any event, we fail to see how a procedural decision to accept and/or use certain information itself would constitute "information that is relevant to the presentation" of an interested party's case.
7.226.
Korea characterizes the Tenaris financial statements as the "information" that is "relevant" to the presentation of the Korean respondents' cases and which was "used" by the investigating authority in the anti-dumping investigation.304 We do not disagree with this characterisation. However, Korea is not arguing that the Korean respondents did not have timely opportunities to see the Tenaris profit data and prepare presentations on that basis. Rather, Korea is arguing that the "information" the Korean respondents did not have timely opportunities to see, and to prepare presentations on the basis of, is the decision by the USDOC to accept and/or use the Tenaris financial data on the record.
7.227.
Korea also argues that the USDOC's failure to notify the interested parties that it had accepted the Tenaris financial statements on the record until its final determination precluded the Korean respondents from submitting rebuttal facts305, and thus denied them the opportunity to prepare presentations on the basis of those statements, as required under Article 6.4. We have rejected Korea's claim that the USDOC's failure to notify the interested parties that it had accepted the Tenaris financial statements on the record until its final determination precluded the Korean respondents from submitting rebuttal facts. Therefore, there is no basis for Korea's argument in this regard.
7.228.
Based on the foregoing, we conclude that Korea has not established that, in not disclosing until its final determination, that it had accepted the Tenaris financial data on the record and was using that data for determining CV profit, the USDOC failed to provide timely opportunities for Korean respondents to see all non-confidential information relevant to the presentation of their cases used by the USDOC and to prepare presentations on the basis of this information.

7.6.2.3.3 Whether the USDOC acted inconsistently with Article 6.9 in not disclosing, until its final determination, that it had accepted the Tenaris financial statements on the record and that it relied on those statements in determining CV profit

7.229.
We have before us two main questions in regard to this claim:

a. whether the USDOC's reliance on the Tenaris profit rate in determining CV profit constitutes an "essential fact" within the meaning of Article 6.9, whose disclosure was therefore required under that provision; and

b. whether the USDOC's acceptance of the Tenaris financial statements on the record constitutes an "essential fact" within the meaning of Article 6.9, whose disclosure was therefore required under that provision.

7.230.
We understand from Korea's submissions that the "acceptance on the record" of a submission containing financial statements by the USDOC means a decision to include that submission on the record of the investigation. We understand the USDOC's "reliance" on the submitted financial statements in determining CV profit to be a decision to use the substance of that submission in making its determination. In view of that difference, we will evaluate these two questions separately.
7.231.
Article 6.9 provides that:

The authorities shall, before a final determination is made, inform all interested parties of the essential facts under consideration which form the basis for the decision whether to apply definitive measures. Such disclosure should take place in sufficient time for the parties to defend their interests.

It is well accepted that Article 6.9 does not require the investigating authority to disclose its decisions or conclusions.306

7.232.
Article 6.9 requires the disclosure of essential facts "under consideration", which form the basis for the decision whether to apply definitive measures. That the essential facts, which must be disclosed are "under consideration" at the time of their disclosure, implies that the investigating authority has not yet reached conclusions regarding its reliance on them at that stage. We agree with the views of the panel in EC – Salmon (Norway) that essential facts for purposes of Article 6.9 are not only those facts that support a determination, but rather are the body of facts essential to any determination that are being considered in the process of analysis and decision-making by the investigating authority.307 That panel further observed that:

[I]n our view, the essential facts to be disclosed under Article 6.9 are not affected by the substance of the determination an investigating authority may ultimately make. Indeed, they cannot be, as the essential facts to be disclosed are those "under consideration that form the basis of the decision" – that is, the disclosure of essential facts precedes the decision. Thus, at the time of the Article 6.9 disclosure, no decision has yet been taken, and, it seems to us, the disclosure of essential facts may not enable an interested party to foresee the ultimate decision.308

7.233.
Given that the final determination may be affected by further arguments or information submitted after the Article 6.9 disclosure, the investigating authority cannot be required to include conclusions in that disclosure. This view is in keeping with the panel's statement in EC – Salmon (Norway) that the requirement in Article 6.9 for disclosure of "essential facts" is not necessarily satisfied by the disclosure of the investigating authority's conclusions on issues of fact that must be resolved before a decision to apply definitive measures is taken.309
7.234.
Turning first to the question whether the USDOC's reliance on the Tenaris profit data to determine CV profit constitutes an "essential fact", as we have stated, the USDOC's reliance on the Tenaris profit data to determine CV profit constitutes a decision to use that data in its determination. In light of the foregoing, we are of the view that Article 6.9 requires an investigating authority to disclose only the essential facts and not its reasoning or its conclusions.310 Given that the USDOC's reliance on the Tenaris profit data to calculate profit constitutes its conclusion to use that data (as opposed to other data it had before it) in calculating CV profit, in our view, that reliance was not an essential fact within the meaning of Article 6.9, and there was therefore no obligation on the USDOC to disclose it.
7.235.
We next consider the question whether the USDOC's acceptance of the Tenaris profit data on the record of the underlying investigation constitutes an "essential fact" within the meaning of Article 6.9.
7.236.
Korea argues that the acceptance of the Tenaris profit data on the record constitutes an "essential fact" because: (a) that data was "under consideration" as evidenced by the USDOC's decision to rely on it to calculate CV profit; and (b) it formed the basis for the decision whether to apply definitive measures as the use of that data was the most important factor that raised the respondents' dumping margins from a preliminary de minimis to a positive final margin.311
7.237.
The question raised by Korea's assertion is whether the acceptance of the Tenaris profit data on the record rather than the Tenaris profit data itself was an essential fact under consideration. There is no issue in Korea's claim regarding whether the Tenaris profit data itself was an essential fact. What is pertinent to deciding Korea's claim is therefore not whether the Tenaris data was a fact under consideration by the USDOC for the determi