.\n160 Accurate and Reliable Dictionary online (accessed 28 April 2010) <h ttp://ardictionary.com/>.\n(emphasis added)\n\nand systems are considered \"public bodies\". So me of these go well beyond government agencies or\nsimilar organs of government, and include, inter alia, government-owned or -controlled corporations\nproviding goods and/or services.161\n8.61 We also consider the French and Spanish versions of Article 1.1(a)(1) of the SCM\nAgreement, and in particular, of the term \"pub lic body\", about which the parties have presented\narguments. The French term for public body is \"o rganisme public\", and the Spanish is \"organismo\npúblico\". In French, the word \"organisme\" (in th e non-biological sense) has the broad meaning of an\norganized grouping of elements (persons, offi ces, etc.) working to a common purpose (e.g.,\n\"public\" also has a broad meaning, including related to, belonging to, or controlled by the State (e.g.,\n\"d'État, qui est sous contrôle de l'État, qui appartie nt à l'État, qui dépend de l'État, géré par l'État\"). 164\nThe Spanish term \"organismo\" is defined similarl y to the French \"organisme\" as referring to a\ngrouping of elements forming a body or institution (e.g., \"conjunto de oficinas, dependencias o\nempleos que forman un cuerpo o institución\"). 165 The Spanish term \"público\", like the French\n\"public\", is defined as belonging to or related to the government (e.g., \"perteneciente o relativo al\nEstado o a otra administración\"). 166 Here, as in the English, we co nsider that while these definitions\n\n161 We note two examples:\n\n Example 1 : (from Free Dictionary online (accessed 28 April 2010)\n<http://encyclopedia.thefreedictionary.com/Scottish+public+bodies>):\n\"Scottish public bodies are a group of organizations that are funded by the Scottish\nGovernment. It includes executive and adviso ry non-departmental public bodies [...];\ntribunals, and nationalised industries\n. These bodies are distinct from executive agencies of the\nScottish Government, as they are not considered to be part of the Government and staff of\npublic bodies are not civil servants\". (emphasis added)\n\n Example 2: (from EC Commission Research Directorate note on \"Public bodies in\nFP6 contracts\", (accessed 28 April 2010 ) <http://ec.europa.eu/research/fp6/model-\ncontract/pdf/fp6-public-bodies-annex5231_en.pdf>):\n\"What is a public sector body?\nAny\n public authority or entity set up under public law by a state or one of its authorities (e.g.\ngovernment). Even if such an entity has a legal personality (e.g. French universities), it acts on\nbehalf of the State with regard to and within the limits of its specifi c areas or competencies.\nActivities carried out by such authorities or entities may be of a commercial nature \".\n(emphasis added)\n\n162 \"Institution composed of inter-related elements, and performing a specific function; each of the\nservices thus coordinated, or of the associations of the persons comprising it\". ( Centre National de Ressources\nTextuelles et Lexicales (accessed 28 April 2010) <http://www.cnrtl.fr/definition/organisme>).\n163 \"Ensemble of services and offices devoted to a task\". (Le Nouveau Petit Robert, J. Rey-Debove and\nA. Rey (ed.) (Dictionnaires Le Robert, 2002), p. 1798).\n164 \"Of the State, that is controlled by the State, that belongs to the State, that depends on the State, that\nis run by the State\". ( Centre National de Ressources Textuelles et Lexicales (accessed 28 April 2010)\n<http://www.cnrtl.fr/definition/public>). See also Le Nouveau Petit Robert, J. Rey-Debove and A. Rey (ed.)\ncollectivité sociale, politique et en émane; qui appartient à l'État ou à une personne administrative [...]\" (\"That\nrelates to the people taken in its totality, that belongs to society, the body politic, and emanates from it; that\nbelongs to the State or to an administrative entity\").\n165 \"Group of offices, dependencies or employments that form a body or institution\". ( Real Academia\nEspañola Dictionary online (accessed 28 April 2010) <http://buscon.rae.es/draeI/>).\n166 \"Belonging or related to the State or other administration\". ( Real Academia Española Dictionary\nonline (accessed 28 April 2010) <http://www.rae.es>). We note that this is the Spanish definition put forward\n\ncould encompass the narrow meaning espoused by Ch ina of the term public body, or organisme\npublic, or organismo público, we see no indication that they are limited to that meaning.\n8.62 Our view is confirmed by examples that we fi nd of uses of the terms \"organisme public\" and\n\"organismo público\" to cover, inter alia, government-owned or -controlled entities that are engaged in\nactivities other than those of a strictly governmental character. For example, in French one use of the\nterm \"organisme public\" (identified as a synonym of the term \"organisme gouvernemental\") is a body\nor entity created by a law or decree, the majority of whose directors are appointed by the government\nor a minister, and which has a certain autonomy, ev en if a large part of its global financing comes\nfrom the State.\n167 The synonymous term \"organisme gouvernmental\" in turn can mean \"distinguished\nfrom the Ministerial apparatus, from other decentr alized public entities, and from entities covered by\nprivate law\", and as including \"State enterprises\", whose \"main function is [...] of a commercial,\nfinancial or industrial nature, and which seeks to be self-financing\". 168 An example in Spanish is\nSpain's Law 6/1997 of 14 April 1997, on the Organization and Functi oning of the General\nAdministration of the State, which identifies th ree types of \"organismos públicos\": \"autonomous\nbodies\", \"public business entities\", and \"State agencies\". 169 Not only do the above sources showing\nvarious governments' usages give meaning to th e terms \"organisme public (gouvernemental)\" and\n\"organismo público\" that go well beyond government agencies and formal arms of the government as\nsuch, both also include as public bodies certain \"business\" entities owned and/or controlled by\ngovernments.\n8.63 Given the above, we are not persuaded by Chin a's argument that the meaning of the terms\n\"organisme public\" and \"organismo público\" is lim ited to \"government agency\" or other entity vested\nwith and exercising governmental authority, and thus that the English term \"public body\" must be\nunderstood to be the \"functional equi valent\" of \"government\". China bases this argument principally\non the fact that the English term \"governments or their agencies\" in Article 9.1 of the Agreement on\nAgriculture appears in the Spanish version as \" gobiernos o [...] organismos públicos\", and on the\nFrench and Spanish versions of the Appellate Body Report in Canada – Dairy , in which the English\nterm \"government agency\" is translated respectiv ely as \"organisme public\" and \"organismo público\".\nChina also cites the OECD Economics Glossary whic h translates \"organisme public\" as \"government\nagency\" in this context. While these definitions and usages indicate that \"public body\" can have the\nnarrow meaning of \"government agency\" or similar entity, as discussed above we have found other\ndefinitions and usages showing a broader possible sc ope. We thus do not cons ider this definitional\n\nby China for the word \"público\". While China translates th e term \"perteneciente a\" as \"pertaining to\", in fact\nthis term connotes \"belonging to\". ( See, e.g., The Oxford Spanish Dictionary, B. Galimberti (ed.) (Oxford\nUniversity Press, 2003), p. 630; Spanish Dict online (accessed 28 April 2010)\n<http://www.spanishdict.com/translate/perteneciente>).\nbonne part de son financement global provient de l'État. Synonyme : organisme gouvernemental\". (Johanne\nTurbide et al, HEC Montreal, Chaire de gestion des arts, \"Règles de Base TPS-TVQ pour les OBNL Culturels\"\n(accessed 28 April 2010) <http://www.gestiondesarts.com/index.php?id=1519>).\nou industrielle tout en poursuivant un objectif d’autofi nancement\". (ENAP, L'Observatoire de l'administration\n<http://www.etatquebecois.enap.ca/docs/ste/organisation/a-organismes.pdf>).\n169 In particular, Article 43.1 of this Law reads:\n\"1. Los Organismos públicos se clasifican en:\n a. Organismos autónomos.\n b. Entidades públicas empresariales.\nc. Agencias Estatales, que se regirán por su normativa específica y, supletoriamente,\npor esta Ley.\"\n\nanalysis to give a conclusive answer to how the term \"public body\", as it appears in the SCM\nAgreement, should be understood.\n8.64 Indeed, as noted, a treaty term can only be prope rly understood in its context and in the light\nof the object and purpose of the treaty, and we thus now turn to the immediate context of the term\n\"public body\" in Article 1.1(a)(1) of the SCM Agre ement, and in particular how \"public body\" is\nrelated to the term \"a government\" in the drafting of the provision. In this regard, the question raised\nby China's claim is whether the clause \" a government or any public body within the territory of a\nMember (referred to in this Agreement as 'government')\", by collectively referring to the two terms \"a\ngovernment\" and \"any public body\" as \"government\", means that these terms must be read as\n\"functional equivalents\", such that a \"public body\" must possess characteristics similar to those of a\ngovernment, i.e., must be an entity which \"exercises powers [or authority] vested in it by a\n'government' for the purposes of performing functions of a 'governmental' character\".\n8.65 We consider significant that in Article 1.1( a)(1) the terms \"a government\" and \"any public\nbody\" are separated by the disjunctive \"or\", suggesting that they are two separate concepts rather than\na single concept or nearly synonymous. In addition, the use of the word \"a\" before \"government\" at\nthe beginning of the clause, and the use of the word \"any\" before \"public body\", further suggest that\nthese terms have separate meanings. Furthermore, the word \"any\" before \"public body\" suggests a\nrather broader than narrower meani ng of that term, i.e., as referring to \"public bodies\" of \"any\" kind.\nTaking these contextual elements together suggests a meaning of the term \"public body\" as something\nseparate from and broader than \"government\" or \"government agency\", and we consider that given the\nuse of the words \"a\", \"or\" and \"any\", this read ing of the phrase \"a government or any public body\"\ngives meaning to that phrase as a whole.\n8.66 We now turn to the collective term \"governme nt\" that is equated to the entire phrase \"a\ngovernment or any public body within the territory of a Member\" in the clause at issue. We recall that\nthe phrase as a whole reads: \"a government or an y public body within the territory of a Member\n(referred to in this Agreement as 'government')\". While for China, the use of the collective expression\n\"government\" compels a reading of the terms \"a government\" and \"any public body\" as \"functional\nequivalents\", we consider more likely that the u se of the collective expression is merely a device to\nsimplify the drafting, to avoid having to repeat the entire phrase \"a government or any public body\"\nthroughout the SCM Agreement. This can easily be the case even if the two elements \"a government\"\nand \"any public body\" have very distinct mean ings. We note that a similar drafting device is\nemployed in Article 2.1 of the SCM Agreement, on specificity, where the undeniably very different\nconcepts of \"an enterprise or industry or group of en terprises or industries\" are collectively referred to\nas \"certain enterprises\". In our view, this collec tive expression is used to simplify the drafting of\nArticle 2, as it obviates the need to repeat the en tire long phrase \"an enterprise or industry or group of\nenterprises or industries\" every time this concept appear s in the text. Yet, given that the term \"certain\nenterprises\" is defined as having the meaning of the longer phrase, where \"certain enterprises\" appears\nin Article 2 it must, by definition, refer to any\n of its underlying constituent elements. Thus, a subsidy\nthat is limited to a single enterprise (\"an enterp rise\") is, for purposes of the SCM Agreement, limited\nto \"certain enterprises\". Equally, a subsidy that is limited to, e.g., three industries (i.e., a \"group of\nindustries\") also is limited to \"certain enterprises\". This does not mean that a single enterprise is the\nfunctional equivalent of, or synonymous with, a group of industries. No r must this be the case for the\nterm \"certain enterprises\" to make sense in the text of the Agreement. In the same way, while the\ndrafting of the phrase that we are examining does not on its face exclude an interpretation of the terms\n\"any public body\" and \"a govern ment\" as \"functional equivalents\" , the latter referring to entities\nvested with and exercising governmental authority, such an interpretation is certainly not necessary\nfor the collective term \"government\" to make sens e in the text of the SCM Agreement. To the\ncontrary, entities of whatever type controlled by governments, along with formal governmental\norgans, could all be encompassed by the collective term \"government\" as that term subsequently is\nused throughout the Agreement.\n\n8.67 The phrase \"within the territory of a Member\" that also appears in the same phrase in\nArticle 1.1(a)(1) of the SCM Agreement provides ad ditional immediate context, as a further modifier\nto the collective term \"government\" that appear s in parentheses and that encompasses both \"a\ngovernment\" and \"any public body\". Again, the entire phrase in Article 1.1(a)(1) reads \"by a\ngovernment or any public body within the territory of a Member (referred to in this Agreement as\n'government')\". This phrase seems to say, in es sence, that where the author of the financial\ncontribution is either an executive organ of any level of government, or a public body of any kind at\nany level of government, within the territory of a Member, the Agreement considers the financial\ncontribution to have been made by the \"government\" of that \"Member\" (directly). In other words, the\ndrafting \"a government […] within the territory of a Member\" seems to connote a broad reading of the\nterm \"a government\" to cover whatever forms and organs of government, be they national, provincial,\nmunicipal, etc., that may be present within the territory of a given Member. Similarly, the word \"any\"\nbefore \"public body\" also conveys a broad sense of that term, particularly when coupled with the\nphrase \"within the territory of a Member\", reinforc ing that the word \"or\" means that \"any public\nbody\" is something other than \"a government\" as such. Seen in its totality, th erefore, in our view the\ncollective term \"government\" – which equates to \"a government within the territory of a Member, or\nany public body within the territory of a Memb er\" – conveys breadth, suggesting a wide range of\ndifferent possible types of entities whether formally part of, or owned by, or controlled by, any level\nof government.\n8.68 Perhaps the most important contextual element in Article 1.1(a)(1) is the term \"private body\"\nin Article 1.1(a)(1)(iv), and its relationship with th e terms \"a government\" and \"any public body\". In\nparticular, we note that Article 1.1(a)(1) describes three kinds of potential providers of subsidies for\npurposes of the SCM Agreement, namely \"government s\", \"public bodies\" and \"private bodies\". From\nthe standpoint of pure logic, this is a complete universe of all potential actors: every entity\n(individual, corporation, association, agency, Mi nistry, etc.) must fall into one of these three\ncategories. In other words, the SCM Agreement does not a priori rule out any\n entity from potentially\ncoming within its scope. The specific question raised in this dispute is whether wholly or majority\ngovernment-owned enterprises that produce and sell goods and services are more appropriately\ncategorized as \"governments\", \"public bodies\" or \"private bodies\" for purposes of the SCM\nAgreement. Neither party argues, and we do not co nsider, that such enterprises could in any way be\ntermed \"government\" as such. Rather, China's argumen t is that such enterpri ses are, as a matter of\nlaw, presumptively \"private bodies\", whose actions would be covered by the SCM Agreement only to\nthe extent that those actions were the result of \"ent rustment or direction\" by a government. Thus, the\nquestion is the correct basis on which to distinguish between \"public\" and \"private\" bodies.\n8.69 We find the dictionary definitions of the terms \"private enterprise\" (\"a business etc. that is\nprivately owned and not\n under State control \")170, and \"public sector\" (\"that part of an economy,\nindustry etc. controlled by the State\") 171 helpful in understanding the relationship between the terms\n\"private body\" and \"public body\". In particular, these definiti ons taken together suggest that a\n\"public\" body is any entity that is under State c ontrol, while a \"private\" body is an entity not\ncontrolled by the State, and that ownership is highly relevant to the question of control, a point which\nwe address below. This is fully in keeping with the everyday notions of \"private\" meaning unrelated\nto the government, and \"public\" meaning governmental in some sense. It also is consistent with the\nusage of the term \"public body\" (and its French a nd Spanish equivalents) by various governments, as\ndiscussed above. If we were nonetheless to interpre t the term \"public body\" narrowly, as meaning\ngovernment agencies and other entities vested with and exercising governmental authority, and as\npresumptively excluding government-owned and/or government-controlled enterprises, by default this\n\n170 Shorter Oxford English Dictionary, Vol. II, p. 2359. (emphasis added).\n171 Id. (emphasis added).\n\nwould mean that such entities would be \"private bodies\". 172 In our view, such a reading would\nconstitute a complete reversal of the ordinary me aning of the term \"priva te body\", and we find no\nsupport for in the text of the SCM Agreement for such a reversal.\n8.70 A further contextual element informing the mean ing of the term \"any public body\" is the list\nof types of financial contributions in Article 1.1(a)(1)(i)-(iii), i.e.:\n\"(i) a government practice involves a direct transfer of funds (e.g. grants, loans,\nand equity infusion), potential direct transfers of funds or liabilities (e.g. loan\nguarantees);\n(ii) government revenue that is otherwi se due is foregone or not collected (e.g.\nfiscal incentives such as tax credits) [footnote omitted];\n(iii) a government provides goods or service s other than general infrastructure, or\npurchases goods\".\nIn particular, pursuant to the chapeau of Article 1. 1(a)(1), these are the functions that \"a government\"\nor \"any public body\" might in the first instance perf orm directly (i.e., rather than by entrustment or\ndirection of a private body in the sense of s ubparagraph (iv)). Among these functions are the\nprovision of loans and loan guarantees, as well as the provision of goods or services, functions that are\ntypically carried out by, indeed in the first instance are the core business of, firms or corporations\nrather than governments. Thus, to read the term \"any public body\" as presumptively excluding\ngovernment-owned or -controlled corporations or an y other types of public entities engaging in these\nsorts of typical business functions (absent specific ev idence in a particular cas e that they are vested\nwith and exercising governmental authority), would appear largely to deprive these provisions of their\ncommon sense meaning and role.\n8.71 We also note the reasoning of the panel in Korea – Commercial Vessels , in respect of a\nsimilar issue raised before it. In that case, Kore a had argued that for an entity to be a public body, it\nmust be acting in an official capacity, or pursuing a public policy purpose, and that if in a particular\ninstance or overall it was behaving commercially, it would not be a public body in that instance, or\noverall. The panel rejected that argument, in part because it introduced the concept of benefit (i.e.,\nwhether the entity was behaving commercially in a particular instance or overall) into the\ndetermination of whether the entity in question w as a public body, while, as has been confirmed by\nthe Appellate Body, the SCM Agreement treats \"fin ancial contribution\" (where the question of\n\"public body\" arises) as a separate, independent concept from \"benefit\".\n173 The panel noted in this\n\n172 This is China's legal interpretation of the Agr eement. For instance, at the second substantive\nmeeting with the Panel, China stated:\n\n\"China is not arguing that government-owned entities can never be public bodies within the\nmeaning of Article 1.1(a)(1). Our position is only that their conduct should be deemed\npresumptively private […]. Consistent with that presumption, their conduct ordinarily should\nbe examined under the entrustment or direction standard of Article 1.1(a)(1)(iv). If the\nevidence in a particular case established th at a government-owned entity was exercising\ndelegated authority to perform functions of a governmental character, then it would be\nappropriate to conclude that it was a public body and that subparagraph (iv) was inapplicable.\nBut absent such evidence, subparagraph (iv) shou ld apply […]\". (China oral statement at the\nsecond substantive meeting, paras. 30-31).\n\n173 The Korea – Commercial Vessels panel stated in this regard:\n\nregard that if the test advanced by Korea was a pplied, a given entity potentially could be a \"public\nbody\" on one day and a \"private body\" the next, sole ly on the basis of its behaviour on those days, a\nresult that the panel did not accept because it woul d make the public/priva te body determination\nentirely dependent on the existence of a benefit in particular transactions.\n174\n8.72 We share the concern of the Korea – Commercial Vessels panel in respect of China's\nargument that \"public bodies\" are limited to \"enti ties which exercise powers or authority vested in\nthem by a 'government' for the purpose of performing functions of a 'governmental' character\". In this\nregard, we note that China argues that only if, in a particular case, a government-owned or -controlled\nfirm were actually exercising governmental authorit y to carry out governmental functions would such\nan entity, in that particular instance, be a \"public body\". We consider that such an approach would\nsuffer from the same flaw of mixing considerations of benefit (behaviour in a particular instance) with\ndetermining the nature of the entity (without regard for its behaviour in a particular instance).\nContrary to China's argument, under the SCM Agreemen t the question of the nature of the entity (i.e.,\nwhether it is \"a government or any public body\") is entirely separate from the behaviour of that entity\nin a given instance (i.e., whether there is a fina ncial contribution, whether a benefit is thereby\nconferred, and whether there is specificity).\n8.73 To us, the foregoing detailed examination of the text of Article 1.1(a)(1) of the SCM\nAgreement in its context strongly suggests that a \"public body\" extends to entities controlled by\ngovernments, and is not limited to government agen cies and other entities vested with and exercising\ngovernmental authority. We now consider this reading in the light of the object and purpose of the\nSCM Agreement.\n8.74 This object and purpose has been characterized by the Appellate Body as \"to strengthen and\nimprove GATT disciplines relating to the use of bot h subsidies and counterva iling measures, while\nrecognizing at the same time, the right of Me mbers to impose such measures under certain\nconditions\"\n175, and by various panels as, inter alia , \"to impose multilateral disciplines on subsidies\nwhich distort international trade\" 176 and to \"disciplin[e] trade-distorting subsidies in a way that\nprovides legally binding security of expectations to Members\". 177 As these statements indicate,\nsubsidies are certain types of government interven tions in markets on non-commercial terms, which\ninterventions can distort trade to the detriment of other Members' interests.\n8.75 In their discussions of the object and purpose of the SCM Agreement, including in respect of\npredictability and certainty, the Appellate Body a nd various panels have emphasized the importance\nof avoiding overly-narrow interpretations of th e Agreement that would create loopholes by which\nMembers could largely, if not entirely, escape th e reach of these disciplines. For example, the\nAppellate Body stated in US – Softwood Lumber IV that:\n\"It is in furtherance of [the Agreement' s] object and purpose [of strengthening GATT\ndisciplines] that Article 1.1(a)(1)(iii) rec ognizes that subsidies may be conferred, not\n\n\"The Appellate Body ruled in Brazil – Aircraft that 'the issues – and the respective definitions – of a\n'financial contribution' and a 'benefit' [are] [...] two sepa rate legal elements'. (footno te omitted) Likewise, we\nconsider that the concepts of 'public body' and 'benefit' should also be treated as separate legal elements. Thus,\nthe question whether an entity is a public body should not depend on an ex amination of whether that entity acts\npursuant to commercial principles. Rather, it is the fact that a financial contribution is provided by a public\nbody (or pursuant to entrustment or direction by a public body) that gives rise to the possibility that the financial\ncontribution might be provided on below-market terms in order to advance public policy goals.\" (Panel Report\non Korea – Commercial Vessels, para. 7.44 (quoting Appellate Body Report on Brazil – Aircraft, para.157)).\n174 Panel Report on Korea – Commercial Vessels, para. 7.45.\n175 Appellate Body Report on US – Softwood Lumber IV, para. 64.\n176 Panel Report on Brazil – Aircraft, para. 7.26.\n177 Panel Report on US – FSC (Article 21.5 – EC), para. 8.39.\n\nonly through monetary transfers, but also by the provision of non-monetary inputs.\nThus, to interpret the term 'goods' in Arti cle 1.1(a)(1)(iii) narrowly, as Canada would\nhave us do, would permit the circumvention of subsidy disciplines in cases of\nfinancial contributions granted in a form other than money[...]\".178\nSimilarly, the panel in US – FSC (Article 21.5 – EC) stated that:\n\"[I]t is evident that the interpretation [of 'revenue foregone'] advanced by the\nUnited States would be irreconcilable with th[e] object and purpose [of disciplining\ntrade distorting subsidies in a way that pr ovides security to Members], given that it\nwould offer governments ' carte-blanche' to evade any effective disciplines, thereby\ncreating fundamental uncertainty and unpredic tability. In short, such an approach\nwould eviscerate the subsidies di sciplines in the SCM Agreement\".\n179 (emphasis\noriginal)\n8.76 In keeping with this object and purpose, we consid er it important to read Article 1.1(a)(1) in a\nmanner that does not allow avoidance of the SCM Agreement's disciplines by excluding whole\ncategories of government non-commercial behaviour undertaken by government-controlled entities.\nIn this regard, we note that the categorization of a given entity as a government, a public body or a\nprivate body under Article 1.1(a)(1) is simply the fi rst filter in a multi-part analysis to determine\nwhether a given measure is covered by the SCM Agre ement. That first filter does not look at the\nbehaviour (i.e., the measure), but rather is c oncerned with whether the entity undertaking the\nbehaviour is or is not the WTO Member, i.e., the entity covered by the WTO Agreement. In this\nsense, the juxtaposition of \"a government or any p ublic body\" with the term \"private body\" makes\nclear that the SCM Agreement does not cover and thus does not disci pline, in any way, any purely\nprivate \"subsidies\" or other purely private transac tions, in which the government has no involvement\n(direct or via entrustment or direction).\n8.77 In this connection, we agree with the following statement by the Korea – Commercial Vessels\npanel:\n\"We do not accept Korea's argument that there is only a 'financial contribution' in the\nmeaning of Article 1.1(a)(1(i) if the relevant government or public body is engaged in\n'government practice' such as regulation or taxation. Article 1.1(a)(1) states in\nrelevant part that the term 'government' refe rs to both 'government' and 'public body'.\nSince the phrase 'government practice' in Article 1.1(a)(1)(i) therefore refers to the\npractice of both governments and public bodies, the practice at issue need not\nnecessarily be purely 'governmental' in the narrow sense advocated by Korea. In this\nregard, we consider that the concept of 'financial contribution' is writ broadly to cover\ngovernment and public body actions that mi ght involve subsidization. Whether the\ngovernment or public body action in fact gi ves rise to subsidization will depend on\nwhether it gives rise to a 'benefit'. Since the concept of 'benefit' acts as a screen to\nfilter out commercial conduct, it is not necess ary to introduce such a screen into the\nconcept of 'financial contribution'\".\n180\n8.78 Thus, to say that an entity is part of the SCM Agreement's collective term \"government\" is not\nto condemn that entity, or otherwise to cast it in a negative light. Rather, such a characterization\nsimply allows a further analysis to be conducted as to whether the entity's behaviour in particular\ninstances is covered by the SCM Agreement. (O bviously, much \"government\" behaviour has nothing\n\n178 Appellate Body Report on US – Softwood Lumber IV, para. 64.\n179 Panel Report on US – FSC (Article 21.5 – EC), para. 8.39.\n180 Panel Report on Korea – Commercial Vessels, para. 7.28.\n\nto do with \"financial contributions\" and thus subsidization). Similarly, to say that certain behaviour of\nan entity is covered by the SCM Agreement (i.e., is a specific subsidy) in itself carries no negative\nconnotation. Only in the particular, narrow instan ce of a prohibited subsidy does the existence of the\nsubsidy give rise to such a connotation, and otherwis e the existence of specific subsidies is a neutral\nevent under the Agreement, actionable only where it cau ses, in particular instances, defined forms of\nadverse effects on another Member's interests.\n8.79 In this sense, we consider that interpreting \"a ny public body\" to mean any entity that is\ncontrolled by the government best serves the obj ect and purpose of the SCM Agreement. This\nreading ensures that whatever form a public entity takes (whether agency, Ministry, board,\ncorporation, etc.) the government that controls it is di rectly responsible for those of its actions that are\nrelevant under the Agreement. In our view, th e particular form of government-controlled entity\nintervening in a market cannot be determinative of whether a government fina ncial contribution (and\nhence potentially a subsidy) exists. To read \"any public body\" in Article 1.1(a)(1) as excusing from a\nMember government's direct responsibility a wide swathe of government-controlled entities engaging\nin exactly the sorts of transactions listed in Ar ticle 1.1(a)(1)(i)-(iii) of the SCM Agreement would\nfundamentally undermine the Agreement's logic, cohe rence and effectiveness, and thus would be at\nodds with its object and purpose.\n8.80 Here, we agree with the finding of the panel in Korea – Commercial Vessels that a public\nbody is an entity controlled by a government. In terms of the object and purpose of the SCM\nAgreement, we consider particularly relevant that pa nel's statement that \"it is the fact that a financial\ncontribution is provided by a public body (or pursuant to entrustment or direction by a public body)\nthat gives rise to the possibility that the financial contribution might be provided on below-market\nterms in order to advance public policy goals\".\n181 In our view, it is the government's control of an\nentity that gives that entity the potential to intervene in markets so as to advance public policy goals,\nby providing financial contributions on better-than-market terms.\n8.81 In short, the systemic implications for Memb ers of interpreting \"any public body\" to mean\nany government-controlled entity are fully in line with the object and purpose of the SCM Agreement\nof effectively disciplining trade distorting subs idies provided by Member governments. These\nimplications fall very far from disciplining, let al one condemning, every act of such entities. This\ninterpretation simply means that the actions of a government-controlled entity are, for purposes of the\nSCM Agreement, directly attributable to the gove rnment itself – no more, no less. Finding that a\ngiven entity is a public body does not speak to the na ture of its actions, including whether they are\neven covered by the Agreement.\n8.82 By contrast, the systemic implications of interpreting \"any public body\" as limited to\ngovernment agencies or other entities vested with a nd exercising governmental authority would be to\nseriously undermine the entire SCM Agreement, something that cannot be reconciled with the\nAgreement's object and purpose. Large numbers of government-controlled entities whose very raison\nd'être is to engage in the kinds of transactions identif ied in Article 1.1(a)(1)(i)-(iii) would be legally\npresumed to be unrelated to the government (i.e., effectively \"private bodies\"). Governments could\neasily hide behind the presumptively \"private\" natu re of such entities, even while running those\nentities so as deliberately to provide trade-distorting subsidies. Yet, before the SCM Agreement could\neven apply to any such entity, such that an inquiry could be started into the possible existence of a\nsubsidy and specificity, a particular instance of \"entrustment or direction\" in the sense of\nArticle 1.1(a)(1)(iv) would need to be established. In our view, this would be equivalent to inquiring\nwhether the government \"entrusted or directed\" itself to do something, and would turning the\n\"entrustment or direction of a private body\" provision on its head.\n\n181 Panel Report on Korea – Commercial Vessels, para. 7.44. (emphasis added).\n\n8.83 The foregoing analysis of the ordinary meaning of the terms of the treaty at issue, in their\ncontext and in the light of the object and purpose of the treaty, leads us to conclude that for the\npurposes of the SCM Agreement, \"any public b ody\" is any government-controlled entity. By\ncontrast, in our view, the narrow reading advanced by China is not supported either by the context of\nthis term or by the object and purpose of the SC M Agreement and, to the contrary, would seriously\nweaken the integrity and effectiveness of the SCM Agreement.\n8.84 We recall that China's arguments are not limited to the foregoing elements based on the SCM\nAgreement itself. Rather, China also has adva nced arguments based on other international\ninstruments that it considers relevant context fo r interpreting the term \"any public body\". The\nquestion we now turn to is whether any of these ot her instruments would override our analysis and\nconclusions based on the text of the SCM Agreement itself.\n8.85 The first of the other instruments cited by China is the Draft Articles. China argues that these\nDraft Articles constitute \"relevant rules of interna tional law applicable in the relations between the\nparties\" in the sense of Article 31(3)(c) of the Vienna Convention, and that they thus must be \"taken\ninto account\" in the analysis of the term \"public body \". In particular, China considers that the Draft\nArticles codify customary international law with resp ect to certain principles of state responsibility, a\nproposition that in China's view has repeatedly been recognized by panels and the Appellate Body.\n182\n8.86 As such, China argues, the term \"public body\" must be interpreted in a manner analogous to\nArticle 5 of the Draft Articles such that the actions of state-owned corporate entities will be attributed\nto the State only when \"empowered by the law of th at State to exercise elements of the governmental\nauthority [...] provided the person or entity is acti ng in that capacity in the particular instance\").\n183\nChina considers that the Appellate Body \"expressly endorsed\" the principles of the Draft Articles with\nrespect to when the conduct of state-owned entities may constitute a financial contribution within the\nmeaning of Article 1.1(a)(1) of the SCM Agreement.184\n8.87 Before we address the substance of this argument, we consider the status of the Draft Articles,\nand in particular whether as China argues we must as a matter of law interpret the provisions of the\nSCM Agreement at issue in conformity with language and concepts in certain provisions of the Draft\nArticles. In this regard, the first question is wh ether the Draft Articles are recognized in the WTO as\n\"rules of international law applicable in the relatio ns between the parties\" to the dispute, and the\nsecond question is whether they are \"relevant\" to this dispute. On the first question, in our view,\nChina significantly overstates the status that has b een accorded to the Draft Articles where they have\nbeen referred to by panels and th e Appellate Body. Indeed, in not a single instance of such citations\nidentified by China has a panel or the Appellate Bo dy identified the Draft Articles as \"relevant rules\nof international law applicable in the relations betw een the parties\" in the sense of Article 31(3)(c) of\nthe Vienna Convention, such that they should be \"t aken into account together with the context\" when\ninterpreting the treaty. Rather, in our view, the va rious citations to the Draft Articles have been as\nconceptual guidance only to supplement or confirm, but not to replace\n185, the analyses based on the\nordinary meaning, context and object and purpose of the relevant covered Agre ements. In particular,\nwhile in some cases the Draft Articles have been cited as containing similar provisions to those in\ncertain areas of the WTO Agreement, in others they have been cited by way of contrast with the\n\n182 See, e.g., China response to Panel question 15(a) (first meeting).\n183 See., e.g., China first written submission, paras. 75-79.\n184 Id., para. 72.\n185 Indeed, in at least one prior proceeding, one of the parties strenuously obj ected to preferring the\nmeaning of the term \"countermeasures\" in the Draft Articles over dictionary definitions advanced by the parties,\non the grounds that the Draft Articles are not \"relevant rules of international law applicable to the relations\nbetween the parties\" within the meaning of Article 31(3)(c) of the Vienna Convention. (Decision by the\nArbitrators on Brazil – Aircraft (Article 22.6 – Brazil), para. 3.44 and footnote 48).\n\nprovisions of the WTO Agreement, as a way to better understand the possible meaning of the\nprovisions of the WTO Agreement. In all cases, however, the exercise undertaken by these panels\nand the Appellate Body has been to interpret the WTO Agreement on its own terms, i.e., on the basis\nof the ordinary meaning of the terms of the treaty in their context and in the light of the object and\npurpose of the treaty.\n8.88 We note that this is true of the Appellate Body's reference to the Draft Articles in US –\nCountervailing Duty Investigation on DRAMS , the instance at the heart of China's arguments before\nus concerning the Draft Articles. In particular, th at reference – which appears in a footnote making\nthe observation, in the context of the issue of \"entru stment or direction\" of a \"private body\", that the\nconduct of private bodies is presumptively not attributable to the state – does not state that the Draft\nArticles constitute relevant rules of international la w in the sense of Article 31(3)(c) of the Vienna\nConvention for purposes of interpreting language in the SCM Agreement. Indeed, the footnote says\nnothing whatsoever about the status of the Draft Articles vis-à-vis the WTO Agreement.\n186\n8.89 Furthermore, in some cases, panels and the A ppellate Body have made explicit that the Draft\nArticles are not binding. 187 We thus find no basis for the assertion that as a general matter the\nAppellate Body and panels have found that the Draf t Articles must be \"taken into account\" as \"rules\nof international law applicable in the relations between the parties\" in interpreting the WTO\nAgreement, and we note that in the present disput e, the United States has e xplicitly rejected this\nproposition.188\n8.90 In any event, even by their own terms, the Draft Articles \"do not attempt to define the content\nof the international obligations the breach of which gives rise to responsibility\" 189, i.e., they are not\nconcerned with the substance of the underlying in ternational obligations, but are rather concerned\nwith determining whether a state is or is not re sponsible for a given action that may constitute a\nsubstantive breach of such an obligatio n. In this regard, of particular relevance to the issue before us,\nthe Draft Articles contain a provision on lex specialis: \"These articles do not apply where and to the\nextent that the conditions for an internationally wr ongful act or the content or implementation of the\ninternational responsibility of a State are govern ed by special rules of international law\". 190 We view\nthe taxonomy set forth in Article 1.1 of the SCM Agreem ent at heart as an attribution rule in the sense\nthat it identifies what sorts of entities are and are not part of \"government\" for purposes of the\nAgreement, as well as when \"private\" actors may be said to be acting on behalf of \"government\".\nThis has precisely to do with \"the content or im plementation of the intern ational responsibility of a\nState\"191 for purposes of the SCM Agreement, a furthe r indication that the Draft Articles are not\n\n186 We recall that in another footnote in the US – Countervailing Duty Investigation on DRAMS report,\nthe Appellate Body also noted the statement of the panel that the USDOC might have been entitled to treat\nwholly-government owned entities as \"public\" rather th an \"private\" bodies. (Appellate Body Report on US –\nCountervailing Duty Investigation on DRAMS, footnote 225).\n187 See, e.g., Appellate Body Report on US – Line Pipe , para. 259; Panel Report on US – Gambling ,\npara. 6.128.\n188 The United States argues, for exam ple, that even if certain parts of the Draft Articles may have the\nstatus of customary international law, this does not mean that the Draft Articles in their entirety, and in their full\ndetail have that status, a question which the United States characterizes as \"open\" and \"contested\".\n(United States second written submission, para. 58).\n189 General Commentary, para. 1 of the Draft Articles.\n190 Article 55 of the Draft Articles.\n191 We emphasize that here we express no view as to other possible parts of the WTO Agreement that\nmight also fall within the scope of the lex specialis provision of the Draft Articles. The issue before us is the\ninterpretation of Article 1.1 of the SCM Agreement, and our analysis thus is limited to that provision. We do\nnote, however, that the Commentary to this provision of the Draft Articles refers at length to the WTO Dispute\nSettlement Understanding as an example of a treaty whose text makes clear \"that only the consequences\nspecified [therein] are to flow\". (Commentary (3) to Article 55 of the Draft Articles).\n\nrelevant to interpreting Artic le 1.1 of the SCM Agreement. 192 In this connection, we recall that the\npanel in Korea – Commercial Vessels , presented with virtually the same argument by Korea that\nChina makes before us, declined to rely on the Draft Articles. In that panel's view, Korea's entire line\nof argumentation concerning the meaning of \"public body\" (which included its arguments based on\nthe Draft Articles) conflated the concept of \"benefit\" with the nature of the actor.\n8.91 On the basis of the foregoing considerations , we do not find that the Draft Articles are\n\"relevant rules of international la w applicable to the relations betw een the parties\", such that we\nshould \"take them into account, together with the context\" in the sense of Article 31(3)(c) of the\nVienna Convention. Given this, we do not need to take up the other issues that would need to be\nresolved in that situation, not least of which is the meaning of \"take into account\" for that purpose.\n8.92 The second instrument invoked by China as contex t is the GATS, in particular its Annex on\nFinancial Services. This Annex contains the term \"public entity\", and China argues that this term\nmust inform the meaning of the term \"public body \" in the SCM Agreement. We note that China's\nargument is the same as one raised by Korea in Korea – Commercial Vessels: That panel rejected this\nargument, on the grounds that the argument conti nued to conflate the c oncepts of financial\ncontribution and benefit. The panel also questioned the relevance of the GATS to the interpretation of\ndifferent language in an entirely different agreement, and finally noted that even the text of the GATS\nFinancial Services Annex itself seemed to imply that , in the absence of the clarification in the cited\nprovision, \"an entity principally engaged in supplying financial services on commercial terms\" might\nbe treated as a \"public entity\", a fact that in the vi ew of the panel undermined Korea's argument that a\npublic entity acting on commercial terms could not be treated as a \"public body\". 193 We, like the\npanel in Korea – Commercial Vessels , do not see the relevance for th e interpretation of the term\n\"public body\" in Article 1.1 of the SCM Agreement, of the different term \"public entity\" in a different\nAgreement, and in particular we see nothing to requi re us to equate these terms or to give them the\nsame interpretation.194 Nor do we consider the term \"non-gove rnmental bodies\" in Article I:3 of the\nGATS, which China invokes, to be re levant to the interpretation of \" public body\" in Article 1.1(a)(1)\nof the SCM Agreement. These are very different terms in separate Agreements, and we find no\nindication in either Agreement of any conceptual or other link between them.\n8.93 Finally, in terms of other instruments, we r ecall that the United States points to the discussion\nin paragraph 172 of the Working Party Report on Ch ina's accession as relevant context making clear\n\n192 The panel in EC – Commercial Vessels reached a similar conclusion that it was unwarranted to read\npublic international law concepts including elements of the Draft Articles into the WTO Agreement to\ndetermine the meaning of Article 23.1 of the DSU. In this regard, that panel stated:\n\n\"The Panel recalls that it has concluded, based on an interpretation of Article 23.1 of the DSU\nin accordance with the ordinary m eaning of its terms and in light of the object and purpose of\nthe provision, that measures not involving a suspension of WTO concessions or other\nobligations are not excluded from its scope. While the Panel realizes that in a number of\nWTO dispute settlement and arbitration cases reference has been made to the public\ninternational law concepts invoked by the European Communities, the Panel can see no basis\nfor using these concepts to read into Artic le 23.1 a limitation that is unsupported by an\ninterpretation based on its text, context and object and purpose.\". (footnotes omitted) (Panel\nReport on Korea – Commercial – Vessels, para. 7.205).\n\nSimilarly to that panel, we can see no basis to read into Article 1.1 of the SCM Agreement any concept\nfrom public international law that is unsupported by an interpretation based on that Article's text, context and\nobject and purpose.\n\n193 Panel Report on Korea – Commercial Vessels, footnote 42.\n194 Id., para. 7.47.\n\nthat China accepted that its stat e-owned enterprises (including banks ) are government actors, or at\nleast public bodies, within the meaning of the SCM Agreement.\n195 We note that the United States\ndoes not rely directly on this language, and does not argue that it constitutes a commitment by China\nas to any particular interpretation of Article 1.1(a)(1 ) of the Agreement. In light of our conclusions\nbased on the text of that provision, we do not cons ider it necessary to analyze the cited language of\nthe Working Party Report.\n8.94 For the foregoing reasons, we conclude that a \"public body\", as that term is used in Article 1.1\nof the SCM Agreement, is any entity controlled by a government. In our view, this is the correct\ninterpretation, which emerges from an analysis of th e ordinary meaning of the term in its context and\nin the light of the object and purpose of the provision and of the SCM Agreement.\n2. The USDOC's determinations that certain SOEs and SOCBs were \"public bodies\"\n8.95 Having interpreted the term \"public body\", we now turn to the USDOC determinations in the\nfour countervailing duty investigations before us that certain entities were public bodies, and that their\nrespective provisions of inputs and loans thus were financial contributions by the government, in the\nsense of Article 1.1(a)(1) of the SCM Agreement.\n(a) Background\n8.96 The USDOC made \"public body\" and \"financial c ontribution\" determinations in respect of (i)\nstate-owned suppliers of inputs, including some tr ansactions made through private trading companies\n(government provision of goods); and (ii) state- owned commercial banks (government provision of\nloans).\n\n8.97 In the four investigations at issue, the US DOC determined that China's provision of inputs\nthrough state-owned producers (SOEs) constituted c ountervailable subsidies. It particular, the\nUSDOC determined that the SOEs were \"public bodi es\" that provided financial contributions in the\nform of certain goods – HRS, rubber, and petroche micals – to investigated producers of, respectively,\nCWP, LWR, OTR, and LWS, for less than adequate remuneration thus confe rring benefits to those\nproducers, and that these subsidies were specific.\n196 Before us, China challenges all of these public\nbody determinations.\n\n195 The passage of paragraph 172 of the Working Party Report reads as follows:\n\n \"Some members of the Working Party, in view of the special characteristics of China's\neconomy, sought to clarify that when state-owned enterprises (including banks) provided financial\ncontributions, they were doing so as government actors within the scope of Article 1.1(a) of the\nSCM Agreement. The repres entative of China noted, however, that such financial contributions would not\nnecessarily give rise to a benefit within the meaning of Article 1.1(b) of the SCM Agreement. He pointed out\nthat China's objective was that state- owned enterprises, including banks, should be run on a commercial basis\nand be responsible for their own profits and losses. The Working Party took note of this commitment.\"\n\n196 In the CWP and LWR investigations , the USDOC determined that the government provision of\nHRS through SOE producers for less than adequate remuneration was a financial contribution which conferred a\nbenefit to CWP and LWR investigated producers. (See, e.g., Exhibits CHI-1, p. 9 and CHI-2 p. 8).\nIn the LWS investigation , the USDOC determined that the government provision of petrochemicals –\nBOPP – through SOE producers for less than adequate remuneration was a financial contribution which\nconferred a benefit to LWS investigated producers. (See, e.g., Exhibit CHI-3, p. 18).\nIn the OTR investigation , the USDOC determined that the government provision of natural and\nsynthetic rubber through SOE producers for less than adequate remuneration was a financial contribution which\nconferred a benefit to OTR investigated producers. (See, e.g., Exhibit CHI-4, pp. 9-10).\n\n8.98 In three of the four investigations at issue (CWP, OTR and LWS), the USDOC also\ndetermined that loans provided by SOCBs to i nvestigated producers constituted countervailable\nsubsidies.197 In particular, the USDOC found that the SOCBs were \"public bodies\" providing\nfinancial contributions in the form of loans, that the loans were on terms more favourable than the\nmarket, and that these subsidies were specific. In the present dispute, China only challenges the\nUSDOC's \"public body\" determination regarding SOCBs in the OTR investigation.198\n\n(b) USDOC public body determinations in respect of government-owned input suppliers (SOEs)\n8.99 In all of the investigations at issue, the USDOC determined that the SOE input suppliers were\n\"public bodies\" (referred to as \"authorities\" in the U.S. statute and thus in the USDOC's\ndeterminations\n199) by applying a rule of majority government-ownership. Under this approach, the\nUSDOC treated as a public body any input producer in which the government held a majority\nownership share.\n200 Where the parties presented additional arguments and evidence related to this\nissue, the USDOC also referred to these in its dete rminations. The analysis conducted in each of the\ninvestigations is summarized below.\n\n(i) CWP investigation\n8.100 In its final determination in the CWP inv estigation, the USDOC determined that SOE\nproducer-suppliers of HRS were public bodies (\"authorities\"). In particular, any producer-supplier in\nwhich a government entity held a majority ownership share was treated as a public body. 201 In this\nregard the determination indicates, and China do es not contest, that the Government of China\nprovided ownership information only in respect of some of the investigated producer-suppliers of\nHRS. The USDOC treated the entities in respect of which the Government of China failed to provide\nthe requested ownership information as public bodi es (on the basis of applying facts available or\nadverse facts available).202\n8.101 During the course of the investigation, the Government of China contested the USDOC's\nmajority-ownership approach to its public body de terminations, which also had been used in the\npreliminary determination. China argued that the USDOC should conduct the factual five-factor\nanalysis it had applied in certain pr ior investigations, in particular Korea – DRAMS , to determine\nwhether entities were public bodies. The five fact ors that the USDOC had examined in that case\nwere: (i) government ownership; (ii) government pr esence on the board of directors; (iii) government\n\n197 In the LWR investigation, the USDOC concluded that any government programme to provide loans\nto the steel industry was \"not used\" by the respondents. (Exhibit CHI-2, p. 47).\n198 China first written submission, footnote 132. As discussed in Section X, infra, China challenges the\nUSDOC's determinations of benefit from these loans in a ll three of the investigations in which producers were\nfound to have received countervailable subsidies in the form of government-provided loans.\n199 According to the United States, under its domestic statute the definition of the term \"authority\"\nincludes the term \"public entity\", and this latter term means \"public body\". (United States first written\nsubmission, footnote 87). There is no disagreement between the parties as to the equivalence of the terms\n\"public entity\" under U.S. law and \"public body\" in Article 1.1(a)(1) of the SCM Agreement.\n200 Exhibits CHI-1, p. 63; CHI-2, pp. 29-30; CHI-3, p. 67; and CHI-4, p. 77.\n201 Exhibit CHI-1, pp. 62-63.\n202 Id., pp. 10-11. With regard to other specific suppliers for which petitioners had claimed SOE status,\nthe USDOC noted that the identities of those suppliers were proprietary and therefore addressed petitioners'\ncomments in a \"BPI Memorandum\". (Id., p. 63). This document is not on the record of the present dispute.\n\ncontrol over activities; (iv) pursuit of governmental policies/interests; and (v) whether the entity was\ncreated by statute.\n203\n8.102 The USDOC acknowledged that it had used such a five-factor test in prior investigations 204\nbut stated that there was insuffici ent evidence on the record to do so in the CWP investigation. In\nparticular, the USDOC noted that other than th e levels of government ownership of certain\ncompanies, the Government of China had not provide d the information that was needed to consider\nthe five-factor analysis, and that therefore the USDOC had applied a rule of majority ownership. 205\nThe USDOC noted, however, that it would reconsider the feasibility of applying the five-factor test\nduring an administrative review, should a countervailing duty order result from the investigation.206\n8.103 Finally, the USDOC stated that because it had de termined that the SOEs were public bodies,\nit did not reach the issue of whether they were priv ate entities entrusted or directed by the government\nto provide financial contributions.207\n(ii) LWR investigation\n8.104 In its final determination in the LWR investig ation, the USDOC determined on the basis of\nmajority government ownership that SOE producer-supp liers of HRS were public bodies, pursuant to\nan essentially identical analysis to that performed in the CWP investigation.208\n8.105 During the course of the investigation, the Government of China and an investigated\nproducer/exporter contested the USDOC's \"public body\" preliminary determ inations, which were\nmade on the same basis. They asserted that govern ment ownership was insufficient grounds for an\nentity to be a public body, and that not every g overnment entity is a public body, as the USDOC had\nrecognized in the Preamble to its countervailing dut y regulations. (The Preamble states that the\nUSDOC would continue to treat \"most\" government -owned corporations as the government itself). 209\nThese respondents further argued that the USDOC should have applied the five-factor factual analysis\nthat it had used in Korea – DRAMS (as described above in respect of the CWP investigation).210 They\nnoted that in Korea – DRAMS , the USDOC itself had found that cer tain wholly government-owned\ncompanies should not be treated as government entiti es. For these respondents, the \"real question\"\nunder the approach taken in DRAMS was whether an entity exercised governmental authority.\n8.106 The USDOC acknowledged that it had used such a fi ve-factor test in some, but not all, prior\ninvestigations211, but determined that there was insuffi cient evidence on the record of the LWR\ninvestigation to perform such an analysis because, beyond the levels of govern ment ownership of the\ncompanies involved, the Government of China ha d not provided the information needed to conduct\n\n203 Exhibit CHI-1, p. 62. In addition to contesting the basis for the public body determination, the\nGovernment of China also asserted that the USDOC had not established that the Government of China had\n\"entrusted\" or \"directed\" those companies to provide the financial contributions at issue. (Id.).\n204 Specifically, the USDOC noted that it had used the five-factor test in DRAMS from Korea and\nMagnesium from Canada. (Id., p. 62).\n205 Exhibit CHI-1, pp. 62-63.\n206 Id., p. 63.\n207 Id.\n208 Exhibit CHI-2, pp. 28-30.\n209 Id., pp. 26-27.\n210 Id., p. 27.\n211 The USDOC noted that it had previously used the five-factor test in DRAMS from Korea and\nMagnesium from Canada , but also noted that in other investigations it had not applied this test where a\ngovernment-owned entity provided a financial contribution to a respondent. (Id., p. 28 and footnote 103).\n\nthe analysis.212 The USDOC noted that it would reconsider the necessity and feasibility of applying\nthe five-factor test during an administrative review.213\n8.107 The USDOC nevertheless specifically discussed in its final determination China's arguments\nin support of the five-factor analysis in respect of one input supplier, Baosteel. In so doing, however,\nthe USDOC stated that it was not making a finding as to whether it was required to apply the five-\nfactor test in respect of Baosteel.\n8.108 Concerning the five factors as applied to Baosteel, the USDOC stated that although the\nGovernment of China had cited record information rela ted to each of the five factors, the information\nwas not sufficient for the USDOC to conclude that Baosteel was not an \"'authority'\". Further, because\nBaosteel was majority-owned by the government, the first of the five factors clearly supported that it\nwas a public body.214 On the other four factors, the USDOC's analysis was as follows:\n• With respect to government presence on the Boar d of Directors, the USDOC stated that the\nGovernment of China had contended that there was no evidence that any member of\nBaosteel's board of directors was a government official. The USDOC referred to record\nevidence suggesting that some members of the board had ties to the government.215\n• Concerning government control over activities, the USDOC stated that the Government of\nChina had argued that there was no evidence of government control over Baosteel's activities,\nincluding production or pricing, and in suppor t had contended that no government authority\nregulated steel producers or set prices. The USDOC noted, however, that the Government of\nChina had cited no information specific to the activities of Baosteel.216\n• With respect to pursuit of government po licies or interests, the USDOC noted the\nGovernment of China's argument that Baosteel did not pursue government interests because it\nhad a duty under Chinese law to protect share holders and maximize profitability. The\nUSDOC stated that these facts did not demonstrate that Baosteel did not pursue government\ninterests. In this regard, the USDOC cite d statements from Baosteel's 2005 and 2006 annual\nreports referring, inter alia , to implementation of the government's five year plan, and the\ngovernment's steel industry policy. The US DOC noted that although these were general\nstatements, they suggested that the govern ment might pursue government policies and\ninterests through its ownership of Baosteel.217\n\n212 Exhibit CHI-2, pp. 28-29.\n213 Id., p. 29.\n214 According to China, Baosteel's private ownership amounted to 27 per cent. (Exhibit CHI-2, p. 27).\n215 Id., p. 29. The USDOC noted that according to the Baosteel's 2006 Annual Report (\"2006 Annual\nReport\"), one of the members of the board of directors during the period of investigation \"has been trusted by\nthe State-Owned Assets Supervision and Administra tion Commission of the State Council as the outside\ndirector of Baosteel Group as well as director of the Company\". Moreover, it noted that the Baosteel's 2005\nAnnual Report (\"2005 Annual Report\") indicated that at least one independent director was also a director of\nstate-owned China Minmetals Corp. Ltd. (Id.).\n216 Id., p. 30.\n217 Id., p. 30. The USDOC noted that the 2005 Annu al Report indicated that \"China has strengthened\nmacroeconomic control over steel industry since 2004 and issued the first Steel Industry Development Policies\nin 2005 […] The Steel industry will undergo strategic restructuring\" and that \"one of the Major Tasks of\nBaosteel's 2006 Business Plan is to Speed up the implementation of the 11\nth Five Year Projects\". It further\nnoted that the 2006 Annual Report also referred to China's steel industry policy and indicated that \"Baosteel\nGroup Corporation, the controlling shareholder [of Baosteel ], mainly deals with state-owned assets within the\nauthorized scope set by the State Council\". (Id.).\n\n• Concerning creation by statute, the USDOC noted the Government of China's argument that\nBaosteel operated under the same Chinese law as private enterprises, but stated that this\ninformation was not sufficient to determine that Baosteel was not created by statute. The\nUSDOC indicated that China had provided no in formation on Baosteel's ultimate controlling\nshareholder, the State-owned Assets Supervision and Administration Commission of the State\nCouncil (\"SASAC\").\n218\n8.109 Overall, the USDOC found that the information on the record was not sufficient to conclude\nthat Baosteel was not an \"'authority'\", noting th at the Government of China had presented general\ninformation on each of the five factors, which was contradicted by other ge neral information on the\nrecord. The USDOC stated that it therefore had used the same rule of majority ownership applied to\nother producer-suppliers to determin e whether Baosteel was an \"'authority'\". The USDOC noted that\nbecause it determined that the SO Es at issue were public bodies, it did not reach the issue of\nentrustment or direction.219\n(iii) LWS investigation\n8.110 In the LWS investigation, the USDOC determ ined that the state-owned petrochemical\nproducers under consideration were public bodies on th e basis of majority government ownership.\nThe USDOC stated that this was consistent with its approach in the CWP investigation, as well as\nwith the Preamble to its countervailing duty regulati ons (\"we intend to cont inue our longstanding\npractice of treating most government-owned corporations as the government itself […]\"). 220\n8.111 During the investigation, the Government of China contested the public body preliminary\ndeterminations, arguing, inter alia, that the USDOC should have applied the five-factor test, and that\nthe respondents had provided sufficient information for the test to be applied.221\n8.112 Although the USDOC acknowledged that it had used such a five-factor test in some prior\ninvestigations222, it rejected the Government of China's argument on the grounds that there was\ninsufficient evidence on the record , as beyond the levels of government ownership of the companies\nin question, the Government of China had not provided the information necessary to conduct a\ncomplete analysis. Nevertheless, the USDOC responded to the Government of China's arguments and\n\"limited\" evidence on this issue as follows:\n• Concerning government ownership, the USDOC stated that the Government of China had\nsimply relied on the fact that the companies were not wholly government-owned (one being a\njoint venture with a publicly listed corporation, and the other being a publicly listed company\nwith shares traded on foreign and Chinese stock exchanges), but had not demonstrated that\nthe companies had significant private ownership. Rather, the record evidence was \"clear\" that\nthe SOE suppliers were majority government-owned.\n223\n• Concerning government presence on the Board of Directors and pursuit of governmental\ninterests, the USDOC stated th at China's argument simply rested on the fact that the\ncompanies were listed on domestic and foreign stock exchanges, and that this argument\n\n218 Exhibit CHI-2, p. 30.\n219 Id.\n220 Exhibit CHI-3, p. 67.\n221 Id., p. 65.\n222 Id., pp. 66-67. The USDOC noted that it had used the five-factor test in the following prior\ninvestigations: DRAMS from Korea and Magnesium from Canada. (Id., p. 67).\n223 Id. p. 67. The USDOC cites the February 1, 2008 submission of verification exhibits, which are not\non the record of the present dispute. (Id.) China does not contest this point before the Panel.\n\nreflected the unsubstantiated assumption that being listed on these exchanges somehow\nshowed that the directors of the companies acted independently in pursuing only commercial\nand not governmental interests.224\n• Concerning government control over the activities of the companies relating to pricing and\nproduction decisions, the USDOC stated that th e Government of China failed to acknowledge\nthe role that the SASAC exercised over managi ng SOEs \"based on 'the rights attendant to the\nownership of shares'\" (citing to the Governme nt of China's questionnaire response). The\nUSDOC considered that this management w ould be substantial based on the government's\nmajority ownership of the SOEs in question.225\n8.113 The USDOC concluded that it had therefore a pplied a rule of majority ownership to\ndetermine whether a government-owned petrochemical input supplier was an \"authority\" (a public\nbody). It further concluded that because it had found these SOEs to be public bodies, it did not reach\nthe issue of entrustment or direction.226\n(iv) OTR investigation\n8.114 In the OTR investigation, the USDOC determin ed that majority government ownership of a\nrubber producer qualified it as a public body, and that this was consistent with the Preamble to its\ncountervailing duty regulations and with past prac tice (namely, the CWP and LWS investigations,\nHot-Rolled Steel from India , and Stainless Steel from Korea ).227 While respondents argued that the\nUSDOC was required to apply the five-factor test, the USDOC found that \"conducting such a test is\nnot necessary absent information that calls into question whether government ownership does not\nmean government control\".\n228 In this respect, it cited other inv estigations where it had not applied the\nfive-factor test, but had made a public body dete rmination purely on the basis of government\nownership.229 The USDOC noted that it would, if appr opriate, reconsider the necessity of applying\nthe test if there were a countervailing duty order, and an administrative review were required.230\n8.115 Finally, the USDOC found that because it had dete rmined that SOEs were public bodies, it\nwas not necessary to evaluate the question of entrustment or direction.231\n\n(c) USDOC public body determination in respect of SOCBs\n8.116 As discussed above, concerning loans by SOCBs China challenges the USDOC's public body\ndeterminations only in the OTR investigati on, although it challenges the USDOC's benefit\n\n224 Exhibit CHI-3, p. 67. The Government of China's arguments were (i) that several directors were\nindependent non-executive directors and that some were officers of the company with no outside government\npositions, and that these companies pursued only commerci al interests based on their stock exchange listings;\n(ii) that by law they were required to protect the intere st of shareholders and to maximize profits; (iii) that one\nwas listed on the New York Stock Exchange and thus was subject to US corporate governance requirements;\nand (iv) that SOEs in China operate under the same co mpany law as private enterprises and they do not exist by\nvirtue of any special statute. (Id., pp. 65-66).\n225 Exhibit CHI-3, p. 67. The cited questionnaire response is not on the record of this dispute, but\nChina does not contest the USDOC's characterization thereof.\n226 Id.\n227 Exhibit CHI-4, pp. 10 and 77.\n228 Id., p. 10.\n229 The USDOC cited, for example, its prior investigation in Hot-Rolled Steel from India, where it had\ncountervailed the provision of iron ore from a mostly government-owned mine without any reference to the\nfive-factor test. (Id., pp. 10 and 77).\n230 Id., p. 10.\n231 Id., p. 77.\n\ndeterminations in respect of loans by SOCBs in three of the four countervailing duty investigations\nbefore us. (The claims concerning these benefit determinations are addressed in Section X, infra).\n8.117 In the OTR investigation, the USDOC found that the Government of China provided\nsubsidies to the tire industry in the form of pr eferential lending by state-owned commercial banks.\n232\nIt determined that the SOCBs were \"authorities\" (i.e., public bodies) on the basis of its previous\nfinding in the CFS Paper investigation, where it had concluded that Chinese policy banks and SOCBs\nconstituted such \"authorities\". In the OTR investig ation, the USDOC stated that the parties in the\ninvestigation had not demonstrated that the Ch inese banking sector had significantly changed such\nthat reconsideration of the CFS decision was warranted. 233 The USDOC also cited scholarly\npublications on the record that reported that SO CBs were required to support the government's\nindustrial policies.234\n8.118 In the CFS Paper investigation, in turn, the USDOC stat ed that in its general practice, loans\nprovided in any given country by state-owned comme rcial banks are not necessarily, or in all cases,\ntreated as government loans, since these banks may operate on a commercial basis. 235 However, it\ndetermined that in respect of China, treatment of SOCBs as commercial banks was not warranted.\nThe USDOC found that the record evidence did not indicate that China's banking sector operated on a\ncommercial basis, as it was subject to significant distortions, mainly from the continued dominant role\nof the government in that sector and the legacies associated with the sector's longstanding pursuit of\ngovernment policy objectives. 236 Therefore, while stating that government control over SOCBs in\nChina had been changing and that the record ev idence in that regard was mixed, the USDOC\nnevertheless determined that the reforms were still in transition and that the government's influence\nremained a significant factor in the operation of China's banking sector.237\n8.119 In the CFS Paper investigation, the USDOC first stated that the central government had been\nvery cautious on completely reforming the banking system; and that as a result, and because banks in\nChina had never operated on a commercial basis, th e government was still very involved in the\nbanking sector.\n238 The USDOC found this view, to vary ing degrees, confirmed by independent\nexperts. It reported some experts stating that \"recent trends have moved away from local government\ninfluence over bank operations\" and \"[t]here still is some local gove rnment control over the bank\nbranches, but [while] this has lessened in recent years […] it is still an ongoing process\". Other\nexperts stated that \"the banking law prohibited go vernment interference […] but […] this prohibition\nwas not very effective in decreasing local governme nt influence [...] [howev er] the creation of the\n\n232 According to China, there are four principal state-owned commercial banks in China (i.e., the so-\ncalled \"Big Four\" banks): the China Construction Bank (\"CCB\"); the Industrial and Construction Bank of China\n(\"ICBC\"); the Bank of China (\"BOC\"); and the Agricultu ral Bank of China (\"ABC\"). (China first written\n233 Exhibit CHI-4, p. 101. For example, the USDOC noted that at verification, an official from the\nTianjin municipal government confirmed that SOCBs are supervised by the Tianjin State-Owned Assets\nSupervision and Administration Commission (\"Tianjin SASAC\"). Tianjin is the city where an investigated\nOTR producer (TUTRIC) was located. (Id.).\n234 As an example, the USDOC cites the IMF Wo rking Paper on China's Banking System Reform\n(Exhibit US-52), which states that \"it is difficult to find clear evidence that SCBs have changed their behavior\nand became commercially oriented\" and that governments should avoid \"interferen ce for policy purposes\".\n(Exhibit CHI-4, footnote 45).\n235 Issues and Decision Memorandum for the Fina l Determination in the Countervailing Duty\nInvestigation of Coated Free Sheet from the People's Republic of China (\"CFS Paper Countervailing Duty I&D\nMemo\"), Exhibit CHI-93, p. 55. As an example, the USDOC cites its previous findings in DRAMS from Korea.\n(Id.).\n236 Id., p. 55.\n237 Id., pp. 58, 60-61.\n238 Id., p. 56.\n\n[Chinese Banking Regulatory Commission] [has led] to significant decreases in the extent of local\ngovernment interference […] [although it] continu es to lack the enforcement powers it needs to\nproperly implement its regulations a nd fulfill its mandate\" and \"there is still a control perspective, as\nbanks continue to be dominated by government and are exposed to outside political influences\".239\n8.120 Second, the USDOC determined that China' s banking system still operated in accordance\nwith governmental planning policies.240 For example, the Chinese Commercial Banking Law required\nbanks to carry out their loan activities consistently with \"the needs of national economy and the social\ndevelopment and under the guidance of State industrial policies\". 241 Further, the USDOC found that\nwhile SOCBs were improving their risk management capacities, they still lacked adequate risk\nmanagement and analysis skills. It also stated that interest rates remained generally undifferentiated –\ninterest rates were quite close to the benchmark set by the People's Bank of China (\"PBOC\").242\n8.121 Furthermore in this context, in addition to its findings as to inadequate risk management and\nanalysis, and as to SOCBs' lending in pursuance of government economic plans, the USDOC pointed\nto government ownership in the banking sector. In particular, the USDOC determined that China's\nbanking sector remained almost entirely state-owned 243 and that even if the largest SOCBs had\nundergone some reorganization to become formal corporate entities – limited initial public offerings,\nand sale of minority stakes to foreign interests – th e Government of China as the majority shareholder\ncontinued to exert control over the largest commercial banks.244 The USDOC noted in this regard that\nforeign investment in Chinese banks was tightly cons trained, with total fore ign ownership limited to\n25 per cent in SOCBs.245\n8.122 According to the USDOC's OTR Countervailing Duty I&D Memo, the Government of China\nargued in that case that the SOCBs' specific actions should be analyzed to determine whether \"a\nfinancial contribution was provided through preferentia l lending\". TUTRIC (one of the investigated\nproducers), is cited as arguing that the SOCBs we re not necessarily government authorities, as they\nhad undergone significant reorganizations to become formal corporate entities operating under market\n\n239 Exhibit CHI-93, pp. 56-57.\n240 Id., pp. 57-58.\n241 Id., p. 58. Similarly, it noted that the Bank of China Offering states that \"Commercial Banking Law\nrequires commercial banks to take into consideratio n government macroeconomic policies in making lending\ndecisions. [They] are encour aged to restrict their lend ing to borrowers in certain industries in accordance with\nrelevant government policies\". (Id.) The USDOC also noted that, at verification, officials from the People's\nBank of China stated that \"it may be necessary for banks to heed industrial policies; banks may be taking on\ngreat risk if their customers use loans in a way that is inconsistent with industrial policies\". (Id.).\n242 Id., p. 59. For example, the USDOC noted that at verification, the PBOC explained that interest rate\nspreads are close to the PBOC-set benchmark rate becaus e \"the Big Four [(the largest SOCBs in China)] attract\nthe largest borrowers [...] [which] are creditworthy [...] and have long-term relationship with the banks\". (Id.).\n243 The USDOC's examination of the SOCBs' ownership appears in the section of the Issues and\nDecision Memorandum covering \"benchmarks\" for SOCB lending, which is cross-referenced in the section of\nthe Memorandum addressing \"policy lending\". The analys es in these two sections overlap substantively to a\nconsiderable extent.\n244 The USDOC noted that according to the data provided by the OECD (\"Economic Survey of China,\nParis: Organization for Economic Cooperation and Development\" (2005)) the state ownership in the Chinese\nbanking sector is much more widespread than in any other major world economy. The OECD report states that\nthe \"extent of ownership in China's financial system is exceptional. All but one of the major commercial banks\nare controlled by the central or local government […] the four largest banks […] known as the state owned\ncommercial banks (SOCBs), still account for almost three- quarters of commercial bank assets\". (Exhibit CHI-\n93, p. 67; and OECD Economic Surveys: China (2005), Exhibit US-54, p. 140). In its first written submission,\nChina acknowledges that at the end of 2006, China's ownership in the Big Four was as follows: 75 per cent in\nthe ICBC; 74 per cent in the CCB; 68 per cent in the BOC; and 100 per cent in the ABC. (China first written\nsubmission, para. 165).\n245 Exhibit CHI-93, p. 67.\n\nconditions, and that the USDOC had in previous cases found that wholly government-owned banks\nwere not government authorities. Starbright (anothe r investigated producer), is cited as arguing that\nits loan from the Bank of China was not counterva ilable as the USDOC had incorrectly determined\nthat SOCBs in China were government authorities. The Memorandum also indicates that Bridgestone\n(a domestic interested party in the investigation) disagreed with the Government of China that the\nbanks were private entities not controlled by th e government, arguing that record evidence and\nscholarly publications demonstrated that the Govern ment of China owned almost all banks in China,\nand that Chinese law required that the banks suppo rt government industrial policies. Bridgestone\ncontended that trends such as decreasing governme nt ownership did not contradict the record\nevidence that during the period of investigation the government \"maintained a strong hold on both\nbank ownership and lending\", such that in Bridg estone's view the USDOC should find that SOCB\nlending and debt forgiveness to the tire producers were financial contributions.\n246\n8.123 The final determination in the OTR investig ation summarizes the USDOC's finding that the\nSOCBs were public bodies as being based on the facts: (i) that national, provincial and municipal\ngovernment authorities effectuated policies to provi de countervailable loans to OTR producers, and\nthat the loans at issue were provided pursuant to these policies; (ii) that the parties in the OTR\ninvestigation had not demonstrat ed that conditions in the Chin ese banking sector had significantly\nchanged since the CFS Paper determination, such that a reconsideration was warranted, citing in this\nregard the verification report of the Tianjin G overnment, where a Tianjin municipal government\nauthority had confirmed that SOCBs were under Tian jin SASAC supervision; and (iii) that scholarly\npublications on the record reported that SOCBs were required to support the government's industrial\npolicies.\n247\n(d) Assessment by the Panel\n8.124 We recall our finding above that the meaning of \"public body\" in Article 1.1 of the SCM\nAgreement is an entity controlled by a government . We note that China's claim concerning the\nUSDOC's determinations that the SOEs and SOCBs at issue were public bodies is based not only on\nits own, different, legal interpreta tion of the term \"public body\", but also on the public body analysis\nand conclusions of the USDOC in the four investig ations. In particular, China claims that these\ndeterminations by the USDOC were based on the application of a \" per se majority ownership test\",\nand that the USDOC did not conduct the \"five-factor analysis\" that it had applied in some prior cases,\nwhich China holds up as evidence that the USDOC had recognized that a \"fact-intensive\" inquiry\n(including an entity's pursuit of governmental policies or interests, and whether an entity is created by\nstatute), was necessary to establish that an entity is a public body in the sense of Article 1.1 of the\nSCM Agreement. More generally, China considers th at the USDOC failed to meet its investigatory\nburden by improperly basing its public body determinations on a presumption that government-owned\nentities are public bodies, rather than gathering a nd analyzing the factual information necessary for\nthe five-factor test.\n8.125 We start by considering China's statements concerning the five-factor test. While we note\nChina's disclaimer that it is not arguing about the consis tency of the five-factor test with Article 1.1 of\nthe SCM Agreement, we view China's statements about the test as implying (as China had argued\nduring the investigations), that the USDOC was ob ligated to have applied that test, in which\ngovernment ownership is just one factor. For exam ple, citing the USDOC's statements regarding the\nnon-application of the test in the investigations, that it would \"reconsider the feasibility of applying\nthe five-factor test during an administrative revi ew\", China states that it \"takes no solace in this\nresponse\".\n248 Thus, for the sake of the completeness of our analysis, we examine the potential\n\n246 Exhibit CHI-4, pp. 100-101.\n247 Id., p. 101.\n248 China first written submission, para. 100. See also footnote 94, supra.\n\nrelevance of the five-factor test to the concept of \"public body\" in Article 1.1 of the SCM Agreement.\nIn this regard, we recall China's argument that the \"key\" question regardi ng whether an entity is a\npublic body is whether it exercises governmental aut hority, and China appears to consider that the\nfive-factor test addresses that question. 249 Given our finding that a public body is an entity controlled\nby a government, however, the legal question is whether under the SCM Agreement it would be\nnecessary to examine the five factors to establish th at an entity is government-controlled. We recall\nthat the factors are (i) government ownership; (ii) the government's presence on the entity's board of\ndirectors; (iii) the government's control over th e entity's activities; (iv) the entity's pursuit of\ngovernmental policies or interests; and (v) whether the entity is created by statute. While these factors\nappear generally to be related to the issue of control, we see no basis in the SCM Agreement on which\nto conclude that consideration of these particular fi ve factors (or any other specific factors) is a legal\nprerequisite for a valid finding that an entity is c ontrolled by a government and thus a public body in\nthe sense of the Article 1.1 of the SCM Agreemen t. Put another way, even if under U.S. law\napplication of the five-factor test were mandatory for a finding that an entity is a \"government\nauthority\" (which the evidence before us suggests is not the case), the failure to conduct that test in a\ngiven investigation would be a matter for the U.S. judicial review system, not the WTO.\n8.126 This brings us to the analyses that the USDO C did conduct in the four investigations in\nrespect of the SOE input suppliers, and in the OTR investigation in respect of SOCBs. The question\nfor the Panel is whether these analyses were reasoned and were based on adequate evidence of\ngovernment control of the entities in question.\n(i) SOE input suppliers as public bodies\n8.127 Concerning the SOE input suppliers in the f our investigations, as described above the\nUSDOC's public body determinations were principa lly based on the uncontested fact that these\nentities were majority government-owned. China characterizes this as a simple per se majority\nownership test. We read the USDOC's determinati ons differently, however. In particular, we do not\nsee the USDOC's determinations as depicting the mech anical application of a per cent-of-ownership\ntest, without regard for any other evidence or argume nts. To the contrary, these determinations show\nthat the USDOC examined all of the evidence and arguments that were before it in reaching its\nconclusions that the SOEs were public bodies.\n8.128 In particular, in the CWP investigation, the USDOC noted that other than the levels of\ngovernment ownership of certain companies produ cing HRS, the Government of China had not\nprovided the information that was needed to consider the five-factor analysis, and that therefore the\nUSDOC had applied a rule of majority ownership.\n250 In this context, where ownership information\nwas not available for certain HRS producers, th e USDOC found them to be government-owned, and\nthus public bodies, on the basis of facts available.\n8.129 In the LWR investigation, the USDOC determin ed that there was insufficient evidence on the\nrecord to perform the five-factor analysis in resp ect of HRS producers, because the Government of\nChina had not provided such evidence. Rather, it had provided only ownership information, and only\nfor some companies, but otherwise had not furnis hed information necessary to conduct the five-factor\nanalysis.251 Despite this, the USDOC did include a sp ecific, detailed discussion of the arguments\nadvanced by the Government of China concerning the five factors in respect of one trading company,\nBaosteel, while stating that it made no finding as to whether a five-factor test was required. As\ndescribed supra, the USDOC found that the evidence was insu fficient to conclude that Baosteel was\n\n249 See, e.g., China first written submission, paras. 90-102.\n250 Exhibit CHI-1, pp. 62-63.\n251 Exhibit CHI-2, pp. 28-29.\n\nnot a public body, and/or that the evidence contradi cted the factual assertion in support of which it\nwas advanced.\n252\n8.130 In the LWS investigation, the USDOC again found that there was insufficient evidence on the\nrecord for it to be able to conduct a five-f actor analysis, as beyond the levels of government\nownership of the companies in question, the Gove rnment of China had not provided the information\nnecessary to conduct a complete analysis. The USDOC nevertheless conducted a detailed discussion\nof the Government of China's arguments and \"limite d\" evidence on the five factors, concluding that\neither that evidence was not apposite to the ques tions examined, or disproved the Government of\nChina's argument. Of particular relevance in this regard was the statement in the Government of\nChina's questionnaire response that the State- Owned Assets Supervision and Administration\nCommission of the State Council played a role in managing SOEs \"based on 'the rights attendant to\nthe ownership of shares'\".253\n8.131 In the OTR investigation, the USDOC found that a five factor test is not necessary in the\nabsence of evidence calling into question whether government ownership does not mean government\ncontrol.\n254 The record documents before us make no mention of any party submitting evidence\nsuggesting an absence of government control, and before us China points to none. Rather, the\nUSDOC's OTR Countervailing Duty I&D Memo indi cates that the Government of China and the\nrespondent parties focused most of their argum entation on the USDOCs' failure to conduct an\nentrustment or direction analysis. Thus, it appears that there was no evidence other than that of the\ngovernment's share of ownership of the input supplie rs before the USDOC in respect of whether these\nSOEs were public bodies.\n8.132 On the basis of our review of the USDOC's public body determinations, we find sufficient\ndiscussion and analysis to explain the basis for tho se determinations and the reasons therefore. In\nother words, it is clear to us from these determin ations what evidence was before the USDOC and,\nwhere there were gaps, the reasons for those gaps , and how the USDOC addressed them. It also is\nclear to us from the determinations what specifi c arguments and evidence were presented to the\nUSDOC and how the USDOC took them into considerati on. In particular, we note the statements of\nthe USDOC that in a number of instances, fa ctual assertions were made without any supporting\nevidence, or with evidence that contradicted the assertions. We further note that the USDOC\nexplained why it considered that it was not legally required to conduct the five-factor test, in\nparticular that in making its public body findings, it relied on the evidence of record that the input\nsuppliers in question were majority government-owned.\n8.133 This then brings us to the legal question of whether the evidence of government ownership of\nthe SOE input producers was a sufficient basis on which to conclude that they were government\ncontrolled and thus public bodies. Here, the United St ates argues extensively before us that majority\nownership indicates control, and indeed China also acknowledges that ownership can indicate control.\nThe difference is that for China, government contro l is the wrong legal test for determining whether\nan entity is a public body.\n255\n8.134 We recall, however, our conclusion that a public body is any entity controlled by a\ngovernment, and in this regard we consider government ownership to be highly relevant (indeed\npotentially dispositive) evidence of government contro l. Here we note in particular the everyday\n\n252 See summary at para. 8.109, supra. See also Exhibit CHI-2, pp. 29-30.\n253 Exhibit CHI-3, p. 67.\n254 In this investigation, a petitioner had argued that \"treating Chinese SOEs as public entities is\nconsistent with China's commitments to the WTO\" (c iting paragraph 172 of the WTO Working Party Report).\n(Exhibit CHI-4, p. 76). The USDOC, however, did not address this argument in its \"public body\" analysis.\n255 See, e.g., China first written submission, para. 61.\n\nfinancial concept of a \"controlling interest\" in a comp any. The technical definition of what is needed\nfor a controlling interest is a maximum of 50 per cent plus one share of the voting stock of a company,\nwith the possibility that a much smaller voting block can be controlling, depending on how dispersed\nthe ownership of the remaining shares is, and the exte nt to which the other shareholders participate in\nvoting.256\n\n256 \"Controlling interest\" is defined as:\n\"Strictly speaking, an ownership stake of any business which is 50% or more. In practice it\nmeans a sufficiently large stake in a company by an individual shareholder to allow effective\ncontrol. In principle, a stake of 50% plus one share gives a blocking majority, but in practice\neffective control can be had with a smaller holding. Key holding levels are 25%, which can\nblock changes in the articles of the company, 51%, which gives voting control, and 76%,\nwhich permits changes to the articles. In a company setting it usually means holding a\nmajority of the voting rights which usually comes from the ownership of equity. The ability\nto capture ownership, or acceptances or pledges, of around this percentage of the voting\nequity in a company can be crucial in such situations as contested takeovers \". (The\nHandbook of International Financial Terms, P. Moles (ed.) (Oxford University Press, 1999),\np. 110). (emphasis original)\n\nSee also the following online dictionaries:\n\n• From Investment Dictionary: \"When one shareholder or a group acting in kind holds a high\nenough percentage of ownership in a company to enact changes at the highest level. By\ndefinition, this figure is 50 per cent of the outstanding shares or voting shares, plus one.\nHowever, controlling interest can be achieved with less than 50 per cent ownership of the\nstock if that person/group owns a significant proportion of the voting shares, because in many\ncases, not every share carries a vote in shareholder meetings.\"\n\n• From Financial & Investment Dictionary and Business Dictionary: \"Ownership of more than\n50 per cent of a corporation's voting shares. A much smaller interest, owned individually or\nby a group in combination, can be controlling if the other shares are widely dispersed and not\nactively voted.\"\n\n• From Wikipedia: \"Controlling interest in a corporation means to have control of a large\nenough block of voting stock shares in a company such that no one stock holder or coalition of\nstock holders can successfully oppose a motion. In theory this normally means that\ncontrolling interest would be 50 per cent of the voting shares plus one.\n\n In practice, though, controlling interest can be far less than that, as it is rare that 100 per cent\nof a company's voting shareholders actively vote.\n\n In addition, a company that requires a 2/3 s uper-majority of shares to vote in favour of a\nmotion, can grant, in effect, veto power to a minority shareholder or block of shareholders that\nown essentially 1/3 of the shares. Thus in some cases, a single entity can essentially maintain\ncontrol, with only 33.4 per cent of the outstanding shares. Ford Motor Company's former 33.9\nper cent ownership of Mazda is an example of a controlling interest with minority\nshareholding.\"\n\n• From Investopedia: \"For the majority of large public companies (such as those that belong to\nthe S&P 500), a shareholder with much less than 50 per cent of the outstanding shares can still\ncause a lot of shake-up at the company. Single shareholders with as little as 5-10 per cent\nownership can push for their own seats on the board, or enact changes at shareholder meetings\nby publicly lobbying for them.\"\n\n(Answers.com (accessed 28 April 2010) <http://www.answers.com/topic/controlling-interest>).\n\n8.135 We see no reason to consider that the concept th at \"control\" of a company resides with its\nmajority owner, which is uncontested in the priv ate sector, would be inapplicable to government-\nowned companies. Logically, quite the reverse should be true, given the generalized power of\ngovernments over economic affairs within their territori es. As such, we consider that, on its own,\nmajority government ownership is clear and highl y indicative evidence of government control, and\nthus of whether an entity is a public body for purposes of the SCM Agreement.\n8.136 We find no legal error, in analyzing whether an entity is a public body, in giving primacy to\nevidence of majority government-o wnership. Of course, public body determinations are to be made\ncase-by-case, on the basis of the evidence of record in a given investigation, and the authority's\ndetermination must explain its analysis based on the evidence before it, in order for that determination\nto be reasoned and adequate and thus consistent with the SCM Agreement.\n257 We note in this regard\nthat there could be cases (however rare in pr actice) in which a government-owned entity was\ncompletely insulated (e.g., by law) from any gove rnment involvement in, or influence over, its\noperations, such that the entity was not controlled by the government and thus fell outside the scope\nof the term \"public body\". In such a situation, it would be the entity and the government in question\nthat would have in their possession the information as to the absence of government control, and in\nour view it would be incumbent upon them, and certain ly it would be in their interest, to bring that\ninformation to the attention of the investigating au thority. To the extent that such evidence were\nplaced on the record, the investigating authority woul d be required to include its analysis of that\nevidence in its determination as to whether the entity was or was not a public body.\n8.137 In the investigations at issue in this dis pute, as noted above, respondents advanced certain\ninformation and/or arguments regarding the ques tion of public body in respect of SOE input\nproducers – mainly based on the five-factor test that the respondents considered the USDOC was\nlegally required to perform, and some of which went to the issue of control – and in all such instances\nthe USDOC in its determinations discussed and resp onded to that information and those arguments.\nIn no case does it appear that the USDOC refused to consider, or dismissed summarily, any such\ninformation or arguments, and China does not allege any such instances. The USDOC did not find in\nany case that there was record eviden ce to indicate that in spite of being owned by the government,\nthe SOEs in question were not public bodies. Furthe rmore, it is not the USDOC's factual findings as\nto the extent of government ownership or control of input suppliers that is the focus of China's\nchallenge, but rather the legal relevance thereof as determinative of whether an entity is a public body.\nIn particular, China advances the same argument that the respondents advanced in the investigations,\nnamely that the USDOC – as a matter of law – shou ld have treated the SOEs as private bodies, and\nthus conducted an entrustment or direction analysis.\n8.138 We have rejected this legal argument, as well as the legal test advanced by China, in respect\nof \"public body\". We also have concluded that the USDOC's determinations that the SOE input\nsuppliers were public bodies were ba sed on relevant evidence of government control (which in these\ncases was principally evidence of government owners hip), and that the dete rminations acknowledge\nand come to reasoned conclusions in respect of all of the additional evidence and arguments before it,\nincluding in particular those advanced by res pondents, as to the question of public body. We\ntherefore find that China has failed to establish that the USDOC acted inconsistently with the\nobligations of the United States under Article 1.1(a) (1) of the SCM Agreement in determining in the\nfour countervailing investigations at issue in this dispute that the SOE input producers were public\nbodies.258\n\n257 See, Section VII.A.2, supra.\n258 Concerning China's claims of consequential violations of Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994 in connection with this claim see Section XIII, infra.\n\n(ii) SOCBs as public bodies\n8.139 We turn now to the USDOC's determination in the OTR investigation that the SOCBs were\npublic bodies. In that case, the undisputed reco rd evidence shows that the government owned the\nlarge majority share of the SOCBs, and exercised si gnificant control over their operations. Before us\nChina does not contest these factual findings but instead argues that government ownership and\ncontrol are not relevant to whether the banks in question are public bodies.\n8.140 In particular, in the OTR investigation, the USDOC's determination that SOCBs were public\nbodies is based on, and incorporates by reference, the en tirety of its analysis of the same issue in the\nearlier CFS Paper investigation . In the OTR investigation, th e USDOC maintained the same\nconclusions that it had reached in CFS Paper on this issue, stating that the parties in the investigation\nhad not demonstrated that the Chinese banking sector had significantly changed such that\nreconsideration of the CFS Paper decision was warranted. We find no indication in the USDOC's\ndetermination in the OTR investigation that the respondents provided evidence or arguments seeking\nto establish that the USDOC's factual findings from the CFS Paper case were no longer valid, nor did\nthey challenge the USDOC's characterization in th e OTR investigation that the situation in the\nbanking sector had not signi ficantly changed since the CFS Paper investigation. In particular, the\nrespondents in the OTR investigation did not contest any of the information or analysis from the CFS\nPaper investigation either as to the degree of governme nt ownership of these banks or the extent to\nwhich they were controlled by the government. In this regard, we note the uncontested statement on\nthe record of the OTR investigation, by a Tianjin government official, that the SOCBs were under\ngovernment supervision. Rather, the respondents adva nced legal arguments as to the interpretation of\nthe term \"public body\" and as to the kind of analysis they considered that the USDOC was required to\nconduct.\n8.141 Before us China does not challenge either th e factual evidence or the conclusions drawn\ntherefrom by the USDOC as to the extent of government ownership of the SOCBs or the\ngovernment's involvement in their operations. Rath er, China argues that the USDOC's analysis was\nbased on the legally incorrect and irrelevant elemen t of government ownership and control, i.e., the\nsame legal argument that it advances in respect of the SOE input suppliers.\n8.142 For the same reasons as discussed supra in the context of the SOE input producers, we reject\nChina's arguments as to the interpretation of the term \"public body\", and as to the necessity of\napplying the five factor test or any other specific t est to determine whether an entity is a public body.\nRather, we have found that the determinant of wh ether an entity is a public body is government\ncontrol, and that majority government ownership is strong evidence of control.\n8.143 We have reviewed the determination in the OTR investigation, and the cross-referenced\ndetermination from the CFS Paper investigation, that the SOCBs are public bodies. We note the\nlengthy discussion in the CFS Paper determination of the evidence that the SOCBs during the period\nof investigation were either wholly or majority government-owned, and that there was extensive\ngovernment involvement in and control over their operations. As noted, China does not challenge\nthese factual findings. We consider that the USDOC 's findings constitute a sufficient basis for its\npublic body determination in respect of the SOCBs. We therefore conclude that China has failed to\nestablish that the USDOC acted inconsistently with the obligations of the United States under\nArticle 1.1(a)(1) of the SCM Agreement in determining that the SOCBs were public bodies.259\n\n259 Concerning China's claims of consequential violations of Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994 in connection with this claim see Section XIII, infra.\n\n(iii) Concluding remark\n8.144 Having found that China has failed to establish that the United States acted inconsistently\nwith its obligations in so far as its determinations of \"public body\" in the investigations before us in\nthis dispute, we recall, as we have already emphasize d, that a finding that an entity is a public body is\nsimply the first step in a multi-part analysis. This finding, on its own, does not mean in any way that\nthe entity in question acted in a non-commercial manne r, by conferring a benefit, nor that any such\nbenefit was specific. Those elements are independent and as such each must established in order for a\nvalid basis to exist for the imposition of a countervailing measure.\nIX. CHINA'S CLAIMS PERTAINING TO SPECIFICITY\nA. D\nE JURE SPECIFICITY OF SOCB LENDING TO THE TIRE INDUSTRY\n1. Claims of China\n9.1 China claims that the USDOC acted inconsistent ly with the obligations of the United States\nunder Article 2.1(a) of the SCM Agreement, by finding in the OTR investigation that preferential\nlending by SOCBs to the tire industry was de jure specific. China further claims that, as a\nconsequence, the United States acted inconsistently with Articles 10 and 32.1 of the SCM Agreement\nand Article VI:3 of the GATT 1994.260\n2. Main arguments of the Parties\n(a) China\n9.2 China submits that the legislation upon which the USDOC relied as the basis for this finding\nof de jure specificity neither refers to the alleged s ubsidy, nor explicitly limits access to the alleged\nsubsidy to the tire industry. 261 China further argues that the SO CB loans were not made pursuant to\nthe legislation in question.262\n9.3 According to China, a valid determination unde r Article 2.1(a) of the SCM Agreement that\ncertain legislation confers a subsidy that is de jure specific requires the establishment of three\nelements: (i) that the legislation define or refer to all of the elements of a subsidy (i.e., the financial\ncontribution and the benefits that will be conferred thereby); (ii) that the legislation explicitly limit the\naccess to the subsidy to certain enterprises (i.e., th at it must clearly and unambiguously provide that\nthe relevant subsidy – the financial contribution and benefit – is only available to \"certain enterprises\",\nto the exclusion of other \"certain enterprises\"); a nd (iii) that the countervailed transaction must have\nbeen made pursuant to the subject legislation (i .e., must be an instance of the subsidy that the\nlegislation defines, and the recipient must be among the \"certain enterprises\" to which the subsidy is\nexplicitly limited).263\n9.4 China notes in addition that pursuant to Article 2.4 of the SCM Agreement, any specificity\ndetermination must be \"clearly s ubstantiated on the basis of positive evidence\", and argues that \"clear\nsubstantiation\" is an even higher standard than \"p ositive evidence\" as that term was interpreted by the\n\n260 Paragraphs B.1(c)(iii) and B.1( e)(i)-(iii) of the \"as applied\" claims in China request for\nestablishment of a Panel; China first written submission, para. 468 (d); second written submission, para. 315 (e).\n261 China first written submission, paras. 208 and 214.\n262 Id., paras. 223 and 225.\n263 Id., para. 209.\n\nAppellate Body in US – Hot-Rolled Steel.264 In this regard, China submits that evidence showing that\na particular subsidy is broadly available throughout an economy is inconsistent with a valid finding of\nspecificity.265\n9.5 China argues that the USDOC's specificity determination in respect of SOCB lending to the\ntire industry is deficient in respect of all three of the elements it considers to be necessary. First,\nChina asserts, the USDOC relied on broad statemen ts in various planning documents and then\nimplicitly linked these statements to other statements in the same planning documents that refer to\nproviding support to various industries. 266 China submits that none of these statements refers to\npreferential lending by SOCBs to the tire industry – the subsidy that the USDOC actually\ncountervailed – and that the only statement in wh ich SOCBs are mentioned does not indicate that\nSOCBs provide loans at preferential interest rates.\n267 For example, China argues that the USDOC\nmisinterpreted the statement in the \"Hebei Provin ce 9th Five-Year Plan\" that the \"'automobile and\ncomponents industry' would, among other industries, be 'developed greatly and stronger'\" as requiring\nSOCBs (which are not even mentioned) to provide preferential loans (which also are not mentioned)\nto companies in the \"automobile and components industry\". 268 In China's view, these documents do\nnot explicitly refer to the allege d subsidy, and therefore (on that basis alone) cannot constitute the\nbasis for a finding of de jure specificity within the meaning of Article 2.1(a) of the SCM\nAgreement.269\n9.6 Second, China submits, even assuming that the legislation at issue referred to the alleged\nsubsidy, the USDOC's final determination provided no analysis of and made no findings as to whether\nthe alleged subsidy was explicitly limited to companies in the tire industry. 270 China considers that\nthe USDOC's statement that \"there are no discrete policy plans for the tire industry, per se, [but] the\ntotality of the information on this record […] shows that the government is directing policy lending to\nthe tire industry or to specific enterprises in the tir e industry\" does not support the conclusion that the\nalleged subsidy was explicitly limited to the tire industry. 271 China argues that no statements in the\nplanning documents indicate that the alleged subsid ies were \"explicitly limited\" to the tire industry.\nIn this connection, China asserts that if the SOCBs were required to support China's industrial policies\nas the USDOC contended, this would mean that the SOCBs were required to support all of the\nChinese industrial policies that concerned the vast array of industries covered by the planning\ndocuments. In this regard, China notes that the \"GOC Catalogue\" (one of the documents on which the\nUSDOC based its specificity determination) identif ies 539 \"encouraged national projects\" in 26 broad\ncategories. China contends that if the \"subsid y\" inferred from this document applied to the tire\nindustry, then it should apply to all of th e industries identified in the GOC Catalogue. 272 I n t h i s\nregard, China considers that the list of encouraged national projects is both so long (539) and so broad\n(in 26 diverse categories) that it could not, as a legal matter, form the basis for a specificity finding.\nChina considers that the findings of the panel in US – Upland Cotton , in particular its statement that\n\"a subsidy would cease to be specific because it is sufficiently broadly available throughout an\n\n264 China first written submission, paras. 210-211, citing to Appellate Body Report on US – Hot-Rolled\nSteel, para. 192. China contends in this regard that any determination of specificity must be based upon a\nthorough examination of all relevant evidence. (Id., para. 212).\n265 Id., para. 213.\n267 Id., paras. 214, 216-217; oral statement at the first meeting of the Panel, para. 61.\n268 China first written submission, footnote 184 (referring to Exhibit CHI-4, p. 14).\n269 Id., para. 217.\n270 Id., para. 219.\n271 Id., para 219 and footnote 185 (referring to Exhibit CHI-4, p. 98).\n272 Id., para. 221 and footnote 186 (referring to the Guiding Catalogue of the Industrial Restructuring\n(2005), promulgated by the National Deve lopment and Reform Commission (the \"GOC Catalogue\"), Exhibit\nCHI-70).\n\neconomy as not to benefit a particular lim ited group of producers of certain products\" supports its\nview.\n273\n9.7 China further argues in this context that cont rary to the USDOC's finding, the preferential\nloans by SOCBs are available to any borrower in China that borrows money from SOCBs at\nprevailing interest rates.274 For China, given the broad availability and use of this financing, it cannot\nbe considered specific.275\n9.8 Finally, China asserts that the USDOC failed to demonstrate that the SOCB loans were made\npursuant to the legislation on which the USDOC re lied. China submits that the USDOC merely\n\"presumed\" that all of the loans that SOCBs exte nded to GTC were made pursuant to the legislation\nidentified by the USDOC. According to China, such a presumption does not meet the stringent\nrequirements for a finding of specificity under Article 2.1(a) of the SCM Agreement. 276 Furthermore,\nChina submits, the evidence on the record does not support this presumption. China asserts that the\ninterest rates that GTC paid on RMB-denominated loans from SOCBs were entirely in the range of\ninterest rates paid by borrowers across all other indu stry sectors in China, and that the interest rates\nthat GTC paid on dollar-denominated loans were consistent with the USDOC's own benchmark.277\n9.9 For these reasons, China contends that the USDOC did not clearly substantiate, based on\npositive evidence, its de jure specificity determination in the OTR investigation.278\n(b) United States\n9.10 The United States argues that the USDOC's de jure specificity finding in respect of SOCB\nloans to the tire industry was consistent with Ar ticle 2 of the SCM Agreement. According to the\nUnited States, the USDOC found the \"policy lending\" in question to be specific because the loans\nwere provided as part of government programmes guiding financial institutions to lend to tire\nproducers.\n279\n9.11 The United States notes that Article 2.1 of the SCM Agreement provides that a subsidy is de\njure specific if the granting authority, or the legislation pursuant to which that authority operates,\nexplicitly limits access to the subsidy to certain ente rprises. The United States points to Article 2.4,\nwhich requires that any determination of specificity must be \"clearly substantiated on the basis of\npositive evidence\", and notes the Appellate Body's finding that such evidence must be of \"an\naffirmative, objective and verifiable character\", which is \"credible\". 280 The United States argues that\nwhere an investigating authority clearly substantiates on the basis of positive evidence that access to a\nsubsidy is explicitly limited, then a finding of speci ficity is consistent with Article 2 of the SCM\nAgreement; and the USDOC's finding of de jure specificity in respect of SOCB lending to the tire\nindustry met this test.281\n\n273 China response to Panel question 56 (first meeting), citing to Panel Report on US – Upland Cotton,\npara. 7.1142.\n274 China first written submission, para.228. China refers, in this connection, to record evidence that\nborrowers in the OTR tires industry obtained loans from SOCBs at interest rates that were not materially\ndifferent from the interest rates on loans that SOCBs pr ovided to borrowers in other industries. (China first\nwritten submission, paras. 168-173; response to Panel question 62 (first meeting)).\n275 Id., para. 229.\n277 Id., para. 224.\n278 See, e.g., China first written submission, paras. 217 and 219; second written submission, para. 191.\n279 United States first written submission, paras. 330-332.\n280 Id., paras. 333-334, citing to Appellate Body Report on US – Hot-Rolled Steel, para. 192.\n281 Id., para. 335.\n\n9.12 The United States argues that the USDOC found th at the Chinese laws, plans and policies –\nwhich operated at central, provincia l and municipal levels of governme nt – limited access to policy\nlending to a group of industries that explicitly incl uded the OTR tires industry. Furthermore, the\nUSDOC found that the provincial and municipal policies and plans were designed to implement\ncentral government plans and were intended to be consistent with those.\n282\n9.13 According to the United States, a catalogue of encouraged projects, which formed \"an\nimportant basis for guiding investment directions\" and for government investment and fiscal policies,\ninter alia, pursuant to the central government's 11th Five-Year Plan, included \"advanced belt tires\" and\nrelated materials and equipment. The 10 th Five-Year Plan had referred to \"meridian radial tires\" as a\nnational security priority, to which the contribution of funds should be \"reasonably directed\". The\nUnited States asserts that the provincial and muni cipal governments closely coordinated their own\nplans with those in the central plans.283\n9.14 Regarding the interpretation of Article 2 of the SCM Agreement, the United States argues that\nthis provision does not require the identification of le gislation that defines the elements of a subsidy,\nas this would conflate the determination of sp ecificity and benefit with that of financial\ncontribution.284 The United States also disagrees with China that the range of projects in the planning\ndocuments was so broad as to render policy lending non-specific. In the view of the United States,\nthe referenced projects concerned a \"group of indust ries\" (the terminology of Article 2.1 of the SCM\nAgreement). The United States also notes that the USDOC found that the planning documents\nprohibited policy lending to projects in the \"restricted\" and \"to be abolished\" categories.285\n9.15 The United States further argues that the questi on of specificity in respect of the SOCB\nlending is different from that of benefit (i.e., the terms of the lending): specificity has to do with\nmaking credit available to certain enterprises, including tire companies. 286 In this regard, the\nUnited States argues that the USDOC found that SO CBs acted pursuant to Chinese laws, policies and\nplans in providing policy loans to the OTR tire industr y. The United States considers that the primary\nmeans of differentiating among borrowers from th e SOCBs was not lending rates (most borrowers\npaid rates near government-set benchmarks) but the availability of credit at all.287\n3. Main arguments of the Third Parties\n(a) Australia\n9.16 Australia disagrees with China's contention that for a de jure specificity finding the legislation\nmust specify a subsidy, that the legislation must explicitly limit access to the subsidy to certain\nenterprises \"to the exclusion of other enterprises\", and that the specific transaction must be made\npursuant to the legislation forming the basis of the de jure specificity finding. According to Australia,\nthis argument conflates elements of Article 1 with Article 2.1, whereas de jure specificity does not\nrequire legislation identifying the elements of a subsid y. Rather, Australia considers that the tests for\nthe existence of a subsidy, and for specificity, are sep arate, and that this approach is consistent with\nthat taken by previous panels. Australia consider s that statements of government policies, plans and\nintentions are highly relevant in determining, inter alia , that subsidies are targeted to certain\nenterprises. Quoting Article 2.1 of the SCM Agreement, Australia argues that for a finding that policy\n\n282 United States first written submission, para. 336; response to Panel question 61 (first meeting).\n283 United States first written submission, paras. 337-338.\n284 Id., paras. 346-347; opening statement at the first meeting of the Panel, para. 43.\n285 United States first written submission, paras. 348 and 351-353; opening statement at the first\n286 United States first written submission, paras. 354-356.\n287 Id., paras. 357-360.\n\nlending is de jure specific, the policy statement that fo rms the basis of the programme must\n\"'explicitly limit access to certain enterprises'\". Au stralia sees nothing in this language requiring that\nsuch limitation be explicitly to the exclusion of others. Australia adds that the test for de jure\nspecificity does not require a direction from the government on \"what the benefit will be\" and \"who it\nwill go to\". Australia also argues that once the exis tence of a subsidy, and specificity, are established\nin accordance with Articles 1 and 2 of the SCM Ag reement, there is no need to impose the third\nrequirement advanced by China that the individual transactions be made pursuant to the legislation in\nquestion.\n288\n(b) European Communities\n9.17 Without prejudice to the determination of specificity in the present dispute, the European\nCommunities submits that a subsidy that reaches a wide number of beneficiaries and industries may\ncall into question the specificity of the measure. Recalling the panel report on US – FSC (Article 21.5\n– EC), the European Communities notes that it is unlikely that a subsidy in the form of a loan could be\neither de jure or de facto specific under Article 2 of the SCM Agreement if the loan can be obtained\nby companies of all sizes (as long as they are suff iciently credit-worthy) with respect to projects\nacross all sectors of the economy. The European Communities also submits that the specificity\nanalysis should focus on the characteristics of the measure at issue rather than merely on the\ndisbursements made thereunder, because it is the subsidy itself that de jure or de facto limits access to\nan \"enterprise or industry or group of enterprises or industries\". The European Communities adds that\nthe Panel must determine \"financial contributi on\" and \"benefit\" as a matter independent from\n\"specificity\" since these elements must be identif ied and examined separately in order to find the\nexistence of specific subsidies within the meaning of the Agreement.289\n(c) Saudi Arabia\n9.18 Saudi Arabia considers that specificity is a separate and independent condition from financial\ncontribution and benefit, c onsistent with previous panels' decisions . Saudi Arabia is also of the view\nthat specificity must be found with regard to the subsidy as a whole, i.e., financial contribution and\nbenefit. To illustrate its point, Saudi Arabia argues that the provision of low-interest loans to a limited\ngroup of enterprises or industries does not fulfil th e specificity criterion if the preferential lending\nrates do not differ materially from the rates that all enterprises in the country of provision may receive\nfor similar loans.290\n4. Assessment by the Panel\n9.19 The issues presented by this claim are: what th e required analytical elements are for a valid\nfinding of de jure specificity under Article 2.1(a) of the SCM Agreement; in this regard whether the\nthree-part test advanced by China is required by that provision; and finally, on the basis of both the\nfacts of the OTR investigation and applicable legal requirements, whether the USDOC's de jure\nspecificity determination in respect of SOCB lendi ng to the OTR tire industry was inconsistent with\nthe United States' obligations under the SCM Agreemen t. Concerning the analytical elements for a\nvalid finding of de jure specificity, China's claim raises both how the limitation of access to a subsidy\nmust be structured, and the meaning of the term \"certain enterprises\".\n\n288 Australia third-party submission, paras. 26-30 and 32; third-party response to Panel questions 10\nand 11.\n289 European Communities third-party submission, paras. 41-44; third-party response to Panel questions\n10 and 11.\n290 Saudi Arabia third-party response to Panel questions 10 and 11.\n\n(a) Interpretation of Article 2.1 of the SCM Agreement\n9.20 We start by considering the text of Article 2.1 of the SCM Agreement:\n\"Article 2\n\nSpecificity\n\n2.1 In order to determine whether a s ubsidy, as defined in paragraph 1 of\nArticle 1, is specific to an enterprise or industry or group of enterprises or industries\n(referred to in this Agreement as \"certain en terprises\") within the jurisdiction of the\ngranting authority, the following principles shall apply:\n(a) Where the granting authority, or the legislation pursuant to\nwhich the granting authority opera tes, explicitly limits access to a\nsubsidy to certain enterprises, such subsidy shall be specific.\n(b) Where the granting authority, or the legislation pursuant to\nwhich the granting authority operates, establishes objective criteria or\nconditions2 governing the eligibility for, and the amount of, a\nsubsidy, specificity shall not exist, provided that the eligibility is\nautomatic and that such criteria and conditions are strictly adhered to.\nThe criteria or conditions must be clearly spelled out in law,\nregulation, or other official document, so as to be capable of\nverification.\n(c) If, notwithstanding any appearance of non-specificity\nresulting from the application of the principles laid down in\nsubparagraphs (a) and (b), there are reasons to believe that the\nsubsidy may in fact be specific, other factors may be considered.\nSuch factors are: use of a subsidy programme by a limited number of\ncertain enterprises, predominant use by certain enterprises, the\ngranting of disproportionately large amounts of subsidy to certain\nenterprises, and the manner in which discretion has been exercised by\nthe granting authority in the decision to grant a subsidy.\n3 In applying\nthis subparagraph, account sha ll be taken of the extent of\ndiversification of economic activiti es within the jurisdiction of the\ngranting authority, as well as of the length of time during which the\nsubsidy programme has been in operation\".\n\ndiscipline trade-distorting subsidies. In partic ular, the specificity provisions establish that the\nsubsidies deemed under the Agreement to be potentially trade distortive are those that are targeted in\nsome way to particular beneficiaries, rather than being broadly available throughout the economy of a\nMember. In other words, the specificity requirement is not about the existence of a subsidy, which is\ndealt with in Article 1.1, but rather about access thereto. Article 2 of the SCM Agreement makes\nclear that specificity can take a number of different forms (enterprise, industry, regional, as well as\ndeemed specificity in the case of prohibited subsid ies), and that the superficial appearance of non-\nspecificity is not sufficient for a subsidy to avoid coverage by the SCM Agreement. In short, the issue\nunder Article 2 of the Agreement is the limitation, on some basis, of access to the subsidy. Subsidies\nto which access is limited in any of the ways referred to in that provision are specific and thus covered\nby the SCM Agreement.\n9.22 Furthermore, the limitation can be \"explicit\" (commonly referred to as \" de jure \") as per\nArticle 2.1(a), or can be determined on the basi s of how, in practice, an apparently non-specific\nsubsidy is allocated (commonly referred to as \"de facto\") as per Article 2.1(c) of the SCM Agreement.\nIn this regard, we note the balance struck in Ar ticle 2 of the SCM Agreement – a subsidy to which\naccess is automatic based on neutral, horizontally-a pplicable economic criteria is not specific, and\nthus falls outside the scope of the SCM Agreemen t, but the appearance of non-specificity can be\noverridden by the facts of how the subsidy is allocate d in practice. We thus must guard against both\nan overly-broad reading of the specificity requireme nt which would sweep within the coverage of the\nSCM Agreement non-specific subsidies, and an overly-rigid or restrictive reading which would\nsubvert the purpose of the specificity requirement , and thus undermine the effectiveness of the SCM\nAgreement.\n9.23 In the provision at issue, Article 2.1(a) of the SCM Agreement, the text requires, and the\nparties do not dispute, that the limitation in questio n must be explicit. Where the parties disagree is\nwith respect to how that explicit limitation must be st ructured for a measure to fall within the scope of\nArticle 2.1(a) of the SCM Agreement.\n9.24 We recall that the text of Article 2.1(a) of the SCM Agreement establishes two bases on\nwhich de jure specificity can be established: either the granting authority, or the legislation pursuant\nto which it operates, \"explicitly limits access to a subs idy to certain enterprises\". We recall that the\nfirst element of the test advanced by China is th at the granting authority, or the legislation setting\nforth the measure in question, must identify or sp ecify the elements of a subsidy, i.e., financial\ncontribution and benefit. We understand that China bases th is contention on the words \"explicitly\"\nand \"subsidy\" in Article 2.1(a), i.e., that the grantin g authority, or the legislation pursuant to which it\noperates, must explicitly limit access to a subsidy. For China, this means that if the granting authority\nor the legislation in question does not explicitly set forth both the financial contribution and the\nbenefit elements, the measure cannot be a de jure specific subsidy.\n291 (China does not rule out that\nsuch a measure could, in particular instances, be a de facto specific subsidy).292\n9.25 The first issue raised by this claim is whethe r, to explicitly limit access to a subsidy, a\ngranting authority or a legislation must specify al l of the elements of a subsidy, i.e., financial\ncontribution and benefit. As noted, for China, this is first and foremost a textual question following\nfrom the definition of \"subsidy\" in Article 1 of th e SCM Agreement, i.e., that the use of the word\n\"subsidy\" in Article 2.1(a) requires that both the financial contribution and the benefit be explicitly\n\n291 For instance, in response to a question from the Panel, China states: \"[T]he necessary consequence\nof the use of the defined term 'subsidy' in Article 2 of the SCM Agreement is that the investigating authority\nmust find that the subsidy is 'explicitly li mited' [...] It is [ ] inadequate, as a matter of law, for an investigating\nauthority to find that only a financial contribution or a benefit is de jure specific\". (China response to Panel\nquestion 55 (first meeting)).\n292 Id.\n\nidentified by the granting authority or the law. A nother way to look at this issue, however, is from a\nfunctional standpoint. That is, f unctionally, could a granting authority or a legislation explicitly limit\naccess to a \"subsidy\" without identifying both the financial contribution and the benefit flowing\ntherefrom? Or put another way, would the only way for a granting authority or a legislation to\nexplicitly limit access to a subsidy be to explicitly identify both th e financial contribution and the\nbenefit, and explicitly limit access to both?\n9.26 We consider that there are many ways in which access to a subsidy could be explicitly\nlimited, and we do not see that both the financial co ntribution and the benefit necessarily would have\nto be set forth explicitly to effect such a limitation. In particular, if access is explicitly limited to a\nparticular type of financial cont ribution, which sometimes but not always gives rise to benefits, the\nparticular cases in which the benefits existed would be de jure specific subsidies. This is because the\nexplicit limitation of access to the financial contribu tion would have the effect of also limiting any\nbenefits resulting from the financial contribution, w ithout the limitation of access to the benefits itself\nneeding to be explicit. Similarly, access could be e xplicitly limited to a par ticular set of benefits\nwithout the access to the underlying financial contribu tions also needing to be explicitly limited, and\nagain, in our view, the access to the \"subsidy\", th e combination of the financial contribution and the\nbenefit, would be explicitly limited.\n9.27 Hypothetical examples help to illustrate this point. Suppose that a law established a\ngovernment credit facility exclusively for the cardbo ard box industry, but was silent concerning the\nterms and conditions on which the financing was to be provided. In this example, it is clear that while\naccess to the financial contribution would be explicitl y limited to a particular industry, there would be\nno explicit limitation of any benefits that might aris e therefrom. Suppose that some of the financing\nunder this facility were provided on be tter-than-market terms, i.e., that benefits were conferred. In\nthis scenario, because by law only the cardboard box industry could obtain any financial contributions\n(the loans) under the programme, any benefits flowi ng therefrom necessarily also would be limited to\nthe cardboard box industry, meaning that any subsidies under this programme would be de jure\nspecific to that industry. Alternatively, suppo se that a law established a government credit facility\naccessible to all enterprises in all industries, and further provided that companies in the cardboard box\nindustry (and only that industry) would get loans unde r this facility on better-than-market terms. In\nthis second example, access to the financial contribu tion (the loans) would not be limited, but access\nto the benefits flowing therefrom would be – to a sing le industry. By virtue of this explicit limitation\non access to the benefits, this subsidy also would be de jure specific.\n9.28 We consider that a reading of Article 2.1( a) of the SCM Agreement that would require\nexplicit limitation of both the financial contribution and the benefit, such as China advocates, is not\nsupported by the text of that provision. In our view, it would limit de jure specificity to a single,\nnarrow set of circumstances, in which a single piece of legislation (or perhaps more than one formally\ninterrelated pieces of legislation) or some action by the granting authority, would explicitly set forth,\nin the form of a formal programme, the financial contribution and benefit elements (including the\nform they would take and how th ey would operate) and would then specify the particular eligible\nbeneficiaries (and possibly also would state explicitly that only those beneficiaries were eligible). We\ncannot agree with such a reading, which in our vi ew would exclude many situations in which access\nto a given subsidy was explicitly limited, by virtue of a limitation of access to either the financial\ncontribution or the benefit.\n9.29 We note that a wide variety of possible forms of subsidization falls within the definition in\nArticle 1 of the SCM Agreement, and we see not hing in Article 2 that would narrow down those\nforms, in a scenario of either de jure or de facto specificity. In this regard, Article 1.2 of the SCM\nAgreement treats the concepts of subsidy and specifi city as separate. In particular, that provision\nestablishes that subsidies in the sense of Article 1 are subject to the SCM Agreement only if they are\nspecific in the sense of Article 2. Indeed, financ ial contribution, benefit and specificity are three\n\nindependent and cumulative elements, all of which must be present for a measure to be covered by the\nSCM Agreement. Concerning financ ial contribution and benefit in th is regard, we recall the findings\nof the Appellate Body in Brazil – Aircraft, that these are independent concepts, both of which must be\npresent for a measure to be a subsidy in the sense of the SCM Agreement.\n293 Similarly, we agree with\nthe approach taken by the panels in EC – Countervailing Measures on DRAM Chips, US –\nCountervailing Duty Investigation on DRAMS, and Korea – Commercial Vessels , all of which\nanalyzed the question of specificity separately from financial contributi on and benefit. In EC –\nCountervailing Measures on DRAM Chips , the panel overturned some of the European Communities'\ndeterminations as to the existence of financial c ontributions and the amounts of benefits pursuant to\nthe measures at issue, but nevertheless as a sep arate matter considered, and upheld, the European\nCommunities' specificity finding in respect of the measures as a whole. 294 The US – Countervailing\nDuty Investigation on DRAMS panel followed the same approach , affirming the investigating\nauthority's finding of de jure specificity of the measures at issue while overturning some of the\ninvestigating authority's findings of financial contribution and benefit. 295 The panel in Korea –\nCommercial Vessels likewise separately evaluated the existence of specificity of the measures before\nit from the questions of financial contribution and benefit.296\n9.30 While ultimately all three elements (financial c ontribution, benefit and specificity) must be\npresent for a given measure to be covered by th e SCM Agreement, a formalistic reading of the\nspecificity provisions as implying a particular conjunc tion of these elements, or a particular order of\nanalysis, might have the effect of omitting from coverage measures which viewed in their entirety\nhave all three necessary elements to be covered by the SCM Agreement. As we noted above, in the\nparticular case of de jure specificity, to require that a given legislation or granting authority lay out all\nelements of a specific subsidy, explicitly lim iting access to both the financial contribution and the\nbenefit, would have the effect of treating as non- de jure specific a wide variety of subsidies to which\naccess was explicitly limited. This would mean th at the only basis on which specificity could be\nfound for such subsidies would be on a de facto basis, a fact-intensive, case-by-case inquiry that\nwould be both illogical and entir ely superfluous under the described scenarios where an explicit\nlimitation of access to a subsidy existed. Furtherm ore, where the details as to the actual distribution\nof the subsidy could not be obtained, the subsid y would be left outside the scope of the SCM\nAgreement in spite of its undeniably being explicitly lim ited to particular beneficiaries. We consider\nthat such a reading would frustrate the purpose of the specificity provisions, and would open\nconsiderable scope for circumvention of the SCM Ag reement, based on a distinction in form but not\nsubstance.\n9.31 By the same token, we see no potential that being able to establish de jure specificity on the\nbasis of an explicit limitation of access either to a financial contribution or to a set of benefits could\nimproperly bring within the scope of the SCM Ag reement measures that in fact are not specific\nsubsidies. In whatever order the analysis is c onducted, and regardless of whether access is explicitly\nlimited in respect of the financial contribution or th e benefit or both, the three elements of financial\ncontribution, benefit and explic it limitation of access would be present, and the measure thus would\nbe a de jure specific subsidy and hence covered by the SCM Agreement.\n9.32 For the same reasons, we disagree with the third pa rt of China's three-part test, i.e., that the\nspecific transaction under investigation must be an inst ance of the subsidy that the legislation defines.\nWe consider that this is largely a restatement of China's argument that the de jure specificity provision\n\n293 Appellate Body Report on Brazil – Aircraft, para. 157.\n294 Panel Report on EC – Countervailing Measures on DRAM Chips , paras. 7.110, 7.186, 7.215 and\n7.230-7.232.\n295 Panel Report on US – Countervailing Duty Investigation on DRAMS , paras. 7.206-7.208. See also\nJapan – DRAMs (Korea), paras. 7.253-7-254, 7-316, 7-361 and 7.375.\n296 Panel Report on Korea – Commercial Vessels, para. 7.192.\n\nrequires the granting authority or the relevant legi slation to identify both the financial contribution\nand the benefit. We see no limitation in the text to such a specific scenario, and thus no such\nrequirement. Again, we note that subsidies can take many forms and can be provided through many\ndifferent kinds of mechanisms, some more and some less explicit. Of course, where a countervailing\nmeasure is applied in respect of de jure specific subsidies, the limitation to \"certain enterprises\" must\nbe explicit, but again we consider that the limitatio n to those recipients could be in respect of the\nfinancial contribution, or the benefit, or both. Furthermore, for the application of a countervailing\nmeasure, there must be evidence that the subsidy that has been provided and is being countervailed is\nthe subsidy that has been found to be specific, but this would be the case for any sort of specific\nsubsidy, not just a de jure specific subsidy.\n(ii) \"Certain enterprises\"\n9.33 China's claim also raises the meaning of the term \"certain enterprises\" in Article 2.1 of the\nSCM Agreement. In particular, the second element of China's three-part test is that the legislation\npursuant to which the subsidy is provided must cl early provide that the subsidy (the financial\ncontribution and benefit) is only available to \"certa in enterprises\" to the exclusion of other \"certain\nenterprises\". We understand that what China is em phasizing in this element is the explicit limitation\nto \"certain enterprises\". While Article 2.1(a) of the SCM Agreement requires such an explicit\nlimitation, that provision does not address the related but separate question of the breadth or\nnarrowness of the term \"certain enterprises\".\n9.34 The relevant text of Article 2.1 of the SCM Agreement reads:\n\"In order to determine whether a subsidy [...] is specific to an enterprise or industry or group\nof enterprises or industries (referred to in th is Agreement as \"certain enterprises\"), the\nfollowing principles shall apply:\"\n9.35 Concerning the meaning of the term \"certain enterprises\", China cites with approval the\nstatement of the panel in US – Upland Cotton that:\n\"'[a]t some point that is not made precise in the text of the agreement, and which may\nmodulate according to the particular circumstances of a given case, a subsidy would\ncease to be specific because it is sufficiently broadly available throughout an\neconomy as not to benefit a particular limited group of producers of certain\nproducts'\".\n297 (emphasis added by China)\nChina argues on the basis of this statement that \"a 'group of enterprises or industries' within the\nmeaning of Article 2 of the SCM Agreement must be 'sufficiently discrete' so that the 'group of\nenterprises or industries' represents no more than a 'limited group of producers of certain products'\".298\nChina acknowledges that there is a certain amount of \"indeterminacy\" in the concept of specificity,\nbut argues that the \"539 'encouraged' industries in China spanning 26 broad sectors of economic\nactivity\" identified in the GOC Catalogue ( one of the documents on which the USDOC's de jure\nspecificity determination was based), are too br oad to be \"specific\" for purposes of the SCM\nAgreement.299\n\n9.36 We see China's argument as pointing to two different elements of the availability of a subsidy:\nthe diversity of the recipients, and the breadth of av ailability of the subsidy. Concerning diversity, we\n\n297 China response to Panel question 56 (first meeting), citing to Panel Report on US – Upland Cotton,\npara. 7.1142.\n298 Id.\n299 China response to Panel question 54 (first meeting).\n\nunderstand China's argument to mean that the sheer diversity of the \"encouraged\" projects or\nindustries, and of the economic sectors from which they come, as identified in the documents relied\non by the USDOC, is too great to support a finding of specificity.\n9.37 Starting with the text of the definition of \"certain enterprises\" we see nothing that addresses\nthe question of diversity of the \"certain enterprises\" . The text simply says that \"certain enterprises\"\ncan be single enterprises or industries, or groups th ereof, but in our view does not imply that there\nneeds to be any similarity among them in order fo r them to constitute \"cer tain enterprises\". If\nanything, the context suggests the contrary. Article 2.1(b) of the SCM Agreement, on non-specificity,\nemphasizes entirely other factors, namely the non-sel ectivity of the eligibility criteria (economic in\nnature and horizontal in application) and the automaticity of eligibility, which speak to broad\navailability. Article 2.1(c), on de facto specificity, suggests that an apparently non-specific subsidy\nmight be confirmed as non-specific even if the facts concerning its actual distribution show that it is\nbeing used by a narrow range of enterprises, agai n emphasizing the breadth of availability of a\nsubsidy throughout an economy. In particular, th is provision cautions that in examining whether de\nfacto specificity exists based on patterns of usage, \"account shall be taken of the extent of\ndiversification of economic activities within the juri sdiction of the granting authority\". This suggests\nthat where the extent of the underlying economic divers ification is low, lack of diversification in the\ndistribution of benefits would not by itself give rise to a finding of de facto specificity. We note that\nthe panel in US – Upland Cotton based its analysis of specificity on how broadly available a subsidy\nis throughout an economy, and that the panel in US – Softwood Lumber IV found that specificity has\nto do with subsidies that, either in law or in fact, \"[are] not broadly available\".\n300 We consider the\nbreadth of availability of a given subsidy in an ec onomy to be a fundamentally different concept from\nthe diversity of activities of the subsidy's recipients.\n9.38 For these reasons, we do not consider that the sheer diversity of economic activities supported\nby a given subsidy is sufficient by itself to preclude that subsidy from being specific, and we do not\nread US – Upland Cotton as standing for such a proposition. To the contrary, the main emphasis of\nthe panel in US – Upland Cotton was on the case-by-case nature of the analysis of the breadth of\navailability of a subsidy in the context of a specificity finding 301, and we consider that if anything the\npanel was cautioning against interpreting the concept of specificity too narrowly. For example, the\npanel emphasized that the SCM Agreement, as an ag reement covering trade in goods, is applicable to\nall goods, and that the concept of specificity must be understood from that perspective.302 We note as\nwell in this context that the US – Upland Cotton panel found that a particular subsidy programme\nbenefiting some 100 different agricultural commodities (crops as well as livestock) was a \"sufficiently\ndiscrete\" segment of the United States economy to qualify as specific for purposes of the SCM\nAgreement.\n303 We take these as indications that that pane l did not consider the economic diversity of\nbeneficiaries, by itself, necessarily to bar a finding of specificity.\n\n300 Panel Report on US – Upland Cotton , paras. 7.1142-7.1152; and Panel Report on US – Softwood\nLumber IV, para. 7.116.\n301 In this regard, we agree with the US – Upland Cotton panel that: \"The plain words of Article 2.1\nindicate that specificity is a general concept, and the breadth or narrowness of specificity is not susceptible to\nrigid quantitative definition. Whether a subsidy is specific can only be assessed on a case-by-case basis\".\n(Panel Report on US – Upland Cotton, para. 7.1142).\n302 The panel specifically stated that: \"the concept of specificity in Article 2 of the SCM Agreement is\ngermane to the disciplines imposed by the SCM Agreement. The SCM Agreement is an agreement on trade in\ngoods, in Annex 1A of the WTO Agreement. By its own terms, subject to considerations reflected in the text of\nsome of its provisions, it applies in respect of all goods. The concept of specific ity must be considered within\nthe legal framework and frame of reference of that agreement as a whole\". (e mphasis original) (Id.,\npara. 7.1144). The panel noted in this connection that the Agreement on Agriculture contains no specificity\nrequirement. (Id., footnote 1274).\n303 Id., paras. 7.1150-7.1151.\n\n9.39 Indeed, we can imagine many examples of subs idies that could be specific in spite of\nbenefiting very diverse recipients. For instance, a subsidy might be limited to producers of oranges,\nproducers of dental implants, producers of comput ers, producers of scuba diving equipment, and\nproducers of certain parts for the space shuttle. Th ere is no question that these are extremely diverse\nindustries – their products are essentially totally unr elated, and come from five very different sectors\nof the economy. Or a subsidy might be explicitly limited to one pa rticular company in each of 200\ndistinct and unrelated industries or sectors. Again, there would be no question that the recipients were\neconomically very diverse. Yet, (subject to the comp lete facts of the case), we consider that each of\nthese subsidies could easily be specific, given its availability to only that particular \"group of\nenterprises or industries\".\n9.40 Thus, as a matter of legal interpretation, we do not consider that economic diversity of\nsubsidy recipients, by itself, is sufficient to prevent a subsidy from being de jure specific.\n9.41 The second element of China's argument has to do with the breadth of availability of a\nsubsidy which, as noted, is the question addressed by the US – Upland Cotton panel. We agree with\nthat panel that the dividing line between a subsidy to which access is limited enough to be specific, as\nopposed to broadly enough available throughout an economy to be non-specific, is not precisely\ndefined in the SCM Agreement and can only be dete rmined on a case-by-case basis. We therefore\nconsider this question infra, in our analysis of the details of the USDOC's determination of de jure\nspecificity in respect of lending by SOCBs to the OTR tire industry.\n9.42 We note, finally, that China also argues in regard to \"certain enterprises\" that \"the legislation\nmust provide that the relevant subsidy [...] is only av ailable to 'certain enterprises', to the exclusion of\nother 'certain enterprises'\".304 China does not make clear whether it is suggesting that Article 2.1(a) of\nthe SCM Agreement requires the granting authority or the legislation to identify explicitly both the\n\"certain enterprises\" that are and the \"certain enterpri ses\" that are not eligible for the subsidy. To the\nextent that China is making this argument, we fi nd no such requirement in Article 2.1(a) of the SCM\nAgreement.\n9.43 To recall, the provision states that for de jure specificity to exist, the granting authority or the\nlegislation must explicitly limit access to certain recipients, i.e., it must in some manner identify or\ndefine the eligible or affected enterprises, and th ese enterprises must be \"cer tain enterprises\" in the\nsense of Article 2.1(a) of the SCM Agreement. We see no requirement that in addition, the legislation\nmust explicitly exclude from access the other \"certain enterprises\" that are not eligible.\n(b) USDOC de jure specificity determination\n9.44 In the light of the foregoing considerations as to the interpretation of Article 2 of the SCM\nAgreement, we now take up China's arguments concerning the USDOC's determination that SOCB\nlending to the OTR tire industry was de jure specific. In particular, we examine whether the USDOC\nprovided a \"reasoned and adequate\" explanation as to: (i) how the evidence on the record supported its\nfactual findings; and (ii) how those factua l findings supported its determination of de jure\nspecificity.305\n9.45 In the OTR investigation, the USDOC determined that China provided subsidies in the form\nof preferential lending by SOCBs (referred to by the USDOC as \"policy lending\" 306) to the tire\n\n305 Appellate Body Report on US – Countervailing Duty Investigation on DRAMS, para. 186.\n306 China contests this term, arguing that there is no programme known as \"policy lending\" by SOCBs\nin China, and that to the contrary, the SOCBs are commercial banks operating on a commercial basis. (See, e.g.,\nChina first written submission, paras. 155 and 165).\n\nindustry, in particular to two companies, GTC and Starbright.\n307 It determined that these subsidies\nwere de jure specific on the basis that relevant Chinese laws, plans and policies explicitly limited\naccess to such \"policy lending\" by SOCBs to a group of industries that included the OTR tires\nindustry.\n9.46 We turn to an assessment of this determinati on in the light of our interpretation, above, of\nArticle 2.1(a) of the SCM Agreement regarding de jure specificity. In particular, we understand that\nthe USDOC based this determination on a finding that a number of central, provincial and municipal\ngovernment planning documents provided for th e development of the OTR tire industry, inter alia,\nthrough the provision of loan financing by SOCBs (i.e., government financial contributions) to the tire\nproducers, in some instances identified by name. The USDOC's benefit determination in respect of\nthis lending was made in a separate part of its de termination, not on the basis of these planning\ndocuments. Given our interpretation of Article 2.1(a) , we find no legal error in this separate analysis\nof these two elements.\n9.47 The remaining question before us in respect of the USDOC's de jure specificity\ndetermination, therefore, is whether that determ ination is reasonably supported by the documents on\nwhich it was based. We must consider, in par ticular whether the evidence before the USDOC\nsupports its findings that the various planning do cuments identified \"certain enterprises\", which\nincluded the OTR tires industry, for development, inter alia, through the provision of loan financing,\nand whether documents on the record also support the USDOC's finding that that SOCBs were acting\npursuant to the prescriptions of the planning documen ts when they provided loan financing to the\nOTR tire producers.\n9.48 Turning now to the USDOC's findings and the related record evidence, the USDOC found\nthat at the central government level the Govern ment of China's Five-Year Plans set the overall\neconomic policies for China, which policies then were implemented in de tail through subsidiary\ncentral government-level instruments (the Impl ementing Regulations, the GOC Catalogue, the SETC\nCircular). The USDOC further found that the provi ncial and local governments implemented at their\nrespective levels these national plans and policies. 308 The USDOC stated, inter alia, that the record\nindicated that GTC had been a \"key target for economic development by Guizhou province and\nGuiyang municipality\", citing specific references to GTC in their respective provincial and municipal\nfive-year plans, and indicating that the plans also st ated that lending should be allocated according to\nthe plans, and that record evid ence showed that GTC had received numerous project development\nloans from SOCBs. 309 Summarizing its view of how these policies at the various levels of\ngovernment were related, the USDOC found that \"cen tral level plans should be considered a central\ngovernment policy or programme that local govern ments adopt and implement through their own\nfive-year plans\".310\n9.49 Via this statement, we consider that the US DOC made a finding that the \"policy lending\nprogramme\" was a central-government programme, i. e., a programme designed and mandated at the\ncentral government level, and that this central-level policy then was implemented at the provincial and\nmunicipal levels. This is significant as it defines th e level of analysis for our review of the USDOC's\ndetermination. Thus our first a nd principal task is to analyze wh ether the central government-level\nplanning documents could support the USDOC's finding of de jure specificity. Put another way,\ngiven the USDOC's determination that the programme is a central level programme, we must analyze\n\n307 The USDOC found that a third co mpany, TUTRIC, had received debt forgiveness with respect to\ncertain of its outstanding loans, and the USDOC therefore did not calculate a benefit for this company in respect\nof government policy lending. (Exhibit CHI-4, footnote 16).\n308 Exhibit CHI-4, pp.13 and 98.\n309 Id., p. 112.\n310 Id., pp. 13-14.\n\nits specificity determination at the same level. If we were to find that the specificity determination\nwas not supported by the central government-level planning documents, such that the programme was\nnon-specific, then provincial and/or municipal-leve l evidence of specific instances of implementation\nof the central-level programme (even if they refe rred explicitly to particular industries and/or\nenterprises) could not override the programme's non-specificity. We thus begin our analysis by\nreviewing the USDOC's findings in respect of the central government-level planning documents.\n9.50 Here, we recall that specificity is an issue in respect of which an investigating authority has\naffirmative obligations under the SCM Agreement, even without any party raising arguments during\nan investigation. We also recall that pursu ant to Article 2.4 of the SCM Agreement, any\ndetermination of specificity must be \"clearly substantiated on the basis of positive evidence\".\n311 We\nthus cannot reach a conclusion on China's claim unde r Article 2.1(a) without considering in some\ndetail the evidence relied upon, and the conclusions drawn therefrom, by the USDOC, as well as the\narguments raised both during the investigation and be fore us concerning that evidence. In conducting\nthis analysis, we are conscious of the need to avoid a de novo review of the evidence, but we are\nequally mindful of the Appellate Body's admoniti on that it is the duty of a panel reviewing an\ninvestigating authority's determination to conduct a \"critical and searching\" examination, based on the\ninformation contained in the record and the expl anations given by the authority in its published\nreport.312 We also recall the Appellate Body's finding that it is not necessary for an authority\nconducting a countervailing duty inves tigation to cite or discuss every piece of supporting record\nevidence for each fact in the final determination.313 By the same reasoning, we consider a fortiori that\nwhere a given piece of evidence forms an explicit part of a finding by an investigating authority, it can\nbe presumed that that evidence has been fully examined even if the discussion in the determination is\nlimited to certain of its aspects.\n9.51 These are admittedly fine lines, which can only be drawn on a case-by-case basis. In this\ncase, we consider that the most appropriate way to approach our consideration of the various planning\ndocuments referred to in the USDOC's specificity determination is to examine them both on their own\nterms and in the light of the USDOC's actual dete rmination, with a view to seeing whether they\nconstitute positive evidence on the basis of which a reasonable and objective administering authority\ncould have found that these documents describe a \"s ufficiently discrete segment of the economy\" (in\nthe words of the US – Upland Cotton panel) as to support a finding of de jure specificity in respect of\nany subsidies provided thereunder to that segment of the economy.\n9.52 Finally, we note that by its own terms, the US DOC's specificity determination in respect of\nSOCB lending to the OTR tire industry was ba sed on the \"totality\" of the evidence. 314 In this regard,\nwe recall the Appellate Body's ruling that a panel re viewing a determination on a particular issue that\nis based on the \"totality\" of the evidence relevant to that issue must conduct its review on the same\nbasis. In particular, the Appellate Body held th at if an investigating authority relies on individual\npieces of circumstantial evidence viewed together as support for a finding, a panel reviewing such a\ndetermination normally should consid er that evidence in its totali ty in order to assess its probative\nvalue with respect to the agency's determination, rather than assessing whether each piece on its own\nwould be sufficient to support that determination. Furthermore, to examine the evidence in the light\nof the investigating authority's methodology, a pa nel's analysis usually should seek to review the\nagency's decision on its own terms, in partic ular, by identifying the inference drawn by the agency\nfrom the evidence, and then by considering whether the evidence could sustain that inference. In\n\n311 We note that although China refers to Article 2.4 of the SCM Agreement in its arguments, it makes\nno claim pursuant to that provision. Nonetheless, the standard in Article 2.4 must guide our evaluation of the\nUSDOC's findings of specificity.\n312 Appellate Body Report on US – Softwood Lumber VI (Article 21.5 – Canada), para. 93.\n313 Appellate Body Report on US – Countervailing Duty Investigation on DRAMS, para. 164.\n314 See para. 9.80, infra.\n\nparticular, where a piece of evidence led the investig ating authority to an intermediate inference, the\npanel should examine whether that evidence supports th at intermediate inference, rather than whether\nthat evidence could directly lead to the ultimate conclusion arrived at on the basis of the totality of the\nevidence.315 We will follow this approach in reviewing the USDOC's de jure specificity finding in\nrespect of SOCB lending to the OTR tire industry.\n(i) Central Government planning documents\n9.53 At the central government level, the USDOC de termined that through a number of related\nplanning documents the Government of China enc ouraged the tire industry. The USDOC noted in\nparticular that: (i) the 11 th Five-Year Plan of the Government of China (the \"GOC 11 th Five-Year\nPlan\") provided for increasing the development of important spare parts for the automobile\nindustry316; (ii) the GOC Catalogue identified the \"production of advanced belt tires\" as an \"an\nencouraged national project\" 317; (iii) the \"Implementing Regulation\" 318 identified the GOC Catalogue\nas the \"'important basis for funding investments directions, etc.'\" 319; and (iv) the \"SETC Circular\n716\"320 under the 10 th Five-Year Plan identified the production of \"meridian tyres\" as a national\npriority and required that the contribution of public funds be reasonably directed in order to guarantee\nthe realization of the target under the plan. 321 In reviewing this determination, we examine in some\ndetail the documents cited by the USDOC in the light of its determination, with a view to seeing\nwhether those documents support the inferences, and the ultimate conclusion, drawn from them by the\nUSDOC.\n(1) The GOC 11 th Five-Year Plan322 (2006-2010)\n9.54 The USDOC determined that in general, under its 11 th Five-Year Plan covering 2006-2010,\nthe central government of China set goals regarding macroeconomic policies. In this regard, the\nUSDOC quotes a questionnaire response of the Govern ment of China as indicating that the plans\n\"'provide a vision for economic development, market and regulatory activities, social administration\nand the provision of public services\". 323 Concerning the GOC 11 th Five-Year Plan in particular, the\nUSDOC found that it calls for \"increasing the development of important spare parts for the\nautomobile industry\".324\n9.55 We note that in its own words, the stated purpose of the GOC 11 th Five-Year Plan is \"to\nclarify the national strategic intention, define th e key emphasis in the government work and guide the\n\n315 Appellate Body Report on US – Countervailing Duty Investigation on DRAMS, paras. 150-151;\nAppellate Body Report on US – Softwood Lumber VI (Article 21.5 – Canada), para. 94.\n316 The USDOC identifies the GOC 11 th Five-Year Plan as the source document for this statement.\n(Exhibit CHI-4, p. 13). We understand that this is the same document as that identified by China as the\n\"Guidelines of the 11 th Five-Year Plan for Economic and Social Development\" in Exhibit CHI-69 (p. 3) on the\nExamination of the Measures identified by Commerce in the OTR Final Determination as the Basis for its\nFinding of De Jure Specificity in Respect of the Alleged \"Policy Lending\" Programme . The full text of the\n\"Guidelines of the 11th Five-Year Plan for Economic and Social Development\" is contained in Exhibit CHI-71.\n317 Exhibit CHI-4, p. 13. The GOC Catalogue, as provided by the parties, is contained in Exhibits CHI-\n70 and US-86.\n318 The Decision of the State Council on Promulgating the \"Interim Provisions on Promoting Industrial\nStructure Adjustment\" for Implementation (the \"Implementing Regulation\"), Exhibit US-87.\n319 Exhibit CHI-4, p. 13.\n320 The Circular of the State Economy and Trade Commission on the Promulgation of the Guidance of\nRecent Development in the Industrial Sector (2002) (the \"SETC Circular 716\"), Exhibit US-83.\n321 Exhibit CHI-4, p. 13.\n322 Exhibit CHI-71.\n323 Exhibit CHI-4, pp. 13 and 98.\n324 Id., p. 13.\n\nbehaviour of market subject\".325 Given that it constitutes the guidance for the economy as a whole, its\nscope clearly is very broad. In particular, the GOC 11 th Five-Year Plan contains 14 Parts and 48\nChapters. The Parts refer in general terms to: Guiding Principles and Development Objectives,\nConstruction of Social Villages, Industrial Struct ure Optimization and Upgrading, Service Industry,\nRegional Development, Resource Efficiency and E nvironment, Science and Education, Structural\nReform, Trade and Foreign Investment, Constructi on of Socialist Society, National Defence, and\nMechanism for Implementation. 326 That said, particular industries and sectors are mentioned\nexplicitly as priorities for development. One of these industries is the automobile industry: in\nChapter 11, \"Vigorously Develop Equipment Manuf acturing Industry\", Section 2 is devoted to\n\"Promote Automobile Industry Level\" and calls fo r \"accelerat[ion of] the development of automobile\nengine, automobile electronics, key assemblies and parts and components with independent\nintellectual property rights\". (emphasis added) Th is section also \"encourage[s] the development and\nuse of energy saving and environmental protection and new type fuel automobiles\". 327 In addition, in\nChapter 19, \"Implement the Overall Regional Devel opment Strategy\", both Section 2 (\"Boom the Old\nIndustrial Bases such as Northeast Region\") and Section 3 (\"Promote the Grow-Up of Central\nRegion\") refer to the automobile industry among the industries to be promoted/supported. 328 Given\nthese references, we consider that this document supports the USDOC's conclusion that this document\nidentified automobile spare parts as a target for development.\n(2) The Implementing Regulation of the 11 th Five-Year Plan329\n9.56 The Implementing Regulation, in its own wo rds, sets forth implementing provisions \"to\nachieve the objective of the Eleventh Five-Year planning\" (2006-2010) and to \"propel the industrial\nstructure adjustment\" (among other goals).330 According to the USDOC, this Regulation identifies the\nGOC Catalogue as the \"'important basis for funding investments directions, etc.'\".331\n9.57 The Implementing Regulation provides that:\n\"[t]he people's governments of all provin ces, autonomous regions and municipalities\ndirectly under the Central Government [...] shall, in accordance with the [Regulation]\nand in light of the local situation on industrial development, formulate specific\nmeasures, rationally guide the investment directions, encourage and support the\ndevelopment of advanced production capac ities, restrict and eliminate outdated\nproduction capacities, prevent blind i nvestments and low-level redundant\nconstruction, and effectively propel indust rial structure optimization and upgrading.\nAll relevant administrative departme nts shall speed up the formulation and\namendment of policies of public finance, taxation, credit, land, import and export,\netc., effectively intensify the coordination and cooperation with industrial policies,\nand further improve and promote the policy system on industrial structure\nadjustment\".332\n\n325 Exhibit CHI-71, p. 1.\n326 Id.\n327 Exhibit CHI-71, pp. 13-14. Chapter 11, Section 2 appears in Part 3 of the Guidelines, entitled \"Push\nForward Industrial Structure Optimization and Upgrading\". (Id., p. 12).\n328 Id., p. 23.\n329 Exhibits CHI-4, p. 13; and US-87.\n330 Exhibit US-87, p. 5.\n331 Exhibit CHI-4, pp. 13. The text of the Implementing Regulation cited in the USDOC's\ndetermination refers to \"guiding\" rather than \"funding\" investment directions (Exhibit USA-87, p. 11).\n332 Exhibit US-87, p. 5.\n\n9.58 As indicated in the USDOC's determination, the Implementing Regulation states that the\nGOC Catalogue constitutes the \"important basis for guiding investment directions\".\n333 It also\nindicates that the GOC Catalogue is the important basis \"for the [sub-central] governments to\nadminister investment projects, to formulate and enforce policies on public finance [...] credit [...]\nimport and export, etc.\".334\n9.59 Of particular relevance to the present dispute, the Implementing Regulation further describes\nthe functions of the industry categories referred to in the GOC Catalogue (discussed in the next\nsection) as follows:\n• Encouraged category: The Regulation describes this category as covering investment projects\nthat are to be encouraged and supported with policies and measures. The Regulation further\nindicates that the category mainly includes ke y technologies, equipment, and products with\nimportant functions of economic and social development, resource saving, environmental\nprotection, and industrial structure optimizati on and upgrading, and states that investment\nprojects within this category must be examined , approved, ratified or archived according to\nthe relevant provisions of the state on investment administration. In addition, it indicates that\n\"all financial institutions are required to provi de credit supports in compliance with economic\nprinciples\". Furthermore, it provides that equi pment imported in connection with encouraged\nprojects shall be exempted from customs duties and import value added tax.\n\n• Restricted category : The Regulation describes this category as covering production\ncapacities, techniques, equipment and products w ith outdated techniques that do not meet the\nconditions for industry access, are unconducive to industrial structure optimization and\nupgrading, and thus need to be transformed or prohibited from being newly built. The\nRegulation prohibits investments in projects in this category, and provides that no financial\ninstitution shall grant loans for such projects, and that no administrative departments, urban\nplanning, construction, customs, etc. are permitte d to handle the procedures for such projects.\nViolations of any of these provisions are subject to penalties. The Regulation indicates that\nnevertheless, under certain circumstances, en terprises with existing production capacities in a\nrestricted industry can be allowed to transf orm or upgrade themselves, and that in those\ncircumstances, the financial institutions sha ll, in compliance with the credit principles,\ncontinue providing supports.\n\n• Eliminated category: The Regulation describes this category as covering outdated techniques,\nequipment and products that do not conform to the relevant laws and regulations, seriously\nwaste resources, pollute the environment, do no t meet work safety conditions, and need to be\neliminated. Not only are financial institutions required to stop providing any form of credits\nin support of such projects, but those institutions are instructed to take measures to recover\npreviously granted loans. Furthermore, the Regulation provides that all localities and\ndepartments \"shall take powerful measures\" to e liminate such projects, and that violations\nwill be subject to penalties.\n\n• Non-listed projects : Article 13 of the Regulation states that projects not belonging to the\nencouraged category, the restricted category or the eliminated category, but conforming to the\nrelevant laws, regulations and policies of the state, belong to the \"permitted\" category, and are\nnot listed in the catalogue.335\n\n333 Exhibit USA-87, p. 11.\n334 Exhibit US-87, p. 10.\n335 Exhibit US-87, pp. 5 and 10-12.\n\n9.60 In our view, the Implementing Regulation in its own words confirms the finding of the\nUSDOC that the function of the GOC Catalogue whic h it cross-references is to form the basis for\ninvestment direction by the various levels of government. It also appears from the mandatory\nwording of the Regulation, and its references to penalties for violati ng the restrictions on financing,\ninvestment, and business transactions relating to the categories, that the categories, and thus the GOC\nCatalogue elaborating the details thereof, are mandatory. We further note that the Regulation\nexplicitly provides that a principal function of the GOC Catalogue is the allo cation of loan financing\nby financial institutions – the categories are define d in large part in terms of whether funds are\nrequired to be provided, prohibited from being provided , and/or subject to recovery. In other words,\nthe Regulation indicates that the function of the GO C Catalogue is to provide the details on how the\ninvestment priorities in the central government plan are to be implemented by the lower levels of\ngovernment. We thus find the USDOC's character ization of the Implementing Regulation to be\nreasonable and supported by the record evidence.\n(3) The GOC Catalogue 336 (11th Five-Year Plan)\n9.61 This brings us to the GOC Catalogue itself. Be fore considering its contents in detail, it is\nimportant to place this document into its contex t among the various central government planning\ndocuments. In particular, we recall that the centr al government's five-year plan indicates certain\npriority industries and activities for investment, a nd that its Implementing Regulation both defines the\nencouraged, restricted and prohibited categories, and indicates that the GOC Catalogue contains the\nlist of the particular projects that fall within each of these categories. Thus, the GOC Catalogue – in\nparticular its encouraged category – identifies the universe of types of projects singled out as a matter\nof national policy for encouragement and investment. Thus, in our view, this document is the central\ndocument in the USDOC's specificity determination: our conclusion as to the de jure specificity\nfinding must necessarily hinge on whether the en couraged projects, taken as a whole, could\nreasonably be viewed as a sufficiently discrete segme nt of the economy as to constitute, collectively,\n\"certain enterprises\". If so, then we must con tinue our analysis by examining the remaining\ndocuments relied upon by the USDOC. If we find, by contrast, that the universe of encouraged\nprojects must be seen as so broad as to be non-specific, then our analysis necessarily would stop at\nthat point, as no further references to particular instances of funding pursuant to this category would\noverride the non-specificity of the programme as a whole.\n9.62 We recall that the USDOC in its determina tion cites the GOC Catalogue's listing as an\n\"encouraged national project\" of \"the production of advanced belt tir e radial, its supporting materials\nand equipment production\".\n337 We note in this regard that the Catalogue lists types of projects, and\nnot, for example, either whole industries or single enterprises.\n9.63 As discussed above in connection with the Implementing Regulation, the GOC Catalogue\nclassifies projects into three categories, \"encouraged\", \"restricted\" and \"to be abolished\", as follows:\n• Encouraged: 539 projects are listed, in the following 26 sectors: Agriculture and Forestry;\nIrrigation and Water Conservancy; Coal; Electric Power; Nuclear Energy; Petroleum and\nNatural Gas; Steel; Nonferrous Metals; Chemical Industry; Building Materials; Medicine;\nMachinery; Automobiles; Ships; Aerospace; Light Industry; Textile;\nArchitecture/Construction; City Infrastructure and Real Estate; Railway; Highway; Shipping;\nAir Transport; Information Industry; Othe r Service Industry; and Combination of\nEnvironmental Protection and Resources Savings. (As noted by the USDOC, the\n\n336 Exhibits CHI-70 and US-86. In this section, we rely principally on the version of the GOC\nCatalogue submitted by the United States (Exhibit US-86), as in many places in the version submitted by China\n(Exhibit CHI-70), the English translations are unintelligible.\n337 Exhibit CHI-4, p. 13.\n\n\"[p]roduction of advanced belt tyre radial, its supporting materials and equipment production\n\"\nis identified as an encouraged project within the Chemical Industry sector). 338 (emphasis\nadded)\n\n• Restricted: 190 projects are listed, in the following 17 sectors: Agriculture and Forestry;\nCoal; Electric Power; Pe troleum, Natural Gas and Chemical Industry; Information Industry;\nSteel; Non-ferrous Metals; Gold; Building Mate rials; Medicine; Machinery; Ships; Light\nIndustry; Textile; Tobacco; Fire Fighting Equipment; Other.\n• To be abolished: 399 projects (subdivided into \"Backward Production Technique Equipment\"\nand \"Backward Products\") are listed, in the fo llowing 17 sectors: Agriculture and Forestry;\nCoal; Electric Power; Petroleum, Natural G as and Chemical Industry; Steel; Nonferrous\nMetals; Gold; Building Materials, Medicine; M achinery; Railway, Light Industry; Textiles;\nPrinting; Fire Fighting; Other.339\n\n9.64 The record documents before us do not contain any indication that either the parties to the\ninvestigation or the USDOC engaged in detailed discussion of the GOC Catalogue, in particular\nconcerning the diversity or breadth of the \"encouraged\" projects listed therein, during the\ninvestigation.\n340 Rather, this point has only been raised before us.\n9.65 In the present dispute China's main argument a bout the GOC Catalogue is that, even if this\ndocument referred to all elements of a subsidy, its coverage is too broad to give rise to a finding of\nspecificity. China points in this regard to both th e diversity and the breadth of the sectors covered by\nthe \"encouraged\" category (\"26 broad categories sp anning virtually the entire range of economic\nactivity\").341 Concerning diversity, as discussed above, as a legal matter we are not persuaded that the\ndiversity of the listed sectors in the \"encouraged\" category by itself precludes a finding of de jure\nspecificity based on the GOC Catalogue.\n9.66 Concerning the breadth of the sectors referred to in the GOC Catalogue we note that, as China\nargues, the sectors or categories under which the en couraged projects are grouped do cover a wide\nswath of economic activity. Nonetheless, as a factual matter what is either \"encouraged\", \"restricted\",\nor \"to be abolished\" within a given sector pursuant to the GOC Catalogue is clearly not the entirety of\nthat sector. Indeed, there is considerable overlap in the sectors identified in the three respective\ncategories: twelve sectors appear in all three lists 342; and an additional five sectors appear in two of\nthe lists.343 Purely as a matter of logic, it would be impossible for a given sector, in its entirety, to be\n\n338 We note that the USDOC's determination refers to the \"production of advanced belt tires [...] and\nequipment production\", which is how this item appears in the translation of the GOC Catalogue submitted by\nthe United States (Id., p. 13 and US-86). The translation of the same item in the version of the GOC Catalogue\nsubmitted to us by China reads: \"high-performance meridian tires and the special materials and equipment\".\n(Exhibit CHI-70, p. 7).\n339 Exhibit US-86.\n340 The arguments by the parties during the investigation, in particular those of the Government of\nChina and the Chinese tire producers, were in the main that the planning documents were not binding, and that\nreferences to particular industries or companies did not mean that support for those industries was required.\nThese respondent parties also raised arguments similar to those raised by China before us that the planning\ndocuments did not refer to, or require, prefer ential SOCB lending to the tire industry. ( See, e.g., Exhibit CHI-4,\npp. 93-94).\n341 See, e.g., China response to Panel question 54 (first meeting).\n342 That is, agriculture and forestry; coal; electric power; steel; non-ferrous me tals; chemical products;\npetroleum and natural gas; building materials; medicine; machinery; light industry; and textiles. (In the\n\"encouraged\" category, chemical s is treated as a separate sector from petroleum and natural gas, while in the\nother two categories, chemicals, petroleum and natural gas are treated as a single sector).\n343 Ships; railway; information industry; gold; and fire fighting equipment.\n\nsimultaneously \"encouraged\", \"restricted\", and/or \"t o be abolished\". Thus, to note that the sectors\nunder which the encouraged projects are grouped co ver a broad spectrum of economic activity adds\nlittle to our analysis of the USDOC's de jure specificity determination.\n9.67 We consider more relevant the characterization by the US – Upland Cotton panel that non-\nspecific subsidies are broadly available throughout an economy, in contrast to specific subsidies to\nwhich access is limited to a \"sufficiently discrete segment\" of an economy as to constitute \"certain\nenterprises\". From this perspective, we cons ider whether the USDOC could reasonably have\nconcluded on the basis of positive evidence before it that the list of encouraged projects taken as a\nwhole, in spite of being lengthy and diverse, c onstituted a \"sufficiently discrete segment of the\neconomy\" as to constitute \"certain enterprises\".\n9.68 In this respect, we consider significant that the GOC Catalogue does not describe what is to\nbe either encouraged, restricted or abolished in general, broad terms. To the contrary, these are\nindividual project types, described in very specifi c and narrowly-circumscribed terms. To us, the\nimpression given by the narrowness of the projects described within each of the listed sectors (in spite\nof the breadth of those sectors as a whole, indi vidually and collectively) , is not one of broad\navailability but rather of singling out of very particular types of projects. Furthermore, as the\nImplementing Regulation makes clear, the express purpose of both the \"restricted\" and\n\"eliminated\"/\"to be abolished\" categories is to impose limitations on investment, provision of credit,\netc., in respect of the projects in those categories.\n9.69 We note that in a number of cases, closely related projects appear in two or three of the\ncategories, with one variant to be encouraged, a second to be restricted, and a third to be abolished.\nFor example, among the \"encouraged\" projects in th e \"chemical products\" sector is \"manufacture of\nPVC by oxychlorination means with the annua l yield no less than 200,000 tons\"; while the\n\"restricted\" category lists \"ethylene oxychlorinatio n PVC units with its annual yield no more than\n200,000 tons annually, calcium PVC units with its annual yield no more than 120,000 tons\".\n344 I n\nother words, it appears that in respect of th e PVC industry, the emph asis pursuant to the GOC\nCatalogue is to increase the size of production facilities, on the basis of detailed parameters. A similar\ntendency appears in respect of electric power : among the encouraged projects are \"heat-supply\nmachines with the concentrated integrated thermal power capacity no less than 300,000 kw [...]\",\nwhereas among the restricted projects are \"normal coal-fuel thermal power generating units with the\nunit machine capacity no more than 300,000 kw [... ]\", and among projects be abolished are \"normal\ncondenser coal-fueled thermal power generation units with [...] single machine less than 10,000 kw\nwithin the range of large grid coverage\".\n345 Most significantly for the present dispute, tires of various\nkinds appear in all three lists, with an apparent tendency away from bias tires and toward radial tires.\nIn particular, \"production of advanced belt tyre radial, its supporting materials and equipment\nproduction\" is listed as an encouraged project, \"bias ty[r]e\" 346 (not further described) appears as a\nrestricted project, and \"bias tyre or tyre productio n line with natural cotton flat chafer fabric as\nframework and with its annual yield no more than 500,000\" is identified as a project to be\nabolished.347\n9.70 In addition, we recall that the Implementing Re gulation makes explicit that the \"encouraged\",\n\"restricted\" and \"eliminated\" projects, taken together , do not describe all economic activity in China.\n\n344 Exhibit US-86, pp. 7 and 19.\n345 Id., pp. 4, 19 and 25.\n346 The English translation of the GOC Catalogue submitted by the United States contains a\ntypographical error, i.e., for this entry it reads \"bias typ e\" (emphasis added) (Exhibit US-86, p. 20). We note,\nhowever, that the corresponding entry in the version of the Catalogue submitted by China refers to \"Inclined tire\nitem.\" (Exhibit CHI-70, p. 24).\n347 Exhibit US-86, pp. 7 and 25.\n\nRather, as noted supra, there is a default \"permitted\" category, which covers all activities not\nspecifically listed but otherwise in conformity with the relevant laws and regulations. While there is\nno information on the record as to th e absolute or relative magnitude of this category, or of the three\nlisted categories, the existence of a \"permitted\" category by definition narrows the maximum possible\nscope of the \"encouraged\" category (as well as of the \"restricted\" and \"eliminated\" categories) relative\nto the economy as a whole.\n9.71 In this respect, we do not see that the documents of record demonstrate that the list of projects\nin the \"encouraged\" category spans \"virtually th e entire range of economic activity in China\", as\nsuggested by China.\n348 We thus do not consider that these documents would compel a reasonable and\nobjective investigating authority to conclude that any subsidies granted on the basis of that category\nwere non-specific. To the contrary, we consid er that a reasonable and objective investigating\nauthority could conclude that any subsidies grante d on the basis of the \"encouraged\" category were to\na sufficiently discrete segment of the economy as to be limited to \"certain enterprises\".\n9.72 For these reasons, we consider reasonable the USDOC's reliance, in reaching its de jure\nspecificity determination in respect of SOCB lending to the OTR industry, on the reference in the\nGOC Catalogue to \"'advanced belt tires […]\"' as an \"'encouraged\"' project.\n(4) The GOC 10 th Five-Year Plan (2001 – 2005) and the SETC Circular 716\n9.73 In addition to the central government planning documents pertaining to the 11 th Five-Year\nPlan, the USDOC also examined and took into account in its specificity analysis the SETC Circular\n716 349, which relates to China's 10th Five-Year Plan (2001-2005).\n9.74 The USDOC points to two particular statements in the Circular; first, its reference to \"the\nproduction of 'meridian tires' (i.e., radial tir es) as a national priority under the GOC 10 th Five-Year\nPlan\"350, and second, that the contribution of public f unds be reasonably directed \"so as to [...]\nguarantee the realization of the target [...]\".351\n9.75 We note, first, that the SETC Circular 716 is directed to:\n\"The economy and trade commissions (economy commissions) of all provinces,\nautonomous regions, municipalities directly under the Central Government and\nmunicipalities separately listed on the State plan and Xinjiang Army Corps of\nProduction and Construction, all associations directly under the State Economy and\nTrade Commission\".\n352\nWe further note that in the preamble to the Circular, the SETC states that:\n\"We have printed the Guidance of Recent Development in the Industrial Sector and\nhereby distribute it to you. Please abide by and implement it\".353 (emphasis added)\n9.76 The full passage partially quoted in the USDOC' s determination, which sets forth in general\nterms the orientation of the Circular, reads:\n\n348 China response to Panel question 54 (first meeting).\n349 Exhibit US-83.\n350 Exhibit CHI-4, p. 13.\n351 Id. According to the USDOC, \"OTR tires\" can be \"bias ply\" tires, \"merid ian tires\" and \"radial\"\ntires. (Id., pp. 14 and 99).\n352 Exhibit US-83, p. 1.\n353 Id.\n\n\"[W]e should, taking the enterprises as the ma in body, the market as the orientation,\nthe development as the topic, the struct ural adjustment as the motif, and the\nimprovement of the competitive power as the target, reasonably direct the\ncontribution of public funds and foreign investments, adjust the public investment\nstructure, improve the efficiency and bene fits of using funds, so as to promote the\nstructural adjustment of the industrial sector, and guarantee the realization of the\ntarget under planning\".\n354\nThe Circular goes on to say:\n \"The recent development orientation of th e industrial sector is hereby proposed\npursuant to the industrial development dir ection clarified in the industry and sector\nplanning of the Tenth Five-Year Plan for the sake of strengthening the macro-control,\nleading the acts of market subjects, and optimizing the allocation of resources\".\n355\n9.77 The Circular then identifies five \"basic princi ples\" – market orientation, highlighting key\nindustries and products, technical progress, coordina tive development, and sustainable development –\nin accordance with which:\n\"[W]e have proposed the recent development orientation for machinery, automobiles,\nmetallurgy, non-ferrous metal, petroleum, petrochemical industry, chemical industry,\nmedicine, coal, building materials light industr y, textiles, etc., which is offered to all\ninvestors and the financial, securities and public consulting departments for\nreference\".356\nFollowing this introductory section, the Circular then contains sections headed \"Recent Development\nOrientation\" for each of the sectors listed in the above-quoted passage. These sections set forth in\nsome detail (in similar fashion to the project listings in the GOC Catalogue under the 11 th Five-Year\nPlan), a series of priority projects or areas for investment.\n9.78 The section on \"Recent Development Orientation for Chemical Industry\" contains four\nsubheadings, one of which is \"Meridian Line Tires\". The text of this subsection reads:\n\"We should accelerate the product structural adjustment of tyre enterprise, and\ncontinue developing meridian line tyres. We should accelerate the development of\nnew varieties, and emphatically develop th e 65, 60, 55 and 50 series with the rim\ndiameter at 15-17 inches, and meridian tyres of high-speed serial saloon cars and\nhigh-capacity meridian tyres of low section without inner tyres; we should enhance\nthe technical renovations of a few major en terprises, and form 2 to 3 large tyre\nenterprise groups with the annual producti on capacity reaching 5 to 8 million (with\nthe annual consumption of raw rubber at 40,000 tons or more). We should\nappropriately support the backbone tire enterp rises in central and western regions, so\nas to enable the regional distribution of meridian tyre production to become more\nreasonable\".\n357\n9.79 We note that some of the language in the SETC Circular 716 appears to be non-mandatory,\nand that before the USDOC the Government of China argued that the central government planning\ndocuments were \"aspirational rec itations of general deve lopment goals\", rather than \"instruments\n\n354 Exhibit US-83, p. 2.\n355 Id.\n356 Id., p. 3.\n357 Id., p. 15.\n\nthrough which government policies are implemented\" . Likewise before us, China argues that the\ncentral planning documents are non-binding general policy orientations. Given the detailed and\nprecise descriptions, in respect of tire industry in vestments to be \"encouraged\" or \"supported\",\nhowever, and the fact that these encouraged investment projects are specifically addressed to all of the\nsub-central government entities, which are enjoined to \"abide by and implement\" the Circular, we\nconsider that their own wording seems to suppor t the USDOC's finding that the SETC Circular 716\nconveyed policy directions, inter alia, concerning investment in the OTR tires industry, to those other\nlevels of government.\n(ii) Provincial and municipal governments planning documents\n(1) General\n\n9.80 We now take up the USDOC's analysis and conclu sions in respect of the sub-central planning\ndocuments, with a view to assessing whether they contain evidence, as the USDOC found, that the\nsub-central governments established and carried out their own planning by implementing the central\ngovernment plans. Concerning these documents, the USDOC found that:\n\"Information on the record shows that provincial and municipality goals and\nobjectives conform with and implement th e central government policy goals and\nobjectives with a focus more tailored to the particular interests and circumstances of\nthat province or municipality. Specifically, the central-level plans set goals regarding\nmacroeconomic policies and [quoting a Government of China's questionnaire\nresponse] 'provide a vision for economic development, market and regulatory\nactivities, social administration, and the pr ovision of public services'. [citation to\nrecord omitted] Information on the reco rd also shows that the provincial and\nmunicipal five-year plans are drafted based on the goals and objectives of the central-\nlevel plans. [citation to record omitted] In other words, local governments (i.e.,\nprovinces and municipalities) align their policies with stated central government\npolicies and carry out those policies to the extent that such measures affect their\nlocality. Therefore, central-level plans should be considered a central government\npolicy or program that local governments adopt and implement through their own\nfive-year plans. [cross-reference omitted]\n[...] Although in this case there are no discrete policy plans for the tire industry, per\nse, the totality of the information on this r ecord […] shows that the government is\ndirecting policy lending to the tire industr y or to specific enterprises in the tire\nindustry\".\n358\n9.81 In this respect, the USDOC indicated that it disag reed with the Government of China that the\nplans were purely aspirational in nature, stating:\n\"If [the plans] were simply aspirational r ecitations of general development goals with\nno meaning, there would be little reason for the provinces and municipalities to\ndevelop plans in accordance with central gove rnment plans. Nor would there be any\nreason for provinces or municipalities to ta ilor their plans to conditions and needs\nwithin their jurisdictions, and there certa inly would be no reason to single out\ncompanies, industries or specific developm ent projects (e.g., technology renovation)\nwithin those plans. The fact that comp anies or tires or rubber are specifically\nmentioned in these plans or catalogues and the fact that these plans and catalogues\n\n358 Exhibit CHI-4, p. 98.\n\ndiscuss support, including loans for 'key' or promoted projects demonstrates that\ngovernment policy lending in the OTR tires industry is de jure specific\".359\n(2) GTC\n(A) USDOC determination\n9.82 With respect to GTC, the USDOC examined r ecord evidence pertaining to Guizhou province,\nand within that province, Guiyang municipality where GTC was located. The USDOC determination\nnoted that: (i) GTC had been explicitly targeted as a key enterprise for economic development by\nGuizhou province and Guiyang municipality since earlier five-year plans; (ii) the number of\nenterprises specifically targeted was limited (in particular, that the Guizhou 10\nth Five-Year Plan,\nbesides singling out GTC for the project of technology renovation for two meridian tire lines,\nmentioned three other enterprises); (iii) the Guizhou 10 th Five-Year Plan further required that policy\nbank loans and loans from abroad be allocated according to the plans; and (iv) the loans were actually\nprovided to GTC by Guizhou province and Guiyang municipal policy lending. 360 The USDOC\nfurther noted that the plans indicated that bot h the provincial and muni cipal governments were\nrequired to give priority to the 5-million-unit semi-steel radial tire project of GTC.361\n9.83 In this regard, the USDOC cited the Guizhou 11 th Five-Year Plan as requiring that \"under 'the\nleadership of Guizhou Tyre, [the rubber industry] sh all give priority to the 5-million-unit semi-steel\nradial tire project of Guizhou Tyre\". 362 The USDOC stated that Section 6 of the Guizhou 10 th Five-\nYear plan also singled out GTC, for the project of technology renovation for two meridian tire lines\n(i.e., \"radial\" tires), noting that OTR tires also can be \"bias ply\" tires. The USDOC noted that the\nnumber of enterprises specifically targeted in Se ction 6 was limited, in that only three other\nenterprises, in addition to GTC, were singled out for the technology renovati on, and concluded that\ntherefore section 6 was \"clearly targeted rather than broad in its scope\".\n363 In addition, the USDOC\nstated that that plan indicated that policy bank lo ans and loans from abroad were to be allocated\naccording to the plans. 364 Finally, the USDOC stated that, at the municipal level, the Guiyang 10 th\nFive-Year Plan also had given priority to GTC's 5-million-unit radial tire project.365\n(B) Guizhou and Guiyang planning documents\n9.84 We now examine the Guizhou (provincial) and Guiyang (municipal) plans relied upon by the\nUSDOC, in the light of the USDOC's analysis and conclusions.\n9.85 At the provincial level, we note that the Guizhou Province 11 th Special Industrial\nDevelopment Plan (the \"Guizhou 11 th Five-Year Plan\") makes very specific reference to GTC's five-\nmillion unit tire project, stating that \"under the lead ership of Guizhou Tyre, (the rubber industry shall)\n[...] reduce the production of bias tires, vigorously develop radial tires and new high-speed low-\nsection tubeless and give priority to the 5-million- unit semi-steel radial tire project of Guizhou\nTyre\".366\n\n359 Exhibit CHI-4, p. 99.\n360 Exhibit CHI-4, pp. 13-14 and 99. The USDOC noted that business proprietary information provided\nby GTC underlined GTC's importance in early five-year plans. (Id., p. 14).\n361 Id., p. 112.\n362 Id.\n363 Id., pp. 14 and 99.\n364 Id., p. 112.\n365 Id.\n366 Exhibit CHI-77. It is not clear whether this document also refers to other industries/projects since\nthe document (as presented) only contains the translation of this one paragraph.\n\n9.86 The Tenth Five-Year Plan Outline For the Na tional Economic and Social Development of\nGuizhou Province (the \"Guizhou 10\nth Five-Year Plan\"), in Section 6 (\"Traditional industry shall be\nimproved through high technology\") of Chapter 7 (\"Industry shall be optimized, industry with specific\nadvantages shall be promoted\"), states that the \"r enovation of traditional industry and development of\nhigh technology industry shall be combined to promote the whole industry's updating and continuous\ndevelopment\".367 This Section states that the technolog y renovation of industries with chemistry\nadvantages must be supported, and specifically refers to the technology renovation project of meridian\nline tires of GTC as well as the renovation projects for three other enterprises. The same plan also\nencourages support to, inter alia, automobile components, and states that by 2005, the renovation and\nupdating of key equipment of enterprises of chemical s, machinery, etc., must be completed and the\nproduction base of automobile components established.368\n9.87 The Guizhou 9th Five-Year Plan states that \"policy ba nks loans and loans from abroad should\ncontinue to be allocated according to the plans\". 369 Here we note that although in the USDOC's\ndetermination this statement is attributed to the Guizhou 10th Five-Year Plan, before us it was clarified\nbetween the parties that this statem ent in fact appears in the Guizhou 9 th Five-Year Plan. According\nto the United States, this mistake was due to e rrors made by the Government of China in the\ninformation it submitted to the USDOC.370\n9.88 At the municipal level, the Guiyang Muni cipality Economic and Social Development 11 th\nFive Year Plan (the \"Guiyang 11th Five-Year Plan\") states that the automotive manufacturing industry\nmust, inter alia, \"develop auto parts, tires and other auto -use rubber products aimed at both domestic\nand world markets\" as well as \"facilitate the devel opment of new products [...] and foster famous\nproducts with intellectual property rights\". 371 This plan explicitly requires the government to give\npriority to GTC's 5-million-unit tire project. The plan also calls for \"loans from State policy banks\"\nand strengthening the \"public credit system, and increase credit loans\".372 The plan also \"encourage[s]\nfinancial institutions to provide funds to the project s in conformity with economic policies\" and states\nthat \"cooperation between banks and enterprises\" should be \"enhanced\".373\n9.89 Given the explicit references to GTC's tire project in the provincial and municipal planning\ndocuments cited by the USDOC, and the similarity of the priorities for the tire industry in these\ndocuments to the description in the GOC Catal ogue of the \"encouraged\" tire project, and the\nreferences to the provision of credit financing to th e projects targeted for development, and given the\nindications in the central-level documents that th e lower-level governments are to establish their own\nplans based on the central plans, we consider that it was reasonable for the USDOC to have\nconcluded, in respect of GTC, that these provincial and municipal plans implemented the central plans\nfor development of the OTR tires industry, including in respect of the provision of credit financing.\n\n367 Exhibit CHI-72, p. 2.\n368 Exhibit CHI-72, p.2.\n369 Exhibit US-82, p.41.\n370 In its first written submission, the United States notes that, as China has pointed out to the Panel,\nthis statement was mistakenly cited to the 10 th Five-Year Plan rather than the 9 th Five-Year Plan. The\nUnited States attributes this error to the fact that when it submitted the 9 th and 10 th Five-Year Plans to the\nUSDOC, China had reversed all but the first pages of both documents, attaching the Chinese language version\nof the 10th Five-Year Plan to the English translation of the 9 th Five-Year Plan and vice versa. The United States\nfurther argues that China failed to provide the USDOC with an English translation of the portion of the 9 th five-\nyear plan discussing the allocati on of loans, which the USDOC only became aware of because a domestic\nproducer provided the USDOC with a partial translation of the Chinese language version. (United States first\nwritten submission, footnote 518 (referring to Exhibits CHI-69, US-84 and US-82)). China does not contest this\nrepresentation by the United States.\n371 Exhibit CHI-78.\n372 Id.\n373 Id.\n\n(3) Starbright\n(A) USDOC determination\n9.90 Concerning Starbright, the USDOC's determinati on states that, in contrast to the Guizhou and\nGuiyang five-year plans, the five-year plan of th e province of Hebei (where Starbright was located)\nidentified as \"key projects\" for development certain industries, rather than individual enterprises or\nprojects. According to the USDOC's determination, the Hebei 11 th Five-Year Plan for technology\nreferred to \"automobile parts and the rubber i ndustry as 'key projects'\" and the Implementing\nGuidelines of this plan \"direct[ed] comm ercial banks to support 'key projects'\". 374 The USDOC also\nfound that the Hebei 10 th Five-Year Plan stated that \"'auto parts', among other industries, shall be\nsupported'\", and that the Hebei 9 th Five-Year Plan stated that the \"automobile and components\"\nindustry, among other industries, would be \"developed greatly and stronger\". 375 According to the\nUSDOC, tires were considered to be part of the automobile parts industry in China.376\n(B) Hebei planning documents\n9.91 Starting with the Hebei Province Science & Technology 11 th Five Year Plan & 2020 Long\nTerm Target (the \"Hebei 11 th Five-Year Plan for technology\"), we note that this plan states that the\n\"economic and social development of the Province heavily depends on the technology\ndevelopment\".377 In this context, inter alia , the plan calls for arranging \"a layout for the key\nindustries\" and developing \"new products with in dependent intellectual property rights\", referring\nspecifically to the \"development of key automobile parts\". 378 In addition, among \"key technology\nprojects\", the plan identifies the establishment of industrial bases for several industries, including the\n\"rubber industry\" and the \"rubber and plastics industry\". 379 The plan designates the automobile and\nautomobile spare parts industries, among several others, as the priority industries for accomplishing\nthe provincial \"equipment manufacture industry\" goal, a nd states that three to five leading enterprises\nwill be involved in the provincial equipment manufacture industry scheme. 380 Furthermore, the plan\ndesignates certain cities (including Xingtai City, where Starbright is located) 381 as the bases for\nautomobile development, and identifies automobile spare parts as among the \"supported products\" for\nwhich the production base was to be developed.382\n9.92 The Guidelines for the Implementation of Hebei Province Science & Technology 11 th Five\nYear Plan (the \"Implementa tion Guidelines of the Hebei 11 th Five-Year Plan\") state that policy\nfinancial institutions \"shall s upport\" national and provincial key technology projects and key\ntechnology industrialization projects. The Guidel ines further state that commercial banks \"shall\nsupport\" these projects through the granting of cred it loans in accordance with national investments\nand credit loan policies.383\n\n374 Exhibit CHI-4, pp. 14 and 99.\n375 Id., p. 99-100.\n376 In this regard, the USDOC noted that the Guiyang 11 th Five-Year Plan referred to the GTC 5-\nmillion-unit tire project within the context of identifying automobile parts as a key industry, and that given the\nparallels among the central and provincial plans, the central, provincial and municipal governments appeared to\nconsider radial tires to be part of the automobile parts industry. (Id., footnote 17).\n377 Exhibit CHI-73.\n378 Id.\n379 Id.\n380 Exhibit US-88.\n381 United States first written submission, para. 342.\n382 Exhibit US-88.\n383 Exhibit CHI-74.\n\n9.93 The Tenth Five-Year Plan Outline for the Na tional Economic and Social Development of\nHebei Province (the \"Hebei 10\nth Five-Year Plan\") requires that \"the equipment industry such as\nenvironment protection, auto parts, packing, foodstuff, machinery shall be supported\". 384 Finally, the\nNinth Five-Year Plan Outline for the National Econom ic and Social Developm ent of Hebei Province\nand Year 2010's Prospective Goals (the \"Hebei 9 th Five-Year Plan\") identifies the automobile industry\nas one of the \"mainstay\" industries \"which can ta ke the lead for the whole economic growth and\nstructural upgrade. The plan specifies that amo ng other \"mainstay\" industries, \"the machinery\nindustry which takes the automobile and its co mponents and large-scale complete plants and\nequipment as the dominance\", \"will be developed greatly and stronger\".385\n9.94 Given the explicit references in the Hebei pla nning documents to the rubber industry and the\nautomobile parts industry, as well as to the provision of credit financing in support of projects in these\nindustries, we consider that it was reasonable for the USDOC to have concluded that these documents\nimplemented the central-level plan in respect of the OTR tires industry, which included the provision\nof financing to that industry.\n(iii) Conclusion in respect of planning documents\n9.95 For the foregoing reasons, we conclude that a reasonable and objective investigating authority\ncould have determined, on the basis of the evidence on the record, that the Government of China, at\nthe central level, explicitly identified \"certain ente rprises\" in the sense of Article 2.1(a) of the SCM\nAgreement for encouragement and development (incl uding the tire industry), and instructed the sub-\ncentral governments to implement this policy. We also conclude that a reasonable and objective\ninvestigating authority could have determined th at pursuant to these same planning documents,\nSOCBs (among other financial institu tions) were instructed to provid e financing to the \"encouraged\"\nprojects. Thus, we find no legal error in the USDOC's determination on the basis of these documents\nthat government authorities at all levels of governme nt in China (central, provincial and municipal)\neffectuated policies to ensure the provision of loans to the OTR tire industry.\n(iv) USDOC determination that SOCBs acted purs uant to government industrial policies in\nmaking loans to the tire industry\n9.96 The final element of the USDOC's de jure specificity determination in respect of SOCB\nlending to both GTC and Starbright was its findi ng that both policy banks and SOCBs acted pursuant\nto the government policies set forth in the planni ng documents just discussed when they provided\nloans to tire producers. We note in this regard that there is no disagreement between the parties as to\nthe existence of SOCB lending to the two tire produ cers. Instead, the disagreement in the context of\nthe de jure specificity finding centres on whether the SOCBs made these loans pursuant to the policies\nset forth in the planning documents.\n9.97 Concerning GTC, the USDOC's determination indicates that business confidential\ninformation on the record indicat ed that loans to GTC were policy lending by Guizhou and Guiyang,\nat the provincial and municipal levels, respectively. The determination states in this regard:\n\"The Department notes that both the provinc ial and municipal five-year plans discuss\nGTC. Based on verification and the docu mentation on the on the record, we have\ndetermined that these loans were provided to GTC by Guizhou provincial and\nGuiyang municipal policy lending. (A full discussion of our analysis concerning\nGTC's loans is only possible by means of reference to business proprietary\ninformation. [cross-reference omitted]) Ther efore, the Department continues to find\n\n384 Exhibit CHI-76, p. 5.\n385 Exhibit CHI-75, p.4.\n\nthat all of the loans received by GTC and its cross-owned affiliates from SOCBs were\nmade pursuant to a government policy to provide loans to the tire industry.\"386\n9.98 Concerning Starbright, the USDOC cited the He ibei Five-Year Plans and related documents\njust discussed, which identified automobile parts and the rubber industry as key projects, and called\nfor financing support to these projects. The USDOC then stated that \"[t]herefore, the Department\ncontinues to find that the loans received by Starbright from SOCBs were made pursuant to a\ngovernment policy to provide loans to the tire industry\".387\n9.99 Concerning SOCBs' lending to the OTR tire producers in general, the USDOC stated that:\n\"After examining all information on the reco rd, we continue to find that national,\nprovincial and municipal government aut horities effectuate policies to provide\ncountervailable loans to OTR tire producers. Acting pursuant to these official\npolicies, PRC policy banks and SOCBs provided loans to OTR tire producers\".388\nThe USDOC then cited its prior \"public body\" finding in respect of Chinese policy banks and SOCBs,\nin the investigation on CFS Paper, incorporating by reference that finding and analysis into the record\nof the OTR investigation. 389 The USDOC stated that in the OT R investigation, parties \"ha[d] not\ndemonstrated that conditions within the Chinese ba nking sector ha[d] changed significantly since that\nprevious decision such that a reconsideration of that decision is warranted\". 390 The USDOC also cited\na statement at verification by an official from the Tianjin municipal government confirming that\nSOCBs there were supervised by the Tianjin SASAC, and noted that there were scholarly publications\non the record reporting that SOCBs were required to support the Government of China's policies.\n391\n\n9.100 One such publication cited by the USDOC in th is context was the IMF Working Paper. The\nUSDOC quoted that publication as stating that \"it is difficult to find clear evidence that SCBs have\nchanged their behavior and become commercially oriented\" and as recommending that governments\nshould avoid \"interference for policy purposes\".392\n9.101 We note that in the CFS Paper investigation, which formed pa rt of the record in the OTR\ninvestigation, the USDOC had determined that SO CBs followed government policies in making their\nlending decisions.393 First, the USDOC had found that the state ownership of the Chinese banking\nsector and the legacies associated with the longsta nding pursuit of govern ment policy objectives\nundermined the SOCBs' ability to act on a commercial basis. 394 Second, the USDOC had examined\nthe Chinese legal framework for banking, noting that the Chinese Commercial Banking Law required\nbanks to carry out their loan activities consistently with \"the needs of national economy and the social\n\n386 Exhibit CHI-4, p. 99.\n387 Id., p. 100.\n388 Id., p. 101. This statement appears in the section entitled \"SOCBs and Financial Contribution\".\n389 Id.\n390 Id.\n391 Id. TUTRIC, the third investigated tire producer, was located in Tianjin. The USDOC did not\ncalculate a benefit to TUTRIC from policy lending, as it found that instead outstanding loans to TUTRIC had\nbeen forgiven. (Id., footnote 16).\n392 Id., footnote 45 (quoting the IMF Working Paper, pp. 18-19).\n393 Exhibit CHI-93, pp. 49-58.\n394 Id., p. 55. The USDOC noted that it had found evidence of reforms in al most all sectors of the\neconomy in China, including the bankin g sector. It stated that the cent ral government however had been very\ncautious in completely reforming the banking system, and that as a result, and because banks in China had never\noperated on a commercial basis, the government was still very involved in the sector. The USDOC noted that\nthis view was to varying degrees confirmed by independent experts interviewed by the USDOC. (Id., pp. 55-\n58).\n\ndevelopment and under the guidance of State industrial policies\".\n395 At the CFS Paper verification,\nofficials from the People's Bank of China had stated that \"it may be necessary for banks to heed\nindustrial policies, banks may be taking on greater risk if their customers use loans in a way that is\ninconsistent with industrial policies\". 396 Similarly, the Bank of China Offering had stated that\n\"Commercial Banking Law requires commercial banks to take into consideration government\nmacroeconomic policies in making lending decisions. [T hey] are encouraged to restrict their lending\nto borrowers in certain industries in acco rdance with relevant government policies\". 397 T h i r d , t h e\nUSDOC had determined that while SOCBs were im proving their risk management capacities, they\nstill lacked adequate risk management and analysis skills. The USDOC had stated that interest rates\nremained generally undifferentiated, and were cl ose to the benchmark set by the People's Bank of\nChina.398\n9.102 In the OTR investigation, as noted, the USDOC determined that the respondent parties had\nnot demonstrated that this situation had changed sufficiently to warrant a reconsideration of the\nanalysis and conclusions concerning SOCBs from the CFS Paper investigation. In this regard, the\nmain specificity-related argument of the respondents in the OTR investigation was that the central\ngovernment and provincial and m unicipal planning documents we re indicative only, and not\nmandatory. It is not clear what evidence was put on the record of the investigation in support of this\npoint, and before us China identifies none. As not ed above, the USDOC determined in this regard\nthat \"central-level plans should be considered a central government policy or program that local\ngovernments adopt and implement through their own five-year plans\". 399 We recall in this context the\nUSDOC's specific rejection of the respondents' argument that the plans were not binding, as described\nin paragraph 9.81, supra.\n9.103 In addition, before us, the United States refers to a range of documents from the CFS Paper\ninvestigation, on the record of the OTR investig ation, which in the view of the United States\ndemonstrates that the SOCBs lent in accordance with government policies. 400 These documents\ninclude annual reports and other publications of certain Chinese banks , verification reports, and other\ndocuments. In particular, the United States cites to the following statements by banks: (i) the\nPeople's Bank of China \"'guided financial in stitutions to grant loans at a proper pace'\" 401; (ii) the\nPeople's Bank of China briefs bank offi cers on \"'how credit should be guided'\" 402; (iii) the Bank of\nChina takes industrial policies into account \"' in assessing a company' s total credit limit'\" 403; and (iv)\n\"'commercial banks are encouraged to restrict th eir lending to borrowers in certain industries in\naccordance with relevant government policies'\".404\n9.104 We note that China does not contest the accuracy of the United States' representations of these\nstatements. Nor does it point to any evidence contra dicting the USDOC's conclusion, from either the\nCFS Paper or OTR investigation.\n9.105 For the reasons described above, we consider that a reasonable and objective investigating\nauthority could conclude on the basis of the record evidence that the SOCBs followed the policies set\nforth in the planning documents in providing credit to GTC and Starbright. We thus find no error in\nthis conclusion by the USDOC.\n\n395 Exhibit CHI-93, p. 58.\n396 Id.\n397 Exhibit CHI-4, p. 58.\n398 Id., p. 59.\n399 Id., p. 98.\n400 United States first written submission, paras. 357-358.\n401 Id., para. 358 (quoting the People's Bank of China 2006 Annual Report, p. 37, Exhibit US-93).\n402 Id., para. 358 (referring to the. CFS CVD GOC Verification Report, p. 5, Exhibit US-89).\n403 Id., (referring to Exhibit US-89, p. 17).\n404 Id., (referring to Exhibit CHI-93, p. 58).\n\n(v) Conclusion by the Panel\n9.106 As discussed supra, we have found that a reasonable and objective investigating authority\ncould have determined, on the basis of the evidence on the record, that the government of China, at\nthe central level, explicitly identified \"certain ente rprises\" in the sense of Article 2.1(a) of the SCM\nAgreement for encouragement and development, and instructed the sub-central governments to\nimplement this policy, and that among these \"certain enterprises\" were advanced radial tires, which all\nparties acknowledge include OTR tires. We have found that a reasonable and objective investigating\nauthority could have determined that pursuan t to these same planning documents, SOCBs (among\nother financial institutions) were instructed to provide financing to the \"encouraged\" projects, and that\nSOCBs did lend to both GTC and Starbright's OTR tire facilities. Finally, we have found that a\nreasonable and objective investigating authority coul d conclude on the basis of the record evidence\nthat the SOCBs followed the policies set forth in th e planning documents when they lent to GTC and\nStarbright.\n9.107 For these reasons, we therefore conclude that China has failed to establish that the USDOC's\nfinding in the OTR investigation, that lending by SOCBs to the OTR tire industry (in particular to\nGTC and Starbright) was de jure specific, was inconsistent with th e obligations of the United States\nunder Article 2.1(a) of the SCM Agreement.405\nB. REGIONAL SPECIFICITY OF LAND-USE RIGHTS\n1. Claims of China\n9.108 China challenges the USDOC's dete rmination in the LWS investigation that the provision of\nland-use rights to one company (Aifudi) located in the \"New Century Industrial Park\" (the \"Industrial\nPark\" or the \"Park\") was regionally specific. China claims that this determination was inconsistent\nwith Article 2 of the SCM Agreement and, as a consequence, Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994.406\n2. Main arguments of the Parties\n(a) China\n9.109 China argues that for a subsidy to be regionally sp ecific, it must be limited in three ways: (i)\nit must be limited to certain enterprises within a designated geographical region within the jurisdiction\nof the granting authority; (ii) it must be limited to \"certain enterprises\" as that term is defined in\nArticle 2.1 of the SCM Agreement; and (iii) those certain enterprises must be located within the\ndesignated region. China argues that it follows a contrario from the limitations in Article 2.2, that if a\nsubsidy is available to all enterprises within the designated region , then it is not regionally specific;\nand that if it is available to enterprises outside that region, it likewise is not regionally specific.407\n9.110 In respect of the provision of land-use right s in the New Century Industrial Park, China\nargues that it is implicit in its specificity analysis that the USDOC considered the industrial park to be\nthe \"designated geographical region\" in the sense of Article 2.2 of the SCM Agreement. China\nconsiders, however, that the term \"designated geographical region\" should be understood to mean an\neconomic or administrative subdivision (region) with in a particular physical area of a country\n\n405 Concerning China's claims of consequential violations of Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994 in connection with this claim see Section XIII, infra.\n406 Paragraphs B.1(b)(i) and B.1(e)(i)-(iii) of the \"as applied\" claims in China request for establishment\nof the Panel; China first written submission, para. 468 (f); second written submission, para. 315 (g).\n407 China first written submission, paras. 283-284.\n\n(geographical) that has been set apar t for some special purpose (designated).\n408 China finds\ncontextual support for this reading of the term in Article 8.2(b) of the SCM Agreement (non-\nactionable subsidies), which referred to an eligible disadvantaged region, inter alia , as \"a clearly\ndesignated contiguous geographical area with a de finable economic and administrative identity\".\nChina argues that the similarity of the phrasing in Articles 2.2 and 8.2(b) means that the same\nconcepts should apply to the term \"designated ge ographical region\" in Article 2.2 of the SCM\nAgreement.409\n9.111 China cites the negotiating history of Article 2.2 of the SCM Agreement in support of its\nposition. In particular, China recalls that the D unkel Draft of the SCM Agreement provided that \"a\nsubsidy which is available to all enterprises located within a designated geographical region shall be\nspecific irrespective of the nature of the granti ng authority\", but that the phrase \"available to all\nenterprises\" was changed to \"limited to certain enterprises\" in the final version of the SCM\nAgreement.410 For China this signifies that the drafte rs of the SCM Agreement considered – and\nrejected – the meaning that the United States now seek s to give to Article 2.2 of the SCM Agreement.\nBy using the term \"certain enterprises\" in Article 2.2, as it is used elsewhere in Article 2, the drafters\nclearly intended that a subsidy would be regionally specific if it were limited to \" certain enterprises\nlocated within a designated geographical region\". This requires the same inquiry into whether the\nbeneficiaries of the regional subsidy represent no more than a \"discrete segment\" of the economy, just\nas it does elsewhere in Article 2 of the SCM Agreement.\n411\n9.112 In this regard, in response to a question from the Panel concerning the purpose of Article 2.2,\nin the light of this argument that for a subsidy to be specific under Article 2.2 it would need to be\nlimited to only certain beneficiaries within the re gion, China states that this provision addresses the\nparticular circumstance in which a subsidy is in fact limited to certain enterp rises located within such\na region. China notes in this regard that unlike Artic le 2.1(a), Article 2.2 does not refer to an \"explicit\nlimitation\" of access to the subsidy by the granting authority or the legislation in question.412\n9.113 China argues that the New Century Industrial Park is not a designated geographical region in\nthe sense of Article 2.2 of the SCM Agreement b ecause it did not have its own definable economic\nand administrative identity and had not been desi gnated for any purpose, let alone to provide\nsubsidies. Rather, it was simply an area of land that Huantai County had rezoned from agricultural to\nindustrial use, and which it decided to call the \"New Century Industrial Park\".413 China considers that\nthe United States' argument, under which provisi on of land to any single company for less than\nadequate remuneration would be regionally specific to that land, would be \"absurd\". In particular,\nunder the logic of the USDOC's \"r egional specificity\" finding in respect of the Industrial Park, any\nparcel of land could be called \"regionally specific\".414\n9.114 China asserts that during the investigation, the USDOC made no finding that the alleged\nsubsidy was limited to \"certain\" enterprises located \"within\" the Industrial Park (i.e., a subset of all\nenterprises in the Park), and thus that it was not limited in the manner required by Article 2.2 of the\nSCM Agreement.415 China further states that the USDOC did not find that the alleged subsidy was\nlimited to enterprises obtaining land use rights in th e Industrial Park, to the exclusion of companies\nobtaining such rights elsewhere in th e county where the Park is located. 416 Finally, China argues, the\n\n408 China first written submission, paras. 286-287.\n409 Id., paras. 288-289.\n410 China response to Panel question 58 (first meeting); second written submission, para. 195.\n412 China response to Panel question 58 (first meeting).\n414 Id., para. 291.\n415 Id., paras. 293-294.\n416 Id., para. 295.\n\nUSDOC's specificity finding was that the provision of land rights (i.e., the financial contribution) was\nlimited to enterprises in an industrial park with in the county's jurisdiction, whereas the Agreement\nrequires that for a valid finding of specificity, the USDOC would have needed to find that the subsidy\nwas limited to certain enterprises within the Park, to the exclusion of others within the Park, and to the\nexclusion of others located elsewhere in the county.417\n9.115 Finally, China argues, even if the USDOC had applied the legal framework advanced by\nChina, the evidence would not support a finding that the alleged subsidy was limited to the Industrial\nPark. According to China, th e evidence showed that all companies (with a small number of\nexceptions) within the Park paid the same lease rate, such that if there were a subsidy, it was not\nspecific as all holders of the land-use rights paid th e same rate. China stat es that the evidence also\ndemonstrated that commercial leaseholders elsewher e in the county paid the same or lower rates than\nthose within the Park. Thus, any subsidy was not li mited to the Park, the area considered by USDOC\nas the \"designated geographic region\".418\n(b) United States\n9.116 The United States argues that the USDOC found that China's provision of land-use rights to\nAifudi was regionally specific because it was limi ted by a county to enterprises located in an\nindustrial park within the county's jurisdiction. 419 The United States argues that pursuant to\nArticle 2.2 of the SCM Agreement, a subsidy is speci fic if it is limited to certain enterprises located\nwithin a designated geographical region within the ju risdiction of the granting authority, and Huantai\nCounty limited the land rights to enterprises locat ed within a designated geographical region – the\nIndustrial Park. 420 The United States argues that China's interpretation − that a \"designated\ngeographical region\" must have its own economic and administrative identity – is overly strict, as\nthese requirements do not appear in Article 2.2 of th e SCM Agreement. Nevertheless, even by this\noverly-restrictive definition, the industrial park would qualify. 421 For the United States, \"designated\"\nmeans \"'specified'\" or \"'called by a name'\". Geographical means, inter alia, \"'pertaining to, or of the\nnature of, geography'\", with geography defined to in clude \"'the features or arrangement of a region or\na place, building, etc.'\"; and \"region\" means, inter alia, \"'[a] large tract of land; a country; a definable\nportion of the earth's surface\". 422 Thus, for the United States, a \"designated geographical region\" is a\nlarge tract of land, defined by the tract of land's feature or arrangement, called by a name or described.\nAccording to the United States, the Industrial Park met this definition.423\n9.117 The United States considers that it and China are of more or less the same view in terms of\nthe meanings of \"designated\" and \"geographical\", but that they differ in respect of \"region\", where the\nUnited States' reading is much broader than China' s \"economic or administrative subdivision\". Here,\nthe United States disagrees that Article 8.2(b) of the SCM Agreement supports China's argument:\namong other things, if the drafters had meant \"r egion\" to connote \"administrative or economic\nsubdivision\", they would not have had to include in Article 8.2(b) of the SCM Agreement the\nmodifier \"a definable economic and administrative identity\" to the term \"disadvantaged region\".424\n9.118 The United States takes further issue with China's argument that Article 2.2 of the SCM\nAgreement requires that a subsidy must be limited to \"certain enterprises\" (i.e., a subset of enterprises)\n\n417 China first written submission, paras. 296-297.\n418 Id., paras. 299-301.\n419 United States first written submission, para. 364.\n420 Id., para. 366.\n421 Id., paras. 367-368.\n422 Id., para. 369.\n423 Id., para. 370.\n424 Id., paras. 371-372.\n\nwithin the region in order to be regionally specific. For the United States this would render\nArticle 2.2 itself redundant, as in any case, even without any geographical limitation, the subsidy\nwould be specific to \"certain enterprises\" pursuant to Article 2.1(a), and such an interpretation would\nbe impermissible.\n425 Furthermore, the United States considers that Article 8.2(b) of the SCM\nAgreement supports its, not China's view, as th at provision indicates that in order to be non-\nactionable, the specified regional subsidies among other things would need to be \"non-specific\"\nwithin the regions. Under China's interpretation, this would be unnecessary to specify, as such non-\nspecific aid within a region would already fall outside the scope of the Agreement. 426 T h e\nUnited States also points to Article 8.1(b) of the SCM Agreement which refers to the various non-\nactionable subsidies listed in Article 8.2 as specific, including the regional subsidies referred to in\nArticle 8.2(b) which are, by definition, non-specific w ithin the regions in question. According to the\nUnited States, here again, the non-specificity requirement in Article 8.2(b) would be unnecessary if\nthose subsidies already were, in general, non- specific pursuant to Article 2.2 of the SCM\nAgreement.\n427\n9.119 Finally, the United States argues that the ava ilability of similar subsidies to enterprises\noutside the region does not invalidate a finding of regi onal specificity. The United States asserts that\nif this were the case, governments could easily circumvent the SCM Agreement by providing a given\nsubsidy to one company outside the region. According to the United States, the land-use rights\nsubsidy at issue was used as an incentive to relocate producers to th e Industrial Park, and was tied to\nthe level of investment within the Park. The fact that the county granted other types of land-use rights\nto other leaseholders outside the Pa rk is irrelevant to the regional specificity of the land-use subsidy\nprovided to enterprises in the Park.\n428\n9.120 Concerning the facts of the investigation, the United States asserts that evidence on the record\ndistinguished the way in which land-use rights we re provided by the government in the Industrial\nPark, in that only enterprises with a certain leve l of investment qualified, and the subsidy was\navailable only to enterprises willing to physically lo cate in the Park. In add ition, the record evidence\nindicated that land-use rights were not prov ided in accordance with government-established\nrequirements, as the land in question had not been co nverted from agricultural to industrial use at the\ntime the land-use rights were provided to the ente rprises in the Park. Furthermore, the local\nauthorities had not conducted a formal appraisal of the land, as was required. In these ways, the\nUnited States argues, the provision by the county government of land-use rights in the Park was\ndistinct from its provision of land-use rights outside the Park.\n429\n3. Main arguments of the Third Parties\n(a) Australia\n9.121 Australia disagrees with China that a subsidy is non-specific if it is available to all enterprises\nlocated within a designated geographic region under the jurisdiction of the granting authority. Rather,\nregional specificity stems from the limitation based on regional locality. Australia therefore disagrees\nwith China that Article 2.2 of the SCM Agreement i nvolves a three-step test. Australia considers that\nsuch a test would render the regional specificity prov ision (Article 2.2) redundant, as one of the other\nbases for specificity (2.1(a)-(c)) already would be present under the three-step test. Australia\nconsiders Articles 8.1(b) and 8.2(b) of the SCM Agre ement to be relevant c ontext, and also suggests\n\n425 See, e.g., United States first written submission, paras. 374-376; opening statement at the first\n426 United States first written submission, para. 377.\n427 Id.\n428 Id., paras. 380-382.\n429 United States response to Panel question 8 (second meeting).\n\nthat the Panel consider whether the reference in Ar ticle 2.2 to \"certain enterprises\" is descriptive to\ndistinguish between enterprises that are located with in the designated geographical regional and those\nthat are outside.430\n(b) Canada\n9.122 Canada agrees with the United States that Artic le 2.2 of the SCM Agreement simply covers\nsubsidies that are limited to a designated geogr aphical region. According to Canada, reading\nArticle 2.2 as also targeting subsidies that are limited to certain enterprises as provided for in\nArticle 2.1, would allow all enterprises located in a designated geographical region to escape the\ndisciplines of the SCM Agreement, even if these subsidies are not broadly available within the\ncountry.431\n(c) European Communities\n9.123 The European Communities argues that subsidies destined to all enterprises in a geographical\nregion are not considered specific under Article 2.2 of the SCM Agreement, noting that the text of this\nprovision was changed from what was proposed in the Dunkel Draft of the SCM Agreement, which\nwould have rendered all regional subsidies specific. For the European Comm unities, such a change\nshould have meaning. The European Communities ar gues that the specificity of regional subsidies\nmust be established by an integrated reading of Ar ticle 2 of the SCM Agreement. In particular, the\nEuropean Communities is of the view that if elig ible regions under a regional subsidy programme are\nchosen on the basis of objective criteria under Article 2.1(b), there would be no regional specificity.432\n4. Assessment by the Panel\n(a) Interpretation of Article 2.2 of the SCM Agreement\n9.124 We begin our analysis with the text of Artic le 2.2 of the SCM Agreement which reads as\nfollows:\n\"2.2 A subsidy which is limited to certa in enterprises located within a designated\ngeographical region within the jurisdiction of the granting authority shall be specific.\nIt is understood that the setting or change of generally applicable tax rates by all\nlevels of government entitled to do so shall not be deemed to be a specific subsidy for\nthe purposes of this Agreement\".\n9.125 The particular language in dispute between the par ties is the first sentence. First, the parties\ndisagree whether the reference to \"certain enterp rises\" means that for speci ficity in the sense of\nArticle 2.2 of the SCM Agreement to exist, there mu st be a limitation of a subsidy to a subset of\nenterprises located within a designated geographical re gion, or instead whether limitation of a subsidy\non a purely geographic basis, to part of the territory within the jurisdiction of the granting authority, is\nsufficient.\n9.126 The parties also disagree as to the meaning of \"designated geographical region\". For China,\nthis language refers to a formal administrative entity, whereas for the United States it refers to any\nspecified, identified large piece of land (whether or not it has a separate administrative identity or\napparatus).\n\n430 Australia third-party submission, paras. 33-36.\n431 Canada third-party submission, paras. 60-62.\n432 European Communities third-party submission, para. 46.\n\n(i) \"Certain enterprises\" as referred to in Article 2.2 of the SCM Agreement\n9.127 Beginning with the term \"certain enterprises\" we recall, as discussed supra in the context of\nde jure specificity, that the chapeau to Article 2.1 of the SCM Agreement defines this term as follows:\n\"In order to determine whether a subsidy, as defined in paragraph 1 of Article 1, is\nspecific to an enterprise or industry or group of enterprises or industries (referred to\nin this Agreement as \"certain enterprises\") within the jurisdiction of the granting\nauthority, the following principles shall apply:\". (emphasis added)\n9.128 Thus, the first question concerning the meaning of the term \"certain enterprises\" in Article 2.2\nof the SCM Agreement is whether that phrase cove rs all enterprises located within the designated\ngeographical region within the jurisdiction of the gr anting authority, or is limited to some subset\nthereof. For China, this term should be understood to mean that only if a subsidy is limited to some\nsubset of enterprises within the region is that su bsidy regionally specific. For the United States,\nhowever, the reference to \"certain enterprises\" in the particular context of Article 2.2 serves to\ndistinguish those enterprises within the designated re gion from those outside it. To try to answer this\nquestion, we first substitute into the text of Article 2.2 of the SCM Agreement the full phrase that is\nequivalent to the contraction \"certain enterprises\". This would read, in pertinent part, \"[a] subsidy\nwhich is limited to [ an enterprise or industry or group of enterprises or industries ] located within a\ndesignated geographical region within the jurisdiction\" of a granting authority. We do not consider,\nhowever, that the text of the provision, in isolatio n, either with or without this substitution, sheds\nparticular light on the question at issue.\n9.129 We thus next turn to the context of the provisi on, the most relevant of which we find to be\nthat afforded by Articles 8.1(b) and 8.2(b) of the SCM Agreement, as these Articles together shed\nconsiderable light on the question before us. These provisions read, in relevant part:\n\"8.1 The following subsidies sha ll be considered as non-actionable\n [footnote\nomitted]:\n(a) subsidies which are not specific within the meaning of\nArticle 2;\n(b) subsidies which are specific within the meaning of Article 2\nbut which meet all of the conditions provided for in\nparagraphs 2(a), 2(b) or 2(c) below.\n8.2 Notwithstanding the provisions of Pa rts III and V, the following subsidies\nshall be non-actionable:\n\n(b) assistance to disadvantaged regi ons within the territory of a\nMember given pursuant to a general framework of regional\ndevelopment [footnote omitted] and non-specific (within the\nmeaning of Article 2) within eligible regions provided that:\n (i) each disadvantaged region must be a clearly\ndesignated contiguous geographical area with a\ndefinable economic and administrative identity;\n\n (ii) the region is considered as disadvantaged on the\nbasis of neutral and objective criteria [footnote\nomitted], indicating that the region's difficulties arise\nout of more than temporary circumstances; such\ncriteria must be clearly spelled out in law, regulation,\nor other official document, so as to be capable of\nverification;\n (iii) the criteria shall include a measurement of economic\ndevelopment which shall be based on at least one of\nthe following factors:\n[...]\".\n9.130 Before considering the exact wording of these provisions, we first recall that the overall\npurpose and effect of Article 8 of the SCM Agreement during the period when it was in force\n433, as\nindicated in Article 8.1(b), was not to change the sp ecificity rule of Article 2 of the SCM Agreement.\nRather, Article 8 gave a special non-actionable status to a limited subset of the universe of specific\nsubsidies which, in the absence of that Article, would have been actionable by virtue of their\nspecificity. Upon the lapsing of Article 8, the form erly non-actionable subsidies simply reverted to\nthe same (actionable) status as all other specific subsidies.\n9.131 Turning now to the text of Article 8.1(b) of the SCM Agreement, we note that this provision\nexplicitly identifies as \"specific\" all of the subsid ies described in Article 8.2 as non-actionable. In\nparticular, this provision describes the non-acti onable subsidies as \"subsidies which are specific\nwithin the meaning of Article 2 but which meet \" the conditions provided for in the various sub-\nparagraphs of Article 8.2, including Article 8.2(b) , covering assistance to disadvantaged regions. In\nother words, Article 8.1(b) makes clear that the subsidies for disadvantaged regions described in\nArticle 8.2(b), as well as the other subsidies described in Article 8.2 are, by definition, \"specific\"\nwithin the meaning of the SCM Agreement. This of course is logical, as if these subsidies were not\nspecific, they would not be covered by, and th us would not be actionable pursuant to, the SCM\nAgreement. Indeed, Article 8.1(a) of the SCM Agre ement makes this point explicitly, identifying as\none of the two categories of non-actionable subsidies those \"subsidies which are not specific within\nthe meaning of Article 2\".\n9.132 As for Article 8.2(b) of the SCM Agreement, the relevant point for this dispute is that in order\nfor a subsidy to a disadvantaged region to ha ve had non-actionable status, that subsidy, inter alia, had\nto be \" non-specific [...] within [an] eligible region [...]\". What this means is that a subsidy to a\nparticular, disadvantaged region was defined by the SCM Agreement as specific in the sense of\nArticle 2 of the Agreement, in spite of being non-specific within the region in question. Had the non-\nspecificity within the region been enough to render the subsidy non-specific in the sense of Article 2,\nthis would have made Article 8.2(b) entirely re dundant given, as just noted, that non-specific\nsubsidies are not covered by, and thus not acti onable in any way under, the SCM Agreement.\nFurthermore, in view of the fact that the regional aid in question, to be non-actionable, had to be non-\nspecific within the region in question, the only possi ble basis for such aid to be specific pursuant to\nArticle 2 was its geographical limi tation, i.e., on the basis of Article 2.2 of the SCM Agreement on\nregional specificity.\n\n433 Pursuant to Article 31 of the SCM Agreement, Ar ticles 6.1, 8 and 9 applied provisionally for five\nyears from the entry into force of th e WTO Agreement, and the period of a pplication could have been extended\nby consensus decision of the SCM Committee. No such consensus was reached, however, and these provisions\nthus lapsed.\n\n9.133 Finally, we consider the role of Article 2.2 within Article 2, especially in relation to Article2.1\nof the SCM Agreement. Here, we are concerned by the implications of China's argument that\nsubsidies limited to a designated geographical regi on within the jurisdiction of a granting authority\nwould have to be further limited to a subset of the enterprises located within that region in order to be\nspecific in the sense of Article 2.2 of the SCM Agr eement. In our view, such an interpretation would\nbe inconsistent with the principle of effectiv e treaty interpretation: it would entirely deprive\nArticle 2.2 of meaning and purpose, as any such subsidy already would be specific pursuant to\nArticle 2.1 of the SCM Agreement. By the same toke n, to view Article 2.2 as a particular case of the\nspecificity referred to in Article 2.1, i.e., where the \"certain enterprises\" in Article 2.2 are those\nlocated within the designated geographical region, does not render Article 2.2 redundant. This is\nparticularly clear when Article 2.2 and Article 8.2(b) are considered together, given that Article 8.2(b)\ndefined and singled out for special treatment under the disciplines of the SCM Agreement a subset of\nthe regionally specific subsidies covered by Article 2.2 of the SCM Agreement.\n9.134 We recall that in response to our question on this point, China argued that the purpose of\nArticle 2.2 of the SCM Agreement is to address \"the particular circumstance in which a subsidy is in\nfact limited to certain enterprises located within\" a designated geographical region, by which we\nunderstand China to argue that specificity in the sense of Article 2.2 can exist only in the de facto, and\nnot in the de jure, sense. In the first place, such an inte rpretation would not resolve the issue, as a\nsubsidy such as the one described by China already w ould be specific pursuant to Article 2.1(c) of the\nAgreement. Nor do we see any limitation to de facto specificity in the text of Article 2.2 of the SCM\nAgreement. Indeed, the only textual basis that China offers in support of this argument is that, unlike\nArticle 2.1(a), Article 2.2 does not refer to an \"e xplicit limitation\" of access to the subsidy by the\ngranting authority or the legislation in question. Given, however, that regional specificity appears in\nits own article (Article 2.2), separate from the gene ral provisions containing the respective definitions\nof de jure and de facto specificity, and given as well that Article 2.2 does not refer either to de jure or\nde facto specificity, we see no basis in the text for co ncluding that Article 2.2 would pertain only to a\nde facto situation, and not a de jure one, or vice versa. In our view, such an interpretation not only is\nunsupported by the text, but also is considerably less plausible than one that would read Article 2.2 as\na particular case of specificity, on the basis of ge ographic limitations, which could arise in either the\nde jure or the de facto sense.\n9.135 On the basis of the foregoing analysis we conc lude that the term \"certain enterprises\" in\nArticle 2.2 of the SCM Agreement refers to those enterprises located within, as opposed to outside,\nthe designated geographical region in question, wi th no further limitation within the region being\nrequired.\n9.136 Given that we find this meaning to be clear ba sed on the text of the provision in its context\nand in light of the object and purpose of the provision and the SCM Agreement, we see no need to\nresort to supplemental means of interpretation in r espect of this issue. We note, however, that China\nhas raised arguments based on the negotiating histor y of Article 2.2 of the SCM Agreement, and we\nthus now consider those arguments.\n9.137 In particular, China compares the adopted Uruguay Round text of Article 2.2 of the SCM\nAgreement with the counterpart provision in the \"Dunkel Draft\" 434 of the Agreement. China recalls\nthat the Dunkel text read, in pertinent part:\n\n434 China refers to the Draft Text on Subsidies and Countervailing Measures of 7 November 1990\n(MTN.GNG/NG10/23). (China second written submission, footnote 160). We note that this document is one of\nthe so-called \"Cartland drafts\" of 1990 and that the \"D unkel Draft\" (20 December 1991) was circulated in\ndocument MTN.TNC/W/FA. The relevant texts of both documents, however, contain the wording on regional\nspecificity cited by China.\n\n\"A subsidy which is available to all en terprises located w ithin a designated\ngeographical region shall be specific irr espective of the nature of the granting\nauthority\".\nwhile the adopted language in the SCM Agreement reads:\n\"A subsidy which is limited to certain enterprises located within a designated\ngeographical region within the jurisdiction of the granting authority shall be specific\".\nFor China, the change of the language from \"avail able to all enterprises\" in the Dunkel Draft to\n\"limited to certain enterprises\" in the final, adopt ed Agreement means that th e negotiators considered\n– and rejected – the meaning whereby a subsidy w ould be specific pursuant to Article 2.2 based on\ngeographical limitation only.\n9.138 In considering this argument, we note that the changes between the Dunkel text and the\nadopted text of the SCM Agreement go beyond the substitution of the term \"limited to certain\nenterprises\" for \"available to all enterprises\", and that the meaning of this change can only be\nunderstood by looking at the entirety of the two sentences. In particular, the Dunkel text provided that\neven if a subsidy granted within a region were comple tely generally available, to \"all enterprises\"\nwithin a designated geographical region, it would ha ve been specific, without regard to who the\ngranting authority was or what its territorial reach was. In practical terms, this would have meant that\neven a subsidy granted by a provincial government to all enterprises within the entirety of its own\nterritory would have been regionally specific.\n9.139 By contrast, Article 2.2 of the SCM Agreemen t changes the focus of the provision, to the\ngranting authority in juxtaposition with its geographical jurisdiction, such that only where a subsidy is\nlimited to a subpart of the territory within the jurisdiction of the granting authority would specificity\narise under this provision. It is this change in orientation and focus between the Dunkel text and the\nSCM Agreement that explains the need, from the poi nt of view of technical drafting, to change\n\"available to all\" to \"limited to certain\". The ne gotiating history of the provision thus certainly does\nnot detract from, and if anything supports, the co nclusion that we have reached regarding the term\n\"certain enterprises\" in Article 2.2 of the SCM Agreement based on our analysis of that provision\nitself.\n(ii) \"Designated geographical region\" in Article 2.2 of the SCM Agreement\n9.140 A further question of legal interpretation rai sed by China's claim is whether a \"designated\ngeographical region\" in the sense of Article 2.2 of the SCM Agreement must necessarily have some\nsort of formal administrative or economic identity as China argues, or whether any identified tract of\nland within the territory of a granting authority can be a \"designated geographical region\" for the\npurposes of a specificity finding pursuant to Article 2. 2 of the Agreement. Starting with the text of\nArticle 2.2, we find no limitation of the kind advanced by China, nor does China point to one. Thus,\nthe text on its own would appear to allow any iden tified tract of land within the jurisdiction of a\ngranting authority to be a \"designated geographical region\" in the sense of Article 2.2 of the SCM\nAgreement.\n9.141 We recall that China's main support for its argum ent is the context provided by Article 8.2(b)\nof the SCM Agreement. In particular, China recalls that Article 8.2(b) required that a disadvantaged\nregion in the sense of that provision, inter alia, had to be clearly designa ted and contiguous, and had\nto have a definable economic and administrative identit y. China argues that due to the similarity of\nthe language in Articles 2.2 and 8.2(b), the concepts in the latter provision should also apply to the\nterm \"designated geographical region\" in Article 2.2 of the SCM Agreement.\n\n9.142 We note first that in fact the texts of the two pr ovisions are different. As an initial matter, we\nconsider that if the drafters had intended for their meanings to be the same, they would have used the\nsame language in both places.\n9.143 In addition, we recall that the purpose and function of Article 8 of the SCM Agreement was to\nconfer non-actionable status on a certain subset of the subsidies that are specific in the sense of\nArticle 2 of the SCM Agreement. Given this, we c onsider that the context provided by Article 8.2(b)\nin respect of the meaning of the term \"designated ge ographical region\" in Article 2.2 points rather to\nthe opposite conclusion from that drawn by China. In particular, the requirements in Article 8.2(b)\nimposed special restrictions and conditions the purpose of which was to define and circumscribe, from\namong the universe of subsidies that were specific on the basis of Article 2.2, those that were non-\nactionable. The need for these restrictions and cond itions thus is obvious, i.e., to ensure that the\nassistance was in reality limited to generalized economic assistance to regions that were economically\ndisadvantaged based on specified, quantifiable pa rameters, and to prevent the non-actionability\nprovisions from being used to disguise what in fact were targeted, trade distortive subsidies. Indeed,\nwithout the additional restriction that a disadvant aged region, to qualify under Article 8.2(b), among\nother things had to have a definable economic and administrative identity, it would have been possible\nfor Members to define any parcel of land – incl uding, say, a particular, individual factory – as a\n\"disadvantaged region\" and on that basis to provi de non-actionable subsidies to that plant, thus\nentirely avoiding the disciplines of the SCM Agreemen t. Similarly, if China's argument as to the\nmeaning of \"designated geographical region\" in Artic le 2.2 were correct, it would become a simple\nmatter to circumvent the SCM Agreement by providing subsidies through industrial parks or similar\ngeographical areas, without targeting particular enterprises within those areas.\n9.144 On the basis of the foregoing analysis, we conc lude that a \"designated geographic region\" in\nthe sense of Article 2.2 of the SCM Agreement can encompass any identified tract of land within the\njurisdiction of a granting authority.\n(b) USDOC regional specificity determination\n9.145 Having reached our conclusions regarding the le gal interpretation of Article 2.2 of the SCM\nAgreement, we now turn to the USDOC's regional specificity determination in the LWS investigation,\nin respect of the provision of allegedly subsidized land-use rights.\n(i) USDOC determination\n9.146 In the LWS investigation, the USDOC determined that China's provision of land-use rights in\nthe New Century Industrial Park to an investigated producer (Aifudi)\n435 constituted a countervailable\nsubsidy in the form of land-use rights for less th an adequate remuneration. The USDOC first found\nthat China's provision of land-use rights to Aifudi constituted a financial contribution by a\ngovernment in the form of provision of goods or services. The USDOC then found that this financial\ncontribution was de jure specific because the provision of the land-use rights within the Industrial\nPark was limited to an enterprise or industry lo cated within a designated geographical region.\nFurthermore, since the provision of land-use rights was found to be \"regionally specific\", the USDOC\ndetermined that factors such as the number of users a nd the types of industries were not relevant to its\nspecificity analysis.\n436 The USDOC then found, as a separat e step, that the land-use rights were\n\n435 The USDOC's determination indicates that \"Golden Moon\" was the enterprise that actually obtained\nthe land-use rights, that it shared the land with Aifudi in the Industrial Park, and th at the two enterprises were\ncross-owned. The USDOC therefore referred to Aifudi as the buyer of the land-use rights. (Exhibits CHI-3,\np. 14 and CHI-34, p. 67906).\n436 Exhibit CHI-3, pp. 14 and 55.\n\nprovided for less than adequate remune ration and therefore conferred a benefit. 437 W e c o n s i d e r\nChina's claims in respect of this benefit determination in Section X, infra.\n9.147 Concerning specificity, the USDOC found that the provision of land-use rights was specific\nbecause the provision of those rights in an industrial park within the county's jurisdiction was limited\nto an enterprise or industry or group thereof located within a designated geographical region.\n438 In\nparticular, the USDOC found that Aifudi was situated in an industrial park that had been created by\nthe Huantai County government for the purpose of providing industrial land-use rights to industries\nwithin that government's jurisdiction, i.e., that the New Century Industrial Park was within the\nauthority of Huantai County and thus that Aifudi re ceived land-use rights by virtue of its location in\nthe Industrial Park.\n439\n9.148 The USDOC indicated that at verification it ha d confirmed that the county had identified a\nspecific, contiguous area of land within its jurisdic tion, designated that land as an industrial park, and\ncontrolled the granting of land-use rights within the industrial park. 440 On the latter point, officials\nfrom the Huantai County Land Bureau had indicated at verification that the county government gave\nthe final approval to companies for land-use rights, and that all levels and all agencies of the county\ngovernment had to approve land-use rights.441\n9.149 Thus, the USDOC's determination makes clear th at its regional specificity finding was in\nrespect of the government financial contribution, i. e., the provision of land-use rights. The USDOC's\nbenefit determination was a separate step in its analysis of this programme.\n9.150 As discussed supra, China's basic arguments against this approach are that regional specificity\ncannot be determined solely on the basis of geogra phic location but must involve a further selectivity,\nand that regional specificity can only exist in a de facto but not in a de jure sense. China's general\nargument that de jure specificity (on whatever basis) cannot be found unless the law or regulation in\nquestion specifies all elements of a specific subsi dy (financial contribution and benefit, as well as\nspecificity) also is relevant here.\n9.151 Part of China's specificity argument thus also concerns the benefit element of USDOC's\nfinding regarding the provision of land-use rights. That part of the finding was that the land prices\nwithin the park, the purpose of which was to provide land-use rights, were below-market, as measured\nagainst an external market benchmark (certain land-use prices in Bangkok and adjacent provinces).\nChina argues however that the evid ence on record showed that land pr ices within the Industrial Park\nwere if anything higher than those outside the Park in the same county, and that this comparison\nshould have factored into both the specificity and be nefit determinations. In particular, for China,\neven if regional specificity were determined on th e basis of geography alone, the price for land use\ninside the Industrial Park would need to be lowe r than land use prices elsewhere in the county for\neither a benefit or any possibility of regional specificity to exist.\n(ii) Assessment by the Panel\n9.152 The question before the Panel in respect of the LWS investigation is whether the USDOC's\nfinding that the provision of land-use rights to Aifudi was regionally-specific was consistent with the\nSCM Agreement. The United States argues that th ere was a financial contribution by a government\n(provision of land-use rights which are totally cont rolled by the government), and that the particular\n\n437 Exhibit CHI-3, p. 14.\n438 Id.\n439 Id., p. 55.\n440 Id.\n441 Id., pp.14 and 55.\n\nland-use rights in question – those to Aifudi, whic h were in the Industrial Park – were regionally\nspecific because they were available only to the companies operating in the Industrial Park. The\nUnited States also argues that there was very little record evidence on prices of land-use outside the\nPark, and that even if there were some subsidies conferred to some land-users outside the Park that\nwould not alter the fact that land-users in the Park were receiving land-use subsidies by virtue of their\nlocation (i.e., regionally-specific subsidies).\n9.153 China, in addition to its legal arguments that regional specificity cannot be determined on the\nbasis of a geographic limitation alone, and that an industrial park cannot be a designated geographic\nregion, argues that the evidence of record did not sh ow that any benefit was enjoyed by Aifudi that\nwas not also enjoyed by other companies inside th e Industrial Park and, moreover, showed that the\nprice for land-use in the Industrial Park was if anyt hing higher than that outside the Park in Huantai\nCounty.\n442 As such, according to China, being located in the Industrial Park conferred no special\nadvantage.443 China thus seems to be saying that ev en if any subsidy existed, it was generally\navailable to purchasers of land-use rights in Huantai County. China also argu es that by the USDOC's\nlogic, the provision by a government of any piece of land would be regionally specific purely by\nvirtue of the geographical nature of land; an outcome that China considers would be absurd.\n9.154 We note that there is no substantial disagreemen t between the parties as to the facts of the\nsituation. The record evidence indicates that a ll of the land in China ultimately was owned by the\ngovernment, that before agricultural land could be put to industrial use it had to be converted by the\nrelevant provincial government, and that the provision of land-use rights to particular enterprises was\nthe responsibility of the relevant municipal (county) government. The record evidence also indicates,\nand the parties do not disagree, (i) that the Industria l Park was created through the conversion, by the\nHuantai County government, of a tract of agricultu ral land to industrial use, and (ii) that only\nsometime after the establishment of the Industrial Pa rk and the installation of a number of enterprises\n(including Aifudi) in the Park was that land conve rsion brought to the attention of, and approved by,\nthe provincial government. Finally, there is no disagre ement between the parties as to the price that\nAifudi paid for the land, or as to the prices paid under other land-use contracts on the record, for\ncertain land both inside and outside of the Industria l Park. Where the disagreement on the latter point\nlies is in respect of the relevance of such other la nd prices to the question of specificity, and in respect\nof the representativeness of this other pricing info rmation (the United States notes that only a few\nsuch contracts were produced by the respondents in response to the USDOC's request).\n9.155 We recall our finding, supra, that it is not necessary for a granting authority or the relevant\nlegislation to identify all elements of a specific subsidy for a valid finding of de jure specificity. We\nthus find no legal error in the USDOC having based its determination of regional specificity on the\nelement of the financial contribution, i.e., on the provision of land-use rights by Huantai County.\n9.156 We also recall our finding that an industrial pa rk, as a designated tract of land within the\njurisdiction of a granting authority, would fall with in the scope of the term \"designated geographical\narea within the jurisdiction of the granting authority\" in Article 2.2 of the SCM Agreement. We thus\nfind no error in the USDOC's having found the Industr ial Park to be a \"designated geographical area\"\nwithin the jurisdiction of Huantai County.\n\n443 Id., para 202. In particular, China argues that the subsidy that the USDOC determined to be\ncountervailable was the provision of land by the governme nt at a price that the USDOC considered to represent\nless than adequate remuneration, but that the United States fails to identify any aspect of the alleged subsidy that\nwas \"only available\" to companies lo cated within the New Century Industri al Park. According to China, the\nsame government – Huantai County – provided land to enterprises located outside of the \"designated\ngeographical region\" at the same or lower prices, and the subsidy identified by the USDOC therefore was not\n\"unique\" or \"only available\" to companies located within the New Century Industrial Park. (Id.).\n\n9.157 Finally, we recall our finding that specificity in the sense of Article 2.2 of the SCM\nAgreement refers to limitation of access to a subs idy on the basis of geographic location alone, and\nthat no further limitation to a subset of the enterpri ses in the region in question is necessary for such\nspecificity to exist. Thus, we find no error in the fact that the USDOC, in reaching its regional\nspecificity determination, did not examine whether some of the companies in the Industrial Park\nobtained their land-use rights on more favourable terms than others.\n9.158 We do not consider that these findings fully resolv e this claim, however. In particular, we are\ntroubled by the implications of the USDOC's analytical approach in the context of the specific facts of\nthe LWS investigation. In this regard, we read the USDOC's determination as meaning that the\nprovision of the land-use rights to Aifudi was re gionally specific because the land was physically\nlocated in a designated area within the jurisdiction of the granting authority, i.e., inside the Industrial\nPark. In particular, the USDOC indicated in its de termination that the Industrial Park was created for\nthe purpose of providing land-use rights to companies that were located there, and thus met the\ncriteria for regional specificity. We consider that this reasoning is essentially circular, however, given\nthat land itself is a location.\n9.159 Furthermore, we recall the undisputed fact of record that in China the government was the\nultimate owner of all land. This implies first that any time an enterprise obtained land-use rights\nanywhere in China it was receiving a financial contri bution by a government. The further implication\nof the USDOC's approach would be that those land-u se rights, wherever in China they were provided,\nwould be regionally specific, given that land is by definition always limited by and to its geographic\nlocation. Here, we note that in the investiga tion before us, while a perimeter was drawn around a\nparticular tract of land within the jurisdiction of the granting authority, which was labelled the New\nCentury Industrial Park, and the USDOC considered th e Park, rather than Aifudi's particular piece of\nland within it, to be the \"geographical region\" in question, we see no basis under the USDOC's\nanalytical approach, and the United States points to no record evidence, to establish that the provision\nof land-use rights in the Industrial Park constituted a distinct regime for the provision of that financial\ncontribution, compared with the provision of financ ial contributions in the form of land-use rights\noutside the Park.\n9.160 Nor has the United States pointed to anything in the record that shows that the creation of the\nIndustrial Park went beyond the re-zoning of a par ticular tract of land from agricultural to industrial\nuse. While this re-zoning initially was undertaken by the county government without the required\nprovincial government authorization, that authoriza tion was subsequently obtained. We note in this\nregard that the verification report indicates that there was no separate land policy for land in industrial\nzones, and that as long as land was for industrial use, it had to be in accordance with industrial land\npolicy, which applied whether the land was inside or outside an industrial zone.\n444 We further recall\nthat the USDOC's determination and the evidence cited therein indicates that the county government\nset the industrial land-use prices both within and outside the Industrial Park, and the United States\npoints to no record evidence showing that the i ndustrial land-use prices within the Park were\nuniform445, or that these prices had any clear distinctive identity compared with the prices outside the\nPark, indicating that the land-use regime for the Pa rk was a distinct financial contribution. We\nemphasize that we refer here to land-use prices, a nd in particular to any indication on the record of\ndifferences in land-use prices within and outside th e Industrial Park, as possible factual evidence of\nthe existence of a separate land-use regime for the Industrial Park. We do not mean to imply that any\nsuch price differences would be indicative of the exis tence or amount of a benefit, which is a separate\nissue, addressed in Section X, infra. The ultimate implication of the USDOC approach to regional\n\n444 Verification of the Questionnaire Responses Submitted by the Government of the People's Republic\nof China (GOC) – Provincial and Local Government (the \"Verification Report\"), Exhibit US-79, p. 8.\n445 The Verification Report indicates th at there were at least two land-use prices within the Park. (Id.,\npp. 12-14).\n\nspecificity in respect of the land-use rights at issue is that if it was then determined (as was the case in\nthe LWS investigation) that the particular land-use rights in question were provided for less than\nadequate remuneration, the result would be that a regionally specific subsidy would be provided. This\nwould be the case even if all purchasers of land-use rights throughout the jurisdiction of the granting\nauthority paid exactly the same below-market price for land, because each individual purchase, due to\nits inherent geographical limitation, would be regionally specific.\n9.161 We consider that such an outcome, and thus the approach that generates it, cannot be\nreconciled with Article 2 of the SCM Agreement, th e purpose of which is to identify those subsidies\nthat by virtue of being limited on some basis, are subject to the Agreement's disciplines. We therefore\nfind that the USDOC's determination of regional sp ecificity in respect of the provision of land-use\nrights to Aifudi is inconsistent with the obliga tions of the United States under Article 2 of the SCM\nAgreement.\n9.162 We emphasize here that our conclusion concer ning the USDOC's regional specificity finding\nin the LWS investigation is driven by the specific facts that were on th e record of that investigation.\nIn particular, we emphasize that we are not saying that the intrinsic geographic nature of land-use\nrights would always preclude a regional specificity finding in respect of the provision of land-use\nrights. Nor, when we say that the United States ha s pointed to no record evidence that the Industrial\nPark constituted a unique land-use regime, as might have been indicated by special rules or distinctive\npricing or other elements that distinguished the pr ovision of land in the Park from the provision of\nland outside the Park, do we mean to imply any factual findings of our own that the Industrial Park\nwas or was not such a regime, or that the terms a nd conditions for land-use inside the Park were or\nwere not indistinguishable from those outside. It is entirely possible that ev idence relevant to these\npoints existed, and had such evidence been placed on the record, it might have resulted in a finding of\nregional specificity consistent with Article 2.2 of the SCM Agreement.\n9.163 It does not appear to us, however, that the USDOC pursued these or similar lines of inquiry\nassiduously. Indeed, while before us the United Stat es argues that the record evidence on land prices\noutside the Industrial Park was thin because Ch ina only supplied a few examples of such land-use\ncontracts, and while in its determination the US DOC implies that those contracts were not fully\nrelevant to its inquiry\n446, we note that when it verified that information, the USDOC appears not to\nhave requested any additional land-use contracts, but instead simply verified the ones it was given. 447\nAs for the nature of the Industrial Park, we see no indication in the record evidence that the USDOC\nexamined whether it constituted a land-use regime th at was clearly distinguishable from the general\nprovision of land-use rights by the county governme nt. Instead, the USDOC appears to have focused\nprincipally on the process by which the Industrial Park was created, and the irregularities in that\nprocess, as well as on how the land-use prices were set both inside and outside the Industrial Park, but\nwith no findings as to any clear basis on which the pr ovision of a financial contribution in the form of\nland-use rights differed as between land inside and ou tside the Park. In short, had the USDOC made\n\n446 On this point, the USDOC's determination reads:\n\n\"Although the Department was provided some documentation at verification showing the\nprices charged for land-use rights in an industrial park in another county, these two contracts\nwere not contemporaneous with the original contracts negotiated for Aifudi's land-use rights\n[...] Similarly, our examination of two other co ntracts for industrial la nd located in Huantai\ncounty that is outside of the industrial park, did not provide us any information as to how\nthese prices were determined\". (Exhibit CHI-3, p. 59).\n\n447 The Verification Report indicates that \"we [...] requested and the land bureau provided us with\ninformation on contracts for industrial land outside of the industrial zone\". (Exhibit US-79, p. 14). There is no\nindication in the report either that the information in the contracts was unable to be verified, or that any\nadditional contracts were requested.\n\nfurther inquiries into these or si milar issues, and depending on the outcome of those inquiries, our\nconclusions as to the WTO-consistency of the USDOC' s regional specificity finding in respect of the\nprovision of land-use rights to Aifudi might have been different.\n9.164 For the foregoing reasons, we conclude th at the USDOC's determination of regional\nspecificity in respect of the provision of land-use rights to Aifudi was inconsistent with the obligations\nof the United States under Article 2 of the SCM Agreement.448\nX. CHINA'S CLAIMS PERTAINING TO BENCHMARKS\nA. CLAIMS OF CHINA\n10.1 China claims that, \"in connection with each inst ance in which US authorities resorted to a\nbenchmark outside of China for the purpose of de termining the existence and amount of any alleged\nsubsidy benefit\", the USDOC's \"rejection of preva iling terms and conditions in China as the basis for\ndetermining whether, and to what extent, subj ect producers received a subsidy benefit under the\nmethodologies set forth in Article 14\" was inconsiste nt with that provision and, as a consequence,\nwith Articles 10 and 32.1 of the SCM Agreement, and Article VI:3 of the GATT 1994. 449 Under this\ngenerally-worded claim, China raises the following series of specific allegations.\n10.2 First, China alleges, in respect of SOE-produced inputs 450 in the CWP, LWR and LWS\ninvestigations, that the USDOC unlawfully presumed that Chinese private prices were distorted, based\nexclusively on the extent of government involvement in the market, and that it thus acted\ninconsistently with Article 14(d) of the SCM Agre ement when it rejected those prices as benchmarks\nand resorted instead to benchmarks based on out-o f-country prices, i.e., it failed to determine the\nadequacy of remuneration for the inputs in relation to prevailing market conditions in China. China\nargues that the USDOC's reliance on these alte rnative benchmarks for measuring adequate\nremuneration with respect to the provision of input s in the three investigations \"was predicated\nexclusively on its invalid findings that private prices were distorted\", and that \"[a]ccordingly, all of\n[the USDOC's] benefit calculations relying on those alternative benchmarks likewise are invalid\".\n451\n10.3 Also concerning these inputs, Ch ina notes that the alleged unlawfulness of the distortion\nfindings and consequential rejection of Chinese pr ivate prices \"makes it unnecessary for the Panel to\ninquire whether each alternative benchmark [ ...] satisfied the requirements set forth in\nArticle 14(d)\".452\n10.4 Second, China alleges, in respect of government provision of land-use rights in the LWS and\nOTR investigations, that the USDOC unlawfully pres umed that private pri ces for land-use in China\nwere distorted due to the significant government role in the market, and that it thus acted\ninconsistently with Article 14(d) of the SCM Agre ement when it rejected those prices as benchmarks\nand resorted instead to benchmarks based on out-o f-country prices. i.e., it failed to determine the\nadequacy of remuneration for land-use rights in relation to prevailing market conditions in China.453\n\n448 Concerning China's claims of consequential violations of Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994 in connection with this claim see Section XIII, infra.\n449 Paragraphs B.1(d)(i) and B.1(e)(i)-(iii) of the \"as applied\" claims in China request for establishment\nof the Panel; China first written submission, para. 468 (b ) and (e)-(g); second writte n submission, para. 315 (c)\nand (f)-(h).\n450 Both sourced directly from SOEs and purchased from trading companies. (China first written\nsubmission, para. 129).\n451 See, generally, China first written submission, paras. 113-130.\n452 Id., paras. 129-130.\n453 China first written submission, paras. 302-306.\n\n10.5 Third, also in connection with land-use rights, China alleges that the USDOC failed to satisfy\nthe requirements of Article 14(d) in respect of the particular benchmark that it used (certain land\nprices in Bangkok, Thailand), because Thai land pr ices (and foreign land prices more generally) do\nnot relate or refer to prevailing market conditions for land-use rights in China.\n454\n10.6 Fourth, China alleges, in respect of SO CB loans denominated in RMB, the USDOC's\nrejection in the OTR, CWP and LWS investigations of Chinese RMB interest rates as benchmarks\nwas inconsistent with Article 14(b), as only Chinese RMB-denominated loans are \"comparable\ncommercial\" loans that the borrowers \"could actually obtain\" in a lending market in which they were\nable to borrow in that currency.\n455\n10.7 Fifth, also concerning SOCB loans denominated in RMB, China argues that the USDOC's 33-\ncountry regression analysis used in the OTR, CWP and LWS investigati ons to generate the\nbenchmark interest rates did not represent \"compa rable commercial loans\" that the borrower could\n\"actually obtain on the market\", as the fictitious loans were not denominated in the same currency\nand, being fictitious, no borrower could \"actually obtain\" these loans in any commercial market.456\n10.8 Sixth, concerning SOCB loans denominated in U. S. dollars, China alleges that by using as a\nbenchmark in the OTR investigation an average annual LIBOR rate, the USDOC used a benchmark\nthat was inconsistent with Article 14(b), as it did not reflect what the tire producer at issue (GTC)\n\"would pay on a commercial loan\" that it \"could actually obtain on the market\". That is, GTC would\nnot have paid an average annual LIBOR rate, but rather the correct daily LIBOR rates for a dollar-\ndenominated loan of the same maturity and the same interest rate terms as the SOCB loans.457\nB. APPLICABLE PROVISIONS OF THE COVERED AGREEMENTS\n10.9 China's request for the establishment of the Panel included claims under both Article 14 of the\nSCM Agreement as well as under Section 15, paragr aphs (b) and (c), of China's Protocol of\nAccession. Section 15(b) of China's Protocol of Accession contains rules pertaining to the\ndetermination of the existence and amount of benefit in countervailing duty investigations on Chinese\nproducts.458 Section 15(c) imposes upon importing Members the obligation to notify, inter alia, the\nmethodologies that it uses pursuant to Section 15(b).\n10.10 In its submissions to the Panel, China requ ested that the Panel only make findings with\nrespect to the WTO-consistency of the USDOC benefit determinations at issue under the provisions of\nArticle 14 of the SCM Agreement. 459, 460 China reserved its right to present arguments under\nSections 15(b) and (c) of its Protocol in the event that the United States invoked the disciplines\n\n454 China first written submission, paras. 307-319.\n455 See, e.g., China first written submission, paras. 233 and 238-239.\n456 Id., para. 245.\n457 Id., para. 242.\n458 See Section VII.B, supra.\n459 The main provision of the SCM Agreement cited by China is Article 14. China's claims under\nArticles 10 and 32.1 of the SCM Agreement and Article VI :3 of the GATT 1994 are consequential to its claims\nunder Article 14.\n460 China first written submission, paras. 29-30 and footnote 8; response to Panel question 25 (first\nmeeting). Essentially, China considers that in the in vestigations at issue, the USDOC did not rely upon\nSection 15(b) as a rationale for its use of non-Chines e benchmarks, or that the USDOC considered that the\nconditions for resorting to out-of country benchmarks unde r Section 15(b) do not differ from those that apply\nunder Article of the SCM Agreement. China argues that, as a consequence, the United States may not seek to\ndefend its use of non-Chinese benchmarks on a basis other than Article 14 of the SCM Agreement. (Id.) China\nfurther notes that the USDOC did not use a methodology notified to the WTO as would have been required\nunder Section 15(c) of the Protocol. (China first written submission, footnote 10).\n\ncontained therein. 461 The United States indicated that, in its view, the Panel did not need to make\nfindings under Section 15(b) of the Protocol of Accession.462\n10.11 In response to a specific question from the Pa nel on the issue, the United States confirmed\nthat even if we were to find that the determinations at issue are inconsistent with its obligations under\nArticle 14(b) and (d), we would not, in the view of the United States, have to evaluate whether the\nUSDOC determinations nevertheless were justified under China's Protocol of Accession. Conversely,\nChina indicated that it is not seeking findings from the Panel under its Protocol of Accession in the\nevent that we find that the USDOC determinations are consistent with the obligations of the\nUnited States under Article 14 SCM Agreement.463\n10.12 In sum, neither China nor the United States is invoking the specific provisions contained in\nSection 15(b) of China's Protocol of Accession pertaining to the application of the disciplines set forth\nunder the SCM Agreement and Article VI of the GATT in countervailing duty investigations on\nimports from China. In addition, the application of Section 15(b) of China's Protocol of Accession in\nspecific factual circumstances raises a number of inte rpretative issues that have yet to be considered\nby a panel or by the Appellate Body, and th e parties have only provided us with limited\nargumentation as to how, in their view, the terms of th is provision should be interpreted. In light of\nthese considerations, we consider it appropriate to limit our analysis of the consistency with the\ncovered agreements of the USDOC's benefit determinations to the provisions of the SCM Agreement\ninvoked by China, primarily Article 14 thereof.464\nC. ORDER OF ANALYSIS OF CLAIMS\n10.13 As indicated in the above summary, the issues ra ised by China in respect of benchmarks fall\ninto two broad categories. The first category conc erns the USDOC's rejection of internal Chinese\ninput prices, land-use prices, and interest rates as the benchmarks used to measure the amount of the\nbenefit from SOE-produced inputs, government-p rovided land-use rights, and SOCB loans,\nrespectively. The second category concerns the be nchmarks actually used by the USDOC to measure\nthe benefits from land-use rights and SOCB loans. (As indicated, China makes no allegations\nconcerning the benchmarks actually used in respect of inputs).\n10.14 Because the two broad categories are con ceptually distinct, and because we address infra our\ndoubts as to whether the second category of issues is covered by our terms of reference, we first\nanalyze all of the issues related to the rejection of Chinese input prices, land-use prices and interest\nrates, in the light of the requirements of Articles 14(d) and 14(b) of the SCM Agreement, respectively,\nbefore turning to the issues related to the benc hmarks actually used by the USDOC in the three\ninvestigations at issue.\n\n461 China first written submission, para. 31. Later, China confirmed its understanding that the\nUnited States was not invoking Section 15. (China response to Panel question 25 (first meeting); second written\nsubmission, para. 53).\n462 In essence, the United States argue s that its determinations were consistent with Article 14 of the\nSCM Agreement. We note, however, that the Un ited States also argued that it was neither necessary nor\nappropriate for the USDOC to seek to justify its de terminations on other bases than U.S. law. ( See, e.g.,\nUnited States response to Panel questions 25-27 and 29 (first meeting); second written submission, para. 67).\nLater, the United States argued that China had \"aban doned\" its claims und er Section 15 of its Protocol of\nAccession, having made no arguments in this respect. (United States response to Panel questions 25-26 and 31\n(first meeting)).\n463 United States and China responses to Panel question 10 (second meeting).\n464 To be clear, while we mention, in our summary of its position on the interpretation of Article 14(d)\nbelow, the United States' arguments referencing China's Protocol of Accession (see infra, paras. 10.26 and\n10.70), we do not take these arguments into account in our analysis of China's claims on benchmarks.\n\n10.15 Before doing so, however, we note that there ha ve been two past, closely related disputes in\nwhich both of these categories of issues were addressed. We consider that these disputes provide\nuseful background for the analyses that we are called upon to make, and we therefore start by\nsummarizing the pertinent parts of those findings.\nD. R\nEJECTION OF IN-COUNTRY BENCHMARKS AND RESORT TO ALTERNATIVES – THE\nSOFTWOOD LUMBER DISPUTES\n10.16 The questions of whether it is possible to rej ect private benchmarks from within the country\nallegedly providing a subsidy, and to resort to alternative benchmarks, including out-of-country\nbenchmarks, first arose in the context of governme nt provision of goods in the disputes concerning\nthe United States' countervailing duty investigati ons and measures on imports of softwood lumber\nfrom Canada. In those investigations, the United States had found that private Canadian stumpage 465\nprices were distorted by virtue of the fact that the government was the predominant owner of the\nforested land, and provider of stumpage contracts, in Canada. On this basis, the United States rejected\nprivate stumpage prices in Canada as the benchmar k to compare with government stumpage prices,\nand instead used certain U.S. stumpage prices as th e benchmark. On that basis, the USDOC found\nthat Canada provided st umpage for less than adequate remu neration. Canada challenged this\napproach on the grounds that it was inconsistent with the language in Article 14(d) of the SCM\nAgreement that adequacy of remuneration is to be determined in relation to prevailing market\nconditions for the good in question \"in the country of provision\" of that good. The panels in the\ndisputes concerning both the USDOC's preliminary and final investigations and determinations agreed\nwith Canada, finding that Article 14(d) of th e SCM Agreement (calculation of the benefit, inter alia,\nfrom government provision of goods) did not permit the rejection of in-country private prices, because\nof the language requiring that the adequacy of remuneration be determin ed in relation to the\nprevailing market conditions \"in the country of provision\" of the good in question.\n10.17 The United States appealed this panel ruling in the dispute concerning the final investigation\nand determination\n466, and the Appellate Body reversed that panel on this point. First, concerning\nwhether any benchmark other than private prices in the country of provision of the good in question\ncan be used, the Appellate Body found that Artic le 14(d) does not require in all cases the use of\nprivate prices in the country of provision; rather, it found that the requirement in that provision is that\nany benchmark used must \"relate or refer to, or be connected with\" the prevailing market conditions\nin that country.\n10.18 Second, concerning the \"very limited\" circum stances under which a benchmark other than\nprivate prices in the country of provision can be used, the Appellate Body found that such an\nalternative benchmark can be used \"when it has been established that the private prices are distorted,\nbecause of the predominant role of the government in the market as a provider of the same or similar\ngoods\".\n467 This was the sole issue on appeal on this point. In particular, the question as framed by the\nUnited States, to which the Appellate Body thus limit ed its analysis, concerned the situation in which\n\"the government has such a predominant role in th e market as a provider of the goods that private\nsuppliers will align their prices with those of the government-provided goods\".468\n\n465 Stumpage refers to the right to harvest standing timber.\n466 The panel report was circulated in document WT/DS257/R. There was no appeal of the panel report\nin respect of the preliminary investigation and determination (WT/DS236/R).\n467 Appellate Body Report on US – Softwood Lumber IV, para. 103.\n468 Id., para. 99. The Appellate Body stated in particular that its examination was limited to \"whether\nan investigating authority may use a benchmark other than private prices in the country of provision in th[e]\nparticular situation\" of \"government predominance in the market, as a provider of certain goods\". (Id.).\n\n10.19 We note here, however, that the panel also had found that a benchmark other than private\nprices in the country of provision of a good would be allowable in the situations where the\ngovernment is the sole supplier in the country of the good in question, and where the government\nadministratively controls all of the prices for that good in that country. In considering the issue\nappealed by the United States, the Appellate Body expressed \"some difficulty with the Panel's\napproach of treating a situation in which the government is the sole supplier of certain goods\ndifferently from a situation in which the government is the predominant supplier of those goods. In\nterms of market distortions and effect on pri ces, there may be little difference between [these]\nsituations\".\n469 We take this to mean that the Appellate Body did not disagree with the panel that\nrejection of in-country prices was allowable where the government is the sole supplier of the good in\nquestion. Furthermore, to us this statement indicates a fortiori that the Appellate Body had no\ndifficulty with the panel's conclu sion that rejection of in-country prices is allowed where the\ngovernment administratively controls all of the prices for the good in question.\n10.20 Concerning the sole issue on appeal in US – Softwood Lumber IV on this point, i.e., \"the\nsituation of government predominance in the mark et, as a provider of certain goods\", the Appellate\nBody distinguished the situations where the governme nt is a \"significant\" supplier from that where it\nis \"the predominant\" supplier, noting that \"an allegation that the government is a significant supplier\nwould not, on its own, prove distortion and allow an investigating authority to choose a benchmark\nother than private prices in the country of provision\". 470 Rather, the Appellate Body found, \"[t]he\ndetermination of whether private prices are distorted because of the government's predominant role in\nthe market, as a provider of certain goods, must be made on a case-by-case basis, according to the\nparticular facts\" of each investigation.471\n10.21 Third, concerning the alternative benchmarks that could be available in such situations, the\nAppellate Body agreed with the participants and th ird participants in the dispute that \"alternative\nmethods for determining the adequacy of remunera tion could include proxies that take into account\nprices for similar goods quoted on world markets, or proxies constructed on the basis of production\ncosts\".472 The Appellate Body emphasized that in pr oceeding in this manner, an investigating\nauthority \"is under an obligation to ensure that th e resulting benchmark relates or refers to, or is\nconnected with, prevailing market conditions in the country of provision, and must reflect price,\nquality, availability, marketability, transportation and other conditions of purchase or sale, as required\nby Article 14(d)\".\n473 The Appellate Body noted that it was not called upon in that appeal to suggest\nparticular alternative methods, nor to assess the c onsistency with Article 14(d) of all alternative\nmethods suggested by the participants and third pa rticipants in the appeal , as such an assessment\nwould depend on how a given method was applied in a particular case, and could not be performed in\nthe abstract.474\n10.22 Finally, concerning the specific alternative method used by the USDOC, which was to use\ncertain stumpage prices in the United States as the benchmark, although the Appellate Body\nemphasized the need for considerable caution when resorting to an out-of-country benchmark, it did\nnot find that the benchmark used by the United States was inconsistent with Article 14(d) by virtue of\nbeing an out-of-country benchmark (or on any othe r basis). Concerning the use of out-of-country\nbenchmarks in general, the Appellate Body warned that:\n\n469 Appellate Body Report on US – Softwood Lumber IV, para. 100. (emphasis added).\n470 Id., para. 102. (emphasis added).\n471 Id. (emphasis added).\n472 Id., para. 106.\n473 Id.\n474 Id.\n\n\"prices in the market of a WTO Member w ould be expected to reflect prevailing\nmarket conditions in that Member; they are unlikely to reflect conditions prevailing in\nanother Member. Therefore, it cannot be presumed that market conditions prevailing\nin one Member [...] relate or refer to, or are connected with, market conditions\nprevailing in another Member [...]. Indeed, it seems to us that it would be difficult,\nfrom a practical point of view, for inves tigating authorities to replicate reliably\nmarket conditions prevailing in one country on the basis of market conditions\nprevailing in another country. First, there are numerous factors to be taken into\naccount in making adjustments to market conditions prevailing in one country so as to\nreplicate those prevailing in another country; secondly, it would be difficult to ensure\nthat all necessary adjustments are made to pr ices in one country in order to develop a\nbenchmark that relates or refers to, or is connected with, prevailing market conditions\nin another country, so as to reflect price, quality, availability, marketability,\ntransportation and other conditions of purchase or sale in that other country\".\n475\n(footnote omitted)\nThe Appellate Body then noted that different fact ors can result in one country having a comparative\nadvantage over another with respect to the provisi on of certain goods, and that necessary adjustments\nwould need to be made to any out-of-country benc hmark to ensure that any resulting countervailing\nduties were used only for the purpose of offsetting a subsidy, and not for offsetting the difference in\ncomparative advantages between the countries involved.\n476\n10.23 The Appellate Body made no finding in respect of the USDOC's particular finding of market\ndistortion due to the predominant role of the government as the supplier of stumpage, because the\npanel had not reached that issue, but instead had stopped its analysis once it concluded that\nArticle 14(d) did not allow use of any benchmark othe r than private prices in the country of provision\nof the good.\nE. CHINA'S CLAIMS UNDER ARTICLE 14(D) OF THE SCM AGREEMENT – SOE-PRODUCED INPUTS\n1. Claim of China\n10.24 China claims that the USDOC's determinations to reject private prices in China for HRS\ninputs in the CWP and LWS countervailing duty investigations, and for BOPP in the LWS\ncountervailing duty investigation, we re inconsistent with Article 14( d) of the SCM Agreement, as\ninterpreted by the Appellate Body in US − Softwood Lumber IV.477, 478\n2. Main arguments of the Parties\n(a) China\n10.25 China argues that the prices at which private s uppliers in China sold the same inputs alleged\nto be provided by SOEs should have been used as th e \"primary benchmark\" in order to determine the\nadequacy of remuneration under Artic le 14(d) of the SCM Agreement. 479 In addition, China submits\nthat the USDOC's rejection of Chinese private prices for HRS and BOPP was inconsistent with\n\n475 Appellate Body Report on US – Softwood Lumber IV, para. 108.\n476 Id., para. 109.\n477 China first written submission, para. 123; opening oral statement at the first meeting of the Panel,\npara. 42.\n478 As indicated at para. 10.1, supra, China also raises consequential claims pursuant to Articles 10 and\n32.1 of the SCM Agreement and Article VI:3 of the GATT 1994.\n479 China first written submission, para. 124, citing to Appellate Body Report on US – Softwood\nLumber IV, para. 90.\n\nArticle 14(d). Specifically, China argues that th e USDOC did not establish that such prices were\ndistorted, but, rather, used a per se rule under which it relied exclusively on the purported\npredominance of SOEs as suppliers of the inputs co ncerned to determine that private prices in China\nfor HRS and BOPP were distorted.480 This, in China's view, disregards the Appellate Body's decision,\nin US – Softwood Lumber IV , that distortion cannot be \"presumed\" but rather must be \"established\"\nthrough a factual inquiry. 481 China submits that the Appellate Body in that case established\nunequivocally that the predominant role of a government in the market does not, in any\ncircumstances, suffice to establish distortion.\n482 Accordingly, China ar gues that investigating\nauthorities are obliged to establish th at the predominant role of the government in a market has, in\nfact, caused private suppliers to \"align their prices\" with those of the government such that \"the\ngovernment effectively acts as a 'price-sette r'\" and private suppliers as \"price-takers\". 483 To this end,\nChina submits that investigating authorities must conduct an analysis of the relevant market, and\nestablish the conditions under which prices were established in that market. 484 China asserts that the\nUSDOC, however, disregarded the evidence on the reco rd that would have established that private\nprices of HRS and BOPP in China were not distorted.485\n(b) United States\n10.26 The United States rejects China's claims and submits that the USDOC's benefit\ndeterminations are consistent w ith Article 14(d) of the SCM Agreement. In particular, the\nUnited States argues that the Appellate Body has recognized that Article 14 provides flexibility and\npermits the use of out-of-country be nchmarks in certain situations. 486 In addition, the United States\nobserves that Section 15(b) of China's Protocol of Accession and paragraph 150 of the Working Party\n\n480 China first written submission, para. 124; second written submission, para. 48. For instance, China\nnotes that in the CWP and LWR investigations, the USDOC rejected China's arguments – that it had an\nobligation to \"look beyond the degree of state-ownership\" and consider the actual nature and structure of the\nHRS industry – solely on the basis that \"the govern ment accounts for a significant portion of production\" of the\nHRS market. China also submits that the USDOC's determination that it would have found private prices of\nHRS to be distorted even if it would have relied on China's data rather than on facts available further indicates\nthat the \"level of government ownership\" was the di spositive factor in the USDOC's distortion analysis. ( See,\ne.g., China opening oral statement at the first meeting of the Panel, paras. 37-38; response to Panel Question 13\n(second meeting)).\n481 China opening oral statement at the first meeting of the Panel, para. 40. According to China, the\nUnited States has effectively conceded that it resorted to out-of-country benchmarks without conducting any\nprice distortion analysis. (China second written submission, paras. 48, 54 and 61).\n482 China cites in this regard the Appellate Body's st atement that \"an allegation that a government is a\nsignificant supplier would not, on its own, prove distortion and allow and investigating authority to choose a\nbenchmark other than private prices in the country of provision\", but rather, \"[t]he determination of whether\nprivate prices are distorted because of the government's predominant role in the market\", must be made on a\n\"case-by-case basis\". (emphasis omitted) ( See, e.g., China first written submission, para. 128; second written\nsubmission, paras. 55-58, citing to Appellate Body Report on US – Softwood Lumber IV, para. 102).\n483 China second written submission, para. 59, citing to Appellate Body Report on US – Softwood\nLumber IV, para. 99.\n484 Id. China argues that in US – Softwood Lumber IV , the Appellate Body declined to complete the\nanalysis, though the undisputed facts demonstrated that a single governmen t supplier in each of the Canadian\nprovinces set prices administratively and held market shares for the good in question ranging from 83 to 99 per\ncent. (Id., para. 60, citing to Appellate Body Report on US – Softwood Lumber IV, para. 115 and footnote 141).\n485 China points, in particular, to the evidence it prov ided with respect to the structure and operation of\nthe HRS and BOPP markets in China. (China first written submission, paras. 125-127).\n486 United States first written submission, paras. 18 2, 184-185, 189-190 and 193; response to Panel\nquestion 30 (first meeting), citing to Appellate Body Reports on Japan – DRAMs (Korea) , para. 191 and US –\nSoftwood Lumber IV, paras. 92-95, 100.\n\nReport confirm the permissibility of using out-of-c ountry benchmarks to measure any benefit in\ncountervailing duty investigations involving imports from China.\n487\n10.27 The United States argues that, based on all of the evidence on the record, the USDOC\ndetermined that China had a predominant role in the HRS and BOPP markets, and therefore, resorted\nto out-of-country benchmarks to measure the benefits at issue. Thus, the United States disagrees with\nChina's assertion that the USDOC determined that pr ivate prices in China were distorted by applying\na per se rule that only considered the degree of govern ment ownership in the input markets at issue.488\nIn respect of the LWR and CWP investigations, the United States submits that China failed to provide\nnecessary information regarding its control of th e HRS market and that, as a result, the USDOC\ndetermined on the basis of facts available that over 96 per cent of HRS production in China was\naccounted for by SOEs. In addition, the USDOC fou nd that the private prices of HRS in China (i.e.,\nfour per cent of the HRS market) reflected the predominant role of the government in the HRS\nmarket. The USDOC also considered the role played by imports in the market, but determined that\nthey were small relative to the state-owned producti on of HRS, representing only three per cent of the\ntotal Chinese HRS production. On that basis, th e USDOC concluded that the Government of China\nhad a predominant role in the market of HRS. 489 Similarly, in the LWS investigation, the\nUnited States submits that the USDOC's analysis wa s impaired by China's failure to supply requested\ninformation on the percentage of government produ ction of BOPP. The USDOC therefore relied on\nfacts available to determine that one government -owned producer accounted for 90 per cent of the\npetrochemical industry and, as a result, the USDOC concluded that the Government of China played a\npredominant role in the BOPP market.490\n10.28 The United States further submits that, contrary to China's assertions, neither the text of\nArticle 14 nor the Appellate Body report in US – Softwood Lumber IV requires Members to perform a\nseparate \"price distortion\" analysis before resorting to out-of-country benchmarks. In US – Softwood\nLumber IV , according to the United States, the Appellate Body did not find that the Agreement\nrequires a \"price distortion\" analysis, but, instead, he ld that where the participation of the government\nin the market is \"so predominant\", \"it effectively determines the price at wh ich private suppliers sell\nthe same or similar goods, so that the compar ison contemplated by Article 14 would become\ncircular\", and therefore, investigating authorities do not act inconsistently with Article 14(d) by using\nout-of-country benchmarks where they have determined that a government plays such a role. 491 The\n\n487 See, e.g., United States first written submission, para.195.\n488 See, e.g., United States first written submission, para. 201-202; second written submission, 84, 88-\n89; response to Panel question 37 (first meeting). To illu strate its point, the United States also submits that in\nthe OTR countervailing duty investigation, although China owned a significant portion of the natural and\nsynthetic rubber produced domestically, the USDOC relied upon the investigated producers' import prices and\ndomestic purchase prices as a benchmarks. Similarly, in the CWP investigation, the USDOC relied on import\nprices of HRS in addition to world market prices. ( See, e.g., United States response to Panel question 16\n(second meeting); opening statement at the first meeting of the Panel, para. 33).\n489 United States first written submission, paras. 215-219; second written submission, para. 84-85;\nresponse to Panel question, 37 (first meeting); response to Panel question 14 (second meeting).\n490 See, e.g., United States first written submission, paras. 221-223; second written submission,\nparas. 84, 86, 89. The United States further indicates that the USDOC could not assess the viability of the\nprivate BOPP sector in China because China failed to pr ovide requested information on the size of the private\nsector. Moreover, there was no basis upon which the USDOC could assess import data with respect to BOPP.\nThe applicable Chinese tariff code fo r BOPP also covered another petrochemical product, and therefore, China\ncould not provide imports figures for BOPP. Likewise, China was unable to provide domestic consumption\nfigures for BOPP. (United States response to Panel question 37 (first meeting); response to Panel question 14\n(second meeting).\n491 See, e.g., United States second written submission, para s. 75-76, 79; response to Panel question 36\n(first meeting), citing to Appellate Body Report on US – Softwood Lumber IV , para. 93. The United States\nfurther argues that the analysis of the Appellate Body reflects the so- called \"Dominant Firm Model\" according\nto which price distortion is the \"resu lt\" of the predominant role of a dominant firm(s) that holds a dominant\n\nUnited States asserts that the USDOC's determin ations in the underlying investigations were\nconsistent with the reasoning of the Appellate Body in US – Softwood Lumber IV . That is, the\nUSDOC determined that private pri ces in China were not \"sufficiently free\" from the effects of the\ngovernment's distortions, and therefore, could not be considered as appropriate benchmarks. 492 The\nUnited States further emphasizes that while China improperly conflates the terms \"significant\" and\n\"predominant\", the USDOC's determinations were based on the Government of China's\n\"predominant\" rather than \"significant\" role in the markets at issue.493\n10.29 Finally, the United States argues that, alt hough China alleges that the USDOC applied a per\nse rule, China has cited no evidence on the record contradicting the USDOC's findings that the\ngovernment of China owns 96 per cent of the produc tion of HRS and 90 per cent of the production of\nBOPP. Nor, it contends, has China explained wh at other factors should have been taken into\nconsideration to determine whether the government has a predominant role and which record evidence\nwas not assessed to that effect. Instead, the Un ited States argues, China restates the arguments it\nmade during the investigations, without addressing the USDOC's determinations that these arguments\nhave no bearing on whether the government played a predominant role in the markets at issue.494\n3. Main arguments of the Third Parties\n(a) Australia\n10.30 Australia recalls the Appellate Body's findings in US – Softwood Lumber IV that Members\nhave some flexibility in the use of methodologies for calculating benefit, provided that such\nmethodologies conform with the \"mandatory\" guidelin es provided for in Article 14. In this regard,\nAustralia further considers that the panel's statement in EC – Countervailing Measures on DRAM\nChips that \"the investigating authority is entitled to considerable leeway in adopting a reasonable\nmethodology\" is limited to the specific circumstanc es where, in the absence of a comparable market\nbenchmark, the text of Article 14 provides no guidance on how to determine the benefit (e.g.,\nArticle 14(b)). With respect to Article 14(d), Aust ralia notes that this provision permits the use of\nout-of-country benchmarks so long as investigating au thorities calculate the benefit \"'in relation to'\"\nthe prevailing market conditions in the country of provision.495\n(b) Canada\n10.31 Canada considers that the United States' r eading of the Appellate Body's decision in US –\nSoftwood Lumber IV is erroneous. In particular, Canada c onsiders that according to the interpretation\nof Article 14(d) of the Appellate Body in that dispute, the predominance of the government as a\nprovider of goods in the market is not sufficient, in and of itself, to establish that private prices are\ndistorted and therefore unusable as benchmarks. In Canada's view, distortion must actually be\ndemonstrated. In this respect, Canada consider s that in the CWP and LWR investigations, the\nUSDOC's determinations to reject private pri ces in China do not satisfy the requirement, under US –\n\nposition in a market. (United States second written submis sion, para. 78; response to Panel question 12 (second\nmeeting), citing to Appellate Body Report on US – Softwood Lumber IV, para. 101).\n492 See, e.g., United States second written submission, para. 80.\n493 United States second written submission, footnote 100; response to Panel question 12 (second\nmeeting).\n494 United States second written submission, para. 87. For instance, the United States notes that while\nthe Government of China asserted that private producers of HRS and BOPP could set their own prices, the\nUSDOC did not determine that the Government of China sets a country-wide price for HRS and BOPP, but\nrather, that the government's predominant role in these markets distorted prices for HRS and BOPP.\n(United States first written submission, paras. 209-210, citing to Appellate Body Report on US – Softwood\nLumber IV, para. 101).\n495 Australia third-party oral statement, paras. 19-20; third-party response to Panel question 6.\n\nSoftwood Lumber IV, to establish that government predominan ce has actually distorted private prices\nin the market of the country of provision. Cana da considers that the USDO C's determinations were\nnevertheless consistent with Section 15(b) of China's Protocol of Accession.\n496\n(c) European Communities\n10.32 The European Communities agrees with the panel statement in Korea – Commercial Vessels\nthat public bodies \"do not constitute a reliable market benchmark with which to asses the existence of\nbenefit\". Accordingly, the European Communities considers that prices set by public bodies may not\nbe considered as a relevant market benchmark as those bodies are also involved as players in the\nmarket concerned. The European Communities also considers that the observations of the Appellate\nBody in US − Softwood Lumber IV are pertinent to the present dispute. In particular, the European\nCommunities is of the view that the fact that the government plays a predominant role in the market\nas a supplier of certain goods is likely to be a determining factor in ascertaining whether private prices\ncan be used as benchmarks. In the investigations at issue, the European Communities understands\nthat the USDOC's rationale to use an external benchmark was primarily based on the preponderant\nshare of SOEs in China. The European Communities considers that if it is demonstrated that private\nprices are almost fully determined by SOEs repres enting public bodies and that such prices are highly\ndistorted, then an investigating authority would have sufficient grounds to depart from the general rule\nof prices in the country of provision. The European Communities also notes that Section 15(b) of\nChina's Protocol of Accession provides an additional set of rules which permit the use of a benchmark\noutside China in certain circumstances and subject to certain conditions.\n497\n(d) India\n10.33 India considers that the United States' use of ex ternal benchmarks must be assessed in light of\nthe limitations on the use of such benchm arks expressed by the Appellate Body in US − Softwood\nLumber IV, notably the Appellate Body's indications th at the circumstances in which a Member may\nuse benchmarks other than the private prices in the country of provision are \"very limited\" and that\nthe price distortion analysis \"must be made on a case-by-case basis, according to the facts underlying\neach countervailing duty investigation\".498\n(e) Japan\n10.34 Japan considers that, consistently with the findings of the Appellate Body in US − Softwood\nLumber IV, the question before the Panel is whether the USDOC had sufficient evidence (including\nadverse inferences) to arrive at the conclusions th at private prices of inputs in China were distorted\nand thus unavailable as benchmarks under Article 14(d). Japan is of th e view that where the evidence\non the record shows such distortion, the investig ating authority has a certain discretion to find a\nreasonable methodology but that, as indicated by the Appellate Body, this discretion is not unlimited –\nArticle 14 establishes mandatory guidelines within which a benefit must be calculated. Japan\ntherefore submits that the USDOC was required to fi nd benchmarks that \"related or referred to, or\nwere connected with\" prevailing mark et conditions in China. In this regard, Japan further considers\nthat requiring investigating authorities to replicate such market conditions \"at a level practically too\nhigh to comply\" would ignore the balance that Pa rt V of the SCM Agreement seeks to strike –\nbetween the right to impose countervailing duties to o ffset injurious subsidization, and the obligations\nthat Members must respect in order to do so. Finally, Japan is of the view that although the Appellate\nBody has determined that \"Article 14 provides a WT O Member with some latitude as to the method it\nchooses to calculate the amount of benefit\", the A ppellate Body has also acknowledged that the terms\n\n496 Canada third-party submission, paras. 22, 27 and 29-41.\n497 European Communities third-party submission, paras. 19-24.\n498 India third-party oral statement. (this statement contains no paragraph numbering).\n\nof Article 14 do not become completely inapplicab le. For Japan, whether investigating authorities\nmay deviate from the parameters set forth in Article 14 depends on the facts underlying the case under\nconsideration and the Panel's task is to determine whether the evidence on the record supports the\n\"reasonableness\" of the benchmarks selected by the USDOC in light of the latitude given to\ninvestigating authorities under Article 14.499\n(f) Mexico\n10.35 Mexico considers that a benefit determination must be consistent with the guidelines set forth\nin Article 14, regardless of whether the benchmark used is internal or external to the country allegedly\ngranting the subsidy. Mexico agrees with th e standard provided by the Appellate Body in US −\nSoftwood Lumber IV according to which an investigating au thority can resort to the use of out-of-\ncountry benchmarks where private prices are distor ted because of the government's predominant role\nin the relevant market. Thus, Mexico considers th at in determining whether the benchmarks used by\nthe USDOC are WTO-consistent, the essential factor to be analyzed is the presence or absence of\ndistortions caused by the role of the Government of China. In this regard, Mexico considers that\nChina's arguments do not address the standa rd provided by the Appellate Body in US − Softwood\nLumber IV and that the Panel should confirm the USDOC's use of external benchmarks, provided that\nthere was evidence that the role of the Govern ment of China in the markets in question was\n\"predominant\". Mexico does not however opine as to whether the alternative benchmarks used by the\nUSDOC meet the requirements set out by the Appellate Body in that case.500\n(g) Saudi Arabia\n10.36 Saudi Arabia considers that, accordi ng to the Appellate Body report in US − Softwood\nLumber IV , Article 14(d) only permits the use of out-o f-country benchmarks in very exceptional\ncircumstances (i.e., when private ma rket prices are distorted by the government's predominant role as\na provider) and only after actual distortion of the do mestic market has been established according to\nthe facts of the investigation. According to Saudi Arabia, presumptions based on indirect evidence or\non theoretical economic deductions, including presumptions of distortion based on the mere fact that\nthe government is a significant supplier or has a majo r presence in the market, are insufficient to meet\nthis requirement. Saudi Arabia also considers that, consistent with the Appellate Body report in that\ncase, the investigating authority's discretion to choose a benchmark is limited by the mandatory\nparameters set forth in Article 14, and that therefor e the benchmark used still must \"relate or refer to,\nor be connected with\" the prevailing market conditi ons in the country of provision and must not be\nused to \"offset differences in comparative advant ages between countries\". Saudi Arabia further notes\nthat while the Appellate Body indicated that ex ternal benchmarks are theoretically alternative\nbenchmarks under Article 14(d), \"in practice\", thei r application in a manner consistent with the\nrequirements of this provision is virtually impossible, because of the nature and extent of the\nadjustments that would be required for the exte rnal benchmark to reflect in-country market\nconditions. Thus, Saudi Arabia c onsiders that benchmarks based on the domestic cost of production\nof the goods or services in question are the most appropriate alternative benchmark where private\nprices have been found to be distorted, and th at these benchmarks have been endorsed by the\nAppellate Body in US\n− Softwood Lumber IV and in Canada – Dairy (Article 21.5 – New Zealand and\nUS).501\n\n499 Japan third-party submission, paras. 27-31; third-party oral statement, paras. 7-9; third-party\nresponse to Panel questions 6 and 7.\n500 Mexico third-party submission, paras. 57-60; third-party oral statement, paras. 19-20; third-party\nresponse to Panel question 6.\n501 Saudi Arabia third-party submission, paras. 65-71 and 73-75; third-party response to Panel\nquestion 6; third-party oral statement, paras. 14-15.\n\n(h) Turkey\n10.37 Turkey agrees with the findings of the Appellate Body in US\n− Softwood Lumber IV that\ninvestigating authorities may use out-of-country benchm arks where they have established that private\nprices on the exporting country are distorted because of the predominant role of the government. In\nTurkey's view, by accepting the terms and conditi ons in the Protocol of Accession, China has\nconfirmed its predominant role in the Chinese economy. In this regard, Turkey notes that the findings\nof the Appellate Body on the use of external benchmarks related to cases in market economy\nconditions, and considers it obvious th at an investigating authority may apply external benchmarks\nwhen dealing with non-market economy conditions.502\n4. Assessment by the Panel\n(a) Can evidence of government predominance alone suffice to establish market distortion?\n10.38 The central legal question raised by this set of claims is whether record evidence that the\ngovernment was the predominant supplier of a good can be sufficient, on its own, to establish market\ndistortion such that rejection of in-country priv ate prices as benchmarks would be permissible under\nArticle 14(d) of the SCM Agreement. In this regard, given the findings of the Appellate Body in US –\nSoftwood Lumber IV to the effect that market distortion due to government predominance must be\nestablished on a case-by-case basis for in-country priv ate prices to be rejected, would some evidence\nin addition to the government's share of the market for the good in question always be required before\nin-country private prices could be rejected?\n10.39 We note that China takes the latter position. China argues that for rejection of in-country\nprivate prices to be valid, the inv estigating authority must have de termined that the government's\npredominant role in a market has, in fact, caused pr ivate suppliers to \"align their prices\" with those of\nthe government-provided goods \"such that the gove rnment effectively acts as a price-setter and\nprivate suppliers as price takers\".503 According to China, before an investigating authority could make\nfindings in this respect, it would have to conduct an analysis of th e relevant market, and evaluate\nconditions under which prices were established in that market.504\n10.40 For a number of reasons, we read the Appellate Body report in US − Softwood Lumber IV\ndifferently from China. We wish to emphasize at th e outset, however, that we share China's view that\nthat report does not envisage or countenance the application of a \" per se\" rule, whereby in every case\nand regardless of any other evidence, the fact th at a government was the predominant supplier of a\nparticular good would be a sufficient basis for rejecting private in-country prices as the benchmark.\n10.41 That said, we consider that the Appellate Body report makes clear that evidence of\ngovernment predominance as a supplier is the principal evidence relevant to this question. We note in\nthis regard, in particular, the Appellate Body's indication that it sees no material difference between\nthe situations where the government is the predomin ant as opposed to the sole supplier of a good, and\nits implicit endorsement in that context of the pane l's finding that the latter situation, without more,\nwould justify looking elsewhere than private in-count ry prices for a benchmark (as such prices would\nnot exist).\n10.42 Concerning the issue of government as the predom inant supplier of the input, we note that the\nanalytical justification for the possibility to reject private in-country prices in that situation is identical\nfor the other two cases of government in volvement that were identified in US – Softwood Lumber IV ,\n\n502 Turkey third-party submission, paras. 33-35; third-party oral statement, para. 12.\n504 Id.\n\nand indeed applies a fortiori to both, i.e., where the government administratively controls all of the\nprices for the good in the country; and where the govern ment is the sole supplier of the good in the\ncountry. In particular, the Appellate Body's analysis was that to require that private prices in the\ncountry be used as the benchmark whenever they exis t could give rise to situations in which there is\nno way of telling whether the recipient is \"bette r off\" than it otherwise would be, absent the\ngovernment financial contribution. That is, the Appe llate Body said, where \"the government's role in\nproviding the financial contribution is so predominan t that it effectively determines the price at which\nprivate suppliers sell the same or similar goods, [...] the comparison contemplated by Article 14 would\nbecome circular\".505\n10.43 By the same token, where the government is the sole supplier, i.e., where there are no private\nin-country suppliers and no or negligible imports 506, there would be no private prices at all, and thus\nnothing to compare with the government prices for purposes of calculating benefits. Similarly, where\nthe government administratively controls all of th e prices, the private suppliers' prices would not\nreflect in any way their own pricing decisions, but instead would be those established and mandated\nby the government, such that again, effectively, there would be no \"private\" prices to compare with\nthe government prices.\n10.44 Returning to the situation where the government is the predominant supplier (the situation\nthat the USDOC found to exist in the investigati ons at issue before us), the Appellate Body\nemphasized that to require an effectively circular price comparison in such a situation is not supported\nby the objective of Article 14 which, as indicated by its title, deals with the calculation of the amount\nof a subsidy in terms of the benefit to the recipi ent. The Appellate Body recalled its statement in\nCanada – Aircraft that \"there can be no 'benefit' to the r ecipient unless the 'financial contribution'\nmakes the recipient 'better off' than it would otherwise have been, absent that contribution\".\n507 The\ncircular comparison that would result if Article 14(d) required in-country private prices even where\nthe government was the predominant supplier of the good would, in the words of the Appellate Body,\n\"frustrate the purpose of Article 14\", as well as, \"[m] ore generally, [...] the object and purpose of the\nSCM Agreement, which includes disciplining the us e of subsidies and countervailing measures while,\nat the same time, enabling WTO Members whose domestic industries are harmed by subsidized\nimports to use such remedies\".\n508 The Appellate Body noted here that if the calculation of the benefit\nyielded a result that was artificially low or even zero, as could be the case from an overly-restrictive\ninterpretation of Article 14(d), then a WTO Member could not fully offset, by applying countervailing\nduties, the effect of the subsidy as permitted by the SCM Agreement.509\n10.45 Thus, we view the Appellate Body's report as underscoring the many reasons why, where the\ngovernment is the predominant supplier of a good, being forced nevertheless always to use private\nprices in the country of provision of the good as th e benchmark would \"frustrate the purpose\" of both\nArticle 14 and the SCM Agreement more generally. In our view, this indicat es that the evidence of\nthe government's predominance as supplier of the good is the central fact that must be established for\na decision to depart from private in-country prices to be valid. While this is of course not to the\nexclusion of other evidence that may be releva nt to the question of whether the government's\npredominance as a supplier would lead to a circular price comparison in a particular investigation, we\nsee the Appellate Body's report as indicati ng that evidence of predominance is the sine qua non for\nany such decision by an investigating authority. Similarly, we see nothing in that report that would\n\n505 Appellate Body Report on US − Softwood Lumber IV, para. 93. (emphasis added).\n506 This is the scenario evoked by the panel in US – Softwood Lumber IV . (Panel Report on US –\nSoftwood Lumber IV, footnote 135).\n507 Appellate Body Report on US – Softwood Lumber IV , para. 93 (quoting Appellate Body Report on\nCanada – Aircraft, para. 157).\n508 Id., para. 95 (quoting Appellate Body Report on US – Carbon Steel, paras. 73-74).\n509 Id.\n\nprohibit, a priori , a finding of market distortion, and a decision to depart from in-country private\nprices, where the only relevant evidence was that the government is the predominant supplier of the\ngood.\n10.46 In this regard, we disagree with China that th e Appellate Body used the terms \"predominant\"\nand \"significant\" interchangeably. In our view, the se are distinct concepts and we read the Appellate\nBody's report as treating them as such.\n510 In particular, \" a significant\" supplier, in our view, refers to\nsomething smaller than \" the predominant\" supplier. Furthermore, to us it is clear that being the\nlargest or even the only domestic supplier in the country in question is not at all the same as being \"the\npredominant\" supplier of the good in question in the country. In particular, the concept of\n\"predominance\" is in relation to the domestic ma rket as a whole for the good in question, including\nimports. Obviously, the larger the share of imports, the lower the possibility to find that a government\nis \"the predominant\" supplier of the good in the country in question.\n10.47 Ultimately, as the Appellate Body stated, the decision to reject in-country prices as the\nbenchmark due to the role of the government in th e market for the good in question can only be made\non a case-by-case basis, in accordance with the relevant evidence in the particular investigation, rather\nthan in the abstract. We thus now turn to the facts of the investigations before us.\n(b) USDOC determination with respect to HRS inputs (CWP and LWR investigations)\n10.48 The USDOC's determinations of market dist ortion due to government predominance as a\nsupplier of HRS in the CWP and LWR investigations are identical. We thus conduct a single, joint\nanalysis of both.\n10.49 In its final determinations in these investiga tions, the USDOC determined that because of the\nGovernment of China's \"overwhelming\" involvement in the HRS market, private prices of HRS in\nChina were not an appropriate basis of comparison for determining whether a benefit existed. In\nparticular, the USDOC relied on facts available a nd drew adverse inferences, on which basis it\nestablished that 96.1 per cent of Chinese HRS production was from SOEs.511\n10.50 The final determinations recall that in the prel iminary determinations in both investigations,\nthe USDOC had not relied on observed HRS prices in China because the Government of China had\nfailed to provide any requested information with regard to the HRS industry as a whole. 512 Instead,\nrelying on \"adverse facts available\", the USDOC had used world market prices from a private\npublication, \"Steel Benchmarker\", to preliminar ily determine whether HRS from SOEs was provided\nfor less than adequate remuneration. 513 The final determinations indicate that following the\n\n510 In particular, the Appellate Body contrasts an allegation that a government is a \"significant\" supplier\n(which would not be sufficient to establish distortion) to a finding of distortion based on the government's\n\"predominant\" role. (Appellate Body Report on US – Softwood Lumber IV, para. 102). (emphasis added).\n511 Exhibits CHI-1, p. 11 and CHI-2, p. 4. The USDOC considered that the Government of China had\nfailed to properly disclose information as regards the ownership of CISA (China Iron and Steel Association)\nmembers, and therefore considered that the Government of China did not act to the best of its ability. As a\nresult, the USDOC drew adverse inferences with respect to the ownership of HRS producers in China. (Id.).\nWe note that in the present dispute, China does no t challenge the USDOC's reliance on facts available and\nadverse inferences to establish this percentage of government ownership of HRS producers. Rather, as\ndiscussed in Section XVI, infra, China's facts available claim is lim ited to the USDOC's reliance on the same\npercentage to estimate the amount of the HRS purchased from trading companies by CWP and LWR producers\nthat had been produced by SOEs.\n512 Exhibits CHI-1, p. 64 and CHI-2, p. 35.\n513 Exhibits CHI-1, pp. 11-12 and 64; and CHI-2, p. 37. In both investigations, the USDOC used Steel\nBenchmarker prices of \"hot-rolled band\" which is a type of HRS that is 5 mm thick x 1200-1500 mm wide. In\nthe LWR investigation the USDOC used these prices ev en though it acknowledged that hot-rolled band could\n\npreliminary determinations, the Government of China provided so me information concerning the\nownership structure of the Chinese HRS industry, so that the USDOC did not simply reject in-country\nprices, but instead examined reco rd evidence regarding \"all potential benchmark prices\" to determine\nthe appropriate one under the hierarchy in the U. S. law (including whether it could use in-country\nprivate prices).\n514\n10.51 The final determinations indicate that the par ties on both sides of the investigation presented\narguments to the USDOC as to whet her private prices could and should be used as the benchmarks.\nThe applicants presented, and made arguments base d on, record evidence, to the effect that the\ngovernment's dominant position in the HRS market dist orted private prices. In particular, in the CWP\ninvestigation, the petitioners referre d to the high level of government ownership of the industry, and\nthe market power of SOEs, as well as record ev idence that the Government of China successfully\ncarried out policies to suppress domestic prices, a nd the existence of industrial policies aimed at\nenhancing the output of downstream steel-using i ndustries. The applicants also argued that\n\"substantial\" record evidence indicated that Chinese prices were distorted because SOEs had\nsignificant market power. In this regard, they argued that verified record evidence supported a private\nownership share of only 2.5 per cent of the industry, meaning that the state could act as a monopolist;\nthat documentation from government agencies 515 indicated that the state controlled sectors it deemed\nimportant to national economic performance, including the steel industry, and that record evidence for\nspecific companies demonstrated the government's \"significant influence\" over the operations of\nprivate producers.\n516 In the LWR investigation, the final de termination indicates that the applicants\nargued that they had submitted evidence that made clear that there was not a usable market-\ndetermined price for HRS in China.517\n10.52 In both investigations, the Government of China and the respondent companies urged the\nUSDOC to look beyond government ow nership and consider the actual nature and structure of the\nHRS market. The Government of China argued in particular that certain aspects of the market\ndemonstrated that government involvement did not distort the market. In this regard, the Government\nof China argued that: (i) there was no single or uniform government-set price for HRS in China, and\nthat SOE producers competed with one another; ( ii) the HRS industry was highly fragmented (i.e., the\n44 large-and medium-sized steel producers that repo rted their production data to the China Iron and\nSteel Association, together accounted for only 52 per cent of HRS production in China; the single\nlargest producer only accounted for 9.6 per cent; and the five largest producers combined accounted\nfor less than 30 per cent of total production and one of the five largest producers was privately-\nowned); (iii) the major SOE producers operated on the basis of the same laws as private producers,\nand thus had the duty to protect their shareholders and maximize profits (noting that some SOEs had\n\nnot be used to produce LWR (i.e., the wall thickness of hot-rolled band was 5 mm thick, while the wall\nthickness for LWR was less than 4 mm). While it noted that it was not able to find another world market price\nfor HRS that could be used to produce LWR, the USDOC nevertheless considered that \"additional rolling would\nbe required to produce the thinner HRS used in LWR production and, therefore, the market price for thinner\nHRS would presumably be higher\". Therefore, relying on facts available, the USDOC determined that Steel\nBenchmarker prices were appropriate to measure the adequacy of remunera tion for state-owned HRS. (Exhibit\nCHI-2, p. 37).\n514 Exhibits CHI-1, p. 64 and CHI-2, p. 35. U.S. law specifies a hierarchy of \"market-determined\"\nbenchmarks in this regard: \"(1) market prices from actual transactions within th e country under investigation\n(e.g., actual sales, actual imports or competitively run gov ernment auctions) ('tier one'); (2) world market prices\nthat would be available to purchasers in the country u nder investigation ('tier two'); or (3) an assessment of\nwhether the government price is consistent with market principles ('tier three')\". (Exhibits CHI-1, p. 63 and\nCHI-2, p. 35).\n515 The determination indicates that the applicants re ferred in particular to the National Development\nand Reform Commission (the \"NDRC\"), and the SASAC. (Exhibit CHI-1, p. 60).\n516 Id., pp. 56-57 and 59-61.\n517 Exhibit CHI-2, p. 34.\n\nsignificant shares of private ownership); (iv) th e HRS industry had increasing levels of private\ninvestment and encompassed significant private pr oducers; (v) the SOEs were profitable, and thus\nwere unlikely to be selling for less than adequate remuneration; and (vi) a functioning HRS market\nexisted in China, as evidenced by prices fluctuating from day to day, and varying across regions, with\nno clear pattern of higher or lower prices being charged by private or SOE producers.\n518 T h e\nGovernment of China also argued that available private pricing demonstrated that there was a\nfunctioning market, such that private prices for HRS were not distorted and could be used as a\nbenchmark.\n519 China also urged the USDOC, if it found that private prices could not be used, to\nassess whether the prices charged by SOEs were consistent with \"'market principles'\" as per the U.S.\ndomestic legislation.520\n10.53 In both determinations, the USDOC considered and rejected as unpersuasive these arguments\nby the respondents. First, the USDOC considered that the Government of China's \"assertions\" that\nthere was no single or uniform government-set price; that the HRS industry was highly fragmented;\nthat the SOEs behaved like private producers; that private investment in the industry was growing;\nand that a functioning market existed, as prices fl uctuated from day to day and varied across regions,\ndid not mitigate the fact that the government accounted for 96.1 per cent of Chinese HRS production.\nThe USDOC stated that \"in such instances, it is reasonable to conclude that domestic prices for\ncomparable goods provided from privates sources are effectively determined by the government\nprovided prices\".\n521 Second, the USDOC found, the profitability of state-owned HRS producers was\nirrelevant for determining whether HRS was provided for less than adequate remuneration.522\n10.54 Thus, in its final determinations the USDOC, as it did in the preliminary determinations,\nrejected private prices in China (both from dome stic producers and from imports into China) as\nbenchmarks. In this regard, the final determinations refer first to the 96.1 per cent share of the HRS\nproduced in China that was produced by SOEs (which the USDOC characterized as \"the government's\noverwhelming involvement\" in the HRS market in China). 523 The determinations indicate that\nbecause of this, using private producer prices in Chin a \"would be akin to comparing the benchmark to\nitself, (i.e., such a benchmark would reflect the distortions of the government presence)\". 524 T h e\ndeterminations also indicate that trade statistics showed that the import quantities of HRS were small\nrelative to the Chinese domestic production, such th at unit values of imports into China were not\nsufficient to serve as reliable benchmarks. 525 The USDOC considered that where the government\naccounts for a significant portion of production, privat e prices for comparable goods effectively align\nwith those set by the government. The USDOC's a ssessment in respect of the government's 96.1 per\ncent share, as noted above, was that \"in such inst ances, it is reasonable to conclude that domestic\nprices for comparable goods provided from privat e sources are effectively determined by the\ngovernment provided prices\". 526 Overall, the USDOC thus concluded that \"prices stemming from\nprivate transactions within China cannot give rise to a price that is sufficiently free from the effects of\n\n518 Exhibits CHI-1,pp. 58-59 and CHI-2, pp. 32-33.\n519 Exhibits CHI-1, p. 58 and CHI-2, p. 33.\n520 Exhibits CHI-1, pp. 58-59 and CHI-2, p. 33.\n521 Exhibits CHI-1, p. 65 and CHI-2, p. 36.\n522 Id.\n523 Exhibits CHI-1, pp. 64-65 and CHI-2, p. 36.\n524 Exhibits CHI-1, p. 64 and CHI-2, p. 36. In this context, in both determinations the USDOC cited its\ndetermination in its investigation of Canadian Lumber , where it had noted that \"[w]here the market for a\nparticular good [...] is so dominated by the presence of the government, the remaining private prices in the\ncountry in question cannot be considered to be independent of the government price. It is impossible to test the\ngovernment price using another price that is entirely, or almost entirely, dependent upon it. The analysis would\nbecome circular because the benchmark price would reflect the very market distortion which the comparison is\ndesigned to detect\". (Id.).\n525 Exhibits CHI-1, footnote 212 and CHI-2, p. 36.\n526 Exhibits CHI-1, p. 65 and CHI-2, p. 36.\n\nthe [Government of China's] actions, and therefore cannot be considered to meet the statutory and\nregulatory requirement [under U.S. law] for the use of market-determined prices to measure the\nadequacy of remuneration\".527\n10.55 We recall that China's legal argument, essentially , is that in these investigations the USDOC\napplied an unlawful \" per se\" rule whereby evidence that the government was the majority supplier of\na good led ipso facto to the determinations that the Chinese market prices for HRS were distorted such\nthat they were not suitable as benchmarks. On the basis of the determinations, as just summarized, we\ndo not view the USDOC's determinations in the sa me way. To the contrary, given the extensive\nsummaries and discussion contained in the determina tions, it is clear that the USDOC received from\nparties on both sides of the investigation, and consid ered, arguments and evidence relevant to the role\nof the government in the Chinese HRS market. In this regard, we note that because China did not\nprovide complete, verifiable information regard ing the amount of domestically-produced HRS that\nwas accounted for by SOEs, the USDOC relied on \"fact s available\" and drew adverse inferences in\nestablishing this fact. China does not argue before us , and there is no indication in the record, that the\nGovernment of China provided during the investiga tion any information that demonstrated that the\ngovernment was not the predominant supplier, and indeed the various arguments raised by the\nGovernment of China (which the USDOC characterized as based on \"assertions\" rather than evidence)\nwere found by the USDOC not to be relevant to the question of the government's predominance as a\nsupplier or its ability effectively to set the prices for HRS in China.\n10.56 In this regard, we disagree with China's inte rpretation of a statement in a footnote in these\ndeterminations, to the effect that even if the (unverifiable) figure of approximately 71 per cent\nadvanced by China as the share of Chinese HRS pr oduced by SOEs were accepted, the USDOC still\nwould have found that lower figure to be a reasonabl e basis on which to conclude that private prices\nin China were distorted and thus unusable as benchmar ks. For China, this statement confirms that the\nUSDOC applied a \"per se\" rule. To us, however, this is simply an indication that the USDOC would\nhave considered this percen tage to be a level that could give rise to distortion. We see nothing in the\nUSDOC's determinations that indicates that the USDO C's analysis would have stopped at that point.\nIndeed, the determinations indicate the contrary in that, although the government's share as a domestic\nsupplier actually found in the investigations was much higher than 71 per cent, the record shows that\nthe USDOC obtained and analyzed a range of other information, including information gathered on its\nown initiative (such as that on the volume and market share of imports). The fact that the USDOC\nultimately did not find that that other information led to the conclusion that government predominance\ndid not distort the market provides no indication, in our view, that a \" per se\" rule was applied in these\ninvestigations.\n10.57 Finally, we consider that the USDOC's analys is and conclusions in the OTR investigation\nprovide strong circumstantial evidence that the USDO C's general approach to predominance is not a\nmechanical, per se test under which, any time the government is \"a significant\" supplier, the USDOC\nmechanically concludes that private in-country prices are unusable as benchmarks. Rather, this\ninvestigation was clearly based on a case-by-case analysis of the particular facts of the investigation,\non the basis of which the USDOC found that the domestic prices were not distorted, in spite of SOEs\nbeing major producers of the rubber inputs in question.\n10.58 In particular, in the OTR investigation, the USDOC found that SOE producers accounted for\na significant portion of Chinese production of natural and synthetic rubber inpu ts. Nevertheless, the\nUSDOC decided to use as benchmarks, for the tire producers' purchases of rubber from SOEs, both\nprices of their rubber purchases from private Chin ese producers, and prices that they paid for\n\n527 Id. We note in this regard that according to the USDOC's determination, under U.S. law, \"market\nprices from actual transactions\" include prices from \"actual sales, actual imports or competitively run\ngovernment auctions\". (Exhibits CHI-1, p. 63 and CHI-2, p. 35).\n\nimported rubber. In other words, the USDOC consid ered that market prices (including import prices)\nwithin China constituted suitable be nchmarks. The basis for this c onclusion was the record evidence\ndemonstrating the high import penetration of the Ch inese markets for the relevant goods (50 per cent\nfor natural rubber and 75 per cent for synthetic rubber), and the absence of any other evidence\ndemonstrating government control or distortion of these markets.\n528\n10.59 The USDOC found that while SOE producers acc ounted for \"a significant portion\" of the\ndomestic production of both categories of rubber:\n\"imports of natural rubber exceed the tota l domestic production of natural rubber as a\npercentage of natural rubber consumption in the PRC. Imports of synthetic rubber\nexceed the total domestic production of synthe tic rubber as a percentage of synthetic\nrubber consumption in the PRC. Thus, gi ven the large penetration of imports of\nnatural rubber and synthetic rubber in the PRC rubber markets and the lack of other\nevidence on the record to show that SO Es or government agencies through other\nmethods had control of, or otherwise distorted, these markets during the POI, we do\nnot find government distortion of the PRC rubber markets\".\n529 (footnote omitted)\n10.60 Thus, to relate this finding back to the reasoning of the Appellate Body in US – Softwood\nLumber IV, it is clear based on the import penetration figures in the OTR determination that there was\nno evidence that the government was \"the predominan t supplier\" or otherwise controlled prices. The\nUSDOC's determination recognized this and thus re lied on the observed prices (of private suppliers\nand imports) in China as benchmarks.\n10.61 For the foregoing reasons, we find that China has not established that the USDOC acted\ninconsistently with the obligations of the United States under Article 14(d) of the SCM Agreement by\nrejecting in-country private prices in China as be nchmarks for HRS in either the CWP or the LWR\ninvestigations.530\n(c) USDOC determination with respect to BOPP inputs (LWS investigation)\n10.62 In the LWS investigation, the USDOC determined that SOE involvement in the petrochemical\nindustry distorted the market, and that therefore it would be inappropriate to rely on private domestic\ninput prices in China as a benchmark. 531 We note that these conclusions were the result of the\nUSDOC's application of facts available and adver se inferences because the Government of China did\nnot provide the requested information necessary fo r determining whether domestic prices could be\nused as benchmarks, and did not act to the best of its ability.532\n10.63 In particular, the USDOC found on this basis that SOEs accounted for 90 per cent of the\nBOPP production in China and distorted the market. The final determination indicates in this regard\nthat in spite of repeated requests to the Government of China, including at verification, to provide\ninformation concerning the ownership of Chinese BOPP producers, no such information was\nprovided. The USDOC therefore stated that \"because the [Government of China] failed to provide us\nwith the necessary information, we are unable to ga uge the extent of government involvement in the\npetrochemical industry which produces these three input s. Without such information, the Department\nis unable to analyze the nature and structure of the market in order to determine whether the level of\n\n528 Exhibit CHI-4, pp. 79-80.\n529 Id., p. 11.\n530 Concerning China's claims of consequential violations of Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994 in connection with this claim see Section XIII, infra.\n531 Exhibit CHI-3, p. 19.\n532 Id.\n\ngovernment ownership significantly distorts the prices for these inputs in the PRC\". 533 In this regard,\nthe USDOC stated that because th e Government of China had failed to provide the requested\ninformation:\n\"we have no record evidence to contravene petitioners' allegation that SOES such as\nChina Petroleum and Chemical Corporation (Sinopec), which was alleged to control\n90 percent of the Chinese petrochemical industry and produces [...] BOPP, distort the\nmarket. As such, we determine in this final determination that domestic private\nprices for these inputs are distorted and not usable as benchmarks\".534\n10.64 On the basis of this determination, the US DOC concluded that \"prices stemming from private\ntransactions within China cannot give rise to a price that is sufficiently free from the effects of the\n[Government of China's] distortions\" to be used as benchmarks. 535 The USDOC noted that this\napproach was consistent with its decision in the CWP investigation, where it had determined that\nbecause of the government's overwhelming involvement in the market for the inputs, the use of\nprivate producer prices in China would be akin to comparing the benchmark to itself (i.e., such a\nbenchmark would reflect the distortions of the government presence).\n536 The USDOC also cited its\nregulations as providing that \"where it is reasona ble to conclude that actual transaction prices are\nsignificantly distorted as a result of the government's involvement in the market, we will resort to\"\nsources other than in-country private prices for benc hmarks. The USDOC also noted that there were\nno actual, company-specific import transactions that it could consider using as benchmarks, as Aifudi\nhad not imported BOPP.537\n10.65 We note that here again, China's claim is th at the USDOC unlawfully based its decision to\nreject private in-country prices as the benchmark for BOPP on a per se test based on the government's\nshare as a producer of the product. We disagree with this characterization. It is clear from the record\nof the investigation that China did not cooperate with the USDOC in respect of the information\nregarding the Chinese industry producing BOPP. In deed, the USDOC found that the Government of\nChina provided none of the requested information in this regard, and before us China makes no\nrepresentation to the contrary. In the words of the USDOC, this left it in the situation where it had\nbefore it \"no record evidence to contravene\" the alle gations of applicants that the SOE petrochemical\nproducers accounted for 90 per cent of domestic production of BOPP and distorted the market. In\nother words, the applicants had made these a llegations, and the USDOC had requested from the\nGovernment of China but had not received, informat ion on the structure and operation of the Chinese\npetrochemical industry. The USDOC thus had no ev idence to rebut the allegations that had been\nmade and in addition found that the Government of China had not cooperated such that the drawing of\nadverse inferences (concerning both the government's share of production, and government distortion\nof the market) was justified. We do not consider that this set of facts can be construed as the\nmechanical application of a per se test, given that it was based on the failure by the Government of\nChina and the respondent companies to provide request ed or other evidence to rebut the allegations as\nto both government ownership and market distortion. Instead we consider that this conclusion is one\nwhich the USDOC could lawfully reach on the circumstances of the case.\n\n533 Exhibit CHI-3, pp. 69-70.\n534 Id., pp. 19-20.\n535 Id., p. 72.\n536 Id., pp. 20.\n537 Id., pp. 20 and 72.\n\n10.66 For the foregoing reasons, we find that China has not established that the USDOC acted\ninconsistently with the obligations of the United States under Article 14(d) of the SCM Agreement by\nrejecting in-country private prices in China as benchmarks for BOPP in the LWS investigation.\n538\nF. CHINA'S CLAIMS UNDER ARTICLE 14(D) OF THE SCM AGREEMENT – GOVERNMENT-\nPROVIDED LAND-USE RIGHTS\n1. Claim of China\n10.67 We now take up China's challenge to the USDOC's decision to reject in-country prices as the\nbenchmark to use for the adequate remuneration determination with respect to subsidies in the form of\nthe provision of land-use rights. 539 China's claim is that the USDOC's decisions to reject land prices\nin China as the appropriate benchmark to determin e benefit in the LWS and OTR countervailing duty\ninvestigations was inconsistent with Article 14(d) of the SCM Agreement.540, 541\n2. Main arguments of the Parties\n(a) China\n10.68 China argues that the USDOC's decisions to reject land prices in China as the appropriate\nbenchmark disregarded the plain la nguage of Article 14(d), as interpre ted by the Appellate Body in\nUS – Softwood Lumber IV.542\n10.69 In particular, China submits that, alt hough the USDOC acknowledged that there are\nsecondary markets for land-use rights in China, th e USDOC rejected these private prices on two\ngrounds: (i) the application of a per se rule based on its finding that the government is the ultimate\nowner of all land in China; and (ii) its finding th at property rights in China \"remain poorly defined\nand weakly enforced\". 543 Concerning what it considers to be the USDOC's application of a per se\nrule, China argues that in US − Softwood Lumber IV the Appellate Body rejected the notion that a\npresumption of distortion could provide a sufficient basis for resorting to out-of-country\nbenchmarks.\n544 With regard to the USDOC's characterizati on of the legal status of property rights in\nChina, China alleges that there is no basis in Article 14(d) to reject \"prevailing market conditions\"\nmerely because they do not accord with an investigating authority's conception of how markets should\nbe structured and regulated, or b ecause they are insufficiently \"pure\". 545 China emphasizes that the\nterm \"prevailing market conditions\" in the country of provision, as interpreted by the Appellate Body\nin US – Softwood Lumber IV , does not refer to a \"pure market\", a \"market undistorted by government\n\n538 Concerning China's claims of consequential violations of Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994 in connection with this claim see Section XIII, infra.\n539 China's related challenge, in respect of the benc hmark actually used, is addressed in Section X.I,\ninfra.\n540 See, e.g., China first written submission, para. 304.\n541 As indicated at para. 10.1, supra, China also raises consequential claims pursuant to Articles 10\nand 32.1 of the SCM Agreement and Article VI:3 of the GATT 1994.\n542 See, e.g., China second written submission, para. 64.\n543 China first written submission, paras. 303 and 305; response to Panel question 34 (first meeting).\n544 See, e.g., China second written submission, para. 49; response to Panel question 34 (first meeting),\nciting to Appellate Body Report on US – Softwood Lumber IV, para. 102.\n545 See, e.g., China response to Panel questions 34 and 43 (first meeting). China also argues that the\nsources relied upon by the USDOC for its Thai benchmark prices provide no indication that prices in China are\ndistorted or that China is a \"special case\" in this resp ect, and that these sources rather contradict the USDOC's\nfinding that all land prices in China are distorted. China notes that the reports relied on by the USDOC to this\neffect illustrate the wide variations for land prices within China, thus, confirming that China has a functioning\nmarket for land-use rights. (China response to Panel question 34 (first meeting)).\n\nintervention\", or to a \"fair market value\".546 Moreover, China submits that the Appellate Body limited\nthe possibility of using benchmarks other than in-c ountry private prices to a single situation, that\nwhere distortion exists due to the \"government's pr edominant role in the market as provider of the\nsame or similar goods\". 547 Thus, China argues, investigating authorities do not have carte blanche to\nreject private prices whenever they consider \"prevailing market conditions\" not quite \"market\nenough\".548\n(b) United States\n10.70 The United States argues that China's claim is unsupported by the text of the SCM Agreement\nand China's Protocol of Accession, and therefore, shoul d be rejected. In particular, the United States\nsubmits that nothing in the text of Article 14(d) suggests that land-use rights are exceptional, or that\nthey should be treated differently than other goods with respect to the use of external benchmarks. 549\nThe United States also argues that China's position is contradicted by the \"flexibility\" of Article 14,\nwhich the Appellate Body has e xplained permits the use of out-o f-country benchmarks, and by the\nterms of Section 15(b) of China's Protocol of Accession, which provides no basis to exclude\ngovernment-provided land-use rights, but rather co nfirms the permissibility of using out-of-country\nbenchmarks in countervaili ng duty investigations concerning imports from China.\n550 In addition, the\nUnited States submits that China's restrictive in terpretation, if accepted, would eliminate the\npossibility of countervailing the subsidized provision of land-use rights, contrary to the object and\npurpose of the SCM Agreement.551\n10.71 The United States submits that the USDOC's determination to use an out-of-country\nbenchmark is consistent with Article 14(d), as interpreted by the Appellate Body in US – Softwood\nLumber IV. Specifically, the United States argues that, based on all the evid ence on the record, the\nUSDOC determined that due to China's predominan t role in the land market, it was necessary to use\nan out-of-country benchmark to measure the benefits at issue. 552 Furthermore, the United States\nsubmits that the USDOC did not limit its distorti on analysis to the mere fact that the Chinese\ngovernment owns all the land in China. Rather, the United States argues that the USDOC also found\nthat China retains and exercises significant control over the supply side of the entire land market in\nChina, including land-use rights for private industria l use, so as to distort prices in the primary and\n\n546 China response to Panel questions 34 and 43 (first meeting), citing to Appellate Body Report on US\n– Softwood Lumber IV, para. 87.\n547 In China's view, the Appellate Body did not even suggest that other situations, such as government\nintervention in markets generally, could justify the rejection of private prices. ( See, e.g., China response to\nPanel question 32 (first meeting), citing to Appellate Body Report on US – Softwood Lumber IV , paras. 93 and\n106).\n548 China opening statement at the first meeting of the Panel, para. 46.\n549 United States first written submission, paras. 272- 273. The United States emphasizes that it is not\nnecessary that goods be tradable acr oss borders for them to be covered by the Agreement, arguing that in US –\nSoftwood Lumber IV the Appellate Body noted that excluding non-tradable goods would permit the\ncircumvention of the WTO's subsidies disciplines. (Id., para. 274, citing to Appellate Body Report on US –\nSoftwood Lumber IV, paras. 57, 67, 64).\n550 See, e.g. United States first written submission, para. 2 76; opening statement at the first meeting of\nthe Panel, para. 32, citing to Appellate Body Report on US – Softwood Lumber IV, para. 103.\n551 United States first written submission, para. 275. For instance, the United States argues, China's\nposition would prevent Members from measuring the benefit of land-use rights provided by the government\nsince the comparison of this financial contribution to the benchmark would become circular, i.e., prices for\ngovernment-provided land would be compared to itself. (United States opening statement at the first meeting of\nthe Panel, para. 31, citing to Appellate Body Report on US – Softwood Lumber IV, para. 93).\n552 The United States argues that in US – Softwood Lumber IV the Appellate Body considered that the\ngovernment's predominant role in the market suffices to distort private prices and to justify the use of out-of-\ncountry benchmarks. ( See, e.g. , United States second written submission, para. 80; response to Panel\nquestion 44 (first meeting), citing to Appellate Body Report on US – Softwood Lumber IV, para. 93).\n\nsecondary markets.\n553 Thus the United States submits that contrary to China's assertions, the\nUSDOC's determination was not based on a finding th at market conditions were insufficiently \"pure\",\nbut rather on a finding that the land market in China had significant distortions from the government's\npredominant role in the market.\n554 In addition, the United States rejects China's argument that,\nbecause there is a differentiation in pricing for land-use rights in China, it has an undistorted\n\"functioning market\". The United States submits that uniform pricing in China was not a basis for the\nUSDOC's findings that China had a predominant role in the land market.555\n3. Main arguments of the Third Parties\n(a) Australia\n10.72 Australia considers that nothing in the SCM Agreement supports the argument that the\nprovision of land should be treated differently from the provision of other goods under Article 14(d).\nConsistently with the interpreta tion of the Appellate Body in US – Softwood Lumber IV , Australia\nnotes that the term \"goods\" has been given a br oad meaning under Article 1.1(a)(1)(iii) of the\nAgreement to include immovable property.556\n(b) European Communities\n10.73 The European Communities recalls that, consiste nt with the observations of the Appellate\nBody in US − Softwood Lumber IV , investigating authorities may use out-of-country benchmarks if\nthey find that prices in the relevant market are distorted.557\n(c) Mexico\n10.74 Mexico recalls that the Appellate Body found in US − Softwood Lumber IV that resorting to\nout-of-country benchmarks in the case of the provis ion of land is consiste nt with Article 14(d)\nprovided that benchmark used \"relates or refers to, or is connected with\" prevailing market conditions\nof the country of provision.558\n(d) Saudi Arabia\n10.75 Saudi Arabia agrees with China that the u se of external benchmarks is especially\ninappropriate with respect to financial contri butions in the form of the provision of land, inter alia,\nbecause the value of land is determined not only by its physical characteristics, but also by the legal\nsystem in which the land exists.559\n\n553 See, e.g., United States second written submission, paras. 105-106; response to Panel question 42(b)\n(first meeting).\n554 The United States also disagrees with China's assertion that factors other than the government's\npredominant role in the market cannot justify rejecting in-country prices as benchm arks. The United States\nsubmits that the Appellate Body in US – Softwood Lumber IV did not address and, therefore, did not exclude the\npossibility that other types of government intervention w ould also distort the market so as to render private\nprices unreliable. (See, e.g., United States second written submission, paras. 81-82 and 107).\n555 The United States adds that the fact that prices differ is not dispositive of whether the government\nhas a predominant role in the market. (United States second written submission, para. 108).\n556 Australia third-party oral statement, para. 21.\n557 European Communities third-party submission, para. 47.\n558 Mexico third-party response to Panel question 6.\n559 Saudi Arabia third-party submission, para. 77.\n\n4. Assessment by the Panel\n10.76 In the LWS and OTR investigations, the USDOC determined that China's provision of land-\nuse rights to investigated producers (Aifudi and Starbright) for less than adequate remuneration\nconstituted a countervailable subsidy. In this context, the USDOC determined that it could not use an\nin-country benchmark for government-provided land-use rights because Chinese land prices were\ndistorted by the significant government role in th e market that prohibited private land ownership in\nChina and resulted in all land being owned by some level of government. The USDOC indicated in\nthis regard that it had verified that all ur ban land was state-owned (owned by the national\ngovernment), and that all rural land was collectivel y-owned (owned by the local government), i.e.,\nthat the government, either at the national or lo cal level, was the ultimate owner of all land in\nChina.560\n10.77 We note here that, on the basis of the reas oning of the panel and the Appellate Body in US –\nSoftwood Lumber IV , the USDOC's finding that the government was the sole supplier of the good in\nquestion might have been sufficient for a conclusi on by the USDOC that it could not use in-country\nprices for land as the benchmark. We do not cons ider, however, that in fact the USDOC based any\nconclusion as to the availability of in-country benc hmarks directly on the government's degree of\nownership of the land or the general fact that it was significantly involved in the market as a provider\nof land-use rights, as such. To the contrary, these were cited as facts describing the nature of the\ngovernment's significant involvement in the land-use market, which then was further analyzed.\n10.78 In particular, the USDOC did not stop with these statements but instead continued its\nanalysis, gathering, assessing and verifying a wide variety of information as to land-use pricing in\nChina, aimed at determining \"whether the […] [G ]overnment [of China] exercises control over the\nsupply side of the land market in China as a whole so as to distort prices in the primary and secondary\nmarkets\".561 In this regard, the USDOC found that g overnment authorities controlled, albeit on a\ndecentralized basis, the supply and allocation of land that could be used by non-state-owned\nenterprises for non-agricultural purposes, and that the restrictions imposed extended the control by the\ngovernment to the secondary in addition to the pr imary market. The USDOC further found that this\ncontrol significantly distorted the price paid fo r the granted land-use rights in both primary and\nsecondary markets, and that land-use prices in China were not set in accordance with market\nprinciples.\n562\n10.79 In this connection, the USDOC found that notw ithstanding the legal reforms implemented by\nChina, agricultural land-use rights remained limite d in scope and were poorly defined and weakly\nenforced, such that land-use rights of farmers in Ch ina still were not secure and their right to alienate\ntheir land was severely restricted. Local governments had often exercised broad and unrestricted\npowers to expropriate land from farmers and had given them only partial compensation for such\nexpropriation. Further, agricultural land could be so ld for non-agricultural use only if its legal status\nwas first changed from \"collective land\" to \"sta te-owned land\", and the power to effect that\nconversion rested solely with local governments.\n563 The supply of land for non-agricultural use in the\n\n560 Exhibits CHI-3, p. 58 and CHI-50, pp. 71368-71369.\n561 See, e.g., Exhibit CHI-3, p. 58.\n562 Id., pp. 15-17 and 58-59; and Exhibit CHI-50, p. 71369.\n563 Exhibits CHI-34 p. 67907 and CHI-50, p. 71369. In the Antidumping Duty Investigation of Certain\nLined Paper Products from the People's Republic of China (the \"Lined Paper investigation\"), the USDOC noted\nthat the status of agricultural land could only be chan ged after it had been expropriated. Therefore, local\ngovernments acted in the dual roles of owners of the agri cultural land and as representatives of the state, and as\nsuch, could expropriate land from farmers, convert it in to state-owned land, and thereafter sell the land-use\nrights to private enterprises. ( Antidumping Duty Investigation of Certain Lined Paper Products from the\nPeople’s Republic of China (\"China\") − China's status as a non-market economy (\"NME\") , Exhibit US-69,\np. 42).\n\nprimary and secondary markets furt her depended, in part, on the \"allocated\" land-use rights which\nwere provided to SOEs on a purely administrative b asis: the government allocated land-use rights to\nSOEs for a nominal one-time charge and annual fee. \"Allocated\" land-use rights were transferable for\ncommercial purposes only if they were first converted into \"granted\" land-use rights. The power to\nconvert \"allocated\" land-use rights into \"granted\" land use rights (and therefore, the land available to\nprivate enterprises for commercial use) rested solely with the government.\n564 The USDOC also found\nthat some SOEs illegally (without first converting their land-use rights as required) had used their\nallocated land-use rights in order to attract foreign investments. Consequently, the USDOC found, the\nconversion of land from \"allocated\" to \"granted\" was not a pro forma process.565\n10.80 The USDOC further determined that China's gove rnment control of the land market distorted\nthe prices of \"granted\" land-use rights in both the primary and secondary markets. 566 Although noting\nthat the Government of China had implemented certa in land reforms in order to increase transparency\nand competitive market conditions, the USDOC dete rmined that these reforms had not been fully\nimplemented – i.e., that there was a wide divergence between the de jure reforms and their de facto\nimplementation.567 Specifically, it found that land-use right s were still transferred via \"closed-door\"\nnegotiations and not via public auc tions, tenders or listings as required by law. Therefore, the\nUSDOC determined that the Government of China reta ined a predominant role in the land market and\nthat this control distorted the supply and pricing of land-use rights in China, such that private prices in\nChina were not an appropriate basis of comparison for determining whether a benefit existed.568\n10.81 Given all of these findings, we also disagree w ith China that the USDOC's determinations\nwere based simply on a finding that land-use right s were limited in scope and weakly enforced.\nWhile this was among the USDOC's characterizations of certain aspects of the land-use market in\nChina, it is by no means the entirety of the USDOC's analysis or determinations. To the contrary, we\nare satisfied that the USDOC conducted an extensiv e analysis of the land-use market in China.\nBefore us, the only specific record evidence that China points to is the \"existence\" of a secondary\nmarket, which it argues the USDOC \"rejected\" as a source for benchmarks. 569 We note, however, as\nindicated, that the USDOC's inquiry was not whether there was a secondary market, but whether the\nevidence showed that prices in th at market were distorted. The USDOC found that the evidence\nindicated that those prices were distorted, and befo re us China points to no record evidence to the\ncontrary.\n10.82 For the foregoing reasons, we find that China has not established that the USDOC acted\ninconsistently with the obligations of the United States under Article 14(d) of the SCM Agreement by\nrejecting in-country land-use prices in China as be nchmarks for government-provided land-use rights\nin the LWS and OTR investigations.570\n\n564 Further, the USDOC noted that enterprises could also purchase \"granted\" land-use rights directly\nfrom the government, and therefore determined that such purchases were government-controlled. (Exhibit CHI-\n34, p. 67907).\n565 Exhibit CHI-34, p. 67907.\n566 As an example, the USDOC noted that if farmer land-use rights were well-defined and effectively\nenforced, there would be less land available for non-agr icultural use and therefore higher prices for granted\nland-use rights. (Id.).\n567 Exhibits CHI 3, p. 16 and CHI-50, pp. 71368-71369.\n568 Exhibits CHI-3, pp. 16 and 59; CHI-34, pp. 67907-67908; CHI-50 p. 71369.\n569 China response to Panel question 34 (first meeting).\n570 Concerning China's claims of consequential violations of Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994 in connection with this claim see Section XIII, infra.\n\nG. CHINA'S CLAIMS UNDER ARTICLE 14(B) OF THE SCM AGREEMENT – GOVERNMENT\nPROVISION OF PREFERENTIAL LENDING\n1. Claims of China\n10.83 In the CWP, LWS and OTR investigations, the USDOC determined that China provided\nsubsidies to producers of the investigated produc ts in the form of RMB-denominated loans by\nSOCBs. In addition, in the OTR investigation, th e USDOC determined that one of the investigated\nproducers, GTC, received subsidies in the form of U.S. dollar-denominated loans from SOCBs.\n10.84 In the three investigations at issue, the USDOC found that lending rates in China were\nsignificantly distorted, and therefore unsuitable as market benchmarks. 571 For this reason, the\nUSDOC resorted to external benchmarks to determine whether loans from SOCBs conferred a\nbenefit.572 According to the USDOC, the use of external benchmarks was consistent with its past\npractice.573\n10.85 Before us, China challenges, as inconsistent with Article 14(b) of the SCM Agreement, the\nUSDOC's decision to reject Chinese in-country interest rates, and to resort to external benchmarks, for\ncalculating the existence and amount of any be nefit from SOCB-provided loans denominated in\nRMB.574 China makes no such claim in respect of th e USDOC's decision to reject Chinese in-country\ninterest rates and resort to external benchmar ks for calculating the exis tence and amount of any\nbenefit from SOCB loans denominated in U.S. dollars . In respect of both RMB- and U.S. dollar-\ndenominated loans, China also ch allenges the specific benchmarks u sed by the USDOC. The issues\nconcerning the specific loan benchmarks are discussed in Sections X.J and X.K, infra.\n2. Main arguments of the Parties\n(a) China\n10.86 China argues that the USDOC's decision to reject interest rates in China as benchmarks for\nthe RMB loans was inconsistent with the requirement s in Article 14(b) of the SCM Agreement. In\nparticular, China alleges that under Article 14(b) the benchmark for determining whether a loan\nprovided by the government confers a benefit is a \"comparable commercial loan that the firm could\nactually obtain on the market\", and that a benchmar k can meet these criteria only if it is denominated\nin the same currency as the government-provided loan. 575 China argues that because interest rates\ndiffer by currency, loans denominated in different currencies cannot be \"comparable\". According to\nChina, a comparison involving loans in different cu rrencies will necessarily measu re the \"factors that\ncause interest rates to be different in different currencies\", rather than the extent to which the recipient\nof the government-provided loan is \"be tter off\" as required by Article 14(b). 576 In addition, China\nconsiders that the \"market\" in which a firm can \"actually obtain\" a \"comparable\" loan will depend\n\n571 Exhibits CHI-1,p. 6; CHI-3,pp. 11 and 83; CHI-4, pp. 7 and 104.\n572 Exhibits CHI-1, pp. 6-7; CHI-3, p. 83; CHI-4, pp. 104-105.\n573 The USDOC cited its previous findings in Softwood Lumber from Canada; CFS from the PRC; and\nCFS from Indonesia, where it had resorted to out-of-country benchmarks. (See, e.g., Exhibits CHI-1, p. 7; CHI-\n3, p. 83; and CHI-4, pp. 7 and 104-105).\n574 As indicated at para. 10.1, supra, China also raises consequential claims pursuant to Articles 10 and\n32.1 of the SCM Agreement and Article VI:3 of the GATT 1994.\n575 China first written submission, para. 233; oral statement at the first meeting of the Panel, paras. 50-\n51; second written submission, para. 77.\n576 China, second written submission, paras. 76-77, citing to Appellate Body Report on Canada –\nAircraft, para. 157.\n\nupon the characteristics of the loan, including the currency in which it is denominated.\n577 Thus, China\nsubmits that because the RMB can only be borrowed in the Chinese market, the USDOC was required\nto identify \"comparable commercial loans\" as benchmarks within this market. 578 China argues that\ndespite the existence of such lo ans in the Chinese market, the US DOC unlawfully rejected them on\nthe ground that China's \"predominant role in the banking sector results in significant distortions that\nrender lending rates in [China] unsuitable as market benchmarks\".579\n10.87 China disagrees with the United States that the Appellate Body's interpretation of\nArticle 14(d) in US – Softwood Lumber IV is relevant to the question of interest rates under\nArticle 14(b). Even accepting arguendo that the concept of \"distortion\" as discussed by the Appellate\nBody in that case had some relevance in the c ontext of interest rates under Article 14(b), China\nsubmits that, consistently w ith the Appellate Body's findi ng, the benchmark selected under\nArticle 14(b) would still need to be based on \"a comparable commercial loan which the firm could\nactually obtain on the market\". 580 China also submits that none of the factors of government control\nand intervention on which the United States seems to base its distortion rationale (i.e., government\nownership of banks, government re gulation of deposit and lending ra tes, and government actions to\ninfluence the direction of interest rates) ca n plausibly support the USDOC's disregard of the\nrequirements of Article 14(b).581\n10.88 China argues, first, that interest rates are a direct consequence of the monetary policies\npursued by governments, and that as a consequence, the interest rates set by governments affect the\ncommercial interest rates charged by all banks, regardless of their level of state ownership. 582 In fact,\nChina argues, the record evidence demonstrates that all interest rates in China, including those\ncharged by non-state owned banks, are affected by the efforts of the central bank to curb monetary\nexpansion through the setting of interest rates, rather than by the extent of the government's ownership\nof banks. 583 Thus, in light of the direct relationship between interest rates and national monetary\n\n577 China second written submission, para. 83; response to Panel question 18 (second meeting). In\nsupport of its position, China relies on the Appellate Body's finding in US – Upland Cotton that the geographic\nscope of the relevant \"market\" will \"depend on the product itself and its ability to be traded across distances\".\nConsistently with this interpretation, China adds that factors such as the curr ency in which a loan is\ndenominated, the borrower's creditworthiness, and the re gulatory factors affecting the ability of borrowers and\nbanks to operate across national borders are all relevant to determine the geographic \"market\" under\nArticle 14(b). China therefore disagrees with the United States that there is a \"wor ld market\" for lending, and\nadds that neither the United States, nor the USDOC have provided any evidence that the relevant \"market\" for\nRMB-denominated loans is anything \"other\" than China's lending market. ( See, e.g., China first written\nsubmission, paras. 237-239; comments on the United States ' response to Panel question 17 (second meeting),\nciting to Appellate Body Report on US – Upland Cotton, para. 405).\n578 China first written submission, para. 239. China fu rther submits that, as also acknowledged by the\nUSDOC, the mere fact that a bank is wholly or partially owned by a government does not mean that loans by\nthat bank are not \"commercial\". That is, a benchmark loan is \"commercial\" if it is made by a bank in the\nordinary course of commerce. (Id, para. 235).\n579 See, e.g., China oral statement at the first meeting of the Panel, para. 51.\n580 China first written submission, paras. 247-248; second written submission, paras. 88-92.\n581 See, e.g., China first written submission, paras. 249, 264, 273.\n582 Id., paras. 255-256, 261; second written submission, paras. 98-102; oral statement at the first\nmeeting of the Panel, para. 54. China refers in this co ntext to an expert report (which was prepared for and\nsubmitted in the CVD investigation), stating that government intervention in credit markets to affect the level of\ninterest rates is a widespread tool of monetary policy, (China first written submission, para. 256, referring to\nExhibit, CHI-81, para. 7).\n583 China explains that the main tool used by its centr al bank (the PBOC) to di rect commercial interest\nrates is a system of benchmark rates under which all commercial banks in China may not extend loans at less\nthan 90 per cent of the prevailing benchmark rate applicable to the loan in question, and that as the PBOC raises\nor lowers the benchmark rates, it affects the rates at which commercial banks lend to borrowers. (China first\nwritten submission, para. 261).\n\npolicies, China submits that the United States' implicit analogy that government ownership of\nfinancial institutions is akin to the \"'role of the go vernment in the market as a provider of the same or\nsimilar goods'\" is unfounded. 584 Moreover, China alleges that the USDOC's presumption that all\nloans by state-owned commercial banks in China are made on non-commercial terms, merely by\nvirtue of state ownership, contradicts the USDOC finding of specificity in respect of the alleged\nsubsidy. In particular, China submits that by rejecting all SOCB loans as benchmarks, the USDOC\nhas implicitly found that \"all\" such loans were \"made on non-commercial terms\", and that therefore\nthe alleged subsidy could not be specific because it would benefit every borrower in China.585\n10.89 Second, China disagrees with the United States ' assertions that China's banking regulatory\nsystem, particularly the fact that China maintains a deposit rate cap and a lending rate floor, distorts\nlending rates or that it is different from what are c onsidered \"traditional\" regulatory controls. China\nsubmits that these are ordinary features of bank regulatory systems and that the United States does not\ndispute this. In addition, China argues that nothing in Article 14(b) allows investigating authorities to\ndisregard the applicable benchmark set forth th erein based on the subjective understanding that a\nbanking regulation system is \"traditional\" or \"unt raditional\", or to second-gu ess the correctness of\nbanking regulations imposed by Members.586\n10.90 Third, in regard to the government intervention in setting interest rates, China submits that it\nis undisputed that governments all over the world set interest rates for thei r currencies, and that\ntherefore the whole premise of the USDOC's rati onale for rejecting Chinese interest rates as\n\"distorted\" is invalid. For China, there are no inte rest rates that are \"undistorted\" by government\n\"control\" and \"intervention\", and as such, government \"distortion\" of interest rates cannot provide a\nbasis for disregarding the requirements of Article 14(b), even if there were any lawful basis to do\nso.587\n10.91 China disagrees with the United States' argument that given the lack of commercial loans in\nChina the USDOC would have been unable to measure the benefit at issue had it applied Article 14(b)\nverbatim. China submits that, according to the record evidence, there are plenty of \"comparable\ncommercial loans\" in China that provide an a ppropriate benchmark as required by Article 14(b).588 In\naddition, China considers that becau se prevailing interest rates are determined by government action,\nthe problem of circularity referred to by the Appellate Body in US – Softwood Lumber IV does not\narise in the case of interest rates. Specifica lly, China argues that, unlike the situation in US –\nSoftwood Lumber IV, it is the government's role \"as a government\" – rather than as a provider of the\nfinancial contribution – that affects prevailing inte rest rates and therefore the applicable benchmark\n\n584 China first written submission, paras. 263-264; second written submission, para. 102. China argues\nthat even if such analogy had any basis, the United States' ownership argument would amount to the same per se\ntest for \"distortion\" that the Appellate Body has already rejected in respect of Article 14(d). China adds that\nsuch a per se test is even more inappropriate in the context of Article 14(b), since the government's role as a\nprovider of a financial contribution is unrelated to the factors that determine interest rates, and the USDOC in\nfact identified no evidence indicating that state owne rship in commercial banks had any bearing upon the\ndirection of interest rates. (Id., paras. 270-271; second written submission, para. 102).\n585 China first written submission, footnote 223.\n586 Id., para. 272; second written submission, paras. 105-106, 110; response to Panel question 41 (first\nmeeting).\n587 China second written submission, paras. 111-112.\n588 Id., para. 115. For instance, China argues that the \"big four\" SOCBs are among the largest\ncommercial banks in the world, are traded on international stock exchanges, and have attracted strategic\ninvestments from major international financial institutions. China adds that other commercial banks in China,\nwhich have either minority state ownership or no state ownership, are also traded on stock exchanges and have\ndomestic and overseas investors. (Id., paras. 116-117).\n\nunder Article 14(b).\n589 Therefore, China submits, when an investigating authority compares the\ninterest rate of a government-provided loan to prevailing national interest rates, it is not comparing the\ngovernment-provided loan to itself, but rather, to the interest rate conditions that affect all commercial\nlenders in that market. China also argues that this comparison is consistent with the notion of benefit\nunder Articles 1 and 14 of the SCM Agreement. That is, a borrower would be \"better off\" only if it\nobtains an interest rate on a government-provided loan th at is lower than the interest rate that it would\nhave paid on a comparable commercial loan under prevailing interest rate conditions. 590 Thus,\naccording to China, it was entirely possible to appl y Article 14(b) to government-provided loans in\nChina in order to determine whether the recipi ent was better off as a result of the financial\ncontribution at issue.591\n10.92 China rejects the \"access to credit\" argumen t advanced by the United States during the\nproceedings in this dispute. China argues that th e United States' argument – that the \"benefit\" of the\nalleged \"policy lending\" subsidy is the mere \"access to credit\", even if the credit is provided at\nprevailing interest rates – amounts to an impermissible ex post rationalization, since it bears no\nrelationship with the \"benefit\" that the USDOC ac tually purported to measure, i.e., the difference\nbetween interest rates in China and the benchmarking interest rates. 592 In any event, China submits\nthat \"access to credit\", on its own, does not confer a benefit under Article 14(b). For China, \"access to\ncredit\" at ordinary commercial interest rates coul d provide a benefit only if the firm receiving the\ngovernment-provided loan could not \"actually obtain\" a comparable loan from a commercial bank\nbecause of its credit status. The record evidence does not indicate th at companies in China could not\n\"actually obtain\" loans from non-SOCBs in the absence of the alleged \"policy loans\".\n593\n10.93 Finally, China points to the broader systemic im plications of the issue before the Panel.\nAccording to China, the rationale used by the USDOC to reject interest rates in China as benchmarks\ncould open the way for WTO Members, through th eir countervailing duty laws, to judge other\nMembers' sovereign monetary policy.594\n(b) United States\n10.94 The United States rejects China's arguments and submits that the USDOC's determination to\nuse out-of-country interest rates was consistent with Article 14(b) of the SCM Agreement. In\nparticular, the United States argues that, based on all of the evidence on the record, the USDOC\ndetermined that not only did China have a predominan t role in the lending market as an owner of the\n\n589 China notes that in US – Softwood Lumber IV the Appellate Body was concerned with the situation\nin which \"the government's role in providing the financial contribution is so predominant that it effectively\ndetermines the price at which private suppliers sell the same or similar goods, so that the comparison\ncontemplated by Article 14 would become circular\". (emphasis as added by China) (China response to Panel\nquestion 34 (first meeting), citing to Appellate Body Report on US – Softwood Lumber IV, para. 93).\n590 China second written submission, para. 100; citing to Appellate Body Report on Canada – Aircraft,\npara. 157; response to Panel question 34 (first meeting).\n591 China second written submission, paras. 120-121. In particular, China submits that it is consistent\nwith Article 14(b) to compare the interest rate on a government-provided loan in China to the PBOC benchmark\nrate. In China's view, there is nothing \"circular\" in this comparison, as it is a comparison of the interest rate on\nthe government-provided loan to the interest rate conditio ns that affect all borrowers of comparable commercial\nloans in the same market. (Id.).\n592 Id., para. 122; oral statement at the first meeting of the Panel, paras. 11-12, citing to the Appellate\nBody Report on US – Softwood Lumber IV (Article 21.5 – Canada), para. 93.\n593 China second written submission, paras. 125-130.\n594 China first written submission, paras. 273-275; oral statement at the second meeting of the Panel,\npara. 47.\n\nmajority of banks in China, it also directly cont rolled interest rates through its regulations of the\nmarket, thereby distorting loan rates in China.595\n10.95 The United States disagrees with China's argument that \"[a]ll interest rates are distorted by\ngovernment intervention\", arguing that China's inte rvention in the lending market is significantly\ndifferent from that of most other governments. For the United States, the mechanism of having both a\nfloor on lending rates and a cap on deposit rates re nders China's regulation different from a typical\ngovernment lending market regulation, and ensures that banks in China earn considerable profits\nthrough lending at or near the floor rate. 596 Accordingly, the United States argues, the USDOC's\ndetermination to reject in-country interest rat es as a benchmark was not based only on China's\nintervention in the banking sector, but also on the extent and nature of its intervention and the\nresulting distortion in the lending market. 597 The United States therefor e rejects China's assertions\nthat the USDOC rejected Chinese lo an rates because they were not \"fully\" market-based, or that the\nUSDOC presumed that all loans by SOBCs were ma de on non-commercial terms, merely by virtue of\nstate ownership.598\n10.96 Likewise, the United States maintains that th e USDOC's concern was not to judge China's\nmonetary policies and/or to determine whether China's direct control over interest rates was\ntraditional. Rather, the United States submits, the USDOC determined, consistently with the\nreasoning of the Appellate Body in US − Softwood Lumber IV, whether such control created distortion\nin the Chinese lending market. 599 In fact, the United States argues, the USDOC evaluated the extent\nto which China's invasive control over interest rates distorted the lending market, such that it was\ninappropriate to rely upon any in-country interest rates as benchmarks. 600 The United States also\n\n595 United States first written submission, para. 230; second written submission, paras. 80-81; opening\nstatement at the second meet ing of the Panel, para. 29. The United States notes that in determining that the\nlending rates in China were unsuitable as market benchmarks, the USDOC relied on the reasoning it had applied\nin the previous investigation of CFS Paper , where the USDOC concluded that China's intervention in the\nlending market distorted that market. The USDOC's findings relied largely upon three major factors: (i) China's\nbanking sector remained almost entirely state-owned; (ii) there was ex tensive government regulation of interest\nrates; and (iii) foreign bank lending in China was subjected to the same distortions as domestic bank lending.\n(United States first written submission, para. 236). The United States observes that China does not contest the\nfacts upon which the USDOC relied, e.g., the fact that it ow ns the majority of the banking sector or the fact the\nChinese banks are still operating on non-commercial basis. (United States second written submission, para. 91).\n596 United States first written submission, para. 240; second written submission, para. 92. The\nUnited States indicates that China ensures that its banks earn a profit on \"each\" loan by (i) capping the deposit\nrate below the interest rate floor and (ii) preventing competition among banks for savers' capital. The\nUnited States adds that China's policies further provide savers' few investment options beyond depositing their\nsavings with the banking system. (United States second written submission, para. 92).\n597 The United States observes that while China does not contest the USDOC's factual findings\nregarding its regulations in the lending market, its indication that \"most commercial borrowers in China obtain\ninterest rates of loans [...] that fall somewhere between the interest floor and the benchmark itself\" confirms the\ndistortion provoked by these regulations in the lending market. For the United States, the marginal difference\nbetween such interest rates is due to the fact that bank s can lend at the floor rate and are still ensured a profit,\nand therefore, the interest rates are not at the level they otherwise would be absent these controls. (Id., para. 93).\n598 United States first written submission, paras. 201-202, 235.\n599 United States second written submission, pa ra. 96, citing to Appellate Body Report on US –\nSoftwood Lumber IV, para. 101; response to Panel question 41 (first meeting). The United States indicates that\nin the OTR investigation the USDOC refrained from judging China's monetary policies as it rejected arguments\nmade by domestic producers that \"China had monetary policies that distorted the inflation rate and, therefore,\nCommerce should not adjust for inflation in its lending benchmark.\" ( See, e.g., United States second written\nsubmission, footnote 161).\n600 Id., para. 96. The United States rejects China's argument that the Appellate Body's recognition of\nthe possibility of resorting to out-of-co untry benchmarks is limited to Article 14(d), arguing that the \"Dominant\nFirm\" theory applies equally to the lending market. (Id., para. 95).\n\nsubmits that China's position would require the use of loans distorted by the government's intervention\nas benchmarks and that this position is at odds with prior panel and Appellate Body findings.\n601\n10.97 The United States also disagrees with China that the terms \"comparable\" and \"actually obtain\non the market\" in Article 14(b) require that the benchmark be denominated in the currency of the\ngovernment-provided loan. The United States submits that nothing in Article 14(b) requires the use\nof a benchmark loan denominated in any particular currency, and that such an outcome would be\nincongruous with the flexible nature of Article 14 of the Agreement which, as the Appellate Body has\nexplained, permits the use of out-of-country benchmarks. 602 The United States adds that while this\nflexibility is confirmed by China's Protocol of Accession, China's interpretation would exclude all\nRMB lending from the scope of that provision, and th ere is no basis in the text of the Accession\nProtocol for such an exclusion. 603 According to the United States, China's interpretation is also\ninconsistent with the object and purpose of the SCM Agreement, since it would prevent Members\nfrom fully offsetting the effects of a subsidy.604\n10.98 The United States submits that the term \"market\" is not qualified in Article 14(b), and that the\ncontext of Article 14 suggests that the relevant \"marke t\" is not limited to the country of provision. In\nthis regard, the United States observes that while Articles 14(a) and (d) refer to a geographical\nindicator, no geographic specification is reflected in Article 14(b). The United States also notes that\nalthough Article 14(d) contains a geographical indicat or, the Appellate Body found that Article 14(d)\ndoes not bind investigating authorities to select onl y in-country benchmarks when the government has\na predominant role in the market. Therefore, the United States submits, there is no basis for\ninterpreting Article 14(b) as imposing a more restrictive \"geographical limitation\" than\nArticle 14(d).605 Nor does the term \"market\" in Article 14(b) require or exclude the possibility of a\nnational market or a world market for lending.606\n10.99 Finally, the United States submits that the term \"market\" in Article 14(b) must not be read in\nsuch a way as to require the use of benchmark loan s distorted by government predominance and other\ninterventions, as such an interpretation would eff ectively eliminate the word \"commercial\" from the\nterm \"comparable commercial loan\", and would in some cases imply a circular benefit comparison.\nIn addition, the United Sates argues that in EC – Countervailing Measures on DRAM Chips the panel\nrecognized the difficulties that investigating author ities face in measuring the benefit of government-\nprovided loans, finding that investigating authorities are \"entitled to considerable leeway\" in adopting\nreasonable methodologies to calculate the benefit.607\n3. Main arguments of the Third Parties\n(a) Australia\n10.100 Australia considers that there is no basis in Artic le 14(b) for the benchmark used to \"relate or\nrefer to, or be connected\" with the conditions prevailing in the market of the country of provision.\nAustralia notes in this respect that loans are availa ble on an international financial market that is\nsubject to international influences. Furthermore, Au stralia considers that there is no basis in the text\n\n601 United States response to Panel question 41 (first meeting), citing to, inter alia , Appellate Body\nReport on US – Softwood Lumber IV, para. 103.\n602 United States first written submission, paras. 249-2 53; opening statement at the first meeting of the\nPanel, para. 32.\n603 United States first written submission, para. 254.\n604 Id., para. 252.\n605 See, e.g., United States response to Panel question 17 (second meeting), citing to Appellate Body\nReport on US – Softwood Lumber IV, para. 103.\n606 Id., citing to Appellate Body Report on US – Upland Cotton, para. 406.\n607 Id., citing to Panel Report on EC – Countervailing Measures on DRAM Chips, para. 7.213.\n\nof Article 14(b) to limit the permissible benchmark to loans in the same curren cy as that of the loans\nbeing investigated given that loans obtained in one currency can be used to purchase any currency at\nrates determined by international markets.608\n(b) European Communities\n10.101 The European Communities considers that the interpretation of Article 14(d) by the Appellate\nBody in US − Softwood Lumber IV is relevant for clarifying the meaning of Article 14(b). The\nEuropean Communities notes that the Appellate Bo dy based its interpretation on the objective of\nArticle 14 of the SCM Agreement (\"Calculation of th e amount of a subsidy in terms of the benefit to\nthe recipient\"). The European Communities is of the view that in light of this objective, once it has\nbeen established that the relevant market conditions are distorted, the comparison contemplated by\nArticle 14 would become useless. The European Communities considers that if it has been shown that\nthe \"comparable commercial loan which the firm could actually obtain on the market\" is also distorted\nbecause of the government intervention, then having recourse to alternative benchmarks could be\npossible on a reasonable basis, and such other benchmarks might correspond to a \"comparable\ncommercial loan\" as provided for by Article 14(b), which has no express territorial limitation.609\n(c) Japan\n10.102 Japan considers that, consistent with the findings of the Appellate Body in Japan – DRAMs\n(Korea), where the government dominates the relevant financial market, an investigating authority has\n\"some latitude as to the method it chooses to calculate the amount of benefit\", although it still has to\nidentify a \"comparable\" and \"commercial loan\" as a be nchmark. Therefore, Japan considers that the\nquestion before the Panel is whether sufficient ev idence supports the USDOC's conclusion that there\nwas no benchmark within China that could be used, and should the Panel find that there were no such\nbenchmarks, it should then examine the consistency with Article 14(b) of the benchmark selected by\nthe USDOC.610\n(d) Mexico\n10.103 Mexico disagrees with China that the USDOC relied on China's monetary policy in order to\nreject the interest rates in China as a benchmark. In Mexico's view, the USDOC's determinations\nwere based on other considerations, which include d the predominant position of public bodies in the\ncommercial banking sector and the extent to which this situation distorted the interest rates fixed by\nChina's central bank.611\n(e) Saudi Arabia\n10.104 Saudi Arabia considers that a benchmark loan mu st comply with the \"cumulative\" criteria set\nforth in Article 14(b) of the Agreement. In this regard, Saudi Arabia is of the view that the term\n\"comparable\" suggests that the be nchmark loan should be a loan de nominated in the same currency,\nand subject to the same generally applicable fina ncial regulations of the country providing the\ngovernment loan. In addition, the word \"commercial\" refers to any transaction that is made in the\nordinary course of commerce, while the phrase \"which the firm could actually obtain on the market\"\nimposes a requirement that the benchmark be based on the actual borrowing experience of the\nrecipient firm. Saudi Arabia argues that the use of constructed benchmarks based on loans that are\n\n608 Australia third-party submission paras. 37-40; third-party response to Panel question 7.\n609 European Communities third-party submission, paras. 39-40; third-party response to Panel\nquestion 7.\n610 Japan third-party submission, paras. 33-37.\n611 Mexico third-party response to Panel question 7.\n\nnot actually available, but rather represent an aver age of a set of loans gathered in a discretionary\nmanner to represent the \"average commercial loan\" ar e inconsistent with Artic le 14(b). Saudi Arabia\ntakes issue with the United St ates' argument that the reasoni ng of the Appellate Body in US\n−\nSoftwood Lumber IV , although decided under Article 14( d), is \"equally applicable\" under\nArticle 14(b). Saudi Arabia argues, inter alia, that nothing in the Appellate Body's report indicates its\napplication to Articles 14 (a), (b), and (c), nor to the \"entirety of Article 14\". However, assuming\narguendo that the reasoning of the Appellate Body in that case applies to Article 14(b), Saudi Arabia\nconsiders that the clear admonitions made by the Appellate Body on the use of out-of-country\nbenchmarks would apply as well.612\n4. Assessment by the Panel\n(a) Whether Article 14(b) permits rej ection of in-country interest ra tes as benchmarks, and if so,\nunder what circumstances\n10.105 The central question of legal interpretation raised by this claim is whether, and if so under\nwhat circumstances, Article 14(b) of the SCM Agreem ent permits the rejection of in-country interest\nrates as benchmarks for government-provided loans. We recall here that China's claim and arguments\nin this regard are limited to SOCB loans denominated in RMB, and in particular that RMB loans can\nonly be obtained in China, and that to be \"compa rable\" in the words of Article 14(b), a benchmark\nloan must be denominated in the same currency as the one under investigation. We note that China\ndoes not challenge the rejection of in-country inte rest rates as benchmarks in respect of SOCB U.S.\ndollar-denominated loans. 613 That said, the USDOC's determinatio ns in the investigations at issue\nmade no distinction on the basis of the currency of the loans as to whether or not in-country interest\nrates could be used. To the contrary, the USDOC's analysis and conclusions were in respect of the\nChinese banking sector, and lending market, in gene ral. Thus, our analysis under Article 14(b)\nfocuses on the general question of whet her, and if so when, rejection of in-country interest rates is\npermissible.\n10.106 We turn first to the text of Article 14 of the SCM Agreement:\n\"Article 14\nCalculation of the Amount of a Subsidy in Terms\nof the Benefit to the Recipient\n For the purpose of Part V, any method used by the investigating authority to\ncalculate the benefit to the recipient conf erred pursuant to paragraph 1 of Article 1\nshall be provided for in the national legisl ation or implementing regulations of the\nMember concerned and its application to each particular case shall be transparent and\nadequately explained. Furthermore, any such method shall be consistent with the\nfollowing guidelines:\n (a) government provision of equity capital shall not be considered as\nconferring a benefit, unless the investment decision can be regarded as\n\n612 Saudi Arabia third-party submission, paras. 91-99.\n613 In fact, China appears to agree in principle with the USDOC's choice of be nchmark for these loans,\nciting the USDOC's use in the OTR investigation of a LIBOR-based benchmark for U.S. dollar-denominated\nloans as indicative of the USDOC's \"r ecognition\" that a \"comparable\" loan must be denominated in the same\ncurrency as the loan under investigation, and that this is consistent with a proper understanding of what it means\nfor a loan to be \"comparable\". (China first written submission, para. 234).\n\ninconsistent with the usual investment practice (including for the provision of\nrisk capital) of private investors in the territory of that Member;\n (b) a loan by a government shall not be considered as conferring a\nbenefit, unless there is a difference between the amount that the firm\nreceiving the loan pays on the government loan and the amount the firm\nwould pay on a comparable commercial loan which the firm could actually\nobtain on the market. In this case the benefit shall be the difference between\nthese two amounts;\n (c) a loan guarantee by a government shall not be considered as\nconferring a benefit, unless there is a difference between the amount that the\nfirm receiving the guarantee pays on a loan guaranteed by the government\nand the amount that the firm would pay on a comparable commercial loan\nabsent the government guarantee. In this case the benefit shall be the\ndifference between these two amounts adjusted for any differences in fees;\n (d) the provision of goods or services or purchase of goods by a\ngovernment shall not be considered as conferring a benefit unless the\nprovision is made for less than adequate remuneration, or the purchase is\nmade for more than adequate remunera tion. The adequacy of remuneration\nshall be determined in relation to prevailing market conditions for the good or\nservice in question in the country of provision or purchase (including price,\nquality, availability, marketability, tr ansportation and other conditions of\npurchase or sale)\".\n10.107 As discussed in Section XI.E.3, infra, the chapeau of Article 14 indicates that the provisions\nset forth in sub-paragraphs (a)-(d) of this provisi on are \"guidelines\", and that while investigating\nauthorities must respect these guidelines in calculati ng the benefits from the particular kinds of\nfinancial contributions identified in the respective sub-paragraphs, they have flexibility as to the\nprecise methodology that they use, so as to be able to take into account the particular facts of a given\ninvestigation.\n10.108 Concerning the specific provision at issue, Artic le 14(b) of the SCM Agreement provides that\nthe relevant comparison for determining whether a government loan confers a benefit is with \"a\ncomparable commercial loan that the firm could actua lly obtain in the market\". In our view, the key\nconcept in this phrase is the word \"commercial\". In particular, the basic task in calculating a benefit\nfrom a government loan is to determine whether, when an investigated entity borrows from the\ngovernment, the terms are better-than-commercial, i. e., better than a commercial lender would charge\nfor the same loan.\n10.109 This view of Article 14(b) is in keeping with the general interpretation of the concept of\nbenefit as an advantage that makes the recipient better off, by virtue of the government's provision of\nthe financial contribution in question, than the r ecipient would be if it obtained the same financial\ncontribution from the market (i.e., commercially).\n614 Indeed, in broad terms this is the comparison\nrequired by all of the subparagraphs of Article 14, namely, to compare the terms of the government\nfinancial contribution with the terms that would be offered through the commercial market for the\nsame financial contribution.\n10.110 Furthermore, we consider that the chapeau of Article 14 establishes this comparison with\ncommercial market terms as the general principle fo r the determination of the amount of benefit from\n\n614 See, e.g., Panel Report on Canada – Aircraft, para. 9.113.\n\nany kind of government financial contribution (inc luding those not specifically referred to in the sub-\nparagraphs of Article 14), via its generally worded requirement that \"any method used [...] to calculate\nthe benefit to the recipient conferred pursuant to para graph 1 of Article 1 [...] be consistent with the\nguidelines\" in the sub-paragraphs.\n615 Our view in this regard is essentially the same as the general\ncharacterization of Article 14 by the panel in Canada – Aircraft , namely that the guidelines in\nArticle 14 \"employ a commercial benchmark, whereby a financ ial contribution 'shall not be\nconsidered as conferring a benefit' unless that fina ncial contribution is made on terms that are more\nadvantageous than would have been available to the recipient on the commercial market\".616\n10.111 Thus, pursuant to Article 14(b) of the SCM Agreement, the comparator to be used to\ndetermine the existence and amount of any bene fit from a government loan must be, first and\nforemost, \"commercial\". One possible interpretation of this term could be that any loan made by a\ngovernment would, ipso facto, not be \"commercial\", because to require otherwise would involve the\ncomparison of the terms of one financial contribution by a government to those of another. We are\nnot, however, called upon in this dispute to definiti vely rule on this question, because in fact the\nUSDOC did not reach its determination that interest rates in China could not be used as benchmarks\non the basis that the government was the predominan t supplier of credit in China, but instead looked\nat a number of other factors as well, as discussed in Section X.J, infra.\n10.112 Second, Article 14(b) indicates that the benchmark loan must be \"comparable\". That is,\nArticle 14(b) indicates that not any \"commercial\" lo an can be used as a benchmark, but instead the\nparticular benchmark loan selected must be \"compa rable\" to the investigated government loan. We\nview the term \"comparable\" to mean, in general terms, that the benchmar k loan should have been\nestablished around the same time, shoul d have the same structure as (fixe d or floating interests rates)\nand similar maturity to the government loan, should be about the same size, and should be\ndenominated in the same currency, as these are the fu ndamental elements used to describe loans, and\nthus the elements on the basis of which different loans can be compared.\n10.113 Finally, the benchmark loan should be one that the borrower \"could actually obtain on the\nmarket\". We see this as a reference first and foremost to the individual characteristics of that\nparticular borrower (essentially, its risk profile). In other words, how would a commercial lender\nevaluate that borrower in deciding whether to make the investigated loan? Most importantly, what\ninterest rate would the commercial lender charge, a nd what repayment terms, collateral, etc., would it\nrequire, for a loan of the same structure and matu rity as the government loan, based on its evaluation\nof the borrower's likelihood of defaulting?\n10.114 The guidelines thus would prevent, for instance, the amount paid on a one-year floating rate\ngovernment loan from being directly compared to the amount that would be paid on a 10-year fixed\nrate commercial loan. Similarly, the guidelines w ould prevent the amount paid on a government loan\nto a AAA-rated borrower from being compared with the amount that would be paid on a commercial\nloan to a B-rated borrower. Furthermore, they would prevent the amount paid on a government loan\ndenominated in Canadian dollars from being directly compared to the amount that would be paid on a\ncommercial loan denominated in Japanese yen, and so forth. Ultimately, therefore, the guidelines of\nArticle 14(b) provide that the benchmark interest ra te used to determine the existence and amount of\n\n615 For example, in the case of grants, which are not listed in Article 14, the comparison with the\nmarket would give the result that the benefit amount is the full amount of the grant because grants are in essence\ngifts, and it is clear that the market does not give gifts. Similarly, the amount of the benefit from a tax\nexemption or similar tax measure also would be the full amount of the taxes not paid, as the tax exemption or\nreduction also would be in essence a gift from the government to the recipient.\n616 Panel Report on Canada – Aircraft , para. 9.113. (emphasis added) We recall that in Canada –\nAircraft, the Appellate Body upheld the panel's analysis and interpretation of the term \"benefit\" in Article 1.1(b)\nof the SCM Agreement, including its reliance on Article 14 as relevant context. (Appellate Body Report on\nCanada – Aircraft, paras. 155 and 161).\n\nbenefit from a government loan reflect not only the basic features of the government loan, but also\nreflect the risk level of the borrower.\n10.115 On the basis of this analysis, it is clear that th e \"ideal\" benchmark in terms of Article 14(b) of\nthe SCM Agreement would be an actual loan from a commercial lender of the same size, maturity,\nstructure and currency, to the investigated entity , taken out on the same day as the investigated\ngovernment loan. It also is clear, however, that in practice the existence of such an ideal benchmark\nloan will be extremely rare. The commercial loan s actually held by a given borrower will almost\ninevitably have certain differences, whether in timi ng, size, maturity, structure, and/or currency from\nthe investigated government loan, that would make them not perfectly comparable, or even not\ncomparable at all, to that government loan. As one example, in a given country there may be no\ncommercial market for long-terms loans – all such loans may be government-provided. In such a\nsituation, the only commercial loans in existence in that country would be short-term. Similarly, a\ngiven borrower may have on its books a commercia l loan that is essentially identical to the\ngovernment loan except for its origination date, a nd there may have been a very large generalized\nmovement in interest rates during the interval that would make these loans not directly comparable.\n10.116 The question then becomes how Article 14(b) addresses such situations, which will arise\nfrequently, indeed probably in the large majority of cases. In particular, where there are differences in\nexisting commercial loans held by the borrower such th at in the strict sense of the term they are not\n\"comparable\" with the investigated government loan, does Article 14(b) require an investigating\nauthority to conclude that there simply is no benc hmark, and that as a result no benefit amount can be\ndetermined (which would mean, in effect, that the benefit amount is zero)? In our view, this is not the\ncase.\n10.117 We note, first, the phrase \"the amount the firm would pay on a comparable commercial loan\nthat which the firm could actually obtain on the market\". In our view, the use of the conditional mode\nhere, in conjunction with the reference to the indi vidual borrower's situation, is an indication that\nwhere loans are concerned, the very individualized nature of borrowing, as discussed above, often will\nlimit an investigating authority's ability to identify a fully comparable existing commercial loan held\nby the investigated borrower to use as a benchm ark for the investigated government loan, meaning\nthat some degree of approximation will be inevita ble. Often this approximation can be accomplished\nby making adjustments to a loan that is not comp arable in every respect, such that, following the\nadjustments, the resulting adjusted loan's terms have been made comparable. In this sense, an\nadjusted non-comparable loan would be a proxy fo r a theoretical \"comparabl e commercial loan\" that\nthe borrower \"could actually obtain on the market\". We thus see that Article 14(b), by its own terms,\nmakes allowance for the use of proxies when an identical or nearly-iden tical loan is not available as a\nbenchmark. The same terms, however (\"comparable\" and \"could actually obtain on the market\"), also\nrequire that, where adjustments and/or proxies are necessary due to the absence of an existing\ncommercial loan that is comparable in every respect, the resulting benchmarks must be appropriate.617\n10.118 In this regard, we view the identification of a loan benchmark pursuant to Article 14(b) as a\nseries of concentric circles. The first best option, as noted, is to find a commercial loan to the same\nborrower that is identical or nearly identical to th e investigated loan (in terms of timing, structure,\nmaturity, size and currency). If that borrower has no such loan, then the next place to look logically\nwould be the borrower's other existing commercial loan s, to see if any of them is sufficiently similar\nthat its terms could be adjusted to reflect the basic characteristics of th e government loan. Such\n\n617 Of course, the SCM Agreement does not requ ire the imposition of countervailing measures,\nmeaning that an investigating authority always has the option not to apply a countervailing measure in respect of\na given subsidy. In this sense, if an investigating authority had difficulty in identifying a suitable benchmark for\na given government financial contribution, it could choose not to perform a benefit calculation, and thus to omit\nthe particular financial contribution from its overall calculation of subsidization of the investigated product.\n\nadjustments might reflect, for example, different dates of origination of the loans (to account for\ninterest rate fluctuations that may have taken place in the market during the interval), different sizes,\ndifferent maturities, different currencies, different structures, changes in the borrower's credit risk\n(e.g., if a loan on the borrower's books was originated at a time when the borrower had a high credit\nrating, but the rating had been downgraded by the ti me the government loan was made), etc. There\nare many possible examples, and we do not mean here to rule on all potential situations that might\narise or to pronounce in any way as to what particular kinds of adjustments might or might not be\nacceptable under Article 14(b) in the circumstances of a given investigation. These are questions that\ncould only be resolved on a case-by-case basis, and our point here is, simply, that in many or most\ncases, certain adjustments will need to be made to ensure that ultimately the amount of the benefit that\nis calculated is based on the amount that \"would\" be paid on a \"comparable commercial loan\" that the\nborrower \"could\" actually have obtained on the market.\n10.119 There may be circumstances, however, where the actual differences between any of the\ncommercial loans on a borrower's books and the inves tigated government loan are so significant that\nit is not realistically possible to address them through adjustments; or the investigated government\nloan might be the only loan on the borrower's books ; or the borrower's only other loans might also be\nfrom the government. In these circumstances, the investigating authority would need to look beyond\nactual loans held by the investigat ed borrower, and use other sources of information. One possibility\nin this regard could be a similar commercial loan granted to another borro wer with a similar credit\nrisk profile as the investigated borrower (if such a loan could be identified). If no appropriate\ncommercial loan benchmark can be identified, then the authority could construct a benchmark loan\nproxy. While Article 14(b) contains no specific guidance as to how this would need to be done, we\nsee no a priori restriction to any geographical market (as exists, for example, in Articles 14(a) and\n14(d)), or any prohibition of any particular approach to constructing a proxy. Rather, the fundamental\nrule in Article 14(b) is that the measurement of th e benefit be based on what \"would\" have been paid\non a comparable commercial loan that \"could\" act ually have been obtained by the investigated\nborrower, even if no such loan exists.\n10.120 We note in this regard that China invokes th e particular case of RMB-denominated loans as a\nsituation in which it is impossible to use any inte rest rate other than one found inside China as a\nbenchmark, due to the impossibility of borrowing RMB anywhere outside China. We acknowledge\nthat the currency in which a loan is denominated is of course one of its most important characteristics,\nand that using as a benchmark a loan in another cu rrency poses particular challenges. That said, in\nour view, currency differences do not necessarily po se the insurmountable hurdle that China posits.\nIn particular, there are means to determine the equi valence of loans expressed in different currencies,\nnotably the various forms of swap transactions that are routinely used in international financial\nmarkets, whereby borrowers in different currenci es swap principal amounts and/or interest payment\nstreams on their respective loans. By definition, these exchanges between willing partners express the\nequivalence of the values of the dissimilar things being exchanged. We note that swap transactions of\nthis type were originally devel oped to circumvent restrictions a nd limitations on borrowing in foreign\ncurrencies.\n618 Thus, unlike China, we do not consider that the geographic restriction of lending in a\nparticular currency precludes, as a matter of law, a comparison with a benchmark loan expressed in a\ndifferent currency from that of the government loan. Rather, this is a feature of a loan that can, at\nleast in certain circumstances, be made to be \"c omparable\", in the sense of Article 14(b), to the\ninvestigated government loan.\n\n618 See http://www.sjsu.edu/faculty/watkins/swaps.htm. We further note that in 2005, the People's Bank\nof China reportedly allowed banks for the first time to engage in cross-currency swaps for forward foreign\nexchange contracts (although not interest). (Risk magazine, \"China opens up renminbi swaps market\",\n1 September 2005).\n\n10.121 More generally, we see China's interpretation of the terms of Article 14(b) as excessively\nformalistic, in that it would effectively limit an investigating authority's ability to identify an\nappropriate benchmark, forcing it instead to fall back on a choice from among inappropriate\nbenchmarks. In particular, in our view, the implication of China's argument is that even if all loans in\na given country were made by the government, the investigating authority would have no choice but\nto identify as a benchmark for the investigated gove rnment loan another government loan, so long as\nthe second loan was made in the \"ordinary course of commerce\" 619 (a term for which China offers no\nexplanation).620 In our view such a comparison would be entirely circular given that the point of the\nexercise under Article 14(b) is to compare the gove rnment loan in question to something that is not a\ngovernment loan. Similarly, we consider that pursuan t to China's argument, if a loan were made in a\nparticular currency which was only lent in the country subject to the investigation, then even if all of\nthe loans in that currency were government-provided lo ans, the fact of the currency restriction again\nwould force the investigating authority to iden tify the benchmark from among the same-currency\ngovernment loans, in spite of the circularity of th e resulting comparison. To us, this is directly\ncounter to the directives of Article 14 in general a nd Article 14(b) in particular, which are aimed at a\nmeaningful comparison with the commercial market.\n10.122 In this respect, we see the logic of the Appellate Body's reasoning in US – Softwood\nLumber IV in regard to Article 14(d) of the SCM Agreemen t to be equally applicable to Article 14(b),\nand indeed to Article 14 in its entirety. Here we re call in particular the Appellate Body's analysis of\nthe terms \"in relation to prevailing market conditions [...] in the country of provision\" in Article 14(d).\nThe Appellate Body reversed the panel's interpretati on that this required the use of in-country prices\nas the benchmark even if distorted by the government's predominance as a supplier of the good. The\nAppellate Body found that instead any benchmark, to be \"in relation to\" those market conditions, had\nto \"relate or refer to, or be connected with\" them . In this regard, the Appellate Body specifically\nindicated that where in-country benchmarks were not available, \"proxies\" could be used so long as\nthese related or referred to, or were connected with , the \"prevailing market conditions in the country\nof provision\".\n10.123 We recall in this context that the problem wh ere in-country benchmarks cannot be used to\ndetermine adequacy of remuneration for goods is th at the prevailing, observed conditions of purchase\nor sale in the country of provision of the good reflect the government's role as predominant supplier or\nas controller of the prices. As such, it is clear that the appropriateness of any selected proxy in such a\nsituation (in terms of how well it reflects the \"pre vailing market conditions\" for the good in that\ncountry) cannot be verified directly. We thus unde rstand the Appellate Body, in these statements, to\nindicate that while proxies can be used in pl ace of the directly observed prices in certain\ncircumstances, those proxies must be carefully sel ected and adjusted as n ecessary to as closely as\npossible represent the market conditions that wo uld prevail if the government was not the\npredominant supplier or did not control the prices. Furthermore, given that the Appellate Body has\nfound that the language in Article 14(d) referring to the \"country of provision\" does not limit, in a\nformalistic way, the selection of a benchmark fro m among the observed prices in that country, we\nconsider that the same is equally true where, as in Article 14(b), the term \"market\" is not\ngeographically modified in any way.\n10.124 We note China's argument that its approach w ould not result in a circular comparison. In\nparticular, China views the United States' approa ch as based on a misplaced analogy between the\nAppellate Body's reasoning in US – Softwood Lumber IV in respect of the \"role of the government in\n\n619 See, e.g., China first written submission, para. 235.\n620 China only provides a dictionary definition of the term \"commercial\" and cites a paragraph of the\nPanel Report on China – Intellectual Property Rights and a paragraph of the Panel Report on Canada – Wheat\nExports and Grain Imports in which the dictionary definition of the term \"commercial\" appears. China provides\nno definition and/or explanation of its own phrase \"ordinary course of commerce\".\n\nthe market as a provider of the same or simi lar goods\" under Article 14(d), and government\nownership of financial institutions. China states that implicit in this argument is the suggestion that\ngovernment ownership of financial institutions somehow \"distorts\" th e interest rates charged by all\nfinancial institutions within a country, such that natio nal interest rates are \"unreliable\" or \"unsuitable\"\nas a benchmark under Article 14(b). China disagrees because, it argues, central banks set interest\nrates as a tool of monetary policy, which rates in turn affect the interest rates on commercial loans\ncharged by all banks, whether or not the latter are government-owned. According to China, there is\nnothing \"circular\" about comparing the interest rate on a government-provided loan to the interest rate\nconditions that affect all borrowers in the same cu rrency, regardless of the source of the loan, because\nthe effect that governments have on interest rates do es not result from whatever role they play in the\nmarket for commercial lending, i.e., from their \"role in providing the financial contribution\". Rather,\nit arises from their role as a government in guiding monetary policy.\n621\n10.125 We do not consider that this argument by Chin a resolves, or even squarely addresses, the\nlegal issue before us. In particular, China's argument presumes that all government control or\nregulation of or intervention in lending markets, of whatever kind and degree, must be treated as the\nsimple implementation of general monetary policy, which by definition cannot give rise to distortion\nof lending rates so as to make the observed interest rates within the country unusable as benchmarks\n(even if all of those observed interest rates happene d to be for government-provided loans). We see\nno such rule in Article 14(b) or anywhere else. Indeed, we recall that the overall purpose of the SCM\nAgreement includes, precisely, to di scipline certain forms of market interventions by governments.\nWe can see no logic, given this, to considering that a particular class of government market\ninterventions (relating to interest rates) must be accepted \"as is\" as the underlying \"market\" condition,\nparticularly where the question to be resolved is exactly whether on a given loan transaction the\ninterest rate charged by that same government is \"below-market\".\n10.126 Furthermore, we see no requirement that observed interest rates in the particular country or\ngeographical market must simply be accepted as the \"commercial\" rates against which to measure the\ninvestigated government loan, even if the government 's interventions of whatever kind (as opposed to\nthe operation of market forces) effectively dictate the levels of those interest rates. Here, we see a\nclear distinction between, on the one hand, the go vernment as the setter and implementer of the\ngeneral monetary policy of a country; and, on the ot her hand, the government participating as a lender\nand/or otherwise intervening in the lending market as such, in a way and to an extent that effectively it\nis the government, and not the market, that establishes the lending rates.\n10.127 We acknowledge, as China points out, that govern ment influence over interest rates is an\nimportant feature of monetary policy. Indeed, ad justing their own lending rates up or down is one of\nthe principal tools by which central banks influence the money supply. It also is true that interest rate\nmovements at the central bank level ripple throu gh the commercial lending market such that the\ndifferent sorts of commercial lending rates (short- and long-term, fixed and floating, for borrowers of\ndifferent risk levels, etc.) tend to move in parallel with the central bank rates. This indeed is generally\nthe goal of such central bank actions, as the loosen ing or tightening of commercial credit directly\nincreases or decreases the money supply.\n10.128 This is a very different matter, however, from a hypothetical situation in which, for example,\nthe government is the only lender in a country. In su ch a situation, whatever its underlying monetary\npolicy, the government itself would directly set all of the lending rates to all of the firms in the\ncountry. Thus, there would be no commercial benchm ark interest rate in that country to which the\ninterest rate on any government loan could be co mpared in the sense of Article 14(b). Any in-country\ncomparison would be inherently circular.\n\n621 China second written submission, paras. 98-100; response to Panel question 34 (first meeting).\n\n10.129 It also is very different from a hypothetical s ituation in which the government simply dictated\nthe lending rates to be charged by \"commercial\" banks . That is, even if the government itself was not\na lender, and even if the banks were not govern ment-owned, and regardless of the underlying\nmonetary policy, it would be the government, not market forces, that set the lending rates for\ncommercial borrowers, by fiat. Thus, here again there would be no commercial benchmark rate to\nwhich the interest rate on a government loan could be compared in the sense of Article 14(b). Again,\nany in-country comparison would be inherently circular.\n10.130 Similarly, some combination of a large govern ment role as a lender to commercial borrowers,\nand significant direct control over lending and in terest rates to commercial borrowers, also could\nresult in a situation in which the interest rates to commercial borrowers do not reflect the operation of\nmarket forces, but instead are distorted in the sense that they are effectively established by the\ngovernment. In this situation as well, we consider that comparing the interest rate on a government\nloan to another loan in the same country would be a circular exercise. We view such a situation as\nanalogous to that analyzed by the Appellate Body in US – Softwood Lumber IV (government\npredominance as a supplier of a good), and as discussed we consider that inherent in Article 14(b), as\nin Article 14(d), is sufficient flexibility to permit th e use of a proxy in place of observed rates in the\ncountry in question where no \"commercial\" benchmark can be found.\n(b) The USDOC determinations not to rely on inte rest rates in China as benchmarks for SOCB\nloans\n10.131 In the three investigations at issue, the US DOC stated that the benefit from a government-\nprovided loan normally is measured by comparison to a \"loan that the recipient could actually obtain\non the market\" and therefore \"the benchmark should be a market-based rate\". In these investigations,\nhowever, the USDOC determined that there was not a functioning market for loans within China\n622,\nand that therefore none of the sources of Chinese interest rates could be used as benchmarks, as\nfollows:\n• SOCBs loans, which were found to be made under the \"Government Policy Lending\"\nprogram, could not used as benchmarks since these loans were the ve ry loans for which\nsuitable benchmarks were needed623;\n• Chinese national interest rates were not reliable as benchmarks because of the pervasiveness\nof China's intervention in the banking sector – i.e., loans provided by Chinese banks reflected\nsignificant government intervention and did not reflect the rates that would be found in a\nfunctioning market624; and\n\n622 Exhibits CHI-1, p. 6; CHI-3, p. 11; and CHI-4, p. 7. The USDOC considered that while\nbenchmarks must be comparable commercial loans – i.e. , they must be from a commercial lending institution,\nand similar in structure to government loans with respec t to whether they are fixed or variable, the date of\nmaturity, and the currency in which th ey are granted – interest rates are un usable to measure the benefit from\ngovernment loans where they are found to be distorted. In the LWS and OTR investigations, citing to its\nprevious findings in the CFS Paper investigation, the USDOC further determined that these market distortions\ncould not be adjusted. It noted that for an adjustment to be practical, an underlyi ng market-based rate must\nexist; however, in China (where no underlying market-b ased rate exists), determining what the necessary\nadjustments would be in order to form a market-determined interest rate would be highly complex, speculative,\nand impracticable. (Exhibits CHI-3, p. 83; CHI-4, p. 104; and CHI-93, p. 70).\n623 The USDOC noted that it does not treat comparable commercial loan s, which it normally uses for\nbenchmarking purposes, as commercial loans where they were provided pursuant to a government programme.\n(Exhibits CHI-1, p. 6; CHI-3, p. 11 and CHI-4, p. 7).\n624 Exhibits CHI-1, p. 6; CHI-4, pp. 7 and 104; and CHI-34, p. 67900.\n\n• Foreign bank lending in China was unsuitable as a benchmark since China's involvement in\nthe banking sector created significant distortions , restricting and influencing foreign banks\noperating within China.\n625\n10.132 The USDOC's assessment and conclusions in the three investigations that Chinese interest\nrates were distorted and did not reflect the rates that would be established by a functioning market\nwere based on its previous findings in the CFS Paper investigation. In that investigation, the USDOC\nhad reviewed the role of the Government of Chin a in the banking sector and concluded that China's\nintervention in the lending market distorted the market. 626 In the three investigations at issue before\nus, the USDOC determined that the respondents ha d not demonstrated that these findings no longer\nheld. The USDOC's determinations in the three inve stigations thus are based on, and cross-reference\nextensively, its determination in CFS Paper. Given this, before we examine the USDOC's specific\nfindings in the three investigations, we summarize the relevant portions of the CFS Paper\ndetermination.\n(i) The CFS Paper determination relied upon by the USDOC in the OTR, CWP and LWS\ninvestigations\n10.133 In CFS Paper, China and investigated producers had generally argued that:\n• There was not a program in place to provide preferential lending : The Government of China\nand Chinese producers argued that \"policy banks\" an d \"policy lending\" no longer existed as\nsuch in China. They noted that the importa nce of both had decreased since the year 2000\nwhen the need for policy lending (and thus, for po licy banks) declined. Since that time, the\nlending from policy banks had shifted from policy loans to commercial loans. The\nrespondents argued that record evidence – statements by the PBOC and the China Bank\nRegulatory Commission (the \"CBRC\") – demonstrated that both SOCBs and policy banks\nfunctioned essentially as commercial banks, independent from government influence, and that\nindustrial policy was only one of the factors that such banks considered in analyzing risk.\nThus, they argued, these banks' decisions were based on commercial considerations.627\n\n• SOCBs and Policy Banks opera ted on a commercial basis : The respondents also argued that\nother characteristics of the banking system de monstrated that SOCBs as well as policy banks\noperated on a commercial basis and acted indepe ndently from the government: (i) the loan\napplication and approval processes were similar to those in the United States and other\ncountries, and the government was not involved in such processes (as demonstrated at\nverification); (ii) banks in China had adopted and implemented risk analysis systems based on\nbest practices, the implementation of which w as monitored by the CBRC (the effect of the\nadoption of these risk analysis systems was that the number of non-performing loans was\ndeclining); (iii) the refusal of loans to some of the companies under investigation proved that\nthey did not enjoy preferential lending from SOCB s; and (iv) according to record evidence\n(verification), banks competed regarding inter est rates and customers were able to shop\naround for the best rates.\n628\n\n625 Exhibits CHI-1, p. 6; CHI-4, p. 105; and CHI-34, p. 67900.\n626 In its previous anti-dumping duty investigation in Lined Paper , (in which, consistent with its\npractice, it treated China as a non-ma rket economy), the USDOC determined that the banking sector in China\ndid not operate on a commercial basis and that it was subject to significant distortions because of the continued\ndominant role of the government in the banking sector. This finding was further elaborated in CFS Paper,\nwhere the USDOC found that the government of China continued to dominate the domestic banking sector and\nto prevent banks from operating on a fully commercial basis. (Exhibits CHI-1, p. 7 and CHI-34, p. 67900).\n627 Exhibit CHI-93, pp. 42-43.\n628 Id., p. 44.\n\n• The role of the government was similar to that of any other government : The respondents\nsubmitted that the role of the government in China was similar to that of any other\ngovernment in allocating credit to specific industr ies: (i) the main role of the PBOC, which\nwas macroeconomic analysis and monetary policy (including issues such as interest rates and\ninflation), did not indicate that it was able to ensure that banks' lending decisions and credit\nallocations conformed to government policies; (ii) the provisions of the Commercial Banking\nLaw were not internally-inconsistent (some pr ovisions prohibited govern ment interference in\nthe banks while others encouraged lending cons istent with State industrial policy). Taken\ntogether, they provided that lending should ta ke into consideration government policy and its\neffect on the borrower/project to be finan ced; (iii) banking reforms in China had been\nimplemented, thus, the assumption that banks based their lending decisions on industrial\npolicy was entirely based on \"policy statemen ts\"; (iv) there was no evidence that bank\nofficials appointed by the government were required to implement government industrial\npolicies; (v) there was no \"direct\" record evid ence to support the proposition that lending and\ncredit allocation in China was directed (i.e., the studies referred to by the applicants contained\noutdated data (before 2005) and were subject to an opposite interpretation from that of\npetitioners)629; and (vi) numerous studies, which showed that a significant amount of capital\nflowed into and out of China, demonstrated th at the Government of China could not constrain\nChinese capital markets.630\n• Internal benchmark in China : The respondents argued that there were appropriate\nbenchmarks in China that the USDOC should use in its benefit calculation. 631 Interest rates in\nChina were like those in a functioning market since, although in the past there had been\ngovernment intervention, there had not been in the recent past and during the period of\ninvestigation, and there had been a gradua l liberalization of the financial markets.\n632 Interest\nrates for foreign currency loans 633 and interest rates on loans received by investigated\nproducers from privately-owned Chinese banks (which were fully verified) were the rates that\nshould be used for benchmarking purposes.634\n10.134 The USDOC rejected these arguments. The USDOC stated that gove rnment influence was\nstill present in the lending sector and that China's banking reforms had not been fully implemented.\nSpecifically, the USDOC determined that:\n\n629 Respondents further argued that where information from secondary sources (e.g., articles, and\ncommentaries) is in conflict with primary source information, the USDOC should rely on the latter. They noted\nthat evidence from primary sources on the record indicated that SO CBs and policy banks functioned as\ncommercial banks – i.e., statements by bank officials, bank loan approval documents, bank project guidelines as\nwell as banking regulations and policies indicated that banks evaluated loans on a commercial basis and that\ngovernment industrial policies were a minor factor in the lending decision making process. (Exhibit CHI-93,\np. 45).\n630 Id., p. 44-45.\n631 Id., p. 62.\n632 Similar to its arguments in the present dispute, the Government of China argued that its\ninterventions on interest rates were not that different from those carried out by other countries around the world,\nand that the mechanisms applied by the government did not distort interest rates, rather it actually kept them too\nhigh (and not too low as asserted by petitioners). (Id., p. 63).\n633 They argued that in fact, the USDOC found government control only of RMB-denominated lending\nand deposit rates, and not of foreign-currency lending in China. Further, the USDOC did not determine that the\nGovernment of China controlled foreign-currency lending practices. (Id., pp. 63-64).\n634 Id., p. 64. The Government of China and Chines e investigated producers also made a number of\narguments with respect to the out-of-country benchmark calculated by the USDOC: they, inter alia, challenged\nthe USDOC's reliance on gross national income (GNI) to determine the proper basket of comparison countries\n(challenged as an outdated World Bank categorization), and argued that the rate of inflation should also be\nconsidered in determining the real cost of a loan. (Id.).\n\n• China's banking system was still under state-control : The USDOC found that China's\nbanking system remained under state control and continued to suffer from legacies related to\nthe longstanding pursuit of government policy objectives, undermining the SOCBs' ability to\nact on a commercial basis. 635 While the scope and extent of government control over SOCBs\nwas changing and evidence on the record with resp ect to such control was mixed, the central\ngovernment had been very cautious on completely reforming the banking system; as a result,\nand since banks in China had never operated on a commercial basis, the government was still\nvery involved in the sector. 636 Further, the USDOC found that while banking reforms in\nChina might be starting to take effect, the evid ence on the record indicated that they had not\nyet been fully implemented and that the influence from the government remained a significant\nfactor in the operation of China's banking sector. 637 The USDOC noted that although the\nlargest SOCBs had undergone some reorganiza tion to become corporate entities (limited\ninitial public offerings had been conducted and minority stakes in SOCBs were sold to\nforeign banks) their primary shareholder remained the Chinese government. Foreign\ninvestment in Chinese banks was tightly constrai ned, with total foreign ownership limited to\n25 per cent in SOCBs.638\n• China's banking system still operated in acco rdance with governmental planning-policies :\nThe USDOC found that (i) the government owne rship of the banking sector in China was\n\"one\" factor in the legacy effects of government control of the banking sector; (ii) the legal\nframework of China's banking sector contra dicted the argument that SOCBs operated\nindependently from the government 639; (iii) the Government of China had not demonstrated\n\n635 The USDOC relied on statements from various reports as follows: (i) the OECD Report stated that\n\"chief executives of the head offices of the SOCBs are government appointed and the party retains significant\ninfluence in their choice\"; ( ii) the 2005 IMF Staff Report stated that \"[r]ooting out the legacy of government\ndirected lending, and training banks to make lending decisions based on purely commercial considerations …\nremains a major reform challenge\"; (iii) the 2005 PBOC Annual Report stated that \"[a]s the economic reform\nwas not completed yet, investment was still orchestrated to a large extent by government […]\"; (iv) the 2004\nPBOC Annual Report stated that \"some local governments still seek to promote economic growth by expanding\ninvestment\"; (v) the 2004 China Monetary Policy Report stated that \"[i]n 2004 the PBC under the guidance of\nthe central government […] strengthening its window guidance and credit policy advi ce for commercial banks\nto follow the State industrial policy constrain credit to overheated industries and those inconsistent with the\nState industrial policy and to increase financial support for development of agriculture small and medium-sized\nenterprises consumption employment education and non-state sector guided\"; and (vi) the 2005 Monetary Policy\nReport stated that \"[t]he PBC implemented […] the m acroeconomic strategy mapped out by the central\ngovernment which called for differentiated treatment to different sectors by timely conveying to financial\ninstitutions the governments policy intentions so as to guide the commercial banks in taking forward-looking\napproach to respond to changes of economic cycles and industrial development and to improve the credit\nstructure\". (Exhibit CHI-93, pp. 55-57).\n636 The USDOC noted that this view was, at varying degrees, confirmed by independent experts. (Id.,\npp. 56-57).\n637 Id., p. 58.\n638 Id., p. 67. As we have noted, footnote 244, supra, China acknowledges that at the end of 2006,\ngovernment ownership of the Big Four was as follows: 75 per cent in the ICBC; 74 per cent in the CCB; 68 per\ncent in the BOC; and 100 per cent in the ABC. (China first written submission, para. 165).\n639 The USDOC noted that while the Chinese Commerc ial Banking Law states that \"commercial banks\nare responsible for their own profits and losses, must protect the interests of their depositors, and are protected\nfrom government influence\", it further requires banks to \"carry out their loan business upon the needs of\nnational economy and the social development and under the guidance of State industrial policies\". Similarly,\nthe Bank of China Global Offering stated that \"Commercial Banking Law requires commercial banks to take\ninto consideration government macroeconomic policies in making lending decisions. [They] are encouraged to\nrestrict their lending to borrowers in certain industries in acco rdance with relevant government policies\". At\nverification, officials from the People's Bank of China stated that \"it may be necessary for banks to heed\nindustrial policies; banks may be taking on great risk if their customers use loans in a way that is inconsistent\nwith industrial policies\". Further, the 2006 Repor t from State Council revealed that the reforms on\n\nhow or to what extent industrial policy was c onsidered in the loan approval process, although\nit had argued that industrial policies were only on e of the factors considered in this process;\n(iv) while SOCBs were improving their risk management capacities, they still lacked\nadequate risk management640; (v) despite several requests, the USDOC had not been provided\nwith sufficient evidence to examine the comple te loan-approval process, or with evidence\nnecessary to show that the loans were made on a commercial basis 641; and (vi) since the\nChinese legal banking framework required banks to take into consideration government\nmacroeconomic policies in making lending deci sions, China's excess liquidity (or high\nvolumes of loans) did not indicate that the Gove rnment of China could not have control over\nthe SOCBs and guide their loan portfolios.642\n• Interest rates regulated by the government : The USDOC found that the continued dominance\nof the State in Chinese banks as well as China's long history of using the banks to carry out its\npolicy objectives, made uncertain the reliability of interest rates in China and their suitability\nas commercial benchmarks. Although the CBRC had been established in 2003, it was\nsupervised by the PBOC until 2004. Thus , it was improbable that it could have\nrevolutionized the operations of the banking sector only one year after taking on its\nsupervisory role. 643 Furthermore, while banks were improving their risk management\ncapacities, the way that interest rate formati on was regulated in China both distorted lending\nrates and proved that SOCBs were not fully able to price their loans on a commercial basis.\nChina maintained a system of both deposit rate caps and lending floor rates in such as way to\nguarantee the banks a considerable profit margin on their loans. 644 The lending rate floor was\nset so as to prevent the banks from pricing their loans at unsustainably low levels. In fact,\ninterest rates remained generally undifferentia ted – interest rates were quite close to the\nPBOC-set benchmark. On the other hand, the cap on deposit rates was set at a level slightly\nhigher than inflation. Therefore, savers in China, beyond being restricted by the government\nto access alternative forms of investment, were prevented (by law) from receiving more than a\nnegligible real return on their savings. As such, banks in China did not compete on deposit\nrates and almost had an unlimited access to the savers' capital at very little cost. 645\n\n\"implementing a system that grants independence in investment coupled w ith responsibility for risk\" were an\nongoing process and were not complete in 2005. (Exhibit CHI-93, p. 58).\n640 According to the USDOC, this was partially demons trated by the fact that interest rates in China\nremained generally undifferentiated. At verification, an official from the PBOC explained that interest rates\nspreads were close to the PBOC-set be nchmark rate because \"the Big Four attract the largest borrowers [which]\nare creditworthy [...] and have long-term relationship with the banks\". (Id., pp. 59, 68-70). The USDOC further\nnoted that the risk analysis system of most of these banks was not fully implemented: the PBOC stated that the\nceiling on the deposit rate had been put in place \"in orde r to afford banks time to restructure and a floor on\nlending rates to maintain order in th e market [...] these restrictions will eventually be eliminated when banks\nhave fully developed risk management and cost controls\"; the CBRC stated that it \"ha[d] [...] established a\nframework for achieving an international level of risk management\" but at the same time acknowledged that\n\"[such a] framework does not necessarily indicate a high level of risk management in practice\"; and the BOC\nstated that its risk management implementation \"i s an on-going process [and that] there was not a\ncomprehensive risk management system fully established in 2005\". (Exhibit CHI-93, pp. 59-60).\n641 Id., p. 60.\n642 Id.\n643 Id., p. 68.\n644 The USDOC noted that at verification \"the PBOC conceded that this floor and cap system sets\nChina apart from other countries and that it is necessary because the banks have not yet fully implemented risk\ncontrol\". (Id., p. 68).\n645 The USDOC noted that the cap on deposit rates was both binding in 2005 and set at a level that was\nbarely higher than inflation. Thus, according to the USDOC, savers were prevented from receiving more than a\nnegligible real return on their savings and banks in China \"do not compete on deposit rates and have access to\nsavers' capital at very little cost\". Thus, given that the government directs China's savings to the banking sector,\nthat only a low return on deposits is allowed, an d that banks cannot compete on deposit rates, the USDOC\n\nFurthermore, the interest rates of the \"issuance of commercial paper\" or \"corporate bills\" – the\nequivalents for lending rates in China that we re not regulated by the government – were not\nmarket-based and therefore not useable as a benchmark.\n646\n• Foreign-owned banks in China were subject to the same restrictions as SOCBs : The USDOC\ndetermined that foreign-owne d banks operated in the same distorted environment as the\nChinese banks. It further found that these banks ' share of financial assets and lending activity\nwas negligible compared with those of SOCBs. While their participation in the domestic\nbanking sector had increased, they provided only a very small share of credit in China and\nstill operated mostly in niche markets. They did not compete directly with SOCBs.647\n• Foreign currency lending rates in China for m easuring the benefit of loans issued in RMB :\nWhile the rates for foreign-currency loans in Ch ina might follow international trends to some\nextent – being influenced by the monetary po licies of the foreign country's central bank –\nforeign currency lending in China formed a very small portion of the overall financial\nsector.648 Further, these rates did not provide any basis for a benchmark of what RMB rate\nwould prevail in a market situation (as China's dominance of and intervention in the banking\nsector meant that such a benchmark did not exist in China).649\n10.135 As noted, in each of the investigations at issue in the present claim, the USDOC relied on\nthese findings. It determined that the market distortions it had found in the CFS Paper case were still\npresent and that the Government of China and inte rested parties had not demonstrated that the\nChinese banking sector had significantly changed such that reconsideration of the CFS Paper decision\nwas warranted. 650 As a result, the USDOC determined in each of the investigations at issue that\ninterest rates in China did not provide a suitabl e basis for assessing whether the loans provided to\ninvestigated producers conferred a benefit.\n10.136 The specific arguments of the respondents and the findings of the USDOC in these three\ninvestigations were as follows:\n(ii) OTR Investigation\n10.137 In the OTR investigation, the Government of China argued that according to the evidence on\nthe record, banks in China operated on market princi ples, and that the government five-year plans and\nother policy documents did not instruct banks to provide preferential financing to the OTR tire\n\ndetermined that \"the concern about the banks driving interest rates down on their own to unsustainable levels\n[was] not surprising\". (Id., pp. 69-70).\n646 The USDOC found that even thou gh the Drazen Report (submitted by the Government of China to\nthe USDOC) was correct in stating that these instruments were similar to bank loans and that they constituted an\nexception to the usual regulatory framework on lending, this lending regulatory framework – which served to\nkeep rates higher than they would be otherwise – made the rates of these financial instruments to be lower than\nthat of standard bank loans. The USDOC considered that this was not a genuine market outcome since these\ninstruments constituted only a limited exception within the market. It noted that, in fact, it was the PBOC's\nmaintenance of lending rate floors – in order to avoid lending rates going down to a level that could endanger\nthe whole financial system – that allowed these alternative financial instruments to constitute only a limited\nexception. The USDOC noted in this respect that bank loans accounted for over 90 per cent of total financing in\nChina in 2004, such that the alternative financial instruments proposed in the Drazen Report accounted for a\nvery small share of total financing in China. (Exhibit CHI-93, p. 69).\n647 Id., p. 70. The USDOC's determination relied on the OECD Report.\n648 For example, CCB foreign currency loans only accounted for 5 per cent of their total loans. (Id.,\np. 70).\n649 Id.\n650 Exhibits CHI-1, p. 7; CHI-4, p. 105; and CHI-34, p. 67900.\n\nindustry. Further, the Government of China claimed that government influence over the operations of\nthe SOCBs was little and that state ownership of banks was diminishing and the state was not\ninfluencing competition among banks or influencing their lending decisions. 651 The Government of\nChina noted that it had eliminated control of inte r-bank lending, liberalized the ability of banks to\ndetermine lending and deposit rates, and provided greater latitude to the banks in paying interest on\nconsumer deposits by only setting a ceiling on deposit interest rates. The Government of China\nargued that therefore domestic interest rates in China should have been used as a benchmark. 652 An\ninvestigated producer argued that interest rate s from foreign banks operating within China should\nhave been considered as the internal benchmark since foreign banks were not controlled by the\ngovernment and provided loans on commercial terms.653\n10.138 In its determination in the OTR investigati on, the USDOC stated that the government's\npredominant role in the banking sector resulted in significant distortions that rendered the lending\nrates in the country unsuitable as benchmarks, cro ss-referencing its findings to this effect in CFS\nPaper. The USDOC noted that pursuant to U.S. domestic law, benchmarks must be comparable\ncommercial loans, i.e., they must come from a commer cial lending institution, they must be similar in\nstructure (variable or fixed rate), date of matur ity, and currency. Because of the distortion of the\ninterest rates in China, howeve r, these interest rates were unusable to measure the benefit from\ngovernment loans, and it was not possible to adjust for those distortions, as such an endeavour would\nbe \"highly complex, speculative, and impracticable\".654\n10.139 The USDOC found that the government's intervention in the banking sector created\nsignificant distortions, restricting and influencing ev en foreign banks within China, such that the\ninterest rates of neither Chinese nor foreign banks could be used as benchmarks. Concerning the\ngovernment involvement in the banking sector, th e USDOC found that while there had been some\npositive developments in SOCBs' lending practices in respect of increased cr edit risk analysis and\nother scrutiny measures before making lending decisions, the government continued to play a\npredominant role with significant distortions in its commercial banking sector.\n655 In this regard, the\nUSDOC noted that it had been denied access to many loan documents that it n eeded for its analysis.\nThe USDOC further found that parties in the inv estigation had not demonstrated that conditions\nwithin the banking sector had changed since its determination in CFS Paper that the Chinese credit\nmarket was distorted. Although the period of inv estigation in the OTR investigation was one year\nlater than that in the CFS Paper investigation, the respondents had not pointed to specific changes that\nhad occurred between those periods that would warrant a reconsideration of the determination that the\ncredit market was distorted. The USDOC noted th at the government's guidance in assisting reform,\nand in moving the banking system toward a commerc ial footing, did not mean that the credit market\nwas not distorted through the government's ownershi p and control of banks. It also noted that\n\n651 Exhibit CHI-4, p. 101. The Government of China noted that banks in China, including the four\nlargest SOCBs, made their lending de cisions according to commercial considerations and had in place written\nprocedures for risk analysis and loan approval similar to those of United States' banks and other market\neconomies. At verification, BOC offi cials informed the USDOC that it cons idered all relevant factors when\nevaluating loan applications (including the company's operation and management, financial performance,\ncompetitive position, industrial risks, future prospects, the development cycle of the industry, changes in that\ncycle, information on the particular industry, and the structure of competition in the industry) and that its\nlending practices followed very detailed internal credit risk analysis guidelines. (Id., p. 102).\n652 Exhibit CHI-4, p. 102.\n653 Id., p. 104.\n654 Id.\n655 The USDOC's determination was based on the fact that it was denied access to many of the loan\ndocuments that it deemed critical for its analysis. In addition, the USDOC noted that the parties did not point to\nany specific changes that occurred between 2 005 (the period of investigation in the CFS Paper investigation)\nand 2006 (the period of investigation in the OTR inves tigation) that would have warranted a reconsideration of\nthe determination in CFS Paper that the credit market in China was distorted. (Id. p. 105).\n\nalthough SOCBs were moving toward a more solid commercial focus, this did not preclude them from\nserving as the implementing arm of government policy lending.\n656\n(iii) CWP Investigation\n10.140 In the CWP investigation, the Government of China argued that the record evidence\ndemonstrated that: (i) China had a commercially-o riented lending market; (ii) loan pricing was\ndetermined by market forces, with banks making lending decisions based upon commercial\nconsiderations, including proper risk assessment; and (iii) governmental industrial policy had a very\nlimited role in lending decisions, and was only one factor that a bank might take into account in\nexamining risk.657\n10.141 The USDOC rejected the Government of Chin a's arguments. It recalled that in the Lined\nPaper investigation it had found that China's banking sector did not operate on commercial basis and\nwas subject to significant distortions, primarily ar ising out of the continued dominant role of the\ngovernment in the sector. It also recalled its determination in CFS Paper that the government still\ndominated the domestic Chinese banking sector a nd prevented banks fro m operating on a fully\ncommercial basis. In the CWP investigation, the USDOC found that these distortions were still\npresent in the Chinese banking sector, and that theref ore the interest rates of the domestic Chinese\nbanking sector did not provide a suitable b asis for benchmarking the loans in question. 658 A l s o\nrecalling the CFS Paper determination, the USDOC found that foreign-owned banks operating in\nChina were subject to the same restrictions as the SOCBs, and that their share of assets and lending\nwas negligible compared with those of the SOCBs. Therefore, for the same reasons discussed in the\nCFS Paper investigation, the USDOC determined that foreign bank lending did not provide a suitable\nbenchmark.659\n(iv) LWS Investigation\n10.142 During the LWS investigation, the Governme nt of China argued that the USDOC had\ncommitted a legal error in the preliminary determinat ion when it used an out of country benchmark to\ndetermine whether the government loans at issue conferred benefits. Th e Government of China\nargued that under U.S. domestic law, the benchmar k must be a comparable commercial loan that the\nborrower could actually obtain on the market, and th at the world-wide interest rates used did not\nrepresent loans that a recipient could obtain in China.660\n10.143 For its final determination in the LWS inves tigation, the USDOC relied on its preliminary\ndetermination as well as its pr evious findings in CWP and CFS Paper to determine that interest rates\nin China were distorted and thus unusable as be nchmarks to measure the benefit from government\nloans. The USDOC also had found that while fo reign-owned banks operated in China, they were\nsubject to the same restrictions as the SOCBs an d their share of assets and lending was negligible\ncompared with those banks. 661 The USDOC stated in this regard that no new information had been\nsubmitted subsequent to the preliminary determination to give a reason to revisit that determination as\n\n656 Exhibit CHI-4, pp. 104-105.\n657 China did not identify any specific evidence on the record. (Exhibit CHI-1, p. 72).\n658 Id., p. 7. In its overall benchmarking determination, the USDOC noted that \"there is not a\nfunctioning market for loans within th e PRC. Therefore, because of the sp ecial difficulties inherent in using a\nChinese benchmark for loans, the Department is selecting [an out-of-country benchmark]\". (Id., p. 6).\n659 Id.\n660 Exhibit CHI-3, p. 82.\n661 Id., p. 11 and CHI-34, p. 67901.\n\nto the benchmark issue. The USDOC also noted th at it was not possible to adjust for the market\ndistortions it had found, because to do so would be too complex, speculative and impracticable.662\n(c) Assessment by the Panel\n10.144 Having reached the legal conclusion that, where lending rates in a given market are distorted\ndue to government involvement such that no commercial benchmark can be found, Article14(b) of the\nSCM Agreement permits resort to alternative s ources for benchmarks, we now analyze the USDOC's\ndeterminations not to rely on Chinese interest ra tes as benchmarks. In particular, we consider\nwhether, based on the evidence before the USDOC, a reasonable and objective investigating authority\ncould have reached the conclusion reached by the US DOC, namely that rates in China were distorted\nby government involvement in and control over the lending market such that there were no\ncommercial interest rates that could be used as benchmarks.\n10.145 We note that although the analysis as presented in the determinations in the investigations\nbefore us in this claim is relatively brief, in each case there is a cross-reference to the determination in\nthe CFS Paper investigation. That determination thus fo rmed the principal substantive basis for the\nUSDOC's determinations, in the three investigations before us, that Chinese interest rates were\nunusable as benchmarks. We note, further, that th e descriptions in the determinations in the CWP,\nLWS and OTR investigations appear to indicat e that little new evidence in respect of the\ngovernment's role in the banking sector was addu ced by respondent parties beyond what had been\nrelied upon in the CFS Paper investigation, and that what was submitted did not lead the USDOC to\nchange its assessment of the government's role in the banking sector. Before us, China makes little\nreference to any new record evidence of this type having been submitted, instead raising legal issues\nas to the permissibility of disregarding the interest ra tes in China. In other words, before us China\ndoes not argue that, contrary to the USDOC's determ ination, there had been a major change in the\ngovernment's role in the banking sector between the determination in the CFS Paper investigation and\nthose in the CWP, LWS and OTR investigations.\n10.146 We thus now turn to the analysis and c onclusions from the determination in the CFS Paper\ninvestigation. Here we note that the CFS Paper determination makes extensive reference to\npublications by outside institutions (OECD and IMF) as well as internal documents including\npublished reports of Chinese banks, laws, etc. in support of its basic finding that the Chinese\ngovernment played a predominant role in the Chinese banking sector and distorted interest rates. The\nUSDOC also conducted extensive verification at whic h various officials made statements indicating\nthe same role and influence of the Chinese government. Furthermore, there was extensive discussion\nin the CFS Paper determination to the effect that lending rates were largely undifferentiated, with\nmost loans being made at rates close to the govern ment-set benchmark rate. While before us, China\nrefers to this as evidence of interest rate competiti on, and the operation of market forces, we consider\nthat the USDOC was not unjustified in concluding that this was rather evid ence that market forces\nwere not operating, in particular, that banks still lacked adequate risk management and analysis\nskills.663 We also note that China does not dispute the USDOC's factual findings that the foreign\nbanks in China were subject to the same governme nt controls as domestic banks, and that privately-\nowned Chinese banks accounted for a very small percentage of total lending.\n10.147 In sum, on the basis of the record evidence be fore the USDOC, we find that a reasonable and\nobjective investigating authority could have concluded that the government played a predominant role\nin the Chinese commercial lending market as both a lender and in terms of controlling the operation of\n\n662 Exhibit CHI-3, p. 83. From the record evidence be fore the Panel, it appears that the Government of\nChina did not present arguments and/or evidence on the question of governmental control of the banking sector\nin the LWS investigation.\n663 Exhibit CHI-93, p. 59-60.\n\nthis market, and thus distorted interest rates, such that the observed rates were not suitable as\nbenchmarks. We also note the statements by the USDOC in the LWS and OTR investigations that it\nwould not be possible to make the necessary adjustme nts to the observed rates to convert them into\nusable benchmarks. It is not the role of a Panel to conduct a de novo review of the evidence, and\nChina has not objected to this conclusion of the USDOC. We thus find no basis in the evidence\nbefore us to question this judgement by the USDOC.\n10.148 For the foregoing reasons we therefore find th at China has not establis hed that the USDOC's\ndecision not to rely on Chinese interest rates as benchmarks for SOCB loans denominated in RMB\nwas inconsistent with the obligations of th e United States under Article 14(b) of the SCM\nAgreement.\n664\nH. PANEL'S TERMS OF REFERENCE – BENCHMARKS ACTUALLY USED BY THE USDOC\n1. Introduction\n10.149 WTO dispute settlement panels are under a duty to address and dispose of certain issues of a\nfundamental nature on their own motion if the parties to the dispute remain silent on those issues. No\ndoubt, the vesting of jurisdiction on a panel through its terms of reference constitutes such an issue of\na fundamental nature. 665 Because we wanted to ascertain the scope of our terms of reference in\nrespect of China's claims under Article 14 of the SCM Agreement, at the second meeting of the Panel\nwith the parties, we asked the parties' views on whether the text of China's request for the\nestablishment of the Panel – in particular paragra ph B.1(d)(i) thereof – provides a sufficient basis for\nChina's claims in respect of the benchmarks actually used by the USDOC in its benefit determinations\nin respect of land-use rights and loans. 666 The issue does not arise with respect to subsidies in the\nform of inputs because for these, Chin a does not challenge the benchmarks that were actually used by\nthe USDOC.667\n2. Main arguments of the Parties\n(a) China668\n10.150 China argues that the language of paragraph B.1(d)(i) of its panel request provides a sufficient\nbasis for its claims in respect of the benchmarks actually used by the USDOC for land use rights and\nloans. China first argues, in this respect, that paragraph B.1(d)(i ) necessarily encompasses the use of\nbenchmarks that are not based on prevailing terms and conditions in China. Second, China submits\nthat the USDOC's out-of-country benchmarks for la nd-use rights and loans are the embodiment of its\ndecision to reject market conditions in China as the basis for determining the existence and amount of\nthe benefits in question. Third, China argues th at it was only through the use of these benchmarks\nthat the USDOC, in fact, rejected market conditions in China as the basis for identifying the relevant\nbenchmark under Article 14 of the SCM Agreement.\n10.151 China further argues that it liste d the articles that it alleged to have been violated (including\nArticle 14 of the SCM Agreement), and that this, by itself, is sufficient to encompass its claims\nagainst the benchmarks that the USDOC actually used for land-use rights and loans. China notes that\npanel requests have sometimes done nothing more than list the articles that are alleged to have been\n\n664 Concerning China's claims of consequential violations of Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994 in connection with this claim see Section XIII, infra.\n665 Appellate Body Reports on Mexico – Corn Syrup (Article 21.5 – US) , para. 36 and US – Carbon\nSteel, para. 123.\n666 Panel question 5 to the Parties (second meeting).\n667 China response to Panel question 35 (first meeting).\n668 China response to Panel question 5 (second meeting).\n\nviolated. Even in those instances, the Appellate Bo dy has found that the panel request satisfied the\nrequirements of Article 6.2 of the DSU.\n10.152 Finally, China notes that there is no indication that the United States harboured any\nmisunderstanding as to the scope of China's claims or suffered any prejudice as a result of how China\nphrased its panel request. (China notes that by c ontrast, the United States requested a preliminary\nruling with respect to the measure challenged as part of China's \"as such\" claims on double remedies.)\nThus, even if there were some ambiguity in paragr aph B.1(d)(i) of the panel request, China argues, it\nis clear from the course of the Panel proceedings that there has been no misunderstanding concerning\nChina's claims against the benchmarks that the USDOC actually used for loans and land-use rights.\n(b) United States669\n10.153 The United States notes that the claim identified in China's request is directed at the \"rejection\nof prevailing terms and conditions in China [...]\" and that nowhere in paragraph B.1(d)(i) or elsewhere\nin China's request for the establishment of the Pa nel, does China refer to the \"benchmarks actually\nused\" by the USDOC for land-use rights or loans.\n10.154 The United States notes that the panel request speci fies that China's claim relates only to \"the\nfollowing obligations of the United States\" and lists certain aspects of the USDOC determinations in\nconnection with Article 14 of the SCM Agreement, indi cating that this is the extent of China's claims\nwith respect to the use of benchmarks. Thus, the United States argues, to the extent that China is\nbringing a different claim, this claim would be outsi de the scope of its panel request. In this regard,\nthe United States notes that the China – Publications and Audiovisual Products panel found that by\nlisting certain specific requirements under the Chines e measures at issue, the United States had only\nnotified China of a claim in respect of these sp ecific requirements to the exclusion of other\nrequirements contained in the measures at issue.\n10.155 The United States disagrees with China that the language in pa ragraph B.1(d)(i) of its panel\nrequest \"necessarily encompasses the use of a benchm ark that is not based on prevailing terms and\nconditions in China\". The United States considers that the USDOC's rejection of prevailing terms and\nconditions in China and its selection of benchmarks actually used are separate determinations.\n10.156 Likewise, the United States notes that China has discussed these issues separately throughout\nits submissions in this dispute, showing that in China's view, the consistency with the covered\nagreements of the USDOC's determination to \"rej ect prevailing terms and conditions in China\" and\nthe benchmark \"actually used\" are distinct analytical questions. That said, the United States considers\nit irrelevant whether China made it clear in its s ubmissions to the Panel that it was challenging the\nbenchmarks actually used by the USDOC for land-u se rights and loans: The question is whether a\nclaim against the benchmarks \"actually used\" was in cluded in China's request for the establishment of\nthe Panel. Finally, the United States considers it irrelevant that it did not raise any objection to\nChina's claims before the Panel posed a question on the issue, noting that WTO panels have to address\nand dispose of certain issues of a fundamental nature, even if the parties to the dispute remain silent\non those issues.\n3. Assessment by the Panel\n10.157 Article 6.2 of the DSU sets out the requirement s pertaining to a complaining party's request\nfor the establishment of a panel. It provides as follows:\n\n669 United States response to Panel question 5 (second meeting); comments on China's response to\nPanel question 5 (second meeting).\n\n\"The request for establishment of the panel [...] shall indicate whether consultations\nwere held, identify the specific measures at issue and provide a brief summary of the\nlegal basis of the complaint sufficient to present the problem clearly\".\n10.158 The requirement, in Article 6.2 of the DSU, to identify the measures at issue in a dispute and\nto provide a brief summary of the legal basis of th e complaint has been linked to the dual necessity of\nestablishing the Panel's terms of reference and th e due process objective of notifying the responding\nparty (and third parties) of the case it has to answer:\n\"The requirements of precision in the requ est for the establishment of a panel flow\nfrom the two essential purposes of the terms of reference. First, the terms of\nreference define the scope of the dispute. Secondly, the terms of reference, and the\nrequest for the establishment of a panel on which they are based, serve the due\nprocess objective of notifying the parties and third parties of the nature of a\ncomplainant's case [...]\".\n670 (footnote omitted)\n10.159 Compliance with Article 6.2 must be demons trated on the face of the request for the\nestablishment of a panel, and reading the panel request \"as a whole\". 671 We agree with the Japan –\nDRAMs (Korea) panel's reasoning that the principles embodied in Article 6.2 of the DSU may only\nproperly be upheld if panels appl y that provision on the basis of the text of the panel request, i.e.,\nwithout regard to whether or not the responding party suffered a prejudice by considering what\nhappened during the course of the panel proceedings.672\n10.160 In raising with the parties the question of our terms of reference, we sought to ascertain our\njurisdiction by identifying the precise claims at issue in the present dispute. Specifically, we sought to\nascertain whether the terms of China's panel request were sufficiently broad to cover both aspects of\nChina's \"benchmarks\" claims in respect of land- use rights and loans, i.e., concerning not only the\nUSDOC's rejection of land-use prices and interest rates in China as benchmarks, but also the\nconsistency with Article 14 of the benchmarks actually used by the USDOC in each instance.\n10.161 The relevant part of China's panel request, section B.1.(d)(i), reads as follows:\n\"B. Legal Basis of the Complaint\n\n1. As Applied Claims\n China considers that the CWP, OTR, LWRP, and LWS anti-dumping and\ncountervailing duty investiga tions, determinations and orders, the definitive anti-\ndumping and countervailing duties imposed pursuant thereto, as well as the combined\neffect of the anti-dumping and countervaili ng duty determinations, orders, and duties\nin each such investigation, are inconsis tent, at a minimum, with the following\nobligations of the United States under the covered agreements\n\n670 Appellate Body Report on US – Carbon Steel, para. 126.\n671 Appellate Body Report, US – Carbon Steel , para. 127, cited with approval in, inter alia, Appellate\nBody Report, US – Oil Country Tubular Goods Sunset Reviews, para. 169.\n672 Panel Report on Japan – DRAMs (Korea), paras. 7.5-7.10. The panel, in its analysis, attached great\nimportance to comments made by the Appellate Body in para. 126 of its Report in US – Carbon Steel . The\npanel also noted the approach taken by the Canada – Wheat Exports and Grain Imports panel. Given that the\nUnited States did not raise the issue we discuss here on its own initiative, we might in any case be hard pressed\nto conclude that the United States was prejudiced by any defect in China's panel request.\n\n(d) in connection with each instance in which the US authorities resorted to a\nbenchmark outside of China for the purpo se of determining the existence and amount\nof any alleged subsidy benefit –\n(i) the US authorities' rejection of prevailing terms and conditions in\nChina as the basis for determining whether, and to what extent, subject\nproducers received a subsidy benefit under the methodologies set forth in\nArticle 14 of the SCM Agreement;\".\n10.162 We are satisfied that read in its totality, China's panel request provides a sufficient basis for\nChina's claims in respect of the benchmarks actually used by the USDOC. We note in particular that\nthe introductory sentence to paragraph B.1.(d) refe rs to the instances in which the USDOC relied on\n\"benchmarks outside of China\". This, in our view , is a sufficient indication of China's intent to\nchallenge before the Panel not onl y the consistency with Article 14 of the SCM Agreement of the\nUSDOC's decision to reject terms and conditions prev ailing in China, but also the consistency with\nthe same provision of the external benchmarks that the USDOC actually relied upon.\n10.163 For the foregoing reasons, we find that China's claims in respect of the benchmarks actually\nused by the USDOC with respect to loans and land- use rights fall within our terms of reference.\nGiven this finding, we now turn to an assessment of these claims of China.\nI. C\nONSISTENCY WITH ARTICLE 14(D) OF THE SCM AGREEMENT OF THE BENCHMARKS\nACTUALLY USED BY THE USDOC – LAND-USE RIGHTS\n1. Claim of China\n10.164 China claims that the benchmark relie d upon by the USDOC in the LWS and OTR\ninvestigations to determine the existence and amount of benefit conferred by the provision of land-use\nrights on, respectively, Aifudi and Starbright, w as inconsistent with Article 14(d) of the SCM\nAgreement.673, 674\n2. Factual background\n10.165 In the LWS and OTR investigations, the USDOC determined the existence and amount of\nbenefit conferred by the provision of land-use rights by comparing the price paid by the investigated\nproducers to prices for certain industrial prope rty in Bangkok and adjacent provinces in Thailand.\n675,\n676 The USDOC considered Thailand to be comparab le to China in terms of its \"prevailing market\n\n673 See, generally, China first written submission, paras. 302-319.\n674 As indicated at para. 10.1, supra, China also raises consequential claims pursuant to Articles 10\nand 32.1 of the SCM Agreement and Article VI:3 of the GATT 1994.\n675 Exhibits CHI-3, p. 17; CHI-34, p. 67909; and CHI-50, p. 71369.\n676 The USDOC also considered, and rejected, two a dditional benchmarks: First, the USDOC rejected\nthe possibility of using world market prices as benchm ark because there is no \"world market\" for land (the\nUSDOC reasoned that land being an in situ property, it could not simultaneously be \"available to an in-country\npurchaser\" while located and sold out-of-country on the world market). The US DOC also examined whether\nland prices in China were determined in accordance with market principles. The US DOC found that they were\nnot, due to the government's involvement in the land-use rights market as well as the widespread and\ndocumented deviation from the authorized methods of pricing and allocating land. In this context, the USDOC\nalso rejected an argument of the Government of China that it should have applied the price discrimination test\nprovided for in its \"market-principles analysis\"; the Government of China had argued that Chinese land-use\nrights prices were consistent with market-principles an alysis because (i) the investigated producer at issue did\n\nconditions\", taking into considera tion certain economic and demographic factors. Specifically, the\nUSDOC found that (i) China and Thailand had similar per capita gross national income (\"GNI\") at\n$2,010 and $2,990, respectively and that (ii) popul ation density in China and Thailand were roughly\ncomparable at 141 persons/km\n2 in China and 127 persons/km 2 in Thailand. 677 The USDOC also\nfound that producers consider a number of markets, including Thailand, as an option for diversifying\nproduction bases in Asia beyond China. 678 In the LWS investigation, the USDOC further took into\nconsideration that population density was higher than national averages in both Shandong province\n(where the investigated producer was located) and in Zone 1 in Thailand (the benchmark used), at\n562/km2 and 908/ km 2, respectively and that Shandong province had a per capita GNI of\napproximately $2900, i.e., closer to that of Thailand than China's overall GNI.679\n10.166 In its price-comparison analysis, the USDOC relied on Thai land prices reported in\nindependent real estate market reports. In the LWS investigation, in which the land-use rights at issue\nwere \"granted\" land-use rights (rights which requi red a large up-front fee but no annual fees aside\nfrom taxes), the USDOC used a one-time purchase benchmark in order to measure the benefit at issue.\nFor this purpose, the USDOC selected industrial land prices in one of three industrial promotion zones\nin Thailand (comprising Bangkok and adjacent provinces) as reported in the market reports.680\n10.167 In the OTR investigation, in which the land-u se rights also included \"allocated\" rights (land-\nuse rights provided to SOEs for a nominal one-tim e charge and an annual land-use fee), the USDOC\ndetermined that these more closely resembled a lease or rental arrangement rather than a one-time\npurchase.\n681 The USDOC therefore looked for an appropriate \"property yield\" for commercial land in\nThailand, i.e., the annual cash flow from rent that a land owner in Thailand c ould expect to earn, and\nto that effect used dividend yields from real estat e investment trusts (\"REITs\"), as reported in market\nreports prepared by the same source that compiled the reports on which it relied to determine the\nindustrial land prices.682\n\nnot benefit from any price discrimination in acquiring its land-use rights; and (ii) the government's price covered\nits own costs and made profits for managing and selling land-use rights. (Exhibits CHI-3, pp. 15-16 and 59;\nCHI-34, p. 67908; and CHI-50, p. 71369).\n677 Exhibits CHI-34, p. 67909 and CHI-50, p. 71369.\n678 The USDOC considered that the same produc ers could compare prices across borders when\ndeciding what land to buy. It noted that the market reports from which it obtained its benchmark prices\ncompared real estate prices in China with other prices in Asia (including Thailand). Further, the USDOC noted\nthat studies by the Japan External Trade Organizatio n (JETRO) comparing Asian alternative investment\ndestinations beyond China reported that \"Thailand got the highest score as the best location for establishing a\nproduction base over the next five to 10 years\" and that \"Thailand ranks as the second-best choice after China as\na location for expanding both high and mid to low end production\". Finally, the USDOC took into\nconsideration a statement contained in a market report that \"[m]any foreign companies believe that Thailand is\nstill a strategic choice for a Southeast Asian producti on base\". (Exhibits CHI-34, p. 67909 and CHI-50,\np. 71369).\n679 Exhibit CHI-34, p. 67909.\n680 Id., p. 67909 and CHI-50, p. 71369.\n681 Exhibit CHI-50, pp. 71369-70.\n682 REITs \"are trusts that are dedicated to owning and/or operating income-producing real estate\" and\ntheir dividends \"are based on the income, often rent, generated from the real estate holdings\". The USDOC\nnoted that REITs portfolios in Thailand held not only industrial but also non-industrial real estate and that there\nwas a wide range of returns. The USDOC considered that nothing on the record indicated that industrial land\nwould yield a higher or lower income than other types of real estate in Thailand and on that basis concluded that\ndividend yields from REITs were a reasonable proxy for assessing the market-value an nual rent for industrial\nland in Thailand. In order to calculate an annual rent , the USDOC calculated an annu al yield percentage (i.e.,\nthe average dividend yield of the REITs in Thailand in the period contemporaneous with the one-time purchase\nbenchmark established in the LWS determination), which it multiplied by the up-front purchase price per square\nfoot established in the LWS determination. (Id., pp. 71369-70).\n\n3. Main arguments of the Parties\n(a) China\n10.168 China submits that the benchmark actually used by the USDOC in the investigations at issue,\ni.e., land prices in Bangkok, Thailand, is inconsiste nt with Article 14(d) of the SCM Agreement, as\ninterpreted by the Appellate Body in US – Softwood Lumber IV.683\n10.169 China argues that land prices in Thailand (or any other country) do not \"relate or refer to\" the\nprevailing market conditions for land in China, and that the Thai benchmark, 3000 km away, bears no\nrelationship to prevailing market conditions in China. 684 China adds that the factors affecting the\nvalue of land (its physical and legal characteristics) are unique to a particular country and even often\nsignificantly vary within a country 685 and questions whether it would ever be possible to make what\nthe Appellate Body referred to as \"all necessary adju stments\" to undertake that sort of comparison\nwith respect to land-use rights. 686 In addition, China argues that the USDOC did not explain how the\nfactors it considered relevant for choosing land prices in Thailand (e.g. the similar levels of per capita\nGNI) have any connection to prevailing market c onditions for land in a particular country or\nlocation.687 China also notes the admission by th e United States that the USDOC made no\nadjustments to its Thai benchmark to ensure that it would \"relate or refer to, or be connected with\"\nprices prevailing on the Chinese land-use rights market.688\n10.170 Further, China argues that the USDOC could ha ve used alternative benchmarks other than\nland prices in another country: China argues that the USDOC has in the past resorted to methods,\nother than the use of external benchmarks for ev aluating the existence and amount of benefit in the\ncase of land. In particular, China notes that the USDOC has for instance, in the past, looked at\nwhether land prices are determined in accordance with market principles. 689 This, in China's view,\n\n683 See, e.g., China second written submission, para. 64; response to Panel question 43 (first meeting),\nciting to Appellate Body Report on US – Softwood Lumber IV, paras. 103 and 108.\n685 Id., paras. 310 and 313-314. According to China, land is a non-tradable good and its value is\ninherently locational, that is, the value of land cannot be separated from its physical and legal characteristics, for\ninstance, topography, transportation infrastructure, taxes, land-use restrictions, labour and environmental laws.\n(Id., para. 308) China submits that the sources relied upon by the USDOC for its Thai land price data confirm\nthat national and local property factors affect the value of land and therefore that land values significantly vary\namong different countries, regions, and even within a single country. (Id., paras. 311-313).\n686 Id., paras. 307 et seq. China argues in this respect that while Article 14(d) makes clear that\navailability, marketability, and transportation form part of the \"prevailing market conditions\" for the good in\nquestion, land is an unmovable good so that it is impossible to \"replicate reliably\" the prevailing market\nconditions for land in China by referring to land prices in Thailand. ( See, e.g., China first written submission,\nparas. 314-315, citing to Appellate Body Report on US – Softwood Lumber IV, para. 108).\n687 Id., para. 318.\n688 China second written submission, para. 50; opening statement at the first meeting of the Panel,\npara. 49.\n689 China argues that in previous investigations where the government was found to be the sole provider\nof the land in question, the USDOC determined the ex istence of the benefit by evaluating whether there was\nprice discrimination among the users of such land, a method which China argues, the Preamble to the USDOC's\ncountervailing duty regulations recognizes. (China response to Panel Question 34 (first meeting) (quoting from\ncomments made by the USDOC in the CWP investigation and USDOC determinations in Steel Wire Rod from\nTrinidad and Tobago (Exhibit CHI-149) and Certain Cut-to-Length Carbon-Quality Steel Plate from the\nRepublic of Korea (Exhibit CHI-150)). China argues that, had the USDOC applied a similar approach in the\nLWS investigation, there would have been no subsidy to the investigated producer concerned (Aifudi). China\nalso adds that in all thr ee of these instances, the USDO C recognized that land values are unique to particular\nlocations, and therefore that any benchmark must be drawn from the same general location and take into account\nspecific factors that affect land values at that location. (Id.).\n\nbelies the United States' argument that it would be im possible to calculate the benefit at all in certain\ncircumstances if China's position were accepted.\n690\n10.171 Finally, China does not consider sufficient the United States' defence of the benchmarks on\nthe ground that \"[t]here is not always a perfect set of data upon which to rely\" and that it may\nconsequently not always be possible to make all the adjustments required by Article 14(d) of the SCM\nAgreement. China argues that the mandatory la nguage of the Agreement cannot be disregarded on\nthe ground that it was too difficult a standard to apply. China also adds that the fact that it would be\nimpractical to adjust for all the factors in Article 14(d) was precisely why the Appellate Body, in US –\nSoftwood Lumber IV, seriously questioned whether out-of country benchmarks could ever lawfully be\nused. China also highlights the warning of the Appellate Body, in US − Softwood Lumber IV , that\neven in the limited circumstance in which out-of-c ountry benchmarks may be used, the benchmark\nmust – without exception – \"relate or refer to, or be connected with\" the prevailing, i.e., existing\nmarket conditions in the country of provision.691\n(b) United States\n10.172 The United States defends the consistency with Article 14(d) of the Thai benchmark used by\nthe USDOC in the LWS and OTR investigations.\n10.173 The United States argues that nothing in the text of Article 14(d) suggests that land-use rights\nare exceptional, or that they should be treated di fferently than other goods w ith respect to the use of\nexternal benchmarks. 692 The United States considers that China's restrictive interpretation, if\naccepted, would eliminate the possibility of countervailing the subsidized provision of land-use rights,\ncontrary to the object and purpose of the SCM Agreement.693\n10.174 The United States submits that by selecting la nd prices in a country with a comparable per\ncapita GNI and population density and by using prices for comparable types of land (e.g., industrial\nzones, allocated versus granted land-use rights) , the benchmark used by the USDOC reasonably\nreflected the \"prevailing market conditions for the good in question\".\n10.175 Specifically, the United States argues that the Th ai prices used accounted for the prevailing\nmarket conditions, consistent with Article 14(d) of the SCM Agreement. The United States notes the\nfactors that the USDOC took into consideration in selecting Thai prices as the benchmark ( per capita\nGNI, population density, and types of land transactions) to ensure that these prices would \"relate or\nrefer to or be connected with\" China's prevailing market conditions. The United States submits that\n\n690 China response to Panel question 34 (first meeting).\n691 See, e.g., China opening statement at the first meeting of the Panel, para. 49; first written\nsubmission, para. 309.\n692 The United States notes that in US − Softwood Lumber IV, the Appellate Body rejected an argument\nsimilar to China's argument that land use-use rights sh ould be treated differently under Article 14(d): the\nAppellate Body rejected an argument of Canada that stan ding timber is attached to the land and incapable of\nbeing traded across borders. The Appellate Body explained that excluding non-tradable goods would permit the\ncircumvention of the WTO's subsidies disciplines. (U nited States first written submission, paras. 273-274,\nreferring to Appellate Body Report on US − Softwood Lumber IV, paras. 57, 64 and 67).\n693 Id., para. 275. In addition to its arguments based on Article 14(d) of the SCM Agreement, the\nUnited States also argues that China's position is contradicted by the terms of Section 15(b) of China's Protocol\nof Accession, which provides no basis to exclude government-provided land use rights, and which confirms the\npermissibility of using out-of-country benchmarks in countervailing duty investigations concerning imports\nfrom China. (Id., para. 276). Because, as explained in Section X.B, supra, the United States has clarified to the\nPanel that it is not relying on the Protocol of Accession in defending this or any of China's claims pursuant to\nArticle 14 of the SCM Agreement, we do not take thes e arguments of the United St ates into account in our\nanalysis.\n\nArticle 14(d) of the SCM Agreement lists several factors in relation to which the adequacy of\nremuneration should be determined, including price, quality, availability, marketability, transportation\nand other conditions of purchase or sale. The Un ited States considers that demand is typically the\nprimary determinant of the price for urban land (becau se supply is considered to be fixed) and that\ndemand in turn is a function of population dens ity and the level of economic development, as\nmeasured by per capita GNI. The United States also submits that quality and marketability of land-\nuse rights prices in China were taken into consideration by the fact that producers, in general, consider\na number of markets, including Thailand, as an option for diversifying production bases in Asia\nbeyond China. Moreover, the USDOC used prices for land in industrial zones, as the land-use rights\nin China were also located in in dustrial zones; the United States ar gues that use of similar types of\nland (i.e., land in industrial zones) would account for the quality and marketability of the land. The\nUSDOC also took into account whether the transaction involved allocated or granted land-use rights,\nwhich would impact the marketability of the land- use rights. Availability was accounted for by\nselecting benchmark prices from an urban area, Bangkok, where population densities were higher than\non average for Thailand, because the land-use rights at issue in the OTR and LWS investigations were\nalso from urban areas of China. 694 Thus, the United States argues, the Thai prices selected by the\nUSDOC reasonably reflected the \"prevailing market conditions\" for the land-use rights in China.695\n10.176 The United States notes that China argues that the USDOC should have taken into account\nother factors such as capital control measures limitin g foreign ownership of companies in Thailand or\nvarious incentives that governments provide to co mpanies, but does not point to any relevant\ninformation on the record that would have allowed the USDOC to make any such adjustments. The\nUnited States submits that investigating authorities are restrained in their ability to adjust prices\nbecause of the limited information before them so th at it may not always be possible to adjust for all\nof the items listed in Article 14(d), but that this should not preclude a Member from selecting a\ncomparison price.\n696 The United States also argues that if the bar for selecting the out-of-country\nbenchmark is set so high that it requires the use of unavailable data, investig ating authorities will be\nrequired to use in-country prices even where they c ontain the very subsidy that they are trying to\nmeasure, and that such measurement, in turn, woul d not capture properly the benefit of the subsidy\ndue to the predominant role of the government. 697 The United States also argues that China's position\nignores the inherent \"flexibility\" in the guidelines under Article 14 of the SCM Agreement.698\n10.177 In response to arguments of China, the United States argues that it considers benchmarks used\nin other USDOC investigations to be irrelevant to this dispute and that the other cases cited by China\nare not analogous to the land-use rights market in China as the USDOC did not find in any of these\ncases that the land markets were distorted by the government's predominant role.699 The United States\nalso argues that in the investiga tions at issue, the USDOC did in fact perform a \"market principles\nanalysis\" and found that land-use rights in China are not priced in accordance w ith market principles.\nThe United States adds that China's argument that a \"price discrimination\" analysis could have been\n\n694 United States first written submission, para. 278-2 84; second written submission, paras. 115-119.\nThe United States also argues that transportation is not a factor in valuing land as land is not transported\n695 See, e.g., United States first written submission, para. 293.\n696 Id., para. 286.\n697 United States response to Panel question 46 (first meeting), citing to Appellate Body Report on US –\nSoftwood Lumber IV, para. 93.\n698 See, e.g. , United States first written submission, para. 286, citing to Panel Report on EC –\nCountervailing Measures on DRAM Chips, para. 7.213; response to Panel question 46 (first meeting).\n699 United States second written submission, paras. 110-112. The United States submits that China\nmisrepresents the USDOC's practice since the USDOC consistently relies on out-of-country benchmarks when it\ndetermines that the government plays a predominant role in the market. In addition, the United States submits\nthat one of the cases cited by China did not even concern the provision of land, but, instead, pertained to an\nanalysis of \"revenue forgone\" by the USDOC. (Id.).\n\napplied is misleading because such an analysis is pa rt of the \"market principles\" analysis that the\nUSDOC performed.\n700\n4. Main arguments of the Third Parties\n(a) European Communities\n10.178 The European Communities considers that the me re fact that a piece of land is located\n3000 km away is not a sufficient reason alone to co nclude that a market benchmark is unreasonable.\nThe European Communities also argues that any comparison must be adjusted in order to replicate the\nprevailing terms and conditions which would have existed absent price distortion.701\n(b) Saudi Arabia\n10.179 Saudi Arabia argues that the use of external benchmarks is especially inappropriate with\nrespect to financial contributions in the form of the provision of land and that, as a result, the\nadjustments required under Article 14(d) ( as acknowledged by the Appellate Body in US − Softwood\nLumber IV) apply a fortiori when the benchmarks concerns the provision of land.702\n5. Assessment by the Panel\n10.180 We recall our finding above that China has not established that the USDOC's decision not to\nrely on Chinese prices for land-use rights as benchmarks was inconsistent with Article 14(d) of the\nSCM Agreement. The remaining question before us thus is whether China has established that the\nactual benchmarks used by the USDOC are inconsistent with Article 14(d) of the SCM Agreement.\n10.181 We recall that under the terms of Article 14(d) of the SCM Agreement, the adequacy of\nremuneration for the government-provision of goods \"s hall be determined in relation to prevailing\nmarket conditions for the good or service in question in the country of provision or purchase\n(including price, quality, availability, marketability, transportation and other conditions of purchase or\nsale)\". We further recall that the Appellate Body, in US − Softwood Lumber IV, cautioned that:\n\"[w]hen an investigating authority resorts [...] to a benchmark other than private\nprices in the country of provision, the benchmark chosen must, nevertheless, relate or\nrefer to, or be connected with, the preva iling market conditions in that country, and\nmust reflect price, quality, availability, marketability, transportation and other\nconditions of purchase or sale, as required by Article 14(d)\".\n703\n10.182 The Appellate Body indicated that a range of factors would have to be taken into account\nwhen making adjustments to replicate conditions that would prevail in the country of provision (in the\nabsence of the distortion caused by the government's role that led to the conclusion that in-country\nprices could not be used as benchmarks). In the pa rticular situation of reliance on prices in another\ncountry as a proxy for the prices that would prevail in the country of provision of a good or service,\nthe Appellate Body noted that \"it would be difficult, from a practical point of view, for investigating\nauthorities to replicate reliably market conditions pr evailing in one country on the basis of market\n\n700 The United States explains that, according to the Preamble to the USDOC's regulations, the USDOC\n\"will assess whether the government price was in accordan ce with 'market principles'\" in situations where the\ngovernment is the only source available to consumers in the country, and that, one factor which the USDOC\n\"may\" rely upon in that assessment, is \"possible price discrimination\". (Id., paras. 113-114).\n701 European Communities third-party submission, para. 47.\n702 Saudi Arabia third-party submission, para. 77.\n703 Appellate Body Report on US − Softwood Lumber IV, para. 103.\n\nconditions prevailing in another count ry\", and that appropriate adjustments would need to be made to\navoid in particular the countervailing of comparative advantages.704\n10.183 Concerning the implications of these findings by the Appellate Body for the use of cross-\nborder benchmarks for land-use rights, China argues fi rst that because land is by definition not traded\nacross borders and because its value is significantly determined by its location and by the applicable\nlegal regime, it is impossible to replicate reliably the prevailing market conditions for land in one\ncountry by referring to land values in another country, which has its own physical, social, political and\neconomic environment.705\n10.184 In our view, the considerations identified by China certainly mean th at ensuring that any\nbenchmark (especially any out-of-country benchmark) used for land-use rights \"relate[s], refer[s] or is\nconnected with\" prevailing market conditions in th e country of provision of the land is a difficult\nexercise. Yet, we do not consider that the terms of Article 14(d) exclude, a priori, the possibility of\ndetermining the existence and amount of benefit for subsidies in the form of provision of land on the\nbasis of land prices in another country. Further, accep ting that it would never be permissible to resort\nto land prices in other countries as benchmarks in situations such as were found to exist in the LWS\nand OTR investigations would mean that precisely because the land market in the country of\nprovision is distorted, it would become impossible for the investigating authority to determine the\nexistence and amount of any benefit. Such a resu lt – that countervailing certain forms of subsidies\nwould become impossible in certain situations 706 – would, in our view, undermine the object and\npurpose of the SCM Agreement, \"which is to strengthen and improve GATT disciplines relating to the\nuse of both subsidies and countervailing measures, wh ile, recognizing at the same time, the right of\nMembers to impose such measures under certain conditions\".707\n10.185 The other principal argument of China focuses on what it perceives as a requirement under\nArticle 14(d) of the SCM Agreement for the investiga ting authority to make adjustments, in all cases,\nto any alternative benchmark that may be selected , to ensure that that benchmark approximates\nprevailing conditions in the country of provision. In other words, we see China as arguing that\nwithout \"adjustments\", an y proxy benchmark will be, ipso facto, inconsistent with Article 14(d). In\nthis regard, China argues, and the United States does not contest, that in the investigations at issue, the\nUSDOC performed no adjustments to the Thai land-use prices it used as benchmarks. The\nUnited States' response to this argument of Chin a is that the USDOC ensured that it met the\nrequirements of Article 14(d) through its selection of the benchmark, such that it was not necessary to\nperform further adjustments.\n10.186 We recall that the ultimate goal in selecting a benchmark is to ensure the comparability of that\nbenchmark with the relevant market conditions, and this is particularly true where proxies are used\n\n704 Appellate Body Report on US − Softwood Lumber IV, paras. 108-109.\n705 China first written submission, paras. 310 and 315.\n706 The claims before us are limited to the benchmarks actually used by the USDOC. Hence, we do not\nhave to consider what benchmarks other than land-use prices in China or land-use prices in other countries the\nUSDOC could possibly have resorted to . Yet, we note China's arguments that in other instances in which it\nconsidered domestic land prices to be distorted, the USDOC relied on benchmarks such as whether the price\npaid for the land was consistent with market principles or the price paid by the investigated producer was\ndifferent than that paid by other entities (price discrimi nation). (China response to Panel question 34 (first\nmeeting)). The United States responds that those other cases did not involve situations where the market was\nfound to be distorted, and that in the investigations at issue in this dispute, in fact the USDOC did conduct a\nmarket principles examination, of which the price discrimination analysis is a part. In our view, the facts of the\ninvestigations at issue underscore the inherent difficulties that would arise from the use of benchmarks focusing\non market distortions in a situation in which it has been found that the entire land-use rights market in the\ncountry of provision is distorted.\n707 Appellate Body Report on US − Softwood Lumber IV, para. 64.\n\ndue to the unavailability of in-country prices. In turn, comparability can be achieved either through\nthe selection of the particular benchmark to be used , or through application of adjustments to a price\non which the benchmark price will be based, or through some combination of selection and\nadjustment. This is how we read the Appellate Body's discussion in US\n− Softwood Lumber IV about\nthe need to ensure that all necessary adjustments are made. 708 That is, rather than establishing a\nlitmus test that in every case, \"adjustments\" must be made no matter how inherently comparable the\nselected benchmark is to the market conditions th at it is being used to approximate, we see the\nAppellate Body as highlighting the elements of comp arability that must be reflected in the benchmark\nultimately applied. That is, the inquiry under Article 14(d) is whether the benchmark as actually used\nis one that \"relates or refers to, or is connected with\" the prevailing market conditions in the country\nof provision, in particular as to \"price, quality, availability, marketability, transportation and other\nconditions of purchase or sale\".709\n10.187 While this is a demanding standard, we recall th at the use of a benchmark other than private\nprices in the country of provision is, in the first pla ce, made necessary by the fact that the (land-use)\nmarket in the country of provision is distorted. It would in our view be incongruous to interpret\nArticle 14(d) so as to effectively require the investig ating authority, confronted with such a situation,\nnevertheless to choose between not performing the benefit calculation or calculating it on the basis of\na benchmark based on distorted market conditions. In sum, in such a situation, we see Article 14(d)\nas requiring an investigating authority to do its b est to identify a benchmark that approximates the\nmarket conditions that would prevail in the absence of the dist ortion. While inherently such a\nbenchmark cannot be perfect as it will never be possible to take into account all of the myriad factors\nthat establish market conditions, and it will never be possible to know with certainty the market\nconditions that would prevail in the absence of th e government-caused distortion, the authority must\nconduct a reasoned analysis based on factual informa tion, selected and adjusted as necessary to be as\ncomparable as possible to such market conditions. In other words, whatever benchmark is selected\nand whatever methodology is used must be on es that a reasonable and objective investigating\nauthority could use for that purpose.\n10.188 Turning now to the approach taken by the USDOC in selecting its land-use benchmarks in the\nLWS and OTR investigations, we are satisfied th at the method adopted by the USDOC meets these\nrequirements. We note in particular that when selecting the benchmark to use for Chinese land-use\nprices, the USDOC took into consideration a number of factors such as per capita GNI, population\ndensity (in the case of the LWS investigation, both for the countries and the provinces at issue), the\ntypes of land transactions, and the type of land at issue (land in industrial zones), with a view to\napproximating what the market conditions would be for the land-use rights at issue in China but for\nthe market distortions. We recall that we have de termined that China has not demonstrated that the\nUSDOC was not justified in resorting to a benchmark other than land-use prices in China in the first\nplace. This being the case, the USDOC was faced with a situation in which it had to construct a\nbenchmark to approach what essentially would be a counterfactual situation – what prices for land-use\nrights in China would be in the absence of distortion.\n10.189 Before us, China identifies various factors that, in its view, may affect the value of land, such\nas the tax incentives that may be prov ided to investors or the quality of infrastructure (availability of\nschools, hospitals, public transportation, etc.).\n710 In China's view, the USDOC's methodology was\nflawed, inter alia , because the USDOC did not \"even attemp t to account for these factors\" in its\ncomparison of land prices in Bangkok to land prices in the Chinese industrial parks at issue. Before\nus, as before the USDOC in the investigations at issue, the arguments of the Government of China and\nthe other respondents have primarily focused on th e permissibility as such of using out-of-country\n\n708 Appellate Body Report on US − Softwood Lumber IV, para. 108.\n709 Id., para. 103.\n710 China first written submission, paras. 313-314.\n\nprices for land-use rights and on whether Thai prices could at all provide an appropriate proxy for\nChinese land market prices, rather than on identifying specific adjustments which the USDOC ought\nto have made to ensure the consistency of its benchmarks with Article 14(d) of the SCM\nAgreement.711 We might add that while there can be no question that the Thai land prices and\nconstructed annual rents relied upon by the USDOC do not provide a perfect picture of what prices for\nland-use rights would be in China in the absence of the distortions that the USDOC found to exist, it\nnevertheless is not clear that the fact of adjusti ng those benchmarks, as such, would ensure a closer\napproximation of the counterfactual situation (an undi storted land use rights market in China). In any\ncase, China has not demonstrated that the USDOC fa iled to make any specific adjustment which it\nwas required to make or which the Government of China or interested parties had identified, before\nthe USDOC or before us.\n10.190 Finally, we note that China's argument in respect of the USDOC's use of the Thai benchmark\nin the OTR investigation is limited to a footnote to its first written submission, in which it refers to its\nargument in respect of the USDOC's LWS determination. 712 For this reason, our examination of the\nUSDOC's Thai benchmarks in the OTR investigations is limited to the general arguments presented\nby China in respect of the USDOC's LWS determination.\n10.191 For the foregoing reasons, we find that China h as not established that the benchmarks relied\nupon by the USDOC for land-use rights in the LWS a nd OTR investigations were inconsistent with\nthe obligations of the United States under Article 14(d) of the SCM Agreement. In making this\nfinding, we note that we are limiting ourselves to th e questions raised by China in connection with\nthis claim.713\nJ. CONSISTENCY WITH ARTICLE 14(B) OF THE SCM AGREEMENT OF THE LOAN BENCHMARKS\nACTUALLY USED BY THE USDOC – RMB-DENOMINATED LOANS\n1. Claim of China\n10.192 China claims, in respect of SOCB loans denomin ated in RMB, that the benchmarks used by\nthe USDOC in its benefit calculations in the OTR, CWP and LWS investigati ons were inconsistent\nwith Article 14(b) of the SCM Agreement.714\n2. Factual background\n10.193 In the CWP, LWS and OTR investigations, having determined that it could not use interest\nrates in China as benchmarks for RMB-denominated loans from SOCBs, due to the distortion of the\nChinese lending market as a whole, the USDOC constr ucted a proxy interest rate using a regression\nanalysis of inflation-adjusted interest rates in 33 lower-middle-income countries 715, on the basis of a\n\"broad inverse relationship\" that it had f ound between income leve ls and lending rates. 716 According\nto the USDOC, the inflation adjustments served as a proxy for the adjustment for exchange rate\nexpectations necessary when comparing interest ra tes across currencies. Th e USDOC stated that a\n\n711 While in the OTR investigation GTC argued that the USDOC should make adjustments to reflect\nmarket conditions in Guizhou Province – i.e. account for the fact that Guizhou Province is one of China's most\nimpoverished provinces – ultimately, the USDOC did not countervail the provision of land-use rights to GTC\nand to TUTRIC. (Exhibit CHI-4, pp. 187, 191).\n712 China first written submission, footnote 237.\n713 Concerning China's claims of consequential violations of Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994 in connection with this claim see Section XIII, infra.\n714 See, e.g., China first written submission, para. 273.\n715 As identified by the World Bank's classification of countries. (See, e.g., Exhibit CHI-1, p. 8).\n716 The USDOC cited its findings to this effect from the CFS Paper investigation based on its analysis\nof IMF data. (Exhibits CHI-1, pp. 7-8; CHI-3, p. 12; CHI-4, p. 8; and CHI-93, p. 71).\n\ncross-country comparison of \"real\" interest rates is a rough proxy for a comparison of exchange rate-\nadjusted nominal rates because of the general link between inflation and (nominal) exchange rate\nexpectations. The regression analysis also took in to account the \"quality of a country's institutions\"\n(including political stability, government effectiveness and rule of law) which, the USDOC stated \"is\nnot directly tied to state-imposed significant dist ortions in the banking sector\". The USDOC stated\nthat the governance factors facilitated cross-country comparisons because they incorporated other\nimportant factors that can influence interest rate fo rmation, in particular because differences in these\nfactors will give rise to differences in perceived ri sk associated with the particular country which will\nbe reflected in a country's overall level of interest rates.\n717\n3. Main arguments of the Parties\n(a) China\n10.194 China claims that the interest rates derived from the USDOC's 33-country regression analysis\nare inconsistent with Article 14(b) of the SCM Agre ement. In particular, China submits that these\ninterest rates do not reflect \"comparable commercial loans\" that a borrower could \"actually obtain in\nthe market\".718\n10.195 China argues that the benchmark loans are not denominated in the same currency as the\nRMB-denominated loans under investigation and are therefore not comparable. China rejects the\nUnited States' assertion that its benchmark loan was \"comparable\" because it was \"based upon lending\nrates from countries with similar [ per capita gross national incomes] and institutional quality as\nmeasured by World Bank governance indicators\". Ch ina asserts that neith er the USDOC nor the\nUnited States has provided any coherent e xplanation as to why these factors (i.e., per capita GNI and\ninstitutional quality) somehow relate to whether loans are \"comparable\" within the meaning of\nArticle 14(b).719 Moreover, China argues that the United States' notion of \"comparability\" fails to\ngive any legally operative meaning to the term \"c omparable\" in Article 14(b), contrary to the\nfundamental principle of effectiveness in treaty interpretation.720\n10.196 China also alleges that no borrower could \"act ually obtain\" the USDOC's benchmark loans in\n\"any\" commercial lending market – whether in China or elsewhere. For China, fictitious, non-existent\nloans cannot be obtained by anyone. 721 China disagrees with the United States' assertion that the\nregression analysis it used was \"tailored to approximate\" a comparable loan that a firm could \"actually\nobtain on the market\". According to China, the USDOC's loan benchmark does not \"approximate\" a\ncomparable commercial loan in China, nor is \"ta ilored to approximate\" the applicable standard under\nArticle 14(b). Rather, China argues, Article 14 es tablishes mandatory para meters with which any\nmethodology used by investigating authorities must comply.\n722 China also rejects the argument\n\n717 Exhibits CHI-1, pp. 7-8 and 78; CHI-3, pp. 12-13; and CHI-4, p. 8 and 109-110.\n718 See, e.g. , China first written submission, para. 244. According to China, whatever \"flexibility\"\nexists in the application of Article 14(b), any methodol ogy used by investigating authorities must refer to a\n\"comparable commercial loan which the firm could actually obtain on the market\". (China response to Panel\nquestion 30 (first meeting)).\n719 China first written submission, para. 245; second written submission, paras. 74 and 81. China adds\nthat the USDOC provided no explanation of how \"governance indicators\" such as government effectiveness,\nregulatory quality and political stability had any bearing upon the process of interest formation or the policy\nchoices of monetary authorities as regards the direction of monetary conditions and interest rates. (China first\nwritten submission, para. 266).\n721 China first written submission, para. 245; second written submission, para. 84; oral statement at the\nfirst meeting of the Panel, para. 52.\n722 China second written submission, para. 85, citing to Appellate Body Report on US – Softwood\nLumber IV, para. 92.\n\nadvanced by the United States that the benchmark loans were \"from the ma rket\" because they were\n\"based on a regression of actual average lending rat es reported by each country\". China argues that\nthere was no evidence that respondent borrowers coul d \"actually obtain\" loans in any of these lending\nmarkets, and no amount of regressing could overcome the lack of such evidence.723\n(b) United States\n10.197 The United States argues that, due to the governme nt's predominant role in the banking sector\nand other government interventions, the USDOC f ound that the lending \"market\" in China was so\ndistorted that there were no comparable \"commercia l\" loans for benchmark purposes. Therefore, the\nUSDOC selected a benchmark lending rate that was both \"commercial\" and \"comparable\", as required\nby Article 14(b) of the SCM Agreement.724\n10.198 The United States argues that the USDOC used an out-of-country benchmark derived from\ninterest rates from a group of countries rather than a single country, because various factors can affect\nnational interest rates. 725 The United States also submits that the USDOC controlled for the most\nsignificant factors affecting interest rates by sel ecting inflation-adjusted rates in countries with per\ncapita GNI similar to that of China, and then perform ed a regression of those rates, the GNI data and\na range of World Bank governance indicators to de termine a yearly comparison interest rate.\nCountries in the same GNI category (lower middle income) as China that were found to be\nanomalously high or low in terms of their inter est rates, or were non- market economies, were\nexcluded from the regression analysis.\n726\n10.199 The United States indicates that the USDOC ad justed the interest rates of the included\ncountries for inflation, because of the general link be tween inflation and exchange rate expectations.\nIn addition, the United States argues that the factors related to the quality of the countries' institutions\nwere included because banks take these into account when assessing risk of lending to businesses in a\nparticular country, and because the Federal Rese rve Board had found a correlation between higher\nquality of institutions and lower real interest ra tes. The United States further submits that the\nbenchmark used took account of the maturity of th e loans and matched lending during the same time\nperiods. Thus, the benchmark was \"tailored to a pproximate a 'comparable commercial loan which the\nfirm could actually obtain on the market'\".727\n10.200 The United States rejects China's contention that the benchmark in Article 14(b) must be an\nactual interest rate available to a borrower in China, arguing that the regression analysis was, in fact,\nbased on a regression of actual interest ra tes available to borrowers in China. 728 The United States\n\n724 See, e.g., United States response to Panel question 17 (second meeting). The United States argues\nthat investigating authorities are entitled to consid erable leeway in adopting reasonable methodologies,\nincluding the use of out-of-country benchmarks where alternatives are inappropriate. (United States response to\nPanel question 39 (first meeting)).\n725 The United States submits that the USDOC could have chosen an out-of-country benchmark from\none particular country, but that such an approach could have sacrif iced comparability. Th at is, each country's\nlending rates may be affected by a variety of economic factors for which there may be insufficient information\nto permit an adjustment, and therefore, those rates individually would not provide sufficient comparability.\n(United States response to Panel question 17 (second meeting)).\n726 United States first written submission, paras. 244-246; second written submission, para. 99.\n727 United States first written submission, paras. 247-248; second written submission, paras. 99\nand 102.\n728 See, e.g., United States second written submission, para. 101. The United States adds that a\nregression analysis is essentially an average of interest rates that takes more factors into account than a simple\naverage, and that China has not obj ected the USDOC's use of average pr ices in other instances (e.g. the\nUSDOC's use of average world market prices for HRS and BOPP). Furthermore, the United States argues that\n\nalso disagrees with China that a benchmark loan ca n meet the criteria of Article 14(b) only if it is\ndenominated in the same currency as the government -provided loan. The United States submits that\nalthough the use of such a benchmark may be prefer able, Article 14(b) contains no obligation to do\nso, and that China's restriction of its currency from international lending markets cannot be interpreted\nas to require Members to use a lending benchmark within China's distorted banking market.\n729\n4. Main arguments of the Third Parties\n(a) Australia\n10.201 Australia considers that there is no basis in Artic le 14(b) for the benchmark used to \"relate or\nrefer to, or be connected with\" the conditions preva iling in the market of the country of provision.\nAustralia notes in this respect that loans are availa ble on an international financial market that is\nsubject to international influences. Furthermore, Au stralia considers that there is no basis in the text\nof Article 14(b) to limit the permissible benchmark to loans in the same curren cy as that of the loans\nbeing investigated given that loans obtained in one currency can be used to purchase any currency at\nrates determined by international markets.730\n(b) Saudi Arabia\n10.202 Saudi Arabia considers that a benchmark loan mu st comply with the \"cumulative\" criteria set\nforth in Article 14(b) of the Agreement. In this regard, Saudi Arabia is of the view that the term\n\"comparable\" suggests that the be nchmark loan should be a loan de nominated in the same currency,\nand subject to the same generally applicable fina ncial regulations of the country providing the\ngovernment loan. In addition, the word \"commercial\" refers to any transaction that is made in the\nordinary course of commerce, while the phrase \"which the firm could actually obtain on the market\"\nimposes a requirement that the benchmark be based on the actual borrowing experience of the\nrecipient firm. Saudi Arabia argues that the use of constructed benchmarks based on loans that are\nnot actually available, but rather represent an aver age of a set of loans gathered in a discretionary\nmanner to represent the \"average commercial loan\" ar e inconsistent with Artic le 14(b). Saudi Arabia\ntakes issue with the United States' argument that the reasoning of the Appellate Body in US-Softwood\nLumber IV, although decided under Article 14(d), is \"equa lly applicable\" under Article 14(b). Saudi\nArabia argues, inter alia , that nothing in the Appellate Body's report indicates its application to\nArticles 14 (a), (b), and (c), nor to the \"entirety of Article 14\". However, assuming arguendo that the\nreasoning of the Appellate Body in that case applies to Article 14(b), Saudi Arabia considers that the\nclear admonitions made by the Appellate Body on the use of out-of-country benchmarks would apply\nas well.731\n5. Assessment by the Panel\n10.203 We have found above that where lending rates in a country are distorted by the government's\nrole in the lending market it is permissible under Article 14(b) of the SCM Agreement to rely on\nsources other than in-country interest rates as benc hmarks. We have further found that in such cases\nit is permissible to use constructed proxies fo r what a borrower \"would pay\" on a comparable\ncommercial loan that it \"could actually obtain on the market\". In other words, we have concluded that\nthe terms \"would pay\" and \"could actually obtain on the market\" accommodate the use of proxies, and\n\nArticle 14(b) does not state a preference for the use of one interest rate ra ther than an average of interest rates.\n(Id.).\n729 United States second written submission, para. 100. Moreover, the United States recalls that the\nUSDOC adjusted for inflation as a proxy for an adjustment for currency exchange rate expectations. (Id.).\n730 Australia third-party submission paras. 39-40; third-party response to Panel question 7.\n731 Saudi Arabia third-party submission, paras. 91-99.\n\ndo not mean that where an actual benchmark loan is not available, the investigating authority is forced\nto conclude that it is impossible to calculate a benefit (effectively meaning a benefit of zero). We also\nrecall our finding that China has not established that the USDOC's determination that interest rates in\nChina could not be used as benchmarks because of the distortion of the lending market due to the\ngovernment's role was inconsistent with Article 14(b). The remain ing question before us thus is\nwhether China has established that the actual benc hmark used by the USDOC is inconsistent with\nArticle 14(b) of the SCM Agreement.\n10.204 In our view, the legal question in this regard is whether the constructed proxy used as a\nbenchmark by the USDOC sufficiently approximates wh at \"would\" have been paid on a comparable\ncommercial loan that \"could actually\" have been obtained on the market, in the particular\ncircumstances of the CWP, LWS and OTR investigations, where it was found not only that no such\nspecific loans existed, but that in fact it was not po ssible to identify any inte rest rates in China that\ncould even be adjusted to approximate what would be paid on such a commercial loan. In this regard,\nwe recall that the USDOC did consider the possibility of adjusting the observed interest rates to try to\napproximate what the commercial rates would be, but decided not do so because this would have been\na highly complex, speculative, and impracticable exercise. 732 We further note that before us China\nmakes no arguments as to any such ad justments that should have been made, as its position is that the\nobserved interest rates in China should have been used as benchmarks.\n10.205 We thus must determine on what basis to evalua te the proxy benchmark actually used. In our\nview, the appropriate approach is to consider wh ether the methodology applied by the USDOC is one\nthat a reasonable and objective investigating authorit y could use, in the particular situation found to\nexist in the CWP, LWS and OTR investigations, to ge nerate a proxy for the interest rate that \"would\"\nhave been paid on a commercial RMB loan that th e borrower \"could actually\" have obtained if the\nChinese lending market were not distorted. We cons ider this approach appropriate because, in view\nof the USDOC's finding that there were no undistorted RMB interest rates in China that could be used\nas benchmarks, there is no point of reference in the record evidence on the basis of which we could\njudge the absolute value of the benchmark used. We also note in this context that China makes no\narguments as to specific flaws in the USDOC' s methodology that could and should have been\ncorrected733, as indeed its argument is that no such proxy methodology based on other countries'\ninterest rates is permissible as a matter of law, a proposition that we have rejected.\n10.206 Given that constructing such a proxy is an exercise in estimation and approximation, in\nconsidering whether the USDOC's methodology is ai med at generating, in an unbiased and objective\nway, a proxy for commercial RMB interest rates that would exist (and thus \"could\" be obtained) in an\nundistorted market, we consider that our task is to evaluate the internal logic of the methodology\nemployed, and the soundness and appropriateness of the data relied upon by the USDOC, in\nconstructing the proxy.\n10.207 In this light, we first consider the USDOC's u se of a basket of other countries' currencies as\nthe basic source for its proxy interest rate. Under th e circumstances in the investigations, we find that\nthis approach was permissible. Further, the reliance on the World Bank grouping of countries in the\nsame income category as China based on GNI per capita also seems to us not unreasonable, as this is\na pre-existing grouping, not one created for the inv estigations. This appears to us to introduce a\ncertain element of macroeconomic similarity among these \"benchmark\" countries, reflecting the\n\n732 Exhibits CHI-3, p. 83 and CHI-4, p.104. China makes no argument that this is what the USDOC\nshould have done. Rather, China's argument is that the USDOC should simply have used observed interest rates\nin China, directly, as the benchmarks.\n733 For example, China makes no argument that the wrong countries were included in or excluded from\nthe basket of countries, or that the inflation adjustments were incorrect or should not have been applied at all, or\nany other arguments as to any specific aspects of the methodology.\n\nUSDOC's identification of a broad inverse relationship between real interest rates and income levels.\nWe accept that the USDOC's exclusion of countries whose interest rates it found to be anomalous, and\nof NME countries, enhances this macroeconomic sim ilarity. The adjustment for inflation also seems\nappropriate, inter alia, as a way of accounting at least partially for exchange rate expectations, which\nare influenced by inflation, as noted by the US DOC. Finally, we do not consider the USDOC's\ninclusion of factors related to the quality of the c ountries' institutions to be unreasonable, as factors\nsuch as political stability, government effectiveness and rule of law are taken into account by lenders\nwhen assessing the riskiness of lendi ng to borrowers in a given country. Nor has China argued that\nthere was a mismatch in terms of either maturities or dates of the benchmark interest rates and the\ninvestigated government loans. We thus do not find the methodology used by the USDOC to be\nunreasonable under the circumstances of the three investigations at issue.\n10.208 In reaching this conclusion, we emphasize that the benchmark established by the USDOC was\nnot perfect and could not literally represent the situation that wo uld have been faced by any given\nborrower in China in the absence of the distortions that were found to exist. However, our conclusion\nreflects our view that the methodology seems to be based on a reasoned and even-handed approach to\nthe unusual situation with which the USDOC was con fronted, rather than appearing arbitrary, or\nbiased. In particular, as noted, the USDOC had the right under Article 14(b) of the SCM Agreement\nto approximate on a reasonable basis the RMB inter est rate that would have been available on\n\"comparable commercial loans\" that borrowers in China could \"actually\" have obtained if an\nundistorted market for such loans existed in Chin a. We consider that a reasonable and objective\ninvestigating authority could have used the met hodology used by the USDOC, and relied on the data\nthat it did, to make such an approximation.\n734\n10.209 For the foregoing reasons, we thus find that China has not established that the benchmark\nactually used by the USDOC to calculate th e benefit from RMB-denominated SOCB loans was\ninconsistent with the obligations of the United States under Article 14(b) of the SCM Agreement.735\nK. CONSISTENCY WITH ARTICLE 14(B) OF THE SCM AGREEMENT OF THE LOAN BENCHMARK\nACTUALLY USED BY THE USDOC – U.S. DOLLAR-DENOMINATED LOANS\n1. Claim of China\n10.210 China claims that in the OTR investiga tion the USDOC acted inconsistently with\nArticle 14(b) of the SCM Agreement when it applied as a benchmark an annual average LIBOR-based\n\n734 In making our findings related to SOCB lending, while we are mindful of the uniqueness of the\nsituation in the investigations at issue, we do not consider that the findings imply that all lending in China ipso\nfacto confers subsidies covered by the SCM Agreement. In particular, our findings are confined to the particular\nfacts of the investigations at issue in this dispute. In this regard, first, we do not mean to imply by our findings\nthat all lending in China is a \"financial contribution\" in the sense of Article 1.1 of the SCM Agreement (i.e., that\nit is by the government, or a public body, or is made pursuant to government entrustment or direction of a\nprivate body). Second, we do not mean to imply that all lending in China is made pursuant to the economic\nplanning documents on the basis of which the USDOC found specificity. Third, concerning the existence of a\nbenefit, while record evidence indicated that the lending rates were in a narrow range during the period of\ninvestigation, there was some, albeit limited, differentiation of interest rates. Finally, while we have not found\nthat the benchmark used by the USDOC was inconsistent with the provisions cited in China's claim, this\ncertainly does not imply that this is the only possible benchmark that could have been or could be used, and\nanother benchmark may have led to a different outcome in the investigations.\n735 Concerning China's claims of consequential violations of Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994 in connection with this claim see Section XIII, infra.\n\ninterest rate, instead of the applicable daily ra tes, to U.S. dollar-denominated SOCB loans to\nGTC.736, 737\n2. Main arguments of the Parties\n(a) China\n10.211 China argues that the USDOC's benchmark me thodology for U.S. dollar-denominated loans\nwas not based on a comparison of like terms. Sp ecifically, China argues that GTC's U.S. dollar-\ndenominated loans were short-term (generally be tween 90 and 120 days) fixed-rate loans, with\ninterest rates based on the applicable U.S. dollar inte rest rates in effect on the days that GTC received\nthe loans. China argues that becau se LIBOR is a rate that changes daily, the interest rate benchmark\napplied to each loan also should have varied accord ing to the date on which the loan was received.\nThus, according to China, the correct method of de termining the existence and amount of the benefit\nat issue was to compare the interest rate on the allegedly government-provided loan to the\ncorresponding benchmark rate in effect on the sam e date. China argues that the annual average\nbenchmark rate used does not represent what woul d be paid by GTC on a comparable commercial\nloan because GTC would not have paid an averag e annual LIBOR rate, something that can only be\ndetermined in retrospect given that LIBOR fl uctuates on a daily basis. China submits that,\nalternatively, the USDOC could have applied an average-to-average comparison, i.e., compare an\naverage annual LIBOR rate to GTC's average intere st rate on its dollar-denominated loans for the\nsame year.738 China alleges that the USDOC, however, co mpared the actual interest rate on each loan\nto a retrospectively-determined average annual LI BOR rate, and that, as a result, it found \"benefits\"\nwhere, in fact, none existed.739\n10.212 China disagrees with the United States' argument that nothing in Article 14(b) requires the use\nof daily rates over annual average rates. China submits that Article 14(b) requires the use of\n\"comparable\" commercial loans as benchmarks, a nd that LIBOR interest rates change daily\nthroughout the year, such that a loan taken out at one point in the year is not \"comparable\" to a loan\ntaken out at another point in the year. China adds that the USDOC's comparison did not measure\nwhether the recipient of a government-provided loan was \"better off\", but only the extent to which\ninterest rates varied throughout the year.\n740 China also rejects the United States' argument that no\nparty provided the relevant information (i.e., daily in terest rate data) to the USDOC, arguing that it is\nthe investigating authorities' obligation – not that of the interested parties – to identify and collect the\n\"information which the authorities require\" to ensu re that the imposition of countervailing duties is\nconsistent with the requirements of the Agreement.741\n10.213 Finally, China submits that had the USDOC ma de a proper comparison, it would have found\nunequivocally that GTC did not obtain a benefit on its U.S. dollar-denominated loans; and that\nalthough this argument was not raised during the i nvestigation at issue, the Appellate Body has\n\n736 See, generally, China first written submission, paras. 240-243.\n737 As indicated at para. 10.1, supra, China also raises consequential claims pursuant to Articles 10 and\n32.1 of the SCM Agreement and Article VI:3 of the GATT 1994.\n738 See, e.g., China response to Panel question 25 (secon d meeting). According to China, the USDOC\nhad the data on the record to undertake such comparison. (Id.).\n739 Id.\n741 Id., para. 134, citing Articles 10 and 12.1 of the SCM Agreement. China further notes that daily\nLIBOR data are publicly available on the Internet. (Id.).\n\nestablished that a WTO Member \"is not confined mere ly to rehearsing arguments that were made [...]\nduring the domestic investigation\".\n742\n(b) United States\n10.214 The United States argues that the benchmark developed by the USDOC for the U.S. dollar-\ndenominated loans was consistent with Article 14( b) of the SCM Agreement. The United States\nexplains that the USDOC used the one-year average of the daily interest rates for LIBOR, and that in\norder to adjust the LIBOR rate to one that a pr ivate company could receive, the USDOC determined\nthe average spread between the LIBOR rate and the one-year U.S. corporate bond rates for companies\nwith a BB rating. The USDOC then added this av erage spread to the LIBO R rate to measure the\nbenefit at issue.743\n10.215 The United States submits that this benchmark in terest rate was constructed on the same basis\nas GTC's loans, which were also based on LIBOR pl us a spread. The United States submits that the\nbenchmark also matched the dura tion and currency denomination of the underlying loans, and that\ntherefore, it represented a \"comparable commercial loan \". In addition, the United States argues that\nthe benchmark was from the \"market\" because it was based on an average of actual LIBOR interest\nrates.744\n10.216 The United States disagrees with China's argume nt that the USDOC was required to use daily\nrather than annual averages rates. The United Stat es submits that daily LIBOR rates were not on the\nrecord of the investigation and that no party ar gued that the USDOC should depart from its usual\npractice of using annual rates.745 Furthermore, the United States argues that Article 14(b) contains no\npreference for daily over yearly average rates, and that in using an annual interest rate, the USDOC\nwas within the flexibility afforded by Article 14(b).746\n3. Assessment by the Panel\n10.217 This claim raises a single legal issue: th e comparability of loans due to, in essence,\ndifferences in timing. In particular, the issue raised by China is whether, to be comparable to the\ngovernment loans provided to GTC, the commercia l benchmarks should have reflected the rates\nprevailing on the particular days on which those loans were taken out.\n10.218 We recall our discussion, supra, of the characteristics that make a loan comparable in the\nsense of Article 14(b) of the SCM Agreement. Am ong these are the date, i.e., to be comparable, a\nbenchmark loan should be established around the same date as the government loan. In this regard, as\nChina points out, LIBOR changes on a daily basis. While we agree with the United States that\nArticle 14(b) affords certain flexibility to inves tigating authorities in the identification and/or\nconstruction of suitable benchmarks , particularly where no strictly comparable commercial loans are\navailable, we do not consider that this is the situa tion before us. In particular, there seems to be no\ndispute between the parties as to the basic suitability of comparing the interest rate on GTC's U.S.\n\n742 China second written submission, para. 134, citing to Appellate Body Reports on US – Lamb ,\npara. 113; US – Corrosion-Resistant Steel Sunset Review , para. 131; and Panel Report on Japan – DRAMs\n(Korea), para. 7.304.\n743 See, e.g., United States first written submission, paras. 257-258.\n744 United States response to Panel question 39 (first meeting).\n745 The United States explains that the USDOC's regul ations generally provides for the use of annual\naverages to determine the benefit from government-provided loans.\n746 United States first written submission, paras. 260-261, citing to Panel Reports on EC –\nCountervailing Measu res on DRAM Chips , para. 7.213 and US – Countervailing Measures on Certain EC\nProducts (Article 21.5 – EC), paras. 7.121-7.122.\n\ndollar-denominated fixed-rate loans to th e LIBOR-based rates used by the USDOC. 747 T h u s , t h e\navailability of a suitable benchmark rate is not in question. Nor is there any dispute between the\nparties that daily LIBOR rates are publicly and easily available. Given that over the course of a year,\nLIBOR, like any interest rate, can and does fluctuate, sometimes considerably, we consider that by not\nmaking any attempt to match the LIBOR interest rate benchmarks to the actual origination dates of\nGTC's U.S. dollar-denominated loans (which were the dates on which their respective interest rates\nwere fixed), the USDOC did not sufficiently ensure that its benchmarks were \"comparable\" to the\ninvestigated loans, in the sense of Article 14(b) of the SCM Agreement.\n10.219 For the foregoing reasons, we find that Ch ina has established that the USDOC acted\ninconsistently with the obligations of the United States under Article 14(b) of the SCM Agreement by\nusing average annual interest rates as benchmarks for GTC's U.S. dollar-d enominated loans from\nSOCBs in the OTR investigation.\n748\nXI. CHINA'S CLAIM PERTAINING TO \"CREDIT\" OR \"OFFSET\" FOR\nUNSUBSIDIZED TRANSACTIONS\nA. CLAIMS OF CHINA\n11.1 China claims that the USDOC's inclusion, in the OTR investigation, of only positive\n\"benefits\" (and its corresponding exclusion of negativ e \"benefits\") in its benefit calculations with\nrespect to the provision of rubber inputs by SOE rubber producers was an arbitrary methodology\ninconsistent with Articles 10, 14, 19 .1, 19.4 and 32.1 of the SCM Agreement and Article VI:3 of the\nGATT 1994.\n749\nB. MAIN ARGUMENTS OF THE PARTIES\n1. China\n11.2 Based on the use of the word \"product\" in Article VI:3 of the GATT and Articles 10, 19.3 and\n19.4 of the SCM Agreement, China submits that the SCM Agreement establishes that a countervailing\nduty is to be imposed in respect of the \"product\" und er investigation. Therefore, subsidization, like\ndumping, is to be defined in relation to a \"product as a whole \", and \"margins of subsidization\", like\n\"margins of dumping\", can only be calculated fo r the product under investigation \"as a whole\". 750\nThus, China submits, paraphrasing the Appellate Bo dy's findings on zeroing in the anti-dumping\ncontext, while the USDOC could choose to undertake multiple comparisons at an intermediate stage\nto establish the margin of subsidi zation, it could only establish the margin of subsidization for each\nproducer on the basis of aggregating all these \"inter mediate values\". China adds that the Appellate\nBody's findings on zeroing in the anti-dumping context apply with even greater force in the\ncountervailing duty context given that subsidization is not investigated on an individual transaction\nbasis but instead necessarily involves an aggreg ated inquiry focusing on the \"manufacture\" or\n\"production\" of a product over the entire period of i nvestigation. In particular, China submits, the\n\n747 As noted supra, China appears to consider the USDOC's choice of a LIBOR-based benchmark to\nhave been appropriate. (China first written submission, para. 234).\n748 Concerning China's claims of consequential violations of Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994 in connection with this claim see Section XIII, infra.\n749 Paragraph B.1(a)(vi) of the \"as applied\" claims in China request for establishment of the Panel;\nChina first written submission, para. 468 (c); second written submission, para. 315 (d).\n750 China refers to the Appellate Body Reports on US – Softwood Lumber V , paras. 93 and 96, US –\nZeroing (EC), para. 126 and US – Zeroing (Japan), para. 115. (China first written submission, paras. 146-150).\n\nprincipal policy justification advanced by the proponents of zeroing in the anti-dumping context –\ntargeted dumping – does not arise in the countervailing duty context.\n751\n11.3 Further, China argues, when goods are purchased frequently over the peri od of investigation,\ndetermining whether remuneration was \"adequate\" necessarily requires an aggregate analysis that\ntakes into account all purchases over that entire period. China adds that because of the lack of perfect\ninformation and frequent fluctuations in market conditions, buyers and sellers never know with\ncertainty what the market price is on any given day. As a consequence, the USDOC's approach\nimplies that government suppliers would have to sell at or above a retroactively-established\nbenchmark price in every transaction to avoid a find ing of subsidization. China submits that no\nmarket actor could ever meet this test, and that the drafters of the SCM Agreement could not have had\nsuch an outcome in mind when they created the \"adequate remuneration\" standard in Article 14.752\n11.4 China argues that the use of the singular terms \"a benefit\" and \"the good\" in Article 14(d) of\nthe SCM Agreement limit an investigating author ity's discretion in selecting benefit calculation\nmethodologies and mandate that for alleged subsidies in the form of the provision of inputs, adequacy\nof remuneration be determined on an aggregated basis for that \"good\" over the entire period of\ninvestigation.753 China submits that under the plain text of Article 14(d), where the same good is\npurchased on multiple occasions over the period of investigation, the only way for \"a subsidy\" to exist\nin the form of the provision of \"the good\" for less than adequate remuneration is if the individual\ntransactions are considered in the aggregate. China considers that its interpretation of Article 14(d) is\nthe only one compatible with the definition of a subs idy in Article 1.1 as interpreted by the Appellate\nBody in past jurisprudence: a producer is not \"be tter off\" over a period of investigation if it ends up\npaying, on average, more than the market price for any \"good\" that it purchases from the\ngovernment.754\n11.5 In this regard, China indicates that, contrary to the United States' characterization, it is not\narguing that the SCM Agreement requires that credit be provided across different types of subsidies or\nacross different types of inputs: if more than one input is provided, Article 14(d) requires a separate\nadequate remuneration analysis for each such \"good\". China submits, however, that in the\ninvestigation at issue, the USDOC defined the programme under investigation as the provision of a\nsingle good – rubber – by the Chinese government for less than adequate remuneration,\nnotwithstanding the fact that rubber was purchased in various forms. 755 China states that the USDOC\nthen calculated a single, period-wide subsidy margin for rubber, regardless of the form in which it was\npurchased, rather than calculating five different period-wide subsidy margins for each separate type of\ninput.756\n11.6 Concerning the other provisions of which it alle ges a violation, China argues that within the\nlegal framework of Article VI:3, it is neither logical nor lawful to consider adequacy of remuneration\non an individual transaction-by-transaction basis in the circumstance where multiple inputs are\npurchased over the period of investigation, since that provision makes clear that subsidization is to be\ninvestigated on an aggregate basis (i.e., on the \"m anufacture\" or \"production\" of a product, the\ninvestigation, in turn, l eads to the calculation of a single subsidy margin for an entire period of\n\n752 Id., para. 151.\n753 China response to Panel question 51 (first meeting); second written submission, paras. 141-144.\n754 China second written submission, para. 145, citing to Appellate Body Reports on Canada – Aircraft,\n755 China response to Panel question 51 (first meeting).\n756 China second written submission, para. 144 and footnote 120. China refers to the USDOC's\ndescription of the alleged subsidy programme as the \"Government Provision of Rubber for Less than Adequate\nRemuneration\", OTR Countervailing Duty I&D Memo, Exhibit CHI-4, pp. 9 and 69.\n\ninvestigation).757 China submits that the Appellate Body, in US − Softwood Lumber IV, noted that the\nrequirements of Article VI:3 of the GATT 1994 a nd of Articles 10 and 32.1 of the SCM Agreement\n\"apply on a cumulative basis\" and that, any incons istency with Article VI:3 would necessarily also\nrender the countervailing measures inconsistent with Articles 10 and 32.1 of the SCM Agreement.\nChina also relies on the Appellate Body Reports in US – Countervailing Measures on Certain EC\nProducts and US − Softwood Lumber IV as support for the propositions that to comply with the\noverarching obligations that these provisions impose, investigating authori ties, before imposing\ncountervailing duties, must ascertain the precise am ount of subsidy, and that to carry out this\nobligation in an original investigation, Article 19. 1 of the SCM Agreement, read in conjunction with\nArticle 1, requires the investigating authority to ma ke a determination of th e existence of a benefit\nbefore countervailing measures can be imposed. 758 China also argues (relying on the panel report in\nUS – Lead Bismuth II ) that Article VI of the GATT, and Articles 19.1 and 19.4 of the SCM\nAgreement collectively \"establish[] a clear nexus between the imposition of a countervailing duty, and\nthe existence of a (countervailable) subsidy\", and are all based on the premise that no countervailing\nduty may be imposed absent (countervailable) subsidization. 759 Concerning the United States'\nargument that Article 19.4 of the SCM Agreement do es not apply to original investigations, China\nreplies that panels and the Appella te Body have determined that Article 19.4 of the SCM Agreement\nand Article VI:3 of GATT 1994 do impose obligations on the USDOC during original investigations\nunder the United States' retrospective system.760\n11.7 In response to a question from the Panel con cerning Canada's third party argument that\ndepending on the facts of a given case (for example, where there is an on-going contractual\nrelationship) it may be necessary to examine more than one input transaction to determine whether\ngovernment provision of a good is made for adequate remuneration\n761, China considers that\naggregation in countervailing duty investigations is inevitable, and that the question therefore is not\nwhether but how an investigating authority sh ould aggregate when calculating benefit under\nArticle 14(d).762 China argues in particular in this regard that subsidies are identified, investigated,\nand measured on a programme-specific basis in the first instance, and where the \"programme\" is the\nalleged provision of a \"good\" for less than adequate remuneration, and there are multiple transactions\nduring the period of investigation involving the pur chase of that \"good\", the investigating authority\nnecessarily has to perform an aggregation in order to arrive at a single, period-wide subsidy benefit\namount for that programme. For China, therefore, because the benefit from such a \"less than adequate\nremuneration\" programme is ultimat ely determined on a period-wide basis, aggregation is simply the\nnatural and inevitable by-product of the Article 14(d) \"benefit to the recipient\" evaluation. Only\nwhere there was a single transaction for the good in question during the period would aggregation not\noccur.\n 763\n11.8 Regarding the specific example cited by Canada of an \"on-going contractual relationship\",\nChina agrees that in such an inst ance the adequate remuneration inqui ry would be legally required to\nexamine all of the transactions during the period of in vestigation. China considers, however, that it is\nnot the nature of the contractual relationship betw een buyer and seller that compels that outcome, but\ninstead the plain language of Article 14(d) , the Appellate Body's interpretation in Canada – Aircraft\nand in US – Softwood Lumber IV of the circumstances in which a \"benefit\" may be deemed to exist,\n\n757 China second written submission, paras. 146-147.\n758 Id., paras. 156-157, citing to Appellate Body Reports on US – Countervailing Measures on Certain\nEC Products, paras. 139 and 147; and US − Softwood Lumber IV, paras. 134, 138 and 154 (quoting Panel Report\non US – Countervailing Measures on Certain EC Products, para. 7.44).\n759 Id., para. 159, citing to Panel Report on US – Lead Bismuth II, paras. 6.52-6.53 and 6.56.\n760 China response to Panel question 52 (first meeting).\n761 See para. 11.28, infra.\n762 China response to Panel question 6 (second meeting).\n763 Id.\n\nand the requirement in Article VI:3 of the GATT 1994 that countervailing duties be imposed to offset\nsubsidies bestowed on the \"manufacture\" or \"produc tion\" of \"the product\" over the entire period of\ninvestigation.\n764 China argues in this regard that if a producer of subject merchandise purchases ten\nunits of an input during the period of investigation, and pays on average at or above the market price\nfor those inputs, it has not received the \"good\" for l ess than adequate remuneration, it is not \"better\noff\" for having made purchases from the government, and the \"manufacture\" and \"production\" of its\nmerchandise can in no objective sense be considered subsidized. For Ch ina, this is the case whether\nthe ten purchases of inputs were made from the same government supplier as part of an \"on-going\ncontractual relationship\", or from ten different government suppliers in one-time only transactions.\n765\n11.9 Finally, China argues that the USDOC used \"aggregate\" monthly benchmarks, which it\ncompared to individual transactions in performing its benefit analysis and, in some instances, used\nbenchmark prices that were not contemporaneous to the input transactions, such that the USDOC did\nnot perform an \"apples-to-apples\" comparison. In response to a question from the Panel as to the\nrelationship between this apples-to-apples argument and its claim that the USDOC was required to\ninclude both positive and negative results from its \"less-than adequate remuneration\" calculations\nconcerning rubber inputs, China asserts first that it is not raising a new issue, but showing that the\nUSDOC used aggregations in its calculations, such that the issue in the dispute was whether the\nmethod of aggregation used by the USDOC was consistent with the covered agreements.766\n11.10 China notes that the USDOC, in calculating be nchmarks where there was more than one\ntransaction per month, aggregated by calculating a single, weighted-average monthly benchmark\nbased on all of the transactions in that month. China argues that the USDO C then aggregated the\nindividual transactions involving the \"good\" that it was investigating – rubber – over the period of\ninvestigation whenever the purchase price was lower than the benchmark price to determine a single,\nperiod-wide benefit for that subcategory of rubber. Finally, the USDOC conducted a further\naggregation when it added each of the \"benefits\" for these subcategories together into a single, period-\nwide benefit for the overall programme entitled \"provision of rubber for less than adequate\nremuneration\".767\n11.11 China argues that this method of aggregation, in which the USDOC included in its aggregate\nbenefit calculation the 18 instances in which the tw o respondents paid less than the benchmark price\nfor rubber inputs, but ignored the 55 transactions in which they paid more than the benchmark price,\ncannot plausibly be considered consistent with the covered agreements. In particular, China submits\nthat the USDOC's aggregation methodology in the OTR investigation cannot pass the \"basic\nreasonableness test\" Article 14 imposes 768, but instead produces manifestly arbitrary and punitive\nresults, not reasonable ones. China argues that the United States has not offered a single justification\nfor its methodology based on market conditions, bu siness practices, commercial considerations or\nanything else.769\n11.12 China indicates that its second reason for referri ng to the USDOC's use of benchmark prices\nthat were not contemporaneous to the transactions al leged to have been made for less than adequate\nremuneration was to underscore why China's legal arguments regarding the proper interpretation of\nArticle 14(d) and the unreasonableness of the USDOC's methodology must be correct.770\n\n764 China response to Panel question 6 (second meeting).\n765 Id.\n766 China response to Panel question 7 (second meeting).\n767 Id.\n768 Id., referring to Panel Report, EC – Countervailing Measures on DRAM Chips, para. 7.213.\n769 Id.\n770 Id.\n\n11.13 China argues that for GTC's purchases of butadie ne rubber (\"BR\"), one of the subcategories\nof rubber examined, the USDOC used a single import transaction for the month of May 2006 as the\nbenchmark for GTC's purchases of BR in January through May. China states that during that period,\nprices for BR in China steadily incr eased. China asserts that more than 90 per cent of the purported\nbenefit that GTC obtained from its purchases of BR dur ing the period of investigation was due to the\nUSDOC's use of the single May import transaction as a benchmark for GTC's January to April\npurchases.\n771\n11.14 According to China, a similar situation occurred for the other respondent, TUTRIC, where the\nUSDOC used a single import transaction involving one category of synthetic rubber – SBR – as the\nbenchmark for all of TUTRIC's purchases during the en tire period of investigation, not only of SBR,\nbut of BR as well. China states that the only in stances in which TUTRIC's purchase price for any\ncategory of rubber was found to be below the benc hmark resulted from this comparison of its actual\npurchase price to a single import price.\n772\n11.15 According to China, the limitations in the be nchmarks that the USDOC developed, and their\nlack of contemporaneity with the transactions being investigated, underscore why the USDOC was\nlegally required to aggregate the results of all of the comparisons during the period of investigation –\nnot just those that yielded positive \"benefits\". China asserts that doing so was the only means\nconsistent with the Article 14(d) for determini ng if GTC and TUTRIC paid less than adequate\nremuneration for their purchases of the \"good\" the US DOC was investigating. Only by aggregating\nall of the comparisons could the USDOC know wh ether GTC and TUTRIC were \"better off\" for\nhaving made purchases from SOEs, and whether the manufacture or production of their tires during\nthe period of investigation benefited from subsidies.\n773\n2. United States\n11.16 The United States argues that the USDOC was not required to provide a credit in the\ncalculations for instances in which SOEs provided rubber inputs for adequate remuneration. The\nUnited States submits, first, that Article 14 of the SCM Agreement affords Members a great deal of\nflexibility in calculating benefit in countervailing duty investigations.774 Recalling the panel report in\nUS – Countervailing Measures on Certain EC Products (Article 21.5 – EC) , the United States argues\nthat Article 14 does not prescribe any particular leve l of aggregation at which the benefit calculation\nmust be conducted, but instead permits investig ating authorities to apply methodologies that account\nfor different factual situations and the c onditions under which th e subsidy was provided. 775 T h e\nUnited States also argues that Article 14 contains no obligation to consider instances in which a\ngovernment provides no benefit or to provide a cred it for such instances when calculating the benefit\nconferred by a subsidy; the concept of \"benefit\" rela tes only to situations in which a firm received an\n\n771 China response to Panel question 7 (second meeting).\n772 Id.\n773 Id.\n774 The United States refers, inter alia, to the Appellate Body Report on US – Softwood Lumber IV ,\n775 The United States notes that the panel in US – Countervailing Measures on Certain EC Products\n(Article 21.5 – EC) found that it was consistent with the SCM Agreement for an investigating authority to\nsegment a share offering into four categories of trans actions in order to evaluate whether the change in\nownership effected through the offering extinguished the benefit of prior subsidies, and that in particular, the\npanel found that there was no legal basis to require the inve stigating authority to conduct its analysis on either a\nsegmented or a non-segmented basis, as long as the authority's methodology was transparent and \"not\nunreasonable\", adding that it could find no legal basis \"to require the USDOC to conduct its analysis in a\nparticular manner\". (Id., para. 292, citing to Panel Report on US – Countervailing Measures on Certain EC\nProducts (Article 21.5 – EC), para. 7.121).\n\nadvantage.\n776 The United States considers in this respect that China's argument cannot be reconciled\nwith the definition of a subsidy under Article 1 of the SCM Agreement: any time a government\nprovides a financial contribution and a benefit is thereb y conferred, a subsidy is \"deemed to exist\". In\nthe present case, each time China provided a rubber input for less than adequate remuneration, a\nbenefit was conferred, and a subsid y was deemed to exist. The fact that at other times, China may\nhave provided rubber inputs to the investigated producer for adequate remuneration, and therefore that\nno subsidy existed in those instances, is irrele vant. These non-subsidies could not eliminate or\ndiminish the benefits conferred when China provided rubber inputs for less than adequate\nremuneration.777\n11.17 Overall, with respect to the various claims of inconsistencies put forward by China, the\nUnited States submits that: 778 (i) China has failed to establish that the United States acted\ninconsistently with Article 14 of the SCM Agreemen t; (ii) it is not clear whether China is making a\nclaim under Article 1 of the SCM Agreement , because although China ma kes an assertion that the\nUnited States acted inconsistently with that provi sion in the relevant section of its first written\nsubmission, it makes no request for panel finding in this respect; (iii) Chin a provides no explanation\nin support of its claims that the United States acte d inconsistently with the other provisions it cites\n(Articles 10, 19.1, 19.4, 32.1 of the SCM Agreemen t, Article VI:3 of the GATT 1994 ). With respect\nto the latter, the United States notes that China me rely points to the use of the term \"product\" in\nArticles 10 and 19.4 of the SCM Agreement and Article VI:3 but does not otherwise explain how the\nUnited States acted inconsistently with these pr ovisions; and that China makes no reference\nwhatsoever to Articles 19.1 and 32.1 of the SCM Agreement in its arguments. Finally, the\nUnited States submits that Ar ticles VI:3 of the GATT 1994 and 19.4 of the SCM Agreement do not\nimpose obligations with respect to countervailing duty investigations as they both pertain to the\nlevying of countervailing duties, i.e., the definitive or final legal assessment or collection of a duty or\ntax which, in the United States' retrospectiv e system, only occurs after the conclusion of\nadministrative reviews.\n11.18 The United States further argues that China's reliance on the Appellate Body reports with\nrespect to \"zeroing\" is misplaced as the legal provision on which those decisions are based applies\nsolely to anti-dumping determinations. The United Stat es also states that neither the term \"margins of\nsubsidization\" used by China in its first written submission, nor the term \"margin\", appears in the\nSCM Agreement. The United States submits that accepting China's argument would mean that the\nmere use of the term \"product\" in certain provisions of the SCM Agreement or the GATT 1994 would\noverride the flexibility afforded to i nvestigating authorities under Article 14.\n779 The United States\nalso submits that a necessary implication of China' s argument is that the obligation to provide a credit\nwould apply to all of Article 14, such that an i nvestigating authority would have to provide a credit\nwhenever it found that a financial contribution did not provide a benefit, including across different\ntypes of input products and even different types of subsidies. 780 The United States notes in this\nrespect that in the investigation at issue, the USDOC investigated the provision of five different types\nof rubber inputs by SOEs, i.e., the provision of fi ve different goods and that, for one company, China\nonly arrives at an overall \"negative benefit\" by offsetting the positive benefits in respect of one of the\ninput products with negative benefits in respect of another input product.781\n11.19 The United States also rejects China's argument based on the use of the term \"good\" (in the\nsingular) in Article 14(d). The United States cons iders it unlikely that the drafters of the SCM\n\n776 United States first written submission, para. 294.\n777 Id., paras. 300-301.\n778 Id., paras. 310-315.\n779 United States first written submission, para. 299.\n780 Id., paras. 302-304.\n781 Id., para. 305.\n\nAgreement would have sought, through the mere use of that term, to establish an obligation to\naggregate the benefits of all transactions duri ng the entire period of investigation involving the\nprovision of a good; and an obligation to provide credit in such an aggregate benefit calculation for\ntransactions in which the good was sold for more than the established benchmark; while also limiting\nthese obligations to the unique situation of government-provided goods or services.\n782 F o r t h e\nUnited States, the term \"good\" in the second sentence of Article 14(d) is in the singular, and\nassociated with the terms \"in question\", because, wh ile a government may provide a variety of goods\nand services, the adequacy of remuneration for a particular good provided by the government must be\ndetermined at the \"prevaili ng terms and conditions\" for that good. The United States notes that the\ninvestigating authority must look at the terms and co nditions prevailing at the time of the sale of the\ngood, \"including price, quality, availability, mark etability, transportation and other conditions of\npurchase or sale\": such terms and conditions would be expected to vary over time and in many cases\nwould be unique to each given transaction. Hence, for the United States, the text of Article 14(d)\nsupports the conclusion that the adequacy of remune ration, and the benefit, may be determined on a\ntransaction-specific basis.\n783\n11.20 According to the United States, the different typ es of inputs at issue in the OTR investigation\nconstituted different types of goods. The Unite d States notes that the respondents in the OTR\ninvestigation reported that SOEs pr ovided them with several distinct types of rubber, and that China\nitself, in its first written submission referred to \"five separate types of rubber inputs\".784\n11.21 The United States submits that under the SCM Agreement, investigating authorities are\npermitted to apply methodologies that account for different factual situations, including the conditions\nunder which the subsidy was provided. In all case s, benefit determinations are made on a case-by-\ncase basis and depend on the particular facts of a given situation.785\n11.22 Indeed, the United States argues, the context of the SCM Agreement supports analyzing the\nbenefit to the recipient on a disaggregated basi s. The SCM Agreement defines a subsidy in the\nsingular form, supporting the conclusion that invest igating authorities have the option of analyzing\neach subsidy on a transaction-by-transaction basis. 786 Moreover, the United States asserts, even if an\nauthority were to choose to conduct an analysis at a particular level of aggregation in certain\ncircumstances, nothing in the SCM Agreement requi res an authority to provide a credit for those\ntransactions that do not provide a benefit when performing such an analysis.787\n11.23 Concerning China's \"apples-to-apples\" argument, the United States argues that it is not clear\nhow this criticism of the USDOC methodology rela tes to China's countervailing duty credit/offset\nargument. Additionally, the United States notes that th is argument appears to be a reversal of China's\nprior position that it was within the USDOC's discr etion under the covered agreements to compare\nfinancial contributions and benchmarks on a monthly basis.788\n\n782 United States second written submission, para. 127. The United States notes, inter alia that, by\ncontrast, in paragraph 6 to Annex IV of the SCM Agreement (concerning the calculation of the overall rate of\nsubsidization under Article 6.1 of the Agreement) the draf ters used the term \"aggregated\": \"In determining the\noverall rate of subsidization in a given year, subsidies given under different programmes and by different\nauthorities in the territory of a Member shall be ag gregated\". (United States first written submission,\nfootnote 227).\n783 United States second written submission, para. 128.\n784 Id., para. 133.\n785 United States response to Panel question 6 (second meeting).\n786 United States second written submission, paras. 129-131.\n787 United States response to Panel question 6 (second meeting).\n788 United States response to Panel question 7 (second meeting).\n\n11.24 In any event, the United Stat es argues, China's arguments mi srepresent the facts. The\ncomparison the USDOC performed in evaluating the benefit conferred by the provision of rubber was\nan \"apples-to-apples\" comparison fully consistent w ith Article 14 of the SCM Agreement. In the\nOTR investigation, the USDOC requested that the investigated producers report their purchases of\neach kind of rubber input by providing the \"monthly, weighted-average price paid [...] to each of your\nsuppliers\".\n789 The USDOC calculated benefits for the pr ovision of rubber for less than adequate\nremuneration by comparing the monthly price of each government-sourced input to a monthly\nbenchmark based on the average price in a given mont h that the investigated producer paid to private\ninput suppliers (i.e., private Chinese producers and/ or the price of the input imported from outside\nChina).\n790\n11.25 The United States argues that in most in stances, the USDOC compared the monthly\nbenchmark to one monthly price for the government-sourced input as reported by the investigated\nChinese producers. However, in a number of instan ces, investigated producers reported two or three\nprices in a given month. 791 Where this was the case, the US DOC accepted the data in the manner\nprovided by the investigated producers and compar ed the monthly benchmark to each price reported\nfor purchases of the rubber inputs in question. In a ddition, the United States argues, in most instances\nthe monthly benchmarks were based on private prices from the same month in which the investigated\nproducers reported purchases of the government produced input. However, for some rubber inputs,\nthe USDOC employed monthly data from a proximate month because the investigated producer did\nnot have private purchases of the input in the given month.\n792\n11.26 The United States submits that the USDOC comp lied with the guidelines in Article 14(d) by\nemploying benchmarks based on th e investigated producers' actual purchases of inputs from private\nsuppliers during the period of investigation. Acco rding to the United States, this provision does not\nrequire that an investigating authority measure the benefit on any particular temporal basis (i.e., daily,\nmonthly, annually). Thus, the USDOC's compar ison of the monthly government-sourced prices\nreported by the investigated producers to a monthly benchmark – whether it was one, two or three\nreported government prices in a given month – was not inconsistent with Article 14(d). Nor,\naccording to the United States, does this provi sion require that benchmarks be exactly\ncontemporaneous with the purchase of goods, i.e., from the same month, same week or same day.\nIntroducing such a requirement could make benefit calculations almost impossible in many situations.\nThus, in the view of the United States, the USDOC 's use of benchmark data from a proximate month\nwhen data for the month of purchase was unavailable is not inconsistent with the obligations of t he\nUnited States.793\n11.27 The United States considers that if China' s argument were accepted, authorities would\neffectively be required, in all cases, to compare th e average price paid in all transactions during the\nperiod of investigation against a single average benchmark for the same period. Nothing in the text of\nArticle 14(d) of the SCM Agreement supports Chin a's view, and China's reading would have the\nperverse effect of prohibiting authorities from taking into account the market conditions that in fact\nprevailed at the time of each individual purchase when determining the adequacy of remuneration for\nthe good in question.794\n\n789 United States response to Panel question 7 (second meeting).\n790 Id.\n791 Id.\n792 Id.\n793 Id.\n794 United States comments on China's response to Panel question 6 (second meeting).\n\nC. MAIN ARGUMENTS OF THE THIRD PARTIES\n1. Canada\n11.28 Canada sees no basis for extending the Appellate Body's reasoning in the \"zeroing\" disputes\nto the interpretation of the SCM Agreement. Sp ecifically, Canada notes that in a dumping context,\nthe calculation of a dumping margin is made by examining various transactions that involve the\nproduct under investigation. In a subsidy context, although the focus of the investigation is on a\nproduct that is allegedly subsidized and causing in jury, the calculation of the amount of benefit does\nnot necessarily involve directly that product under investigation. More generally, Canada considers\nthat there is no provision in the SCM Agreement th at specifically requires the offsetting argued for by\nChina. However, under certain circumstances, th e examination of whether the provision of a good\nthrough one or more transactions is made for adequate remuneration ma y require that other\ntransactions be examined; in particular, Canada c onsiders that where there is an on-going contractual\nrelationship between a government supplier and a purchaser, it may be appropriate to take into\naccount a range of transactions between the same parties concerning the same goods in order to\ndetermine whether one or more transactions were made for adequate remuneration.795\n2. European Communities\n11.29 The European Communities does not view the issue of \"offsets\" raised by China as\ncomparable to the \"zeroing\" issue arising under the AD Agreement: (i) the AD Agreement contains\nspecific provisions, which are not present in the SCM Agreement, and which when taken together\npreclude a dumping determination on a transaction-speci fic basis; and (ii) the calculation of benefit\nunder the SCM Agreement is not conceptually comp arable to the calculation of a dumping margin.\nGenerally, in comparing a particular price with a benchmark under the SCM Agreement, the guiding\nprinciple is that like must be compared with like, due adjustment being made where necessary, unless\nthere is a justification for doing otherwise, and on a case-by-case basis. If that is done, then the\nprevailing market conditions will take into account the normal fluctuations or variations in the price of\nthe product in question within the selected period of time. 796 On the other hand, the European\nCommunities considers that injurious subsidisation is not investigated on an individual transaction\nbasis; rather, Article VI:3 of the GATT a nd various provisions of the SCM Agreement refer to\n\"merchandise\", \"product\" or \"product under investig ation\". Thus, the calculation of the total amount\nof subsidisation granted to a particular product allo ws for the aggregation of \"all\" subsidies found to\nhave been granted to that product during the peri od of investigation. As to whether a similar\naggregation can be done when calculating the amount of subsidisation in a particular subsidy scheme,\nthe European Communities is of the view that when calculating the amount of subsidisation in a given\ncase, the question is what amount of benefit has been given to a particular product through the\nspecific subsidy scheme during the period of investig ation, and in that exercise, great importance\nshould be given to how the investigating authority defines the relevant subsidy scheme and the period\nof investigation. Once the subsidy scheme has been defined and the period selected, the investigating\nauthority must be \"coherent\" with its own selecti on throughout the investigation when calculating the\n\"overall\" benefit granted to the product concerne d through that subsidy practice in the selected\nperiod.797\n\n795 Canada third-party response to the United States' question to Canada; third-party oral statement,\nparas. 22-23.\n796 The European Communities gives as example the is sue of whether the terms of the transaction are\ndetermined ex ante (at the time of the contract) or ex post (at the time of the order) – the benchmark used must\nthen correspond to prevailing market conditions either as of the date of contract or as of the date of the order.\n797 European Communities third-party submission, paras. 29-34; response to Panel questions 8 and 9.\n\n3. India\n11.30 India submits that benefit must be calculated on the basis of an aggregate analysis of all\ntransactions during the period of investigation, and not by reference to isolated transactions or merely\nof those transactions which confer benefit, disregarding other transactions.\n798\n4. Japan\n11.31 Japan considers that the benefit should be examined on a subsidy-specific basis without\nzeroing and that China's argument on \"zeroing\" ma y have certain merit. Japan notes that a\ncountervailing duty may be imposed to offset the am ount of a subsidy, and that the question before\nthe investigating authority (and this Panel) is to define the scope of \"a subsidy\".799 As regards benefit,\nJapan considers that the benchmark under Article 14( d) must be the prevailing market price for the\nsale of the goods at issue under comparable terms ava ilable at the time that the financial contribution\nwas granted. Whether normal fluctuations or vari ations in the price of a good or service should be\nreflected or taken into account to determine the benchmark would depend on the terms of the financial\ncontribution. For example, a government might sell input materials under certain terms and\nconditions for a certain period of time through multiple shipments. Japan considers that in such a\ncase, the entire series of shipments could be cons idered to be a financial contribution and the\ncalculation of the amount of the subsidy should be b ased on the total value of all shipments – rather\nthan the assessment of the benefit for an individua l shipment based on the value of its shipment.\nJapan adds that it also may not be reasonable to pick certain transactions and disregard other\ntransactions to assess the amount of benefit conferred by the financial contribution.800\n5. Norway\n11.32 Norway considers that two elements support Chin a's claim that the use of \"zeroing\" in the\nbenefit calculations to create a countervailable subsidy where none would otherwise exist is\ninconsistent with Article VI:3 of the GATT. Fi rst, Article VI:3 makes clear that a countervailing\nmeasure is to be levied on a product, and any duty sha ll not be in excess of the benefit granted on the\nmanufacture, production or export of \"such\" product. For Norway, the use of the singular form makes\nclear that the calculation of benefit from inputs received from SOEs must be for all input transactions\nduring the period of investigation; the reasoning that led the Appellate Body, in its \"zeroing\"\njurisprudence, to find that similar words in Ar ticle VI:2 of the GATT precluded a finding of dumping\nfor individual transactions applies with equal force to the calculation of benefits derived from single\ninput transactions viewed separately. Second, No rway states that the United States resorted to\nmonthly external benchmarks, and thus that the \"benefit\" determination was not based on a\ncalculation of the product cost for the SOEs providing the five types of rubber, and took no account of\nfactors that could have explained cyclical di fferences in product types of these enterprises as\ncompared to the monthly variations in the benc hmark prices. Using monthly benchmark prices in\nsuch a situation, and \"zeroing\" monthly results wh ich showed \"no benefit\" made a finding of benefit\nalmost certain from the outset. No rway considers that the application of a methodology that is almost\ncertain to lead to a conclusion of benefit in all cases, based on single transactions compared to a\n\n798 India third-party oral statement (this statement contains no paragraph numbering). India cites a\nnumber of provisions (Articles VI:3 of the GATT, Articles 19.2 and 19.4 of the SCM Agreement) in making its\narguments with respect to \"offset\", but does not directly link these provisions to the obligation to take all\ntransactions into consideration which it puts forward.\n799 Japan notes that Article 1.1(a)(1) and 2.1(c) refer to the existence and specificity of \"a subsidy\".\n800 Japan third-party submission, paras. 40-44; response to Panel questions 8 and 9.\n\nbenchmark set by the investigating authorities, cannot be said to comply with the requirements of\nArticle 14(d) of the SCM Agreement and Article VI:3 of the GATT.801\nD. FACTUAL BACKGROUND\n11.33 In the OTR investigation, the USDOC calculate d benefits to each investigated tire producer\nfrom its purchases of rubber inputs from SOEs) as follows. 802 For each month in which rubber was\npurchased by a tire producer from an SOE, the USDOC calculated, for each type of rubber input\npurchased (natural rubber, butadiene rubber (BR), styrene butadiene rubber (\"SBR\"), neoprene),\nwhether a benefit was provided during that month, by comparing the purchase price of the rubber\ninput in question to a monthly benchmark price for th at type of rubber. The benchmark prices were\nconstructed from the price paid by the tire producer in question for imported rubber of the same type\nand, where available, for domestically-produced rubber from private producers.\n803 For any monthly\ncomparison in which the purchase price for a given rubber input sourced from an SOE was less than\nthe benchmark price, the USDOC calculated a monthly \"benefit\" in the amount of the difference. For\nany month in which the purchase price was greater than the benchmark price, the USDOC concluded\nthat no benefit had been provided.\n11.34 For each type of rubber input, the USDOC then aggregated all of the positive monthly\n\"benefit\" amounts, to arrive at a total benefit for that input for the entire period of investigation.\nThese total amounts then were further aggregated to arrive at an overall benefit amount for the tire\nproducer from its purchases from SOEs of all types of rubber inputs combined. In other words, for\neach tire producer, the USDOC aggregated all positive monthly comparisons for each type of rubber\ninput, and then aggregated all of the resulting input- specific sub-totals to arrive at the total benefit\namount for rubber inputs. For two of the three producers (GTC and TUTRIC), the USDOC\ndetermined that there were positive overall benefit amounts.\n804 For the third producer (Starbright) the\nUSDOC determined that there was no benef it from purchases of rubber inputs from SOEs. 805\nTherefore, the remainder of our discussion focuses only on GTC and TUTRIC.\n11.35 The following table illustrates th e approach taken by the USDOC to calculate the benefits\nfrom government provision of rubber inputs, and the approach that China argues should have been\ntaken instead. Here we note that the numbers in the table are fictitious and are used simply to\nillustrate the two approaches:\n\n801 Norway third-party submission, paras. 34-37.\n802 See, Final Calculation Memorandum for Guizhou Tire Company Limited (GTC) (the \"USDOC\nCalculation Memorandum for GTC\"), Exhibit CHI-56; Final Calculation Memorandum for Tianjin United Tire\n& Rubber International Co., Ltd. (TUTRIC) (the \"USDOC Calculation Memorandum for TUTRIC\"), Exhibit\nCHI-57; China's Calculations with Offsets, Exhibit CHI-58; and CHI-4, p. 92.\n803 The USDOC requested, and the in vestigated producers reported, information on rubber purchases\nseparately by type of rubber, on a monthly basis. ( Attachment to the Supplementa l Questionnaire Concerning\nthe Countervailing Duty Investigation of New Pneumatic Off-The-Road Tires from the People's Republic of\nChina – Government of the People's Republic of China , Exhibit US-107, part III(c)). In some instances, an\ninvestigated producer reported a single volume and value of a given type of rubber input purchased from a given\nSOE during a particular month, in other instances the producer reported more than one volume and value of a\ngiven type of rubber purchased from a given SOE during a particular month. The USDOC made comparisons to\nthe monthly benchmarks on whatever basis the inves tigated producer reported their input purchases.\n(United States first written submission, footnote 477).\n804 Exhibit CHI-4, p. 12.\n805 Id.\n\n SBR BR Neoprene Natural Rubber\nMonth Bench-\nmark\n\nPrice\n\nBenefit\nBench-\nmark\n\nPrice\n\nBenefit\nBench-\nmark\n\nPrice\n\nBenefit\nBench-\nmark\n\nPrice\n\nBenefit\nUSDOC\napproach\n\n1 10 8 2 11 10 1 6 5 1 8 9 0\n2 9 9 0 11 11 0 5 6 0 8 9 0\n3 11 12 0 13 14 0 7 5 2 7 8 0\n4 10 9 1 12 11 1 8 9 0 9 12 0\nPOI total 3 2 3 0\n\nPOI total\nall rubber 8\n\nChina\napproach\n\n1 10 8 2 11 10 1 6 5 1 8 9 -1\n2 9 9 0 11 11 0 5 6 -1 8 9 -1\n3 11 12 -1 13 14 -1 7 5 2 7 8 -1\n4 10 9 1 12 11 1 8 9 -1 9 12 -3\nPOI total 2 1 1 -6\n\nPOI total\nall rubber\n\n-2\n\n11.36 We recall that, as illustrated above, China is challenging the fact that the USDOC did not\n\"offset\" the positive benefit amounts it found in certain months for certain types of rubber inputs with\nnegative amounts in the other months, and for the othe r types of rubber. In other words, in China's\nview, the USDOC was required by Article 14(d) of the SCM Agreement, Article VI:3 of the GATT\n1994, and the other provisions cite d in this claim, to have summed these positive and negative\namounts over the entire period of investigation and – the USDOC having defined the good at issue as\n\"rubber\" – all four kinds of rubber inputs. In par ticular, China argues that the references to \"product\"\nin Article VI:3 of the GATT 1994, and Articles 10, 19.3 and 19.4 of the SCM Agreement require an\naggregate analysis of the inputs in question over the entire period of investigation.\n806 Furthermore,\nspecifically in regard to Article 14(d) of the SCM Agreement, China argues that \"in the context of a\ncase like OTR, where the alleged government-provi ded goods were purchased frequently over the\nperiod of investigation, determining whether remuneration was 'adequate' [in the sense of\nArticle 14(d)] necessarily required an aggregate analysis that took into account all of the respondents'\npurchases over the entire period of investigation\".807 For China, if the net effect of these transactions\nover the course of a year is that the average pr ice charged by the governme nt supplier equals or\nexceeds the average \"market price\" benchmark, it would be nonsensical to suggest that the\ngovernment received insufficient remuneration for the goods it sold. 808 China further argues that if a\npurchaser of inputs pays on average at or above th e market price for those inputs, it has not received\nthe \"good\" for less than adequate remuneration, it is not \"better off\" for having made purchases from\nthe government, and the \"manufacture\" and \"production\" of its merchandise can in no objective sense\nbe considered subsidized.\n809 China's view is that there is a legal obligation under the covered\nagreements, at least in some circumstances, to use a method of aggregation that takes into account the\n\n806 China first written submission, paras. 145-149.\n807 Id., para. 149.\n808 Id., para. 151.\n809 China response to Panel question 6 (second meeting).\n\nfull range of transactions that occurred during the pe riod of investigation, not just some of them.810 In\nsum, China argues, the USDOC was obligated to conduct an aggregate analysis of all transactions\ninvolving the purchase of rubber inputs over the period, including those that were made for more than\nthe benchmark price, and not merely those that were made for less than the benchmark price.811\n11.37 The record shows that, as described above, th e USDOC calculated monthly benchmarks for\neach of four kinds of rubber inputs (SBR, BR 812, natural rubber, and neoprene), and compared these\nwith the monthly average unit values of the co rresponding kinds of rubber purchased by the tire\nproducers from SOE suppliers. We note here that Ch ina is not challenging the benchmarks that were\napplied813, but rather the fact that the USDOC did not calculate the amount of benefit on an average,\nnet basis, aggregating positive and negative amount s from all transactions, for all types of rubber\ninputs combined, across the entire period of investigation.\nE. ASSESSMENT BY THE PANEL\n11.38 We recall that China's claim cites a number of provisions of the SCM Agreement, as well as\nArticle VI:3 of the GATT 1994, and that China based its initial arguments principally on this latter\nprovision, in particular the word \"product\" in Artic le VI:3 of the GATT 1994. This word is the basis\nfor China's argument drawing on an analogy with the Appellate Body's findings in the anti-dumping\n\"zeroing\" disputes. We address that argument infra.\n11.39 China's explanation, in response to an argumen t advanced by the United States, of the legal\nbasis of this claim, however, focuses in detail on Article 14(d) as a source of the substantive\nobligations it asserts.814 China then explains that the USDOC's benefit calculations relating to rubber\ninputs also were inconsistent with Article VI:3 of the GATT 1994 and Article 10, as well as\nArticles 19.1 and 19.4 of the SCM Agreement because the USDOC used a benefit methodology that\nresulted in an inflated benefit amount, or pr oduced a purported benefit where none existed. 815 On the\nbasis of this explanation, we understand that the a lleged violations of Article VI:3 of the GATT 1994\nand of Articles 10, 19.1 and 19.4 of the SCM Agreement in the context of this particular argument are\nconsequential to the alleged substan tive violation of Article 14(d). We thus begin our analysis with a\nconsideration of Article 14(d) of the SCM Agreement.\n11.40 There is no disagreement between the parties that Article 14(d) of the SCM Agreement\ndirectly pertains to the calculation of benefit fro m government provision of goods. This provision\nreads:\n\"Article 14\nCalculation of the Amount of a Subsidy in Terms of the Benefit to the\nRecipient\n For the purpose of Part V, any method used by the investigating authority to\ncalculate the benefit to the recipient conf erred pursuant to paragraph 1 of Article 1\nshall be provided for in the national legisl ation or implementing regulations of the\nMember concerned and its application to each particular case shall be transparent and\n\n810 China response to Panel question 6 (second meeting).\n812 SBR and BR are collectively referred in some of the record documents as \"synthetic rubber\".\n813 China response to Panel question 35 (first meeting).\n814 China second written submission, paras. 137-152.\n815 Id., paras. 153-160.\n\nadequately explained. Furthermore, any such method shall be consistent with the\nfollowing guidelines:\n\n(d) the provision of goods or services or purchase of goods by a\ngovernment shall not be consid ered as conferring a benefit\nunless the provision is made for less than adequate\nremuneration, or the purchase is made for more than\nadequate remuneration. The ad equacy of remuneration shall\nbe determined in relation to prevailing market conditions for\nthe good or service in question in the country of provision or\npurchase (including price, quality, availability, marketability,\ntransportation and other conditions of purchase or sale)\".\n11.41 The precise question before us is whether th e methodology used by the USDOC to determine\nthat the provision of rubber inputs by SOEs conferred benefits on OTR tire producers was inconsistent\nwith Article 14(d). We recall that China's argume nt based on the text is that because Article 14(d)\nrefers to \"the good [...] in question\", and to \"a be nefit\", in the singular, and the USDOC identified the\n\"good\" in question as \"rubber\", the calculation re garding the adequacy of remuneration must be\nconducted on an aggregate basis in respect of all of the rubber inputs, combined. China also argues\nthat where a given good is purchased on multip le occasions over a period of investigation,\nArticle 14(d) requires that those individual transacti ons be considered in the aggregate to determine\nwhether a producer is \"better off\" over a period of i nvestigation. In China's view, the producer is not\nbetter off if it ends up paying, on average, more than the market price for any \"good\" that it purchases\nfrom the government over that period. China furthe r considers that pursuant to Article 14(d) some\naggregation is inevitable, such that the question becomes not whether, but how, to aggregate in a\nWTO-consistent manner.\n11.42 We further recall China's argument that in th e OTR investigation, the USDOC identified as a\n\"programme\" the provision of rubber inputs by the government for less than adequate remuneration.\nChina argues that the USDOC thus was required to a ggregate all of the different types of rubber (as\n\"the good\" in question) in performing its benefit calculations.\n11.43 We thus see two main components to China's argument based on Article 14(d): temporal (the\nperiod of investigation as a whole); and regarding th e meaning of \"good\" in this provision (how the\ninput \"programme\" is defined by the investigating authority).\n1. Period of investigation\n11.44 Starting with the temporal element, we note that there is no direct reference to time in\nArticle 14(d), or elsewhere in Article 14 of the SCM Agreement. In fact, the only way in which\nArticle 14(d) refers to time, albeit indirectly, is through its referenc e to \"prevailing market\nconditions\", which we understand to mean the conditions in the market prevailing at the time of the\npurchase of the good or service in question from the government. But this is a different issue from the\none raised by China.\n11.45 From the practical point of view, we agree with China that countervailing duty investigations\ninherently have a temporal component, as alleged subsidies must be analyzed in relation to a\nparticular period to ultimately arrive at an overall am ount of subsidization of the investigated product,\n\nad valorem and/or per unit, as provided for in Articles 11.9 and 19.4 of the SCM Agreement. 816 For\nthis reason, an investigating authority will define a period of investigation and typically will need to\nperform a certain amount of aggregation and/or disaggregation of benefit amounts from different\ninvestigated subsidies to determine the total amount of subsidization of the product during that period.\n11.46 This observation, which is shared by China, that benefit amounts from different subsidies\nneed somehow to be aggregated over the period of in vestigation in order to arrive at the total amount\nof subsidization of the investigated product, does not however address the temporal issue raised by\nChina. In particular, China is arguing that Article 14( d) (via its references to a \"good\" and \"a benefit\"\nin the singular) requires that the determination of whether purchases of inputs from government\nsources were for less than adequate remuneration mu st be calculated on an overall, net basis for the\nentire period of investigation for the good in questi on, using for each transaction the benchmark price\nidentified by the investigating authority as the yardstic k. In other words, China's argument is that if\nsome purchases during the period of investigation are made for a higher-than-benchmark, or above-\nmarket, price, the full amount of these \"negativ e\" benefit amounts, as measured against the\nbenchmark price, must, as a matter of law, be o ffset against the \"positive\" benefit amounts, over the\nfull period of investigation.\n11.47 In assessing this argument, we note first that Article 14(d) of the SCM Agreement contains no\nreference to any notion of offsetting, or \"negativ e benefits\" or of averaging across the period of\ninvestigation, for a particular good. Indeed, in our view, the language of the provision – especially the\nstatement that \"the provision of goods or services or purchase of goods by a government shall not be\nconsidered as conferring a benefit unless the provision is made for less than adequate remuneration\" –\nif anything suggests both a disaggregated analysis and a focus on instances where benefits are found\nto exist. We note in particular the negative terms in which this sentence is drafted – a benefit \"shall\nnot\" be conferred \"unless\" – which could be restated as there being no benefit, i.e., a benefit of zero,\nwhere the remuneration is at least \"adequate\".\n11.48 The fact that the comparison required by Article 14(d) is with \"prevailing market conditions\",\nin our view, also cuts against China's argument th at if on average over the period of investigation a\npurchaser of a good has not paid a below-market price, there is no benefit. In particular, given that\n\"prevailing market conditions\" can and do change over time, an investigating authority would need to\nensure that its benchmark price was updated as necessa ry to reflect any such changes that might occur\nduring the period of investigation. This suggests th at rather than viewing the period of investigation\nmonolithically, an investigating authority shou ld be seeking to match the transactions under\nexamination to contemporaneous benchmarks, and that the existence or absence of a benefit in respect\nof one transaction or group of transactions is indepe ndent of the existence or absence of a benefit in\nother transactions.\n11.49 We also note that the approach advocated by China has a significant internal inconsistency\nwhich is most easily seen in a hypothetical situation where all of the purchases of a given good from a\ngovernment are for prices above \"prevailing market conditions\". Under China's methodology, the\nbenefit calculations would generate \"negative benefits\", both indivi dually and overall. China argues\nthat it sees no requirement under the SCM Agreement to offset any such net negative benefits from\nprovision of goods against positive benefits from any ot her kinds of subsidies. Yet, we can find no\nbasis in China's argument on which such a distin ction could be made be tween positive and negative\nbenefit amounts from one given ki nd of subsidy and positive and negative benefit amounts across\ndifferent kinds of subsidies. We see no such requi rement in the SCM Agreement, and to the contrary\n\n816 Article 11.9 of the SCM Agreement establishes that subsidization of less than 1 per cent ad valorem\nis de minimis and must result in termination of an investiga tion. Article 19.4 of the SCM Agreement refers to\ncalculation of \"the amount of the subsidy found to exist [...] in terms of subsidization per unit of the subsidized\nand exported product\".\n\nconsider that the Agreement – starting with the ba sic definition in Article 1 – instead provides that\neach subsidy must be analyzed and assessed independently.\n817 China's proposed methodology is\ninconsistent with this principle.\n11.50 For the foregoing reasons, we find no requirement in Article 14(d) of the SCM Agreement\nthat, as such, positive and \"negative\" benefits from government provision of a good must be offset\nover the period of investigation.\n2. \"Good\" in the sense of Article 14(d) of the SCM Agreement\n11.51 The second aspect of China's aggregation argument is that the USDOC should have treated all\nrubber inputs as a single \"good\" in the sense of Ar ticle 14(d), and that an overall net benefit amount\n(positive or negative) should have been calculated for \"rubber\" of all types together, for each tire\nproducer. China bases this argument on the fact that the USDOC notionally treated provision of\n\"rubber inputs\" for less than adequate remuneration as a \"programme\" in its investigation.\n11.52 While this argument of China would at first sight appear to be a purely factual one, it raises a\nlegal question, that of the breadth of the term \"good\" in Article 14(d), and the extent to which what is\nconsidered to be a \"good\" for the benefit de termination pursuant to Article 14(d) should be\ndetermined by the way in which the investigating authority groups various alleged subsidies in the\ninvestigation.\n11.53 We consider that the text of Article 14(d) must be understood to refer to the intrinsic\ncharacteristics of the good itself, i.e., that the existence of a benefit must be determined based on how,\nin practice, the specific good in question is sold. In particular, this is the purpose of the language in\nthat provision referring to \"prevailing market conditions\" as \"including price, quality, availability,\nmarketability, transportation, and other conditions of purchase or sale\". This means that any\nbenchmark identified as representing the \"prevailing market conditions\" for the good provided by a\ngovernment must reflect the price for that same good as it would be or is sold by private sources at\nthat time and on comparable terms and conditions. This language thus requires a careful matching of\nthe transactions being examined with appropriate benchmarks, and militates against an aggregated,\naveraged approach across different kinds of goods.\n11.54 We thus consider that, like the temporal question, Article 14(d) of the SCM Agreement points\nmore to a disaggregated than an aggregate analysis of the pricing of a government-provided \"good\"\nfor purposes of benefit calculation. Given this, we see no requirement in the text that simply because\nan investigating authority may refer to the provi sion of certain goods as a \"programme\" for purposes\nof its analysis, all of those goods must be treated as a bloc, on the basis of their average unit value, in\nthe benefit calculations. To the c ontrary, we see a clear requirement that the benchmark must in fact\nreflect the actual market conditions, starting with price, for any given good at issue.\n3. Degree of flexibility for investigating authorities under Article 14 of the SCM\nAgreement\n11.55 We note that while China argues that the met hodology it advances is required in all cases, the\nUnited States counters that Article 14 provides inves tigating authorities with considerable leeway to\nperform benefit calculations, with in the general framework mandated by Article 14 of the SCM\nAgreement. We thus now turn to this question. In this regard, we note first that the chapeau of\nArticle 14 explicitly characterizes the rules set forth in the four subparagraphs of Article 14 as\n\n817 For example, Article 1 of the SCM Agreement refers to \"a subsidy\", \"a financial contribution\", and\n\"a benefit\"; and \"countervailing duty\" is defined in footnote 36 as a special duty to offset \"any subsidy\"\nbestowed upon the manufacture, production or export of any merchandise.\n\n\"guidelines\". In this respect, we agree with the findi ngs of past panels and the Appellate Body that as\nsuch, these \"guidelines\" establish the basic framework for the calculation of benefits from the kinds of\nfinancial contributions referred to in the various subparagraphs, but that they leave a considerable\namount of leeway to investigating authorities as to precisely how those calculations are to be\nundertaken in any given case, depending on the specific facts under investigation. We note in\nparticular the following statements of the Appellate Body in US – Softwood Lumber IV:\n\"[...] The chapeau of Article 14 requires that ' any' method used by investigating\nauthorities to calculate the benefit to the recipient shall be provided for in a WTO\nMember's legislation or regulations, and it re quires that its application be transparent\nand adequately explained. The reference to ' any' method in the chapeau clearly\nimplies that more than one method consis tent with Article 14 is available to\ninvestigating authorities for purposes of calculating the benefit to the recipient. [...]\n\"[T]he term 'guidelines' suggests that Ar ticle 14 provides the 'framework within\nwhich this calculation is to be performed ', although the 'precise detailed method of\ncalculation is not determined'. [...] [T]hese terms establish mandatory parameters\nwithin which the benefit must be calculate d, but they do not require using only one\nmethodology for determining the adequacy of remuneration for the provision of\ngoods by a government. Thus, [...] the use of the term 'guidelines' in Article 14\nsuggests that paragraphs (a) through (d) shoul d not be interpreted as 'rigid rules that\npurport to contemplate every conceivable factual circumstance'\".\n818 (emphasis\noriginal)\nWe further note the Appellate Body's similar statement in Japan – DRAMs (Korea):\n\n\"The chapeau of Article 14 provides a WTO Member with some latitude as to the\nmethod it chooses to calculate the amount of benefit. Paragraphs (a)-(d) of Article 14\ncontain general guidelines for the calculation of benefit that allow for the method\nprovided for in the national legislation or regulations to be adapted to different factual\nsituations\".\n819\n\n11.56 We recall that we have found, above, no requireme nt in Article 14(d) for either the temporal\nor the product \"offsetting\" advocated by China. The above findings of th e Appellate Body support\nthis view, by indicating that no one specific methodol ogy (whether that put forward by China or any\nother) is required by Article 14(d) of the SCM Agreem ent. We also have found that the language of\nArticle 14(d) suggests more a disaggregated than an aggregate approach, both temporally and in\nrespect of a \"good\" in the sense of that provision. That said, as discussed above, we consider that the\nbasic requirement of Article 14(d), as expressed by the phrase \"prevailing market conditions for the\ngood [...] in question [...] (includi ng price, quality, availability, marketability, transportation and other\nconditions of purchase or sale)\", is that the benchm ark used must correspond to the particular good at\nissue, as it is actually sold, at the time of the transaction being analyzed (i.e., it must reflect the factual\nsituation found to exist in respect of the govern ment-provided good). It is within this basic\n\"guideline\" that an investigating authority can exercise the methodological flexibility accorded to it\nunder Article 14 so as to appropriately take into account the specific facts of the investigation.\n11.57 Finally, we recall China's initial argument, based on an analogy with certain dispute\nsettlement findings on the issue of \"zeroing\" in the context of anti-dumping, that Article VI:3 of the\nGATT 1994 as well as Articles 10, 19.3 and 19.4 of the SCM Agreement establish that a\ncountervailing duty is to be imposed in respect of th e \"product\" under investigation, and that therefore\n\n818 Appellate Body Report on US – Softwood Lumber IV, paras. 91-92.\n819 Appellate Body Report on Japan – DRAMs (Korea), para. 191.\n\nsubsidization, like dumping, is to be defined in relation to a \"product as a whole \", and that \"margins\nof subsidization\", like \"margins of dumping\" , can only be calculated for the product under\ninvestigation \"as a whole\". China submits therefore that while the USDOC could choose to undertake\nmultiple comparisons at an intermediate stage to establish the \"margin of subsidization\", it could only\nestablish that \"margin\" for each producer on the basi s of aggregating all these \"intermediate values\",\nand that the Appellate Body's findings on zeroing in the anti-dumping context apply with even greater\nforce in the countervailing duty context given that s ubsidization is not inves tigated on an individual\ntransaction basis but, rather, necessarily involves an aggregated inquiry focusing on the \"manufacture\"\nor \"production\" of a product over the entire period of investigation.\n11.58 As we have discussed above, we consider that a countervailing duty analysis does inherently\ninvolve a certain amount of aggregation, of be nefits from distinct subsidies benefiting the\nmanufacture, production or export of an investigated product, and of those benefits over the course of\nthe period being investigated. In our view, however, such aggregation of benefits to the investigated\nproduct from different subsidies is unrelated to Ch ina's contention that \"negative\" benefit amounts\nmust offset \"positive\" benefit amounts in calcula tions pertaining to the government provision of a\ngiven good (one among several possible subsid ies affecting a given investigated product).\n820 We\nrecall here that in any case, China itself argues (and we agree) that offsets of \"positive\" and \"negative\"\nbenefit amounts across different subsidy programm es are not required, by Article 14 of the SCM\nAgreement or any other provision of the WTO Agreement. We thus do not find China's zeroing\nanalogy to be apposite to this claim.\n11.59 For these reasons, we do not find that, as a matter of law, Article 14(d) or any of the other\nprovisions cited in China's claim requires the me thodology advanced by China, or any specific\nmethodology, to be applied in calculating be nefits from the government provision of a good.\n821 We\nhave instead found that Article 14(d), the directly applicable provision, requires that benefit be\ndetermined in a way that reflects the actual facts of the investigation. We do not here exclude, a\npriori, the possibility that a given set of factual circ umstances (perhaps a hypo thetical scenario along\nthe lines referred to in Canada's third party arguments) might dictate the methodology advocated by\nChina in a specific case. That said, the questi on remains whether the OTR investigation presented\nsuch a situation.\n4. The USDOC benefit determination in respect of rubber inputs\n11.60 Having considered the legal issues under Article 14(d) of the SCM Agreement and the other\nprovisions cited by China, we now turn to the US DOC's analysis and determination of benefit from\nthe government provision of rubber inputs to OTR tire producers. In particular, we consider whether\nthe particular facts of the OTR investigation necessitated the methodology advocated by China.\n11.61 The record demonstrates that in the OTR inves tigation, the USDOC referred to the subsidy at\nissue as the provision of \"rubber\" for less than adequate remuneration. 822 In its calculations,\n\n820 We note further that the term \"margin of subsidization\" does not appear in the SCM Agreement.\n821 Nor do we consider that China has established the existence of a \"basic reasonableness test\" under\nArticle 14 that would impart particular obligations that do not appear on the face of that provision. Indeed,\nChina provides no discussion of what it means by the term \"basic reasonableness test\", instead simply citing a\nparagraph of the report of the panel in EC – Countervailing Measures on DRAM Chips in which that term\nappears.\n822 See, inter alia , Exhibit CHI-4 pp. 9 and 69 (title of the programme \"determined to be\ncountervailable\" is the \"Government Provision of Rubber for Less than Adequate Remuneration\"); Exhibit CHI-\n50, p. 71372-71374, (\"Provision of Natural and Synthetic Rubber by SOEs for Less than Adequate\nremuneration\"); Exhibit CHI-51 p. 40484, item D (\"Gove rnment Provision of Rubber for Less than Adequate\nRemuneration\"); Exhibits CHI-56 and CHI-57 (Final Calculation Memoranda for GTC and TUTRIC\n(\"Government Provision of Rubber for Less than Adequate Remuneration\")).\n\nconsistent with the basis on which the informatio n was reported by investigated producers, the\nUSDOC performed a separate calculation for each of the rubber inputs. 823 GTC and TUTRIC both\nreported to the USDOC their purchases of rubber inputs from SOEs by month (sometimes reporting\nmore than one transaction during a given month), separately for each of the types of rubber. There is\nno indication in the record of the investigation or before us that this was at odds with how the tire\nproducers maintained the records of their rubber purchases.\n11.62 The USDOC calculated monthly market benchmar k prices for each type of rubber, based on\nthe tire producers' actual purchases of rubber from private sources, and used these monthly\nbenchmarks to determine on a monthly basis whethe r a benefit had been conferred. For each tire\nproducer, the USDOC summed the positive benefit amounts thus calculated for each type of rubber, to\narrive at a total benefit for the period of investiga tion to that tire producer from that type of rubber.\nThese input-product-specific benefit totals then were added together to arrive at the total benefit to the\ntire producer from government provision of rubber inputs of all kinds during the period of\ninvestigation.\n11.63 We note first that China does not contend that all of the different types of rubber were sold for\na single, undifferentiated price. Nor does the record evidence indicate that this was the case. To the\ncontrary, the record evidence shows that each type of rubber was sold as a specific, separate product\nwith its own pricing, and that the tire producers ma intained their purchase records separately for each\ntype.\n824 Furthermore, we recall that China raises no cl aim in respect of the benchmarks used by the\nUSDOC in these benefit calculations, or the matching of any particular benchm ark to any particular\nrubber purchase. In other words, China does not claim that the benchmarks used by the USDOC\nfailed to reflect \"prevailing market conditions\" either temporally or in terms of the characteristics or\nterms and conditions of sale of the particular kinds of rubber at issue.\n11.64 Instead, what China contends is that in spite of their differentiated pricing, all of the different\nrubber inputs were legally required to be treated as a single \"good\" in the sense of Article 14(d)\nbecause the USDOC treated the government provision of rubber inputs to the OTR tire producers as a\n\"programme\".\n11.65 In our view, China's characterization of the USDOC's description of the measure places undue\nweight upon the title given by the USDOC to the progr amme at issue, and we are not convinced that\nthe USDOC sought to define the \"good\" at issue as \"rubber\" in the aggregate, without distinction\nbetween various types of rubber inputs. But in a ny case, even if we were to agree with China's\ncharacterization of the USDOC's description of the s ubsidy or good at issue, we find no basis in the\nSCM Agreement for China's arguments, nor do we c onsider that aggregating all \"rubber\" inputs, as\nChina suggests was required, would reflect any market reality. Indeed, we note that there would be a\nconsiderable margin for inaccuracy if investigating authorities were legally required to ignore the\nactual pricing of a given good in favour of an average value across a range of goods with\ndifferentiated pricing. Furthermor e, we consider that the guidelines of Article 14(d) mean that the\nlevel of aggregation or disaggregation of the anal ysis of a given \"good\" must correspond to how that\ngood is marketed in reality. Given the facts of the case before us, we thus c onsider it appropriate for\nthe USDOC to have separately calculated benefit am ounts for the different kinds of rubber purchased\nby the tire producers.\n11.66 Turning to the USDOC's approach of analyzing the rubber transactions on a monthly basis\nand taking into account only the positive monthly am ounts, we recall that China contends that the\nUSDOC should instead have calculated the overall positive or negative net benefit for the period of\ninvestigation as a whole, i.e., that it should have compared the average price paid for all forms of\n\n823 See Exhibits CHI-56 and CHI-57 (Final Calculation Memoranda for GTC and TUTRIC).\n824 Exhibits CHI-56 and CHI-57.\n\nrubber over that period with the average benchmark.\n825 We consider that there could be certain\nsituations in which some sort of grouping or aver aging of transactions might be necessary in order to\narrive at a determination of the amount of the benefit. Examples might include where a given set of\ntransactions was made pursuant to a contract, or possibly where the actual prices paid to the\ngovernment fluctuated slightly around the market benchmark(s) over the entire period of\ninvestigation. In the OTR investigation, howe ver, the positive benefits calculated by the USDOC\nwere clustered in particular months of the period of investigation and generall y were sizeable, rather\nthan being small amounts above and below the benchm arks spread uniformly over that period. This\nfact pattern, to us, does not mandate the kind of te mporal averaging advanced by China. We thus\nconsider that the USDOC acted within the limits of the flexibility accorded to it by Article 14(d) of\nthe SCM Agreement in performing as it did the benefit calculations on a monthly basis.\n11.67 Finally, we consider China's argument that the fact that the USDOC compared \"aggregate\"\nmonthly benchmarks to individual transactions in performing its benefit analysis, and in some\ninstances used benchmark prices that were not cont emporaneous to the input transactions, resulted in\ncomparisons that were not \"apples-to-apples\". We note that China reiterates, in making this\nargument, that it is not raising any new issues pertaining to non-contemporaneous (or non-like)\nbenchmarks. We consider, however , that the benchmarks used by the USDOC are in fact the precise\nfocus of this argument, which we see as a different issue from the \"offset\" issue that is the subject of\nChina's claim as set forth in its request for establi shment of the Panel. We thus do not find this\nargument germane to our consideration of that claim.\n5. Conclusions\n11.68 For the foregoing reasons, we find that China has not established that the USDOC acted\ninconsistently with the obligations of the United States under Article 14(d) of the SCM Agreement by\nnot \"offsetting\" positive benefit amounts with \"nega tive\" benefit amounts, either across different\nkinds of rubber or across different months of the pe riod of investigation, nor that the United States\nalso thereby acted inconsistently with its obligati ons under Articles 10, 19.1, 19.4 or 32.1 of the SCM\nAgreement, or Article VI:3 of the GATT 1994.\n11.69 We recall that we are called upon by this claim, as by all others before us, to determine\nwhether the United States has acted inconsistently w ith its obligations on the basis alleged by China.\nIn finding that China has not established its claim we thus are not making a judgement as to the\noverall consistency or inc onsistency of the USDOC's benefit calcu lations in respect of rubber inputs\nwith the United States' obligations, under the cited provisions or any other provisions.\nXII. CHINA'S CLAIMS PERTAINING TO THE PROVISION OF SOE-PRODUCED\nINPUTS BY PRIVATE TRADING COMPANIES\nA. C\nLAIMS BY CHINA\n12.1 China submits that even if the USDOC's finding that SOE input producers were public bodies\nwere valid, in the CWP, LWR and OTR investig ations the USDOC acted inconsistently with\nArticle 1.1 of the SCM Agreement (and as a c onsequence with Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994) by finding subsidies where inputs produced by SOEs\nwere purchased from private trading companies by th e producers of the investigated products, as the\n\n825 See para.11.36, supra. This is another way used by China to express its argument that the positive\nand negative subsidy amounts should have been \"offset\".\n\nUSDOC made no finding that the trading companies we re \"entrusted\" or \"directed\" in the sense of\nArticle 1.1(a)(1)(iv) of the SCM Agreement to provide the goods.826\n12.2 China further submits that if the Panel were to conclude that the USDOC was not obligated to\nmake a finding that the trading companies themselv es provided a financial contribution, the benefit\nanalysis in respect of the sale of inputs was nonetheless flawed because it was predicated on an\nunlawful presumption that the trading companies rece ived, and passed-through to the producers of the\ninvestigated products, countervailable benefits from their purchases of the inputs from SOEs.827\n12.3 Concerning the first issue (the entrustment or di rection issue), the relevant portion of China's\nrequest for establishment of the Panel (paragraph B.1(a)(iii)) reads as follows:\n\"(iii) even assuming a valid determination that certain SOEs are public bodies, the\nUS authorities' failure to make a determina tion that SOEs \"entrust or direct\" trading\ncompanies to provide goods to producers of subject merchandise, within the meaning\nof Article 1.1(a)(1)(iv) of the SCM Agreement;\" (footnote omitted)\n12.4 Concerning the second issue (the pass-through issue) , which China raises in the alternative to\nthe financial contribution issue discussed supra, China, in response to a question from the Panel,\nidentifies paragraphs B.1(a)(iv) and B.1(a)(v) of its request for establishment of the Panel as setting\nforth its claim(s) relative to the pass-through issue.\n828 These paragraphs read:\n\"(iv) the US authorities' determination that the sale of goods by trading companies\nto producers of subject merchandise confers a countervailable subsidy within the\nmeaning of Article 1 of the SCM Agreem ent and a benefit under the guidelines set\nforth in Article 14(d) of the SCM Agreement;\n(v) the US authorities' failure to determ ine whether the alleged benefit received\nby trading companies was passed through to producers of subject merchandise, in\nviolation of Article VI:3 of the GATT 1994 and Articles 10, 14, 19.1, 19.4, and 32.1\nof the SCM Agreement\".\nB. M\nAIN ARGUMENTS OF THE PARTIES\n1. China\n12.5 China argues that the USDOC had no basis to conclude that the respondents obtained\n\"government-provided goods\" when they purchased inputs from the trading companies, since the\nUSDOC made no findings that the private tradi ng companies themselves had made a financial\ncontribution when selling SOE produced inputs, i.e., that they had been \"entrusted or directed\" to\n\"provide goods\" within the meaning of Article 1.1. For China, this necessarily means that the\nsubsidies at issues were countervailed unlawfully.\n829\n12.6 China alleges that even if the Panel were to disagree with this conclusion, the USDOC’s\nfindings with respect to trading companies would still be unlawful, because they are based on an\nerroneous benefit analysis as well. In particul ar, China submits that the USDOC never established\nthat the private trading companies themselves received subsidies, in particular that it did not examine\n\n826 Paragraphs B.1(a)(iii) and B.1( e)(i)-(iii) of the \"as applied\" claims in China request for\nestablishment of the Panel; China first written submission, para. 132; second written submission, paras. 44 and\n315 (b).\n827 China first written submission, paras. 133-138.\n828 China response to Panel question 34 (second meeting).\n829 See, e.g., China first written submission, para. 132.\n\nthe price paid by the trading companies for th e inputs they purchased from SOEs in any of the\ninvestigations. Rather, according to China, th e USDOC \"presumed, without any investigation or\nanalysis, that the purported financial contribution to the trading companies – the provision of [inputs]\nby SOEs – conferred a benefit on the trading co mpanies\". By presuming, rather than actually\ndetermining, whether and to what extent a benefit was conferred in the transaction between the SOEs\nand the trading companies, the USDOC acted incons istently with Articles 1.1(b) and 14(d) of the\nSCM Agreement.\n830\n12.7 China further argues that without a valid findi ng that the trading companies themselves had\nreceived a benefit, the USDOC had no legitimate basi s to conclude that \"all or some portion of the\nbenefit\" they purportedly received was \"confe rred on the […] producers who purchase the [inputs]\nfrom the trading company suppliers\". In other words, China submits, the USDOC presumed the \"pass\nthrough\" of a benefit that had not been found to ex ist. According to China, the USDOC analysed the\npurchase of inputs from trading companies as if they were \"indirect\" subsidies, and although the\nUSDOC did not expressly characterize it as such, its ra tionale for concluding that the investigated\nproducers received a benefit was based on an assumption that some or all the subsidy conferred to the\ntrading companies \"passed through\" to the inves tigated producers when they purchased inputs from\nthe trading companies.\n831 In China's view, the USDOC’s approach cannot be reconciled with the\nAppellate Body's jurisprudence on \"pass through\": the USDOC could not lawfully establish that the\nSOEs had conveyed an indirect subsidy upon the investigated producers \"via\" their purchases from\nthe trading companies unless it had first established that the trading companies themselves were the\ndirect recipients of a subsidy. China argues th at the USDOC had to examine both the transactions\nbetween the SOEs and the private trading companies and the transactions between the private trading\ncompanies and the investigated producers. By examining only the latter of these transactions, the\nUSDOC's benefit determinations with respect to the trading companies transactions were inconsistent\nwith Articles 10, 14, 19.1, 19.4, and 32.1 of the SCM Agreement and Article VI:3 of the GATT.832\n2. United States\n12.8 With respect to sales through trading compani es, the United States argues that the USDOC\nproperly applied the SCM Agreement when it dete rmined that the public bodies (the SOEs) made\nfinancial contributions to the trading companies, and that these financial contributions conferred\nbenefits to the producers of investigated products.833\n12.9 Concerning the financial contribution issue, the United States argues that no entrustment or\ndirection analysis was required, and that China has not substantiated its claim that the USDOC's\nanalysis was improper. According to the United States, the USDOC found that \"'the [Government of\nChina's] financial contribution (provision of a good [by an SOE]) is made to the trading company\nsuppliers that purchase the [good], while all or some portion of the benefit is conferred on the OTR\ntire producers who purchase rubber from the trading companies'\", and explained that the producer is\nthe key link in the sales chain, su ch that when the producer is state-owned, there is a financial\n\n830 China first written submission, para. 133-135; response to Panel question 34 (second meeting).\n831 China explains that under the USDOC’s approach, the \"full difference\" between its benchmark price\nand the price paid by investigated producers to trading companies would presumptively be considered a\ncountervailable \"benefit\". However, China argues, there is no basis for such a presumption: there are a number\nof reasons (unrelated to subsidization) why the price between the trading companies and the investigated\nproducers may be lower that the (unlawfully presumed ) subsidized price at which the trading companies\noriginally purchased from SOEs. For example, China notes, the market price for the inputs in question could\nhave been lower at the time the trading company resold the inputs than when it purchased them from SOEs.\n(China first written submission, para. 136; response to Panel question 34 (second meeting)).\n832 China response to Panel question 34 (second meeting), citing to Appellate Body Report on US –\nSoftwood Lumber IV, paras. 129 and 140-146.\n833 United States first written submission, para. 147.\n\ncontribution by a public body.834 The United States argues that there is no indication in Article 1.1(a)\nof the SCM Agreement of who must receive a fina ncial contribution, as that provision only addresses\nwho grants a financial contribution.835\n12.10 In this regard, the United States submits that, although the financial contribution must confer\na benefit, Article 1.1(b) does not specify upon whom the benefit must be conferred. The\nUnited States quotes the finding of the Appellate Body that \"the 'benefit' of a financial contribution\n[...] [does not necessarily have to] be 'received and enjoyed' by the same person, or put differently,\nthere is nothing indicating that the 'benefit' cannot be 'received and enjoyed' by two or more distinct\npersons\".836 The United States recalls that in Mexico – Olive Oil, the panel interpreted the Appellate\nBody's findings as meaning that \"a benefit might be received by different recipients, that the recipient\nof the benefit might be different from the recipient of the financial contribution, and that a subsidy can\nbe bestowed directly or indirectly, and in r espect of production, manufacture or export of a\nproduct\".837\n12.11 According to the United States, China's clai m that the USDOC \"presumed\" a financial\ncontribution from the trading companies misses the point , as the USDOC instead found a financial\ncontribution to the trading companies. Fo r the United States, this argument by China assumes that\nArticle 1.1 of the SCM Agreement requires there to be only one recipient, which must receive both\nthe financial contribution and the entire amount of the benefit, an assumption for which China has\noffered no support.838\n12.12 The United States argues that in the investigations at issue, the financial contribution occurred\nwith the sale of goods by the SOE to the \"intermedi ary\" trading company, and that this government\nprovision of goods then conferred benefits upon the respondent produ cers of investigated products,\nwhen the trading companies sold the goods to those producers. According to the United States,\nalthough the trading companies received \"perhaps some benefit\" this did not preclude the producers of\nthe investigated products from receiving a benefit, wh ich existed to the extent that the prices paid by\nthose producers for the goods were less than the corresponding benchmark prices.839\n12.13 Concerning the pass-through issue, the United States disagrees that the USDOC presumed the\npass-through of a benefit that had not been found to exist. According to the United States, to the\nextent that a trading company received a benefit from the financial contribution provided by an SOE\nin the form of provision of goods, and some portion of that benefit in effect passed through the trading\ncompany to a producer of subject merchandise, the USDOC accounted for this and properly\ncalculated the benefit conferred upon the producer of the investigated product. To do so, the\nUnited States submits, the USDOC compared the pri ce the producer of the investigated product paid\nfor the goods in question with an appropriate benchmark price.\n840 The United States cites the\nAppellate Body and the Olive Oil panel for the propositions that a pass-through analysis is not\nrequired every time there is an arms'-length transac tion between unrelated companies in the chain of\n\n834 United States first written submission, paras. 148 and 156.\n835 Id., para. 150.\n836 Id., para. 152, citing to Appellate Body Report on US – Countervailing Measures on Certain EC\nProducts, para. 110. (emphasis original).\n837 Id., para. 154, citing to Panel Report on Mexico – Olive Oil, para. 7.152.\n838 Id., paras. 155-156.\n839 Id., para. 157.\n840 Id., para. 320.\n\nproduction of an investigated product, and that the recipient of a benefit may be different from the\nrecipient of the financial contribution.\n841\n12.14 The United States further argues that in the transactions at issue, the USDOC accurately\nmeasured the benefit by comparing the price paid by the producer of the investigated product for the\ninput with an appropriate benchmark price. In particular, any difference between the price paid by the\ntrading company to the SOE for the input and the pr ice paid to the trading company by the producer\nof the investigated product, e.g., the mark-up adde d by the trading company, was reflected in the\nbenefit calculations. Put another way, the United States argues, even if the USDOC had first\ndetermined the difference between the benchmark and the price paid by a trading company to an SOE\nfor a government-provided good, and then also de termined the difference between the benchmark and\nthe price paid by the producer of the investigat ed product to the trading company for the good, the\nresulting determination of benefit would be the same.\n842 The United States concludes that whether the\ntrading company sells the goods for the price it pa id for them or with a mark-up, the benefit\ncalculation properly determines the benefit confe rred on the last buyer, the producer of the\ninvestigated product.843\nC. MAIN ARGUMENTS OF THE THIRD PARTIES\n1. Australia\n12.15 Australia considers that when trading companies are mere inte rmediaries in a transaction, a\ncomplete pass-through analysis may not be necessary, and that this approach is consistent with the\nfindings of the Appellate Body in US – Countervailing Measures on Certain EC Products and US –\nSoftwood Lumber IV . Australia further notes that where intermediaries do not change the nature of\nthe input, the benefit is most accurately calculated at the level of the exporters concerned. Australia\nsuggests that the Panel examine what could cons titute a pass-through analysis, which could include\nestablishing the existence of a subsidy to an input product, and the price paid by the producer of the\ninvestigated product for the input compared with an appropriate benchmark.\n844\n2. Canada\n12.16 Canada argues that to impose a valid count ervailing duty on a product as a result of the\nsuccessive sales at issue, the USDO C had to determine that the sales of inputs by the SOEs to the\ntrading companies constituted a financial contribution that conferred a benefit both directly upon the\ntrading companies and indirectly upon the respondent producers, recalling that pursuant to Appellate\nBody findings, no separate financial contribution de termination would be required for the sale of\ninputs to those producers. Concerning benefit, Ca nada submits that wher e the direct recipient\npurchases goods from a government or public body, and resells them without further processing them,\nthe difference between the resale price paid by the indirect recipient and the benchmark price reflects\nthe extent to which the benefit has passed through.845\n3. European Communities\n12.17 The European Communities considers that provision of goods by trading companies is a mere\nintermediate act, that does not change the nature of the financial contribution (i.e., the fact that the\n\n841 See, e.g., United States first written submission, para. 321; citing to Panel Report on Mexico – Olive\nOil, paras. 7.143 and 7.152 (quoting Appellate Body Report on US – Countervailing Measures on Certain EC\nProducts, paras. 110-113).\n842 United States first written submission, paras. 323-324.\n843 Id., para. 324.\n844 Australia third-party submission, para. 24; third-party oral statement paras. 16-18.\n845 Canada third-party oral statement, paras. 8-12 and 17.\n\nsuppliers of the goods are SOEs), and in such cases, where there is no transformation of the product\nconcerned, it would be unnecessary for the USDOC to have shown pass-through.846\n4. Mexico\n12.18 Mexico recalls the Appellate Body finding that a financial contribution may be granted to a\ncompany indirectly. In the present dispute, becau se the private trading companies were only the\nvehicle through which the financ ial contribution reached the companies under investigation, the\ninvestigated companies received the contribution i ndirectly, and thus it was not necessary to make a\nfinding of benefit to the trading companies. Concerning pass-through, such an analysis is only needed\nwhen the subsidies are given for the production of a good that is an input for the product under\ninvestigation (in other words, upstream), which was not the case in the investigations at issue.\n847\n5. Saudi Arabia\n12.19 Saudi Arabia argues that in case of alleged subs idized inputs, a pass-through analysis should\nbe conducted to determine if the downstream produ cer has received a benefit. Saudi Arabia argues\nthat a two steps analysis must be undertaken each time the investigated product did not directly\nreceive a subsidy from the government. The investig ating authority must first determine whether a\nsubsidy (financial contribution and benefit) was provided to the original recipient; second, it must\ndetermine whether all or part of the benefit from the original subsidy passed through to the exporter of\nthe investigated product by the sale of the input product.848\n6. Turkey\n12.20 Turkey, referring to the report of the panel in Mexico – Olive Oil , considers that the SCM\nAgreement does not require the recipients of a benefit a nd a financial contribution to be the same.\nAcceptance of the opposite proposition would lead to the circumvention of the disciplines on\nsubsidization simply by including a private party in the distribution chain.849\nD. ASSESSMENT BY THE PANEL\n12.21 We find a certain lack of clarity as to the exact nature and basis of China's claims concerning\nthe provision of SOE-produced inputs by private tr ading companies. In respect of the first issue\nraised by China (the entrustment or direction i ssue), the relevant portion of China's request for\nestablishment of the Panel (paragraph B.1(a)(iii)) reads as follows:\n\"(iii) even assuming a valid determination that certain SOEs are public bodies, the\nUS authorities' failure to make a determina tion that SOEs \"entrust or direct\" trading\ncompanies to provide goods to producers of subject merchandise, within the meaning\nof Article 1.1(a)(1)(iv) of the SCM Agreement\". (footnote omitted)\nThis formulation indicates that the inconsistency alleged by China in its request for establishment\nfocuses not only on the USDOC's failure\n to have made a determination that trading companies were\nentrusted or directed to provide goods to producers of the investigated product, but also that in the\nview of China that determination, to be valid, shou ld have been in respect of the SOE input producers\n(presumably as the public bodies that would have had to so entrust or direct the trading companies).\n\n846 European Communities third-party submission, para. 27.\n847 Mexico third-party oral statement, para. 18; third-party submission, paras. 54-56.\n848 Saudi Arabia third-party submission, paras. 106-108, citing Appellate Body Report on US –\nSoftwood Lumber IV.\n849 Turkey third-party submission paras. 36-40; third-party oral statement, para. 14.\n\n12.22 In its first written submission, China again argued that the USDOC erred by not finding\n that\nthe trading companies made financial contributions , i.e., that the USDOC made no finding that the\ntrading companies were entrusted or directed to provide goods. China makes no reference in the\ncontext of this argument to the role of the SOEs as entrusters or directors. 850 In the same submission,\nChina makes a generally-worded request for findings in respect of the issue of financial contributions\nconnected to the provision of goods, in particular that the Panel find the USDOC's determination of\nfinancial contributions in respect of the allege d provision of goods to be inconsistent with the\nprovisions referred to in paragraph 12.1, supra. There is no specific request for findings in respect of\nthe transactions involving trading companies.851\n12.23 In its second written submission, China argues that in the absence of a finding of entrustment\nor direction of the trading companies, the USDOC had no basis for its conclusion that the producers\nof the investigated products purchased \"governme nt-provided\" as opposed to \"government-produced\"\ngoods, so that the USDOC's failure to make a finding that the trading companies provided financial\ncontributions rendered its subsidy findings in resp ect of those transactions inconsistent with\nArticle 1.1 of the SCM Agreement. 852 In the same submission, however, the finding requested by\nChina in respect of this claim is that the USDOC's \"findings [...] that private trading companies\nprovided financial contributions [...]\" was the sour ce of the inconsistency with the cited provisions. 853\nThus while the argument refers to the failure to make the finding as the legal error, the ruling\nrequested of the Panel identifies as the source of the legal error findings that were made to the effect\nthat private trading companies provided financial contributions.\n12.24 China's oral statements make no reference to this issue.\n12.25 In short, the arguments and requests for findi ngs made by China during the course of the\npresent dispute in respect of the financial contribution issue do not exactly match the claim as set forth\nin its request for establishment of the Panel.\n12.26 Concerning the second issue (the pass-through issue) , which China raises in the alternative to\nthe financial contribution issue discussed supra, there also is a lack of clarity as to China's claims. In\nthe first place, it is not entirely clear on the face of the request for establishment of the Panel whether\nonly paragraph B.1(a)(v) pertains to this claim, or wh ether paragraph B.1(a)(iv) also is relevant to this\nissue. We note that China, in responding to a question from the Panel, identifies both of these\nparagraphs as setting forth the claim(s) relative to the pass-through issue. These paragraphs read:\n\"(iv) the US authorities' determination that the sale of goods by trading companies\nto producers of subject merchandise confers a countervailable subsidy within the\nmeaning of Article 1 of the SCM Agreem ent and a benefit under the guidelines set\nforth in Article 14(d) of the SCM Agreement;\n(v) the US authorities' failure to determ ine whether the alleged benefit received\nby trading companies was passed through to producers of subject merchandise, in\nviolation of Article VI:3 of the GATT 1994 and Articles 10, 14, 19.1, 19.4, and 32.1\nof the SCM Agreement\".\n12.27 In its first submission, China argues in regard to the pass-through issue that the USDOC never\nestablished that the trading companies received s ubsidies when they purchased inputs from SOEs.\n\n850 China first written submission, paras. 103-110.\n851 Id., para. 468(a).\n853 Id., para. 315(b).\n\nInstead, according to China, although the USDOC found that the trading companies received financial\ncontributions when they purchased inputs from th e SOEs, it never investigated whether the trading\ncompanies also received benefits therefrom. Without a valid finding of benefit, China argues, there\nwas no legitimate basis for the USDOC to conclude that benefits were conferred on the producers of\nthe investigated products when they purchased input s from the trading companies; that is the USDOC\npresumed the pass-through of a benefit that had not been found to exist.\n12.28 We note that this argument in the first submission makes no reference to any alleged violation\nof any provision, nor does it contain any cross-reference to any part of the request for establishment of\nthe Panel. Furthermore, in the list of requested findings contained in the first submission, China asks\nthe Panel to make the generally-worded finding that the USDOC's benefit determinations in respect of\nthe provision of goods are inconsistent with Artic le 14 and, as a consequence, with Articles 10 and\n32.1 of the SCM Agreement, and Article VI:3 of the GATT 1994. There is no request for a finding\nthat the benefit determination in respect of the pr ovision of goods was inconsistent with Article 1 of\nthe SCM Agreement. We note that China's second written submission contains no arguments related\nto the pass-through issue, and China makes no speci fic request for findings on this issue in that\nsubmission. Nor do China's oral statements refer to this issue.\n12.29 In response to a question from the Panel at th e second substantive meeting as to what, in\nparticular, China was asking the Panel to do in resp ect of the pass-through issue as referred to in its\nfirst written submission, China stated that this issue corresponded to the claims in\nparagraphs B.1(a)(iv) and (v) of its request for establishment of the Panel, quoted above. China\nargues that the USDOC presumed a pass-through of benefits by trading companies (an indirect\nsubsidy) without first finding that the trading comp anies had received benefits (a direct subsidy).\nAccording to China, this result cannot be reconcile d with the Appellate Body's findings relating to\npass-through of a subsidy from one transaction to anot her. According to China, under the Appellate\nBody's reasoning in US – Softwood Lumber IV\n854, the USDOC could not lawfully establish that the\nSOEs had conveyed an indirect subsidy upon the pr oducers of the subject goods via their purchases\nfrom trading companies without first establishing th at the trading companies were themselves the\ndirect recipients of a subsidy via their purchases from SOEs. According to China, the only way for\nthe USDOC lawfully to find an indirect subsidy w ould be to examine both the transactions between\nthe SOEs and the private trading companies, and t hose between the private trading companies and the\ninvestigated tire producers. China argues that a number of reasons having nothing to do with\nsubsidization might cause the price between the trading company and the subject producer to be lower\nthan the (unlawfully presumed) subsidized price at which the trading companies originally purchased\nfrom the SOE. China cites as a po ssible example a situation where the market price of the input\ndeclines between the time the trading company pur chases and resells that input, which might occur\nwhere the trading company holds inventory. China argues that presuming rather than determining a\nbenefit in the transactions between SOEs and tradi ng companies was inconsistent with Articles 1.1(b)\nand 14(d) of the SCM Agreement, and that exam ining only the second transaction (between the\ntrading companies and the producers of investigated products) in making the benefit determination for\nthese purchases was inconsistent with Article VI:3 of the GATT 1994 and Articles 10, 14, 19.1, 19.4,\nand 32.1 of the SCM Agreement.\n\n854 Here, China argues that the Appellate Body found that a pass-through analysis is required where \"a\nsubsidy is received directly by an entity other than a producer of subject products, and that entity subsequently\nsells inputs to producers of subject products. [...] In ot her words, it cannot be assumed that some or all of the\nindirect subsidy has passed through\". (China response to Panel question 34 (second meeting), citing Appellate\nBody Report on US – Softwood Lumber IV, para. 129. (emphasis original)) We note, however, that this passage\ndoes not reflect a statement of opinion or reasoning by the Appellate Body, but rather summarizes an argument\nby the United States.\n\n12.30 We note that this set of arguments explaining the legal basis of this claim does not exactly\nmatch the claim as set forth in the request for estab lishment of the Panel. In particular, while the\nclaim in paragraph B.1(a)(iv) of that request iden tifies the transactions between the trading companies\nand the tire producers as the source of the alleged in consistencies with Articles 1 and 14(d), in the\narguments presented in support of this claim the source of these alleged inconsistencies are the\ntransactions between the SOEs and the trading companies.\n12.31 As outlined above, we find a certain lack of clar ity concerning this set of claims, due to the\nsomewhat variable way in which China characteriz ed the issues in its submissions, and due to the\ninconsistencies between the statement of the claims in China's request for establishment of the Panel\nand China's descriptions of them in its submissions . We thus have some doubts as to whether these\nclaims are properly before us. That said, we note th at the United States has raised no objection in this\nregard. To the contrary, not only does the Un ited States appear to understand the claims, it has\npresented full and substantive rebuttals to China's arguments, in spite of noting (at least in its first\nsubmission) that China's first submission makes no re ference, in respect of the pass-through issue, to\nany alleged inconsistency with an y provision of the WTO Agreement. Thus, we have decided to\nanalyze the substance of these claims in spite of our doubts.\n1. Financial contribution\n12.32 China's claim regarding the financial contributi on issue, as expressed in the arguments in its\nsubmissions, is that because the USDOC ma de no findings, in the CWP, LWR and OTR\ninvestigations, that the trading companies that supplied SOE-produ ced inputs were entrusted or\ndirected to, in turn, make a financial contribution to the producers of the investigated product in the\nform of the inputs, the USDOC's finding that these transactions conferred subsidies on those\nproducers was inconsistent with SCM Article 1.1 of the SCM Agreement.\n12.33 Article 1 of the SCM Agreement requires that, for a subsidy to exist, there must be a financial\ncontribution, as defined, and a benefit conferred thereby. That provision does not, however, specify\nwho must be the recipient of the financial contri bution and the benefit. In particular, it does not\nindicate that for a subsidy to exist, a single entit y must receive both the financial contribution and the\nbenefit.\n12.34 This point was made by the Appellate Body in US – Countervailing Measures on Certain EC\nProducts, and by the panel in Mexico\n− Olive Oil . Furthermore, the analyses by both the panel and\nthe Appellate Body in US – Softwood Lumber IV reflected the same understanding. In particular, the\nissue in US – Softwood Lumber IV was whether the initial recipient of a subsidy (i.e., a financial\ncontribution conferring a benefit) retained all of the benefits when it so ld an input to a producer of the\ninvestigated product, or instead whether some or all of the benefits from the subsidy were passed\nalong to the producer of the investigated product. That analysis thus was not premised on a series of\ngovernment financial contributions at each successive transaction (i.e., an initial financial contribution\nby the government itself, followed in each late r transaction by a passing along of the financial\ncontribution via entrustment or direction in the sense of Article 1.1(a)(1)(iv) of the SCM Agreement).\nTo the contrary, the initial financial contribution, to the initial recipient, was sufficient for there to\nhave been, for the purposes of the SCM Agreement, a financial contribution by a government. (The\nissue of benefit was treated as a separate question).\n12.35 In all of the investigations at issue pursuant to this claim (CWP, LWR and OTR), the USDOC\nfound that there was a financial contribution by th e government to the trading companies in the form\nof the provision of goods (the inputs in question) by SOE input producers. The USDOC then found,\nas a separate matter, that the benefits from those fina ncial contributions were conferred in whole or in\n\npart on the producers of the investigated products when those producers purchased the inputs for less\nthan the applicable benchmark prices.855\n12.36 While the factual situations in the prior dis putes just discussed were somewhat different from\nthat before us, we consider that the basic prin ciples from those disputes apply here. First, the\nrecipient of the financial contribution can be someone other than the recipient of the benefit. Second,\nwhere an initial government financial contribution ha s been made (under any of the subparagraphs of\nArticle 1.1(a)(1)), the SCM Agreement does not requi re, for a valid finding of the existence of a\nsubsidy, that in any ensuing transactions involving the proceeds of the financial contribution the\ngovernment has entrusted or directed the initial recipi ent of the financial contribution itself to make a\nfinancial contribution. In other words, if the government makes a financial contribution in the form of\na loan to a goods producer, the SCM Agreement does not require, for a valid finding of the existence\nof a subsidy to be possible, that the sale of goods pr oduced with the proceeds of that loan be the result\nof government entrustment or direction. Again, the question of benefit is separate, and where the\npurported recipient of the benefit is someone other th an the recipient of the financial contribution, the\nrecipient of the benefit must be connected somehow to the matter at issue (whether in a countervailing\nduty investigation or a subsidy dispute pursuant to the SCM Agreement's multilateral disciplines), but\nagain, the issue of benefit requires a separate analysis.\n12.37 We consider that if, instead, a chain of entrustment or direction by a government were\nrequired for every subsequent transaction involving th e proceeds of a financial contribution, in order\nfor a valid finding of the existence of a subsidy to be possible, the disciplines of the SCM Agreement\ncould be easily circumvented. This is particular ly evident in the case of government provision of\ngoods.\n12.38 For these reasons, we find that China has not established that by not determining in the CWP,\nLWR and OTR investigations that the trading co mpanies were entrusted or directed by the\ngovernment to make financial contributions (in the form of provision of goods) to the producers of the\ninvestigated products, the USDOC acted inconsistently with the obligations of the United States under\nArticle 1.1 of the SCM Agreement.856\n2. Pass-through of benefits\n12.39 China's claim in respect of the pass-through i ssue, as expressed in its arguments, is an\nargument in the alternative. In particular, China makes this claim in the event that the Panel finds that\nthe USDOC was not required by Article 1.1 of th e SCM Agreement to determine that the trading\ncompanies were entrusted or directed by the governme nt to make financial contributions in the form\nof provision of goods to the producers of the investigated products in the CWP, LWR and OTR\ninvestigations. Having made this finding, we now take up China's pass-through claim.\n12.40 In this regard, we note first that we find, infra, that in the CWP and LWR investigations, the\nUnited States acted inconsistently with its oblig ations under Article 12.7 of the SCM Agreement by\nresorting to facts available in determining the am ount of HRS produced by SOEs that was purchased\nby CWP and LWR producers. Given this finding, there is no need for us to reach the pass-through\nissue in respect of the CWP and LWR investigations . Our analysis and findings in respect of this\nclaim thus are confined to the OTR investigation.\n\n855 We recall here that we have found no inconsis tency in the USDOC's determination that the SOE\ninput producers were public bodies, and as a consequence, no inconsistency in the USDOC's determination that\nthe sales of inputs by the SOE producers to trading companies constituted financial contributions by the\ngovernment in the form of government provision of goods. See Section VIII, supra.\n856 Concerning China's claims of consequential violations of Articles 10 and 32.1 of the SCM\nAgreement and Article VI:3 of the GATT 1994 in connection with this claim see Section XIII, infra.\n\n12.41 Unlike in the CWP and LWR investigations, in the OTR investigation, GTC and TUTRIC\n(the tire producers found to have received subsidies in the form of government provision of goods)\n857,\nreported the full details of their rubber purchases, by producer, source and supplier (i.e., seller). The\nUSDOC thus based its analysis of rubber inputs (tho se sold directly by SOEs and those produced by\nSOEs and sold by trading companies) on verified information gathered in the investigation, and not on\nfacts available.\n12.42 This brings us to the substance of China's clai ms related to the pass-through issue, in respect\nof which we note that China presents no specific legal argumentation concerning the provisions it\ncites, or of how precisely it considers that these provi sions apply in this dispute. For its claims under\nArticles 1.1 and 14(d) of the SCM Agreement, China's legal reasoning seems to be, in essence, that no\nbenefit, and thus no subsidy, to the trading compan ies was found to exist in the first place, meaning\nthat Articles 1.1(b) and 14(d) of the Agreement were violated.\n12.43 Concerning the remaining provisions cited, China says only that because the USDOC's\nexamination was limited to the transactions betw een the trading companies and the producers of\ninvestigated products, and did not also include an analysis of the transactions between the SOEs and\nthe trading companies, the USDOC's benefit determin ations in respect of the purchases of inputs from\ntrading companies were inconsistent with Articl es VI:3 of the GATT 1994 and Articles 10, 14, 19.1,\n19.4 and 32.1 of the SCM Agreement. China's apparent legal basis for this set of alleged violations is\nthe Appellate Body's reasoning in US – Softwood Lumber IV , as China simply asserts that the\nUSDOC's analytical approach cannot be reconciled with that reasoning.\n12.44 Turning in more detail to the particular provisions cited by China, starting with Articles 19.1\nand 19.4 of the SCM Agreement, we recall that neither the panel nor the Appellate Body in the US −\nSoftwood Lumber IV dispute – the only prior dispute cited by Ch ina in support of its claims related to\npass-through – made findings under any of these provisions, as the panel exercised judicial economy\nin respect of those claims. Give n that China has provided no legal reasoning in support of its claims\nunder these provisions, nor even identified any prior dispute settlement findings concerning those\nprovisions\n858, we find that China has not established that the USDOC's determination in respect of the\nprovision of SOE-produced rubber inputs by private trading companies is inconsistent with the\nobligations of the United States under Article 19.1 or 19.4 of the SCM Agreement.\n12.45 Concerning China's citation of Article 14 of the SCM Agreement in this context, it is not clear\nto us whether this second citation is in addition to the inconsistency allege d due to the absence of a\nfinding that trading companies received a benefit described in paragraph 12.42, supra. To the extent\nthat that allegation is the basis for this second refe rence to Article 14, we consider that argument by\nChina, although brief, to be reasonably clear. To the extent, however, that China is making a second,\ndifferent claim of violation of Article 14, in partic ular in connection with the issue of pass-through of\nbenefits as such, it has made no argument whatsoever as to the legal basis for this claim, nor did either\nthe panel or the Appellate Body in US – Softwood Lumber IV make any finding under Article 14 of\nthe SCM Agreement in the context of pass-through, as Canada raised no such claim. Therefore, to the\nextent that China is asserting that the absence of a finding by the USDOC that benefits received by\ntrading companies selling rubber were passed through (as such) to producers of tires was inconsistent\nwith Article 14 of the SCM Agreement, we find that China has not established this claim.\n\n857 We recall that the USDOC found that Starbright received no benefits from its purchases of rubber\ninputs from SOE producers.\n858 We do not here mean to imply that citing prior dispute settlement findings by itself would have been\nsufficient in terms of legal argumentation. We simply wish to emphasize the entire absence of any legal basis,\nin China's representations to the Panel, for its claims under Articles 19.1 and 19.4 of the SCM Agreement.\n\n12.46 Concerning the remaining provisions cited by Ch ina in its claims related to pass-through,\n(Article VI:3 of the GATT 1994, and Articles 10 and 32.1 of the SCM Agreement), we note that these\nprovisions formed the basis of the pass-through findings of the panel and Appellate Body in US –\nSoftwood Lumber IV. In particular, the substantive obligatio ns were found in Article 10 of the SCM\nAgreement and Article VI:3 of the GATT 1994, with Article 32.1 of the SCM Agreement found also\nto have been violated as a consequence. As not ed above, the only apparent legal basis for these\nclaims advanced by China is its implication that the reasoning of the Appellate Body in that dispute\ndirectly applies to the situation at issue before us.\n12.47 We recall that in US – Softwood Lumber IV , the panel and the Appellate Body found that the\nUnited States had impermissibly presumed that be nefits from subsidies provided to input producers\nwere passed through, in full, to producers of th e investigated products wh en the latter purchased the\ninputs. The specific problem identified in that dispute was that, although the United States had\ncalculated the amount of the subsidy benefits provided to the producers of inputs (raw logs), it had not\nexamined the extent to which the input producers pass ed along any of the benefits when they sold the\ninputs to the producers of the investigated products.\n12.48 The panel found in favour of Canada's claims under Article 10 of the SCM Agreement, and\nconsequentially Article 32 of the SCM Agreemen t, as well as Article VI:3 of the GATT 1994, in\nrespect of the situations where producers of logs were unrelated to the sawmills that processed the\nlogs into primary lumber, as well as where producers of remanufactured lumber were unrelated to the\nlumber manufacturers (sawmills) from which the rema nufacturers obtained their lumber inputs. The\npanel found that no pass-through analysis was requi red where the producer of the inputs was related\nto the lumber producer (i.e., where the production w as vertically integrated). The panel exercised\njudicial economy in respect of Canada's Article 19 claim.\n859\n12.49 The Appellate Body upheld the panel's findings that Article 10 of the SCM Agreement and\nArticle VI:3 of the GATT 1994 require a pass-through an alysis in circumstances in which a subsidy is\nreceived by a producer of an input product, and the inves tigated product is a different, downstream\nproduct produced by an unrelated producer using the subsidized input. More specifically, the\nAppellate Body found that:\n\"Where a subsidy is conferred on input products , and the countervailing duty is\nimposed on processed products , the initial recipient of the subsidy and the producer\nof the eventually countervailed product, may not be the same. In su ch a case, there is\na direct recipient of the benefit—the producer of the input product. When the input is\nsubsequently processed, the producer of the processed product is an indirect recipient\nof the benefit—provided it can be establishe d that the benefit flowing from the input\nsubsidy is passed through, at least in part, to the processed product. Where the input\nproducers and producers of the processed products operate at arm's length, the pass-\nthrough of input subsidy benefits from the direct recipients to the indirect recipients\ndownstream cannot simply be presumed; it must be established by the investigating\nauthority. In the absence of such analysis, it cannot be shown that the essential\nelements of the subsidy definition in Article 1 are present in respect of the processed\nproduct\".\n860 (Italic emphasis in original; underline emphasis added)\n12.50 We note and agree with the characterization by the panel in Mexico – Olive Oil that in US −\nSoftwood Lumber IV the Appellate Body \"emphasized that not every situation in which a subsidy is\nprovided on the production of an input product gives rise to an obligation to conduct a pass-through\nanalysis\", and that the existence of such an obligation also depends on the relationship between the\n\n859 Panel Report on US – Softwood Lumber IV, paras. 7.81-7.99.\n860 Appellate Body Report on US – Softwood Lumber IV, para. 143.\n\nproducer of the input product and the producer of the imported, processed product, as well as on the\nscope of the investigated product. In the latter regard the Appellate Body, reversing one of the panel's\npass-through findings, held that no pass-through analys is was required in respect of sales by lumber\nproducers to unrelated lumber remanufacturers because both the lumber inputs and the\nremanufactured (further processed) lumber products were imported products covered by the\ncountervailing duty investigation.\n861\n12.51 In this regard, we note that the quotation that China characterizes as an opinion or reasoning\nof the Appellate Body in US − Softwood Lumber IV (quoted at footnote 854, supra ) in fact is the\nsummary of an argument by the United States, an d that the Appellate Body's actual findings and\nreasoning are as quoted at paragraph 12.49, supra. We also note that the factual situation in the US −\nSoftwood Lumber IV dispute was quite different from that be fore us, in that the entities from which\nthe producers of the investigated products purchased inputs were the producers of those inputs, and\nthose input producers were the recipients of subsidies in respect of their production of the inputs. The\nlanguage in the Appellate Body's reasoning indeed refe rs only to that particular factual situation (i.e.,\nthe situation in which the immediate recipient of the s ubsidy is a producer of an input that is then sold\nto and used by a producer of an investigated produ ct). We do not consider that a reference to a\nmisattributed statement in the Appellate Body report from US − Softwood Lumber IV is sufficient to\nestablish China's claim that the USDOC's determinati on in the OTR investigation is inconsistent with\nArticle VI:3 of the GATT 1994 and Articles 10 a nd 32.1 of the SCM Agreement because the USDOC\ndid not conduct an analysis to determine whether an y subsidy benefits received by trading companies\nselling rubber inputs were passed through to the tire producers purchasing those inputs.\n12.52 This leaves us with China's claims that the USDOC's failure to establish that the trading\ncompanies received a benefit when they purchased the rubber inputs from the SOEs meant that the\ndetermination that the tire producers received a benefit when they purchased the rubber inputs from\nthe trading companies was inconsistent with Articles 1.1 and 14(d) of the SCM Agreement. While, as\ndiscussed above, the actual arguments presented by Ch ina, and its related requests for findings, are\nsomewhat internally inconsistent; and there is an apparent discrepancy between the arguments, which\nfocus on the existence of a benefit to the trading companies, and the description of the claim in the\nrequest for establishment of the Panel, wh ich focuses on the existence of a benefit to the producers of\nthe investigated products; we nevertheless consid er the essential legal basis of this claim to be\nrelatively clear. That is, China argues that the methodology used by the USDOC did not establish the\nexistence of a benefit (and thus of a subsidy) consiste ntly with the two cited provisions of the SCM\nAgreement.\n12.53 As noted above, in the OTR investigation, GTC and TUTRIC (the tire producers found to\nhave received subsidies in the form of government provision of goods)\n862, reported the full details of\ntheir rubber purchases. This included not only the dates, quantities, prices and delivery terms for\nthese purchases, by type of rubber, but also the de tails as to the identity of the producer of each\npurchase of rubber.\n863 GTC and TUTRIC also provided details concerning which particular purchases\nwere from trading companies and which were direc tly from producers. Furthermore, these companies\n\n861 Panel Report on Mexico – Olive Oil, para. 7.140 (quoting Appellate Body Report on US – Softwood\nLumber IV, paras. 140-147, 156-159 and 163).\n862 We recall that the USDOC found that Starbright received no benefits from its purchases of rubber\ninputs from SOE producers.\n863 With respect to TUTRIC, see Final Calculation Memorandum for Tianjin United Tire & Rubber\nInternational Co., Ltd. (TUTRIC) (\"USDOC Calculation Memorandum for TUTRIC\") as contained in Exhibit\nUS-156; and Further Detail on Reported Rubber Prices , Exhibit US-157. As regards GTC, see Final\nCalculation Memorandum for Guizhou Tire Company Limited (GTC) (\"USDOC Calculation Memorandum for\nGTC\"), Exhibit CHI-56; and GTC Minor Corrections and Supporting Documents, \"Rubber Purchases\" , Exhibit\nUS-155.\n\nprovided information as to which of the producer s from which they purchased rubber inputs (whether\ndirectly or through trading companies) were SOEs. Thus, the record evidence shows that in respect of\nevery purchase of each type of rubber, including fr om trading companies, the two tire producers at\nissue had full knowledge both of the identity of the producer of the rubber that they were buying, and\nof whether that producer was an SOE.\n864\n12.54 We recall that the methodology used by the USDOC to determine the existence of a benefit to\nthe tire producers from the rubber purchased from trad ing companies was to calculate the difference\nbetween the price paid by those producers to the trading companies and the applicable benchmark\nprice. We note that the United States justifies b asing its analysis exclusively at this level of\ntransaction, and not also performing such a calcu lation for the sales by SOE rubber producers to the\ntrading companies, on the basis that any portion of the initial benefit retained by the trading\ncompanies would be reflected in their selling pr ice for the inputs. By this we understand the\nUnited States to be arguing, for example, that if the trading company received a benefit of 10 (based\non the market benchmark) when it purchased rubber fr om an SOE, and it added a mark-up of 4 when\nit sold the rubber to a tire producer, the comparison of the price paid by the tire producer with the\nmarket benchmark would yield a benefit of 6 to the tire producer.\n12.55 We see a certain logic in this methodological a pproach to the extent that it could (at least\nunder certain circumstances) accomplish in a single step exactly the same result that otherwise would\nrequire a two-step calculation. That is, this appro ach would not give rise to an inflated calculation of\nbenefits, or a finding of benefits where there were none, where the trading company acted as a simple\nlogistical intermediary in individual transacti ons, for which services it charged a commission or a\nmark-up on the transaction (or was otherwise compensated), and did not itself purchase for and/or sell\nout of its own inventory, or hold title to the goods in question over an extended period. Thus, in a\nsituation where a producer of an investigated product nominally purchases from a trading company,\nbut the trading company in turn places a specific order for that purchase with the producer of the\ninput, and the merchandise is then shipped to the producer of the investigated product on the basis of\nthat particular order, in our view the methodology used by the USDOC would not give rise to an\ninflated calculation of the amount of the benef it, and thus would not raise any concerns under\nArticle 1 or 14(d) of the SCM Agreement. This is because in such a situation it would be perfectly\nreasonable to assume that the trading company, as a simple logistical intermediary, would always\ncollect its commission or mark-up, such that the price it charged its customer (the producer of the\ninvestigated product) would always be higher by that amount than the price it paid to the input\nproducer.\n12.56 We note, however, that this is one particular role that a trading company might play, but that\ntrading companies in fact operate in a range of di fferent ways. For example, some trading companies\nact as distributor/stockists, taking ownership and p hysical possession of goods and selling out of their\nown inventories. Others might enter into contr acts to purchase in bulk (even if they never take\nphysical possession), and then make individual sal es from their bulk purchases. In these and similar\ncircumstances, the methodology used by the United States would not be accurate. Price fluctuations\nin the market between the time a trading company purchased inputs (whether or not it physically\ninventoried them) and the time it sold them to a pr oducer of an investigated product would inevitably\ngive rise to situations where the benchmark price a pplicable to the trading company's purchase of the\ninputs was different from the benchmark price applicable to its sale of those inputs to the producer of\nthe investigated product, and this would require so me adjustments to the methodology, or the use of\nan entirely different methodology.\n12.57 This brings us to the facts of the OTR inves tigation, where, as described, the tire producers\nprovided full details on all of their rubber purchases, including the precise identity of the producer of\n\n864 Exhibits US-156-157 (TUTRIC) and CHI-56 and US-155 (GTC).\n\neach reported purchase. This fact suggests that the trading companies involved may well have been\nacting purely as intermediaries, on a transacti on-by-transaction basis, rather than as\ndistributor/stockists or as bulk purchasers. This is further suggested by the \"ex-works\" delivery terms\nof a number of purchases\n865, a phrase generally synonymous with \"ex-factory\". That said, there is no\nreference in the USDOC's determination in the OTR investigation to any evidence regarding the\nprecise role played by the trading companies fro m which GTC and TUTRIC purchased rubber inputs,\nnor any indication that the USDOC made inquiries in that regard. Before us, the United States makes\nno arguments in this respect. We consider th at, for the reasons explained above, given the\nmethodology that the USDOC chose to use to the esta blish the existence and amount of the benefit to\nthe tire producers from their purchases of inputs fro m trading companies, it was incumbent on the\nUSDOC to have investigated the precise role played by the trading companies, so as to ensure that its\nmethodology did not calculate a benefit in excess of that conferred by the government provision of\nSOE-produced inputs.\n12.58 The record evidence presented to us does not indicate that the USDOC undertook any such\ninquiries. Therefore, there is nothing before us that demonstrates that, under the particular facts of the\ninvestigation, the USDOC's methodology could not and di d not give rise to a ca lculation of benefit in\nexcess of that conferred by the provision of the in puts. We therefore find on this basis that the\nUSDOC acted inconsistently with the United States ' obligations under Article 1.1 and Article 14 of\nthe SCM Agreement.\nXIII. CHINA'S CONSEQUENTIAL CLAIMS\n13.1 We now turn to various consequential claims raised by China. In particular, at\nparagraph B.1(e) of its request for establishment of the Panel, China alleges consequential violations\nof Articles 10 and 32.1 of the SCM Agreement, and of Article VI:3 of the GATT 1994, \"in connection\nwith all countervailing duty investig ations, determinations and orders specified above\" (i.e., specified\nat paragraphs B.1(a)-(d) of the request for establis hment of the Panel). China requests findings in\nrespect of these consequential claims at paragraphs 468 (a), (b), (d), (e), (f), and (g) of its first written\nsubmission, and at paragraphs 315 (a), (b), (c), (e), (f), (g), and (h) of its second written submission.\nWe note that China has presented no argumentation in support of these consequential claims, but\nsimply requests findings on them in the paragra phs just identified. Particularly under these\ncircumstances, in the light of the findings we have made supra, we see no need to rule on these\nconsequential claims. We therefore apply judicial economy in respect of all of them.\n13.2 We recall, however, that in respect of its othe r allegations pursuant to Article 10 and 32.1 of\nthe SCM Agreement and Article VI:3 of the GATT 1994 (specifically, those raised in connection with\nits claims addressed at Sections XI and XII.D.2 supra, and Section XIV, infra) China did present\nargumentation. As set forth in the respective sec tions and as summarized below at Section XVII, we\nhave examined and made findings in respect of these allegations.\nXIV. CHINA'S CLAIMS PERTAINING TO \"DOUBLE REMEDIES\"\nA. INTRODUCTION\n14.1 We now consider China's claims with respect to \"double remedies\". China's claims in this\nrespect arise from the concurrent imposition, by the United States, of countervailing duties and of\n\n865 See Exhibit US-156. Ex Works is defined as: \"An <Incoterm> whereby the seller is responsible\nonly for having the ordered <goods> av ailable for pickup at the agreed pl ace, which is usually the seller's own\npremises. The seller is also usually responsible for export packing to the extent that the transportation\nparticulars are made available [...]\". (A to Z of international trade, F. Reynolds (ICC Publishing S.A., 2002),\np. 79).\n\nanti-dumping duties calculated pursuant to the USDOC's NME methodology on products from China\nin the four sets of parallel anti-dumping and countervailing duty investigations at issue.\n1. Background\n14.2 In anti-dumping investigations involving pr oducts from countries it considers to be non-\nmarket economies (\"NMEs\"), the USDOC calculates the normal value on the basis of surrogate values\ntaken from countries which it considers to be \"mar ket economies\" rather than on the basis of the\nprices or costs of production actually incurred by the investigated producer. 866 Specifically, under its\nNME methodology, the USDOC: (i) determines the quantities of the factors of production (e.g.\ninputs, labour, energy) actually used by the respondent producer in producing the investigated good;\n(ii) multiplies those quantities by the prices of each of those factors based on a \"surrogate value\" from\na market economy country (or, where available, th e actual price paid for an input imported from a\nmarket economy country); and (iii) adds an amount for factory overhead, selling, general and\nadministrative (SG&A) expenses, and profit, calcula ted on the basis of ratios of these costs to the\ncosts of the other inputs in the surrogate country.\n867\n14.3 The USDOC generally treats China as an NME in anti-dumping investigations, and did so in\nthe anti-dumping investigations at issue in this di spute. As a result, the USDOC applied its NME\nmethodology in calculating the normal value for th e investigated Chinese producers. The normal\nvalue so constructed was then used to determine these producers' dumping margins.\n14.4 As China points out, the four countervailing duty inve stigations at issue in this dispute mark a\npolicy change on the part of the USDOC. The USDOC had taken the position, in 1984, that its\ncountervailing duty legislation did not apply to imports from non-market economies: In its\ninvestigations on Wire Rod from Poland and from Czechoslovakia, the USDOC determined that it was\nimpossible to identify a \"bounty\" or \"grant\" within the meaning of U.S. countervailing duty law in\nNMEs, because of the pervasive role played by the governments of such centrally-planned economies.\nThis interpretation of the U.S. countervailing duty st atute was affirmed by the U.S. Court of Appeals\nfor the Federal Circuit in Georgetown Steel .868 In March 2007, the United States reversed this\nlongstanding policy of not applying U.S. count ervailing duty legislation to NMEs: In the CFS Paper\ninvestigation, the USDOC considered that while still not a market economy, China's economy had\nevolved sufficiently that it was possible to identify and countervail subsidies granted by China. 869 At\nthe same time, the USDOC maintained China's NM E status for purposes of applying the U.S. anti-\ndumping regime. 870 Ultimately, no duties were imposed in the CFS Paper case. Thus, the four\n\n866 Section 773(c) of the U.S. Tariff Act of 1930 (codified at 19 U.S.C. 1677b(c)), Exhibit CHI-119.\nThe USDOC may, in anti-dumping inves tigations involving an NME country, determine that the industry being\ninvestigated operates on market prin ciples (market-oriented industry, or \"MOI\"). China indicates that the\nUSDOC has never found any industry in any country that it designates as an NME to be an MOI.\n867 United States first written submission, para. 450.\n868 Georgetown Steel Corporation v. United States , U.S. Court of Appeals for Federal Circuit,\n18 September 1986, Exhibit CHI-90. This USDOC polic y was reaffirmed in the Preamble to the USDOC's\ncountervailing duty Regulations, Countervailing Duties: Final Rule, 63 Fed. Reg. 65348, Exhibit CHI-91,\np. 65360.\n869 Countervailing Duty Investigation of Coated Free Sh eet Paper from the People's Republic of China\n– Whether the Analytical Elements of the Georgetown Steel Opinion are Applicable to China's Present-Day\nEconomy (\"Georgetown Steel Memo\"), Exhibit CHI-89, p. 5; and Issues and Decision Memorandum for the\nAntidumping Investigation of Certain Pneumatic Off-the-Road Tires from the People's Republic of China (\"OTR\nAnti-Dumping Duty I&D Memo\"), Exhibit CHI-53, pp. 5-10.\n870 In maintaining its qualification of China as an NME, the USDOC in August 2006 considered that\n\"market forces in China are not yet sufficiently develope d\" to allow it to rely on Chinese costs and prices in\nestablishing normal value. (Final Affirmative Countervailing Duty Determination: Certain New Pneumatic Off-\n\ncountervailing duty investigations at issue in the present dispute constitute the first instances of\nimposition by the USDOC of countervailing duties on imports from an NME.\n14.5 China claims that this imposition by the US DOC of countervailing duties concurrently with\nanti-dumping duties calculated under the U.S. NME methodology results in the imposition of a\n\"double remedy\". China explains that by \"doubl e remedy\" it means that the subsidies at issue are\n\"offset\" twice, once through the imposition of the countervailing duties, and once through the\nimposition of the anti-dumping duties, because of the manner in which the latter are calculated.\n14.6 The Government of China and Ch inese interested parties raised the issue of double remedies\nin each of the four countervailing duty investigations before us. In its determinations in three of the\ninvestigations (LWS, LWR, and OTR), the USDOC i ndicated that it had no authority to address the\nissue of double remedies in the context of count ervailing duty investigations, and that if any\nadjustment to avoid a double remedy were possible, it would only be in the context of anti-dumping\ninvestigations.\n871 Interested parties also raised th e issue in the CWP and OTR anti-dumping\ninvestigations. In the CWP anti-dumping investigation, the USDOC declined to make adjustments for\ndouble remedies given that the interested party that had raised the issue had not received an individual\ncompany-specific margin. The USDOC also indicated that \"Congress provided no anti-dumping\nadjustment for CVDs imposed to offset s ubsidies that are not export subsidies\". 872 In the OTR anti-\ndumping investigation, the USDOC considered th at interested parties had not established the\nexistence of a double remedy, and in particular had not provided sufficient evidence in support of\ntheir arguments that domestic subsidies automati cally lower prices or that they \"pass through\", pro\nrata, to domestic prices.\n873 The USDOC also considered that the Chinese interested parties had not\ndemonstrated that they were \"entitled to an ad justment under US AD law to prevent a presumed\ndouble remedy from arising\".874\n\nthe-Road Tires from the People's Republic of China – Final Loan Benchmark and Discount Rate , Exhibit CHI-\n88, Attachment 2).\n871 For instance, in the LWR countervailing duty investigation, the USDOC addressed the double\ncounting arguments presented by respondents as follows:\n\n\"[...] The [Government of China and a respondent ] have not cited to any statutory authority\nthat would allow us to terminate this countervailing duty investigation to avoid double\ncounting and the CVD law provides no authority to make an adjustment to the CVD\ncalculations to prevent double counting. If any adjustment to avoid a double remedy is\npossible, it would only be in the context of an antidumping investigation and no party raised\nthis claim in the companion antidumping investigation of LWR\". (Exhibit CHI-2, p. 19).\n\nThe USDOC made virtually identical statements in its determinations in the LWS and OTR\ncountervailing duty investigations. (Exhibits CHI-3, p. 40 and CHI-4, p. 53). In the CWP countervailing duty\ninvestigation, the USDOC incorporated by reference its treatment of the issue in the concurrent anti-dumping\ninvestigation. (Exhibit CHI-1, p. 101).\n\n872 Exhibit CHI-9, pp. 21-22.\n873 Exhibit CHI-53, pp. 13-14. The USDOC rejected the argu ments that it must assume that domestic\nsubsidies necessarily result in lower export prices and that it had recognized that domestic subsidies lower prices\npro rata in both domestic or export markets, indicating that \"when it has considered the issue, the Department\nhas sometimes presumed that, whatever the effect, if an y, of domestic subsidies upon the prices subsequently\ncharged by their recipients, that effect would be the same for domestic prices and export prices\". (Id., p. 14).\n874 In this respect, the USDOC stated that:\n\n\"As we noted in [ CFS Paper], 'despite addressing the issue of parallel AD duties and CVDs\ndirectly, and explicitly requiring that the amount of any CVDs to offset export subsidies be\nadded to U.S. price, Congress provided no adjustment for CVDs imposed by reason of\n\n2. Claims of China\n14.7 China considers that the imposition of a \"doubl e remedy\" is incompatible with the United\nStates' obligations under the covered agreements. Ch ina makes \"as such\" and \"as applied\" claims in\nthis respect.\n(a) China's \"as applied\" claims\n14.8 China's \"as applied\" claims concern the duties imposed as a result of the four sets of anti-\ndumping and countervailing duty investiga tions at issue in this dispute. China claims that in each of\nthese four sets of determinations, the USDOC's use of its NME methodology to determine normal\nvalue in the anti-dumping determinations, concurre ntly with the imposition of countervailing duties\non the same products, was inconsistent with Article s 10, 19.3, 19.4, and 32.1 of the SCM Agreement\nand with Article VI of the GATT 1994.875\n14.9 In addition, China claims that the United Stat es acted inconsistently with Article I:1 of the\nGATT 1994 in each of the four sets of anti-dumping and countervailing duty determinations at issue\ndue to the failure of the USDOC to extend to im ports from China the same unconditional entitlement\nto the avoidance of a double remedy that it extends to like products originating in other Members.\n876\n14.10 China also claims that, in the determinations at issue, the United States acted inconsistently\nwith: (i) Article 12.1 of the SCM Agreement, due to the USDOC's failure to provide interested\nparties notice of the information which the USDOC required to evaluate the existence of a double\nremedy; (ii) Article 12.8 of the SCM Agreement, due to the USDOC's failure to inform China and\ninterested parties of the essential facts under cons ideration that would \"form the basis\" for the\nUSDOC's determinations in respect of the issue of \"double remedy\".877\n(b) China's \"as such\" claims\n14.11 The measure that is the subject of China's \"as su ch\" claims is an alleged omission, defined by\nChina as the \"failure of the United States to provide sufficient legal authority for Commerce to avoid\nthe imposition of double remedies for the same alleged acts of subsidization when it imposes anti-\n\ndomestic subsidies in NME proceedings.' In addition, the statutory and legislative history\nprovides no basis for adjusting for domestic subsidies, or any presumption of their effect on\nexport prices.\"\n\n\"[...] the Department has determined that, absent a statutory directive for an adjustment and\nunderlying assumption similar to that regarding CVDs imposed to offset export subsidies, or\nevidence that domestic subsidies have lowered U.S. prices in a given case, any adjustment for\nan assumed or undetermined effect would be inappropriate.\" (Exhibit CHI-53, pp. 14-16).\n\n875 Paragraphs B.1(f)(i)-(iv) of the \"as applied\" claims in China request for establishment of the Panel;\nChina first written submission, para. 468 (h); second written submission, para. 315 (i).\n876 Paragraph B.1(f)(vii) of the \"as applied\" claims in China request for establishment of the Panel;\nChina first written submission, para. 468 (j); second writte n submission, para. 315 (k). In its panel request,\nChina also made claims of violation of Articles 2.4, 9.2 and 9.3 of the AD Agreement, due to the alleged\nimposition of double remedies. China did not pursue these claims before the Panel.\n877 Paragraphs B.1(g)(vi)-(vii) of the \"as applied\" claims in China request for establishment of the\nPanel; China second written submission, paras. 269-270. China did not include this claim in its requests for\nfindings. Further, China's panel request also included claims under Articles 2.4 and 6.1, as well as Annex II(1)\nof the AD Agreement, which China did not pursue.\n\ndumping duties determined pursuant to its NME me thodology simultaneously with the imposition of\ncountervailing duties on the same product\".\n878, 879\n14.12 China contends that, as a result of this failure, U.S. law is inconsistent \"as such\" with (i)\nArticles 10, 19.3, 19.4, and 32.1 of the SCM Agre ement and Article VI of the GATT 1994; and (ii)\nArticle I:1 of the GATT 1994 due to the absence of legal authority to extend to imports from China\nthe same unconditional entitlement to the avoidance of a double remedy that the United States extends\nto like products originating in other Members.880\nB. UNITED STATES REQUESTS FOR PRELIMINARY RULINGS\n14.13 The United States requests that we find that th e measure challenged as part of China's \"as\nsuch\" claims, as well as China's \"as such\" claims themselves, fall outside our terms of reference. 881\nThe United States requests that we make findings on two distinct grounds: First, the United States\nsubmits that the alleged \"failure [...] to provide legal authority\" was not among the measures included\nin China's request for consultations. Second, the Un ited States submits that this alleged \"failure\" is\nnot a \"specific measure at issue\" identified in China's panel request pursuant to Article 6.2 of the\nDSU.\n14.14 China asks us to reject these requests for preliminary rulings.882\n1. Main arguments of the Parties\n(a) United States\n(i) U.S. request for ruling concerning China's failure to consult on the \"omission\"\n14.15 The United States argues that the alleged \"failure [...] to provide legal authority\" was not\nincluded in China's request for consultations and is therefore not within the Panel's terms of\nreference.883 The United States submits that the Appellate Body has indicated that, in determining\nwhether measures not included in the consultations re quest fall within a panel's terms of reference, a\npanel should compare the respective parameters of th e consultations request and of the panel request\nto determine whether the addition of measures in th e panel request expanded the scope or changed the\nessence of the dispute. 884 The United States argues that the a ddition, by China, of the \"omission\"\nconverted the dispute from one limited to a series of \"as applied\" claims to one which includes a\n\n878 China first written submission, para. 468 (i) and (k); see also paragraph B.2 of the \"as such\" claims\nin China request for establishment of the Panel and second written submission, para. 315 (j) and (l).\n879 China proceeds under alternative hypotheses with respect to extent of the legal authority conferred\non the USDOC to avoid the imposition of double remedies under U.S. law. China argues that while the\nUSDOC's position on \"double remedies is \"opaque and apparently contradictory\", it is possible to draw the\nconclusions that: (i) the USDOC has no authority to avoid the imposition of double remedies under the U.S.\ncountervailing duty legislation; (ii) the USDOC \"appears\" to lack such le gal authority under U.S. anti-dumping\nlaws, \"but this is unclear\", and to the extent that the USDOC does possess authority under the U.S. anti-dumping\nlaws to avoid imposing double remedies, \"this legal authority whatever it might be, places the burden on\nrespondent producers to present 'evidence' that 'subsidies pass through, pro rata, to U.S. prices'\". (China first\nwritten submission, paras. 359-363 and footnote 1).\n880 In its panel request, China also made claims of violation under Articles 2.4, 9.2 and 9.3 of the AD\nAgreement. China did not pursue these claims before the Panel.\n881 United States first written submission, paras. 65-86; second written submission, paras. 5-16.\n882 China response to the U.S. request for preliminary rulings, para. 40.\n883 United States first written submission, paras. 74-86.\n884 Id., para. 87, citing to Appellate Body Report on US – Shrimp (Thailand) / US – Customs Bond\nDirective, para. 294.\n\n\"measure\" challenged \"as such\", resulting in an expa nsion of the scope and a change in the essence of\nthe dispute.885\n14.16 The United States takes issue with the argument of China that the alleged \"failure\" to provide\nlegal authority to avoid the imposition of a dou ble remedy was evident on the face of the\ndeterminations at issue. First, the United States rejects China's suggestion that the USDOC made any\nbroad pronouncement in those dete rminations as to whether it had legal authority to adjust the anti-\ndumping duties to avoid any double remedy. 886 The United States adds that even assuming that the\nalleged \"absence of legal authority\" were reflected in the determinations at issue, it would not follow\nthat consulting on the specific investigations w ould have fulfilled the obligation to consult on the\nalleged \"failure\". The United States submits in this respect that higher-order measures such as\nstatutes and regulations are often referenced in ruli ngs and determinations that apply those measures;\nif such references were sufficient to place a re sponding Member on notice that they would be the\nsubject of an \"as such\" challenge, consultations on \"as such\" claims would almost never be\nrequired.887 Lastly, the United States reads China's argument as an admission that China was aware of\nthe existence of the alleged measure before it re quested consultations, meaning that it consciously\nopted not to include the measure in its consultations request.888\n(ii) U.S. request for ruling under Article 6.2 of the DSU\n14.17 The United States recalls that Article 6.2 of the DSU requires a complaining party to identify\nin its panel request the \"specific measures\" at issu e in the dispute. The United States argues that the\n\"failure\" identified in China's panel request is not a \"specific measure at issue\" in this dispute and, as a\nresult, is not within the Panel's terms of reference. The United States considers that China's complaint\nis not about the absence of any \"legal authority\", but about a requirement that China believes exists\nunder U.S. law to apply anti-dumping and countervailing measures in a way that results in the \"double\nremedy\" alleged by China.889 Thus, the United States argues, China is actually challenging a positive\nact, yet China's panel request fails to identify the specific U.S. legal provisions underlying this alleged\nrequirement (i.e., the aspects of U.S. law allegedly requiring or authorizing the concurrent application\nof anti-dumping duties and countervailing duties). In fact, the United States notes, China's panel\nrequest contain no references to any U.S. legal provision.890\n14.18 The United States further considers that an \"omi ssion\" or \"failure\" presents a special case for\npurposes of dispute settlement, and ma y only be considered to be a \"m easure taken\" if there is an\naffirmative obligation on a Member to take the action that it is accused of not having taken. As China\nfails to identify any WTO requirement for the United States to enact legislation to provide particular\nauthority to the USDOC with respect to doubl e remedies, and because no such WTO requirement\nactually exists, the United States considers that Ch ina has not established that the alleged \"failure\"\nconstitutes an \"omission\" cognizable for purposes of WTO dispute settlement.891\n\n885 United States first written submission, para. 85, citing to US – Oil Country Tubular Goods Sunset\nReviews, paras. 172-173; oral statement regarding the U.S. preliminary ruling request at the first meeting of the\nPanel, para. 9; response to Panel question 8 (first meeting).\n886 United States oral statement regarding the U.S. preliminary ruling request at the first meeting of the\nPanel, para. 11.\n887 United States response to Panel question 7 (first meeting).\n888 United States oral statement regarding the U.S. preliminary ruling request at the first meeting of the\nPanel, paras. 12-13; first written submission, para. 84.\n889 United States first written submission, paras. 65-72.\n890 Id., paras. 65-72; second written submission, paras. 11-13; responses to Panel questions 1, 2 and 3\n(first meeting).\n891 United States oral statement regarding the U.S. preliminary ruling request at the first meeting of the\nPanel, paras. 4-5; responses to Panel questions 1 and 2 (first meeting); second written submission, para. 9.\n\n(b) China\n(i) U.S. request for ruling concerning China's failure to consult on the \"omission\"\n14.19 China argues that it is well established in WTO jurisprudence that there need not be \"a precise\nand exact identity between the specific measures that were the subject of consultations and the\nspecific measures identified in the request for the establishment of a panel\"; rather, the relevant\nquestion is whether the addition of a measu re \"expand[s] the scope of the dispute\".\n892 China notes\nthat in the recent US – Continued Zeroing dispute, the Appellate Body, in evaluating this issue,\nexamined whether the additional me asures \"relate\" to th e measures identified in the request for\nconsultations, and whether the \"legal basis\" of the claims raised in respect of the additional measures\nis the same as the legal basis of the claims set forth in the consultations request\". 893 China submits\nthat the additional measure it added in its panel re quest easily meets both criteria as: (i) the USDOC's\nlack of legal authority was already evident on the face of the measures that were the subject of\nconsultations and the panel request does nothing more than identify this absence of legal authority as\na distinct measure; (ii) the measures are \"related \" because the USDOC specifically referred to the\nabsence of legal authority in the underlying determina tions, and even in the absence of such a specific\nreference, the absence of legal authority is one po ssible explanation for the USDOC's failure to avoid\nthe imposition of double remedies in the investigations at issue; and (iii) the legal basis for China's\nclaims in respect of the additional measure is identic al to the legal basis for China's claims in respect\nof the measures that were the subject of consulta tions and the legal issue with respect to all these\nmeasures is the same (i.e., whether the impositi on of double remedies for the same alleged acts of\nsubsidization is inconsistent with the covered agreements). 894 China also considers that the\ncomplaining party's prior awareness of a measure has no relevance to whether that measure is\nsufficiently related to the measures that were consulted upon.895\n14.20 Finally, China submits that the fact that it is challenging a measure \"as such\" is not relevant to\nwhether that measure relates to the dispute that w as the subject of consultations. China notes in this\nrespect that the Appellate Body observed in US – Continued Zeroing that \"the distinction between 'as\nsuch' and 'as applied' claims does not govern the definition of a measure for purposes of WTO dispute\nsettlement\".896\n(ii) U.S. request for ruling under Article 6.2 of the DSU\n14.21 China argues that it is the United States' own conduct that is at the origin of whatever\nuncertainty exists as to the provisions of U.S. law – or their absence – that re late to the problem of\ndouble remedies. China considers that although th e USDOC acknowledges the existence of the issue\nof \"double remedies\", the USDOC has been vague and evasive as to whether it possesses legal\nauthority to avoid the imposition of double reme dies, and under what legal framework it would\nanalyze that issue.897 In any case, China notes, the Appellate Body has found that the identification of\na measure under Article 6.2 need be framed only with sufficient particularity as to indicate the nature\nof the measure and the gist of what is at issue. China considers that it has gone well beyond this\nminimal requirement and that it was not required to identify the entire body of U.S. trade remedy laws\n\n892 China response to the U.S. request for preliminary rulings, paras. 27-28, citing Appellate Body\n893 Id., para. 29, citing to Appellate Body Report on US – Continued Zeroing, paras. 228 and 235.\n894 China response to the U.S. request for preliminary rulings, paras. 30 et seq. ; response to Panel\nquestion 7 (first meeting).\n895 China response to Panel question 6 (first meeting).\n896 China response to the U.S. request for preliminary rulings, para. 36, citing to Appellate Body Report\non US − Continued Zeroing , para. 179; and Panel Report on US − Continued Zeroing , para. 7.46; response to\nPanel question 8 (first meeting).\n897 Id., paras. 3-10.\n\nand regulations in its panel request in order to apprise the United States of the nature of this dispute.898\nChina also argues that is has exhaustively documen ted the facts and circumstances that demonstrate\nthe omission by the United States 899 and that the \"absence of legal authority\" identified in its panel\nrequest is the same omission that has been the subject of extensive consideration within the\nUnited States and that the USDOC itself identified as the explanation for its failure to avoid double\nremedies in the investigations at issue.900\n14.22 In addition, China takes issue with the United States' characterization of its claims. China\nsubmits that its complaint does not relate to any provision of U.S. law requiring the USDOC to apply\nAD duties calculated under the NME methodology concurrently with countervailing duties. Rather,\nChina's claim is that when the USDOC chooses to apply countervailing duties concurrently with anti-\ndumping duties determined in accordance with its NME methodology, a necessary consequence of\nthat choice is the imposition of a double remedy an d that this is because th e USDOC lacks authority\nunder U.S. law to account for the double remedy that arises in such circ umstances. Thus, the\nimpairment identified by China in this dispute fi nds its source in the fact that the USDOC lacks\nauthority to avoid the imposition of double remedies whenever it applies anti-dumping and\ncountervailing measures in respect of the same product from China.\n901\n14.23 Finally, China notes that the Appellate Body has indicated that an examination of the\nsufficiency of a panel request does not entail a substa ntive consideration as to what types of measures\nare susceptible to challenge under the DSU 902, and has made clear that any act or omission can be a\nmeasure for purposes of dispute settlement.903\n2. Assessment by the Panel\n(a) U.S. request for a preliminary ruling with resp ect to the alleged failure to consult on the\n\"omission\"\n14.24 We first consider the United States' argument that the \"omission\" 904 identified by China in its\nrequest for the establishment of the panel does not fall within our terms of reference because it is a\nmeasure that was not included in China's request for consultations.905 The United States' request for a\npreliminary ruling in this respect raises the question of the relationship between the measures included\nin a complaining party's request for consultatio ns and those included in its request for the\nestablishment of a panel.\n\n898 China response to the U.S. request for preliminary rulings, para. 24; response to Panel question 3\n(first meeting).\n899 China response to the U.S. request for preliminary rulings, paras. 21-23.\n900 China response to Panel question 4 (a) (first meeting).\n901 China response to the U.S. request for preliminary rulings, paras. 15-17; response to Panel\nquestion 3 (first meeting).\n902 China response to the U.S. request for preliminary rulings, paras. 13, 20; response to Panel\nquestion 4(b) (first meeting), all citing to Appellate Body Report on US – Continued Zeroing, para. 169.\n903 China response to the U.S. request for preliminary rulings, para. 20, citing to Appellate Body\nReports on US – Corrosion-Resistant Steel Sunset Review , para. 81, EC – Selected Customs Matters , para. 133\nand US – Continued Zeroing, para. 176; response to Panel question 4(b) (first meeting).\n904 Our reference to the alleged \"failure [...] to provide legal authority\" as an \"omission\" or a \"measure\"\nin this section is for ease of reference only and is w ithout prejudice to the United States' argument that China's\npanel request does not identify the \"sp ecific measure\" at issue in the disput e in accordance with Article 6.2 of\nthe DSU.\n905 We address the United States' request for preliminary ruling with respect to the absence of\nconsultations on the \"omission\" before considering the United States' request concerning the identification of\nthis measure in China's panel request. In our view, proceeding in this order follows the logical sequence of\nevents that determine a panel's terms of reference.\n\n14.25 The \"measure\" the inclusion of which in the pa nel request is challenged by the United States\nis the following:\n\"In certain of the investigations specifi ed above, the US Department of Commerce\nstated that US law provides no basis to make any adjustment to either the anti-\ndumping or countervailing duty calculations to avoid the imposition of a double\nremedy for the same unfair trade practice, where such a double remedy arises from\nthe use of the US non-market economy (NME) methodology to impose anti-dumping\nduties simultaneously with the impositi on of countervailing duties on the same\nproduct. The measures therefore include, as an omission, the failure of the United\nStates to provide legal authority for the US Department of Commerce to avoid the\nimposition of a double remedy when it im poses anti-dumping duties determined\npursuant to the US NME methodology simultaneously with the imposition of\ncountervailing duties on the same product\".\n906 (emphasis added)\n14.26 Further, China's panel request contains a se ction entitled \"As Such Claims\" which indicates,\ninter alia, that:\n\"[...] The United States has not provided the Department of Commerce with any legal\nauthority to adjust either the anti-dumping or countervailing duty calculations to\navoid the imposition of a double remedy when it imposes anti-dumping duties\ndetermined pursuant to its NME methodolog y simultaneously with the imposition of\ncountervailing duties on the same product. The Department of Commerce has\nacknowledged the absence of any such legal authority.\nChina considers that the absence of any legal authority for the Department of\nCommerce to avoid the imposition of a double remedy is an omission that, as such, is\ninconsistent with the following obligations under the covered agreements\" [follows a\nlist of provisions of the covered agreem ents which, the request indicates, are\ncontravened by the \"absence of legal authority to avoid a double remedy]\".\n907\n\n\"To the extent that US law does not permit the Department of Commerce to avoid the\nimposition of a double remedy for the same unfair trade practice in parallel anti-\ndumping and countervailing duty investig ations involving imports from WTO\nMembers that the United States has d esignated as non-market economies, China\nconsiders that US law is, as such, inc onsistent with Article I of the GATT 1994\n[...]\".\n908 (emphasis added)\n14.27 There is no disagreement between the parties th at China's request for consultations does not\nexplicitly identify, as a \"measure at issue\", the om ission included by China in its request for the\nestablishment of a panel. China's request for cons ultations states that it \"concerns definitive anti-\ndumping and countervailing duties imposed by the Un ited States pursuant to the final anti-dumping\nand countervailing duty determinations and orders issued by the US Department of Commerce\" in the\nfour sets of anti-dumping and countervailing duty investig ations at issue in this dispute. The request\n\n906 China request for establishment of the Panel, Section A, p. 3.\n907 Id., Section B.2, p. 7.\n908 Id., Section B.2, p. 8.\n\nconcludes \"China reserves the right to raise a dditional claims and legal matters regarding the above-\nmentioned measures during the course of the consultations\".909\n14.28 Article 4 of the DSU, governing requests fo r consultations, and Article 6 of the same\nAgreement, governing requests for the establishment of a panel, are relevant to the issue before us.\nArticle 4.4 of the DSU provides:\n\"[...] Any request for consultations shall be submitted in writing and shall give the\nreasons for the request, including identifi cation of the measures at issue and an\nindication of the legal basis for the complaint\".\n14.29 Article 6.2 of the DSU provides:\n\"The request for establishment of the panel [...] shall indicate whether consultations\nwere held, identify the specific measures at issue and provide a brief summary of the\nlegal basis of the complaint sufficient to present the problem clearly\".\n14.30 A panel's terms of reference are determined by the content of the request for its establishment.\nYet, \"as a general matter, consultations are a prerequisite to panel proceedings\"910, and therefore to the\ninclusion of a measure in the request for the establishment of a panel and (by consequence) the panel's\nterms of reference. The Appellate Body has explaine d that \"Articles 4 and 6 of the DSU [...] set forth\na process by which a complaining party must request consultations, and consu ltations must be held,\nbefore a matter may be referred to the DSB for the establishment of a panel\". 911 The Appellate Body\nhas also highlighted the importance of consultations, explaining that they \"provide the parties an\nopportunity to define and delimit the scope of the dispute between them\".\n912\n14.31 Past panels and the Appellate Body have r ecognized a certain degree of latitude to the\ncomplaining party in terms of the correspondence be tween the request for consultations and the panel\nrequest: there need not be \"a precise and exact identity between the specific measures that were the\nsubject of consultations and the specific measures identified in the request for establishment of a\npanel\".913 Where a complainant includes, in its panel request, a measure that was not part of the\nconsultations request, it must be asked whether the co mplaining party, in so doing, expands the scope\nof the dispute914 or changes its essence.915\n14.32 In answering this question, panels and the Appe llate Body have, in prior disputes, focused on\nvarious aspects of the relationship between the me asures included in the panel request and those\nidentified in the consultation request. Notably, in certain disputes, they considered whether the\nadditional measures constituted \"separate and lega lly distinct\" measures from those which had been\n\n909 China request for consultations, pp. 1 and 6. (emphasis added).\n910 Appellate Body Report on Mexico – Corn Syrup (Article 21.5 – US), para. 58, cited with approval in\nAppellate Body Report on US – Upland Cotton, para. 284.\n911 Appellate Body Report on Brazil – Aircraft , para. 131, cited with approval in Appellate Body\nReport on US – Upland Cotton, para. 285.\n912 Appellate Body Report on Mexico – Corn Syrup (Article 21.5 – US), para. 54, cited with approval in\nAppellate Body Report on US – Continued Zeroing, para. 222.\n913 Appellate Body Report on Brazil – Aircraft , para. 132, (emphasis original), cited with approval in\ne.g., Appellate Body Reports on US – Upland Cotton, para. 285 and US – Continued Zeroing, para. 222.\n914 Appellate Body Report, US – Upland Cotton , para. 293, cited with approval in Appellate Body\nReports on US – Continued Zeroing, paras. 222, 224 and 228, and US – Shrimp (Thailand) / US – Customs Bond\nDirective, para. 293.\n915 Appellate Body Report on US – Shrimp (Thailand) / US – Customs Bond Directive , para. 293\n(quoting Appellate Body Report on Mexico – Anti-Dumping Measures on Rice , para. 137, (referring to\nAppellate Body Report on Brazil – Aircraft, para. 132)).\n\nconsulted upon, in view of the content of the measures, their legal bases, the government agencies that\nissued them and/or the legal linkages between them.\n916 In other, more recent disputes, they found that\nthe measures added in the panel request fell within the panel's terms of reference because they were\nsimilar or sufficiently related to those that had b een consulted upon, and because the legal basis of the\nclaims made in respect of the two different sets of measures were identical.917\n14.33 While this prior jurisprudence offers some gui dance on how to resolve the question identified\nabove, we do not read it as establishing precise criteria that would apply in every instance,\nirrespective of the factual situation at issue. This understanding is consis tent with the Appellate\nBody's indication that \"whether a complaining party has 'expand[ed] the scope of the dispute' or\nchanged the 'essence' of the dispute through the inclus ion of a measure in its panel request that was\nnot part of its consultations request must be determined on a case-by-case basis\".\n918\n14.34 In any event, the present dispute involves factual circumstances which have not been\nconsidered in past WTO disputes. In the present case, China's panel request added a new measure in\nthe form of a rule or norm of general and prospectiv e application (albeit formulated in the negative) –\nthe \"omission\" – whereas the request for consultatio ns had only included measures in the nature of\nindividual instances of application of that rule of general application – the eight USDOC anti-\ndumping and countervailing dut y determinations. Paralleling this expansion in the nature of the\nmeasures at issue was an expansion in the nature of the legal claims in respect of these measures\nwhich, as the United States points out, had the effect of transforming a dispute involving only \"as\napplied\" claims into one also including \"as such\" challenges.\n919\n14.35 In its argument that the \"omission\" falls within our terms of reference, China, relying on the\nfindings of the Appellate Body in US – Continued Zeroing, argues that the measure added in the panel\nrequest \"relates\" to the measures id entified in the request for consulta tions and that the legal basis of\nthe claims raised in respect of the additional measure is the same as the legal basis of the claims set\nforth in the consultations request. We consider that the examination of the nature and extent of the\nrelationship between these two sets of measures is a tool to help us understand whether including the\nadditional measure \"expands the scope of the disput e\" or \"changes its essence\" and, we agree with\nChina that, in the present dispute, the additional measure is significan tly related to the measures that\nwere identified in China's request for consultations, albeit for reasons other than those put forward by\n\n916 Appellate Body Report on US – Certain EC Products , paras. 60-82; Panel Report, US – Customs\nBond Directive, paras. 7.173-7.204; Appellate Body Report on US – Shrimp (Thailand) / US – Customs Bond\nDirective, paras. 286-295.\n917 Panel Report on US – Continued Zeroing , paras. 7.16-7.29; Appellate Body Report on US –\nContinued Zeroing , paras. 213-236. See also Appellate Body Report on Brazil – Aircraft , paras. 127-133,\nfinding that the additional measures (regulatory instruments relating to the administration of the subsidy\nprogramme at issue) did not change the essence of the measure consulted upon. In US – Continued Zeroing, the\nAppellate Body qualified its findings in US – Certain EC Products (additional measure excluded on the basis\nthat it was separate and legally distinct from the measur es consulted upon), indicating that the two measures at\nissue in US – Certain EC Products were not only legally distinct, but \"were entirely different and, as a\nconsequence, the matters covered by the consultations requ est and the panel request were distinct\". (Appellate\nBody on US – Continued Zeroing, para. 230).\n918 Appellate Body Report on US – Shrimp (Thailand) / US – Customs Bond Directive , para. 293. In\nthe same case, the Appellate Body indicated that its findings (which it referred to as a \"dictum\") in US – Certain\nEC Products (considering whether the measures were \"separate a nd legally distinct\") were not to be treated \"as\ncreating an exclusive test or precedent\". (Id., para. 295 and footnote 391).\n919 The Appellate Body has indicated that panels should limit their analysis to the request for\nconsultations, and not whether consultations actually took place with respect to the alleged measure. (Appellate\nBody Report on US − Upland Cotton, para. 287). In consequence, in determining whether the inclusion of the\n\"omission\" in China's panel request had the effect of expanding the scope of the dispute or changing its essence,\nwe limit our analysis to the text of China's request for consultations.\n\nChina.920 Yet, we do not consider the \"relationship\" between the \"omission\" and the determinations\nidentified in China's consultations request to be comparable to that which existed between the\nmeasures at issue in US – Continued Zeroing . In that case, the measures at issue were subsequent\ndeterminations taken in the context of the same anti-dumping orders, and \"derive[d] from the same\nunderlying legal basis\".\n14.36 By contrast, and as discussed above, the relations hip in this dispute is between specific\nbehaviour in the first case and the norm of general or prospective application on which that specific\nbehaviour is allegedly based on the other. The m easures identified in China's consultations request\nconstitute specific instances of application of the measures identified in its panel request. For this\nreason, it comes as no surprise that the measures c ontained in each of these documents are closely\nconnected. For the same reason, one would expect in such circumstances that the complaining party\nwould allege violation of similar pr ovisions of the covered agreements, as is the case here. Yet, this\nclose relationship between the measures included in each of the requests and the fact that the legal\nclaims made in respect of these measures invoke th e same provisions of the covered agreements does\nnot, in our view, outweigh the fact that the inclus ion of the \"omission\" by China had the effect of\nbringing a wholly new type of measure – norms of general and prospective application – within the\nscope of the dispute and of adding \"as such\" claims to the \"as applied\" ch allenges included in the\nrequest for consultations. We consider that the a ddition of such new measures and claims in this case\nso broadens the scope of the present dispute, and changes its nature, as to place that measure outside\nof our terms of reference.\n14.37 In reaching this conclusion, we take into c onsideration the recognition by panels and the\nAppellate Body that \"as such\" challenges against la ws, regulations or other instruments that have\ngeneral and prospective application are serious cha llenges that have more far-reaching implications\nthan \"as applied\" challenges against individual inst ances of application of such norms of general and\nprospective application.921, 922\n14.38 Our conclusion that the inclusion of the \"omission\" by China significantly expands the scope\nof the dispute and therefore that this measure and th e claims made in its respect are outside our terms\n\n920 In our view, the \"relationship\" between the measures set out in the panel request and those identified\nin the request for consultations derives from their substan tive connection, not from the fact that the former may\nor may nor have been \"evident\" on the face of the latter. See paragraph 14.39, infra.\n921 See Appellate Body Report on US – Oil Country Tubular Goods Sunset Reviews, para. 172:\n\n\"[...] 'as such' challenges against a Member's measures in WTO dispute settlement proceedings\nare serious challenges. By definition, an 'as such' claim challenges laws, regulations, or other\ninstruments of a Member that have general an d prospective application, asserting that a\nMember's conduct—not only in a particular instan ce that has occurred, but in future situations\nas well—will necessarily be inco nsistent with that Member's WTO obligations. In essence,\ncomplaining parties bringing 'as such' challenges seek to prevent Members ex ante from\nengaging in certain conduct. The implications of such challenges are obviously more far-\nreaching than 'as applied' claims\".\n\n922 To be clear, we consider that taki ng into account the nature of the claims at issue in examining the\ncorrespondence between the measures listed in the request for consultations and those listed in the panel request\nis appropriate since they, together, determine the \"matter\" which is before a panel. We note that in US –\nContinued Zeroing, the Appellate Body found that the panel had properly examined both components of the\n\"matter\" before it – claims and measures – when it took into account the fact that the legal nature of the\nEuropean Communities' claims regarding the additional measures \"[did] not in any way differ from that of the\n[...] measures identified in the [...] consultations request\" in reaching its conclusion that the consultations request\nand the panel request in that case referred to the same subject-matter, and as a result, that the additional\nmeasures fell within the panel's terms of reference. (Appellate Body Report on US\n− Continued Zeroing,\npara. 233).\n\nof reference finds support in the findings of the Appellate Body in US – Shrimp (Thailand) / US\n−\nCustoms Bond Directive. In that dispute, the Appellat e Body was critical of the proposition that the\ninclusion, in the request for consultations, of a sp ecific measure would suffice to bring within the\nscope of the dispute any legal instrument providing a general authority or legal basis for that specific\nmeasure.923 The Appellate Body added that such an a pproach would imply that laws and regulations\nproviding general authority – incl uding constitutional provisions – w ould automatically be implicated\nin a dispute even if they were not mentioned in a consultations request\".924\n14.39 We recall China's view that there is a relationship between the determinations identified in the\nrequest for consultations and the alleged \"omission\" because those determinations \"stated that U.S.\nlaw provides no basis to make any adjustment […] to avoid the imposition of a double remedy\". 925\nLeaving aside whether or not China's characterizat ion of the determinations is correct, we do not\nbelieve that such a reference, in and of itself, establishes a relationship sufficiently close as to bring\nthe alleged omission within the scope of this disput e. An applied measure ma y often refer, implicitly\nor explicitly, to the legal basis under which it is taken and measures of gene ral application will often\nbe referenced in the specific instances in which they are applied. We agree with the United States that\nif China's arguments were followed, consultations on \"as such\" claims would almost never be required\nsince consultations on related \" as applied\" matters would suffice. 926 In sum, as previously explained,\nwe consider that the addition to a dispute of \"as such\" claims regarding a norm of general and\nprospective application represents a significant expans ion of the scope of the dispute, and changes its\nnature, even if the norm is substa ntively related to the individual in stances of behaviour identified in\nthe request for consultations.\n14.40 Further, unlike China, we do not read the Appellate Body Report in US – Continued Zeroing\nas suggesting that the distinction between \"as such\" a nd \"as applied\" claims is irrelevant to a panel's\nconsideration of its terms of reference. 927 The statement of the Appellate Body relied upon by China\naddresses the question of what constitutes a \"mea sure\" for purposes of WTO dispute settlement and\nwhat types of measures are susceptib le to WTO challenge, substantive questions that are not to be\nconfused with the jurisdictional issues before us. In essence, in that statem ent, the Appellate Body\nmakes the narrow point that \"[i]n order to be suscepti ble to challenge, a measure need not fit squarely\nwithin one of [the] two categories\" of measures recognized in WTO jurisprudence. The Appellate\nBody did not, in that case or elsewhere, suggest th at there is no significant difference between norms\n\n923 Appellate Body Report on US – Shrimp (Thailand) / US – Customs Bond Directive, para. 294.\n924 Id., footnote 390. The parties debate the relevance of the panel and Appellate Body findings in US –\nShrimp (Thailand) / US – Customs Bond Directive in light of the differences between the facts of that dispute\nand those of the present one. As noted above, the panel and Appellate Body reports in US – Customs Bond\nDirective do not directly address the issue before us. Consequently, we do not consider it necessary to examine\nin detail the factual differences between that dispute and the present one.\n925 China response to U.S. request for preliminary rulings, paras. 30-32; response to Panel question 7\n(first meeting).\n926 United States response to Panel question 7 (first meeting).\n927 China relies on the following statement of the Appellate Body:\n\n\"We share the Panel's view that the distinction between 'as such' and 'as applied' claims does\nnot govern the definition of a measure for purposes of WTO dispute settlement. This\ndistinction has been developed in the jurisprudence as an analytical tool to facilitate the\nunderstanding of the nature of a measure at issue. This heuristic device, however useful, does\nnot define exhaustively the types of measures that may be subject to challenge in WTO\ndispute settlement. In order to be susceptible to challenge, a measure need not fit squarely\nwithin one of these two categories, that is, eith er as a rule or norm of general and prospective\napplication, or as an individual instance of the application of a rule or norm\". (China response\nto the U.S. request for preliminary rulings, para. 36 (quoting Appellate Body Report on US –\nContinued Zeroing, para. 179).\n\nof general and prospective applica tion and individual instances of application of such norms, or that\nsuch difference is irrelevant in determining a pa nel's terms of reference. To the contrary, the\nAppellate Body has repeatedly made it clear that challenges to the former not only entail a different\nlegal analysis on the part of the panel, but also that \"as such\" challenges have systemic implications\nthat go well beyond those of \"as applied\" claims.928\n14.41 Finally, the parties have debated the issue of the relevance of China's awareness of the\nexistence of the additional measure at th e time of its request for consultations. 929 Prior cases offer\nlittle guidance on whether a complaining party's prior knowledge of such an \"additional\" measure is a\nrelevant consideration. In any event, given our findi ngs above, this is an issue we need not decide in\nthe present case.\n14.42 For the reasons set out above, we find that the \"omission\" challenged by China in its \"as such\"\nclaims falls outside our terms of reference, and c onsequently, that China's \"as such\" claims equally\nfall outside our terms of reference.\n(b) United States request for a preliminary ruling under Article 6.2 of the DSU\n14.43 Having already determined that the measure ch allenged by China in the context of its \"as\nsuch\" claims and China's \"as such\" claims themsel ves are not properly before us because China did\nnot identify them in its request for consultations , we do not need to address the second request for\npreliminary ruling presented by the United States, i.e., that these measure and claims fall outside our\nterms of reference due to China's failure to identify the \"measure at issue\" in the dispute pursuant to\nArticle 6.2 of the DSU.\nC. C\nHINA'S \"AS APPLIED\" CLAIMS\n1. Introduction\n14.44 In the following sections, we address China' s \"as applied\" \"double remedy\" claims.\nSpecifically, we consider China's claims that:\n(i) the United States imposed a \"double remedy\", inconsistent with Articles 10,\n19.3, 19.4 and 32.1 of the SCM Agreement and Article VI:3 of the GATT\n1994;\n(ii) the USDOC's treatment of the qu estion of \"double remedy\" in the\ninvestigations at issue was inconsiste nt with United States' obligations under\nArticles 12.1 and 12.8 of the SCM Agreement;\n(iii) the United States denied imports from China \"most-favoured nation\"\ntreatment under Article I:1 of th e GATT 1994 by imposing double remedies\nin the investigations at issue.\n\n928 In US – Oil Country Tubular Goods Sunset Reviews the Appellate Body recognized that the\ndistinction between \"as such\" and \"as applied\" challe nges may be relevant to issues affecting a panel's\njurisdiction in making observations about the identification of \"as such\" claims in a panel request . The\nAppellate Body in that case found that Argentina had sufficiently identified the measure at issue pursuant to\nArticle 6.2 of the DSU but nonetheless opined that Argentina could have been clearer in setting out it claims. It\n\"urge[d] complaining parties to be especially diligent in setting out 'as such' claims in their panel requests as\nclearly as possible\". (Appellate Body Report on US – Oil Country Tubular Goods Sunset Reviews, paras. 172-\n173). (emphasis original).\n929 We do not understand China to contest that it was aware of the existence of the alleged omission at\nthe time it submitted its request for consultations.\n\n14.45 Also as a preliminary remark, we consider it a ppropriate to emphasize that the dispute before\nus is limited to the consiste ncy with the covered agreements\n of the USDOC's determinations in the\nfour sets of investigations at issue; the consistency of double remedies with U.S. law is not before us.\n2. General considerations with respect to the potential for \"double remedies\" to arise from\nthe simultaneous imposition of countervailing duties and of anti-dumping duties\ncalculated pursuant to the U.S. NME methodology\n14.46 We first examine the parties' arguments with respect to whether the concurrent imposition of\nanti-dumping duties calculated under the U.S. NME methodology and of countervailing duties results\nin the imposition of double remedies.\n(a) Main arguments of the Parties\n(i) China\n14.47 China argues that where anti-dumping duties calculated pursuant to a methodology that relies\non surrogate, market-determined, values (NME methodology) and countervailing duties are\nsimultaneously applied to imports of a same good, it necessarily results that any domestic subsidy\nbestowed upon the production of that good is offset twice, once through the calculation of the\ndumping margin, and once as a result of the imposition of the countervailing duties.\n930\n14.48 By way of background, China notes that for a long time, the USDOC held the position that it\ncould not apply countervailing duties to countries wh ich it determined to be non-market economies, a\nposition which the USDOC reversed in the CFS Paper case.931 The four investigations at issue in this\ndispute represent the first instances in which the USDOC simultaneously imposed anti-dumping\nduties calculated under its NME methodology and countervailing duties.\n14.49 China notes that the issue of double remedies has been the subject of extensive discussions in\nthe United States and was acknowledged by all three branches of the Government of the\nUnited States, including the USDOC itself.\n932 In addition, China argues that, more generally, the\nUSDOC has consistently recognized that the manne r in which it calculates anti-dumping duties can\noffset subsidies, including domestic subsidies. In particular, China argues that in numerous anti-\ndumping investigations of imports from market economy countries, the USDOC has recognized that\nby (i) adding subsidies to the producer's cost of production; (ii) deducting countervailing duties from\nthe export price; or (iii) using a producer's repor ted costs, if these costs do not reflect subsidies\nreceived (or otherwise using unsubsidized costs) to determine constr ucted normal value; it would\n\n930 See, e.g., China first written submission, para. 326.\n931 Id., paras. 328-346. See paras. 14.2-14.4, supra, for the Panel's discussion of the evolution of the\nUSDOC's position on the applicability of the U.S. countervailing duty regime to NMEs.\n932 China oral statement at the first meeting of the Panel, para. 79; first written submission, paras. 347-\n354; oral statement at the second mee ting of the Panel, para. 60. China notably refers to a 2005 report of the\nU.S. Government Accountability Office (the \"GAO\"), in which the GAO assessed whether it would be possible\nfor the USDOC to apply countervailing duties to imports from China; to draft legislation (which was adopted by\nthe U.S. House of Representatives but not the U.S. Senate) to provide the USDOC with explicit authority to\naddress the issue of double remedies, should it apply the U.S. countervailing duty legislation to NMEs; to the\nrecent decision of the U.S. Co urt of International Trade in GPX, (discussed in more detail below); and to\nstatements made by the USDOC in relation to the CFS Paper case. (Id., referring, inter alia , to U.S.\nGovernment Accountability Office, U.S. – China Trade: Commerce Faces Practical and Legal Challenges in\nApplying Countervailing Duties , GAO-05-474 (June 2005) (\"GAO Report\"), Exhibit CHI-121; United States\nTrade Rights Enforcement Act, H.R. 3283, Exhibit CHI-122; and to United States Court of International Trade,\nGPX International Tire Corporation and Hebei Starbright Tire Co., Ltd., v. United States (\" GPX\"), Exhibit\nCHI-169).\n\neffectively collect countervailing duties a second time.933 China submits that the United States fails to\nexplain how the double remedy that arises from the use of an NME methodology differs from these\nother forms of double remedies, which the USDOC has taken all necessary steps to avoid.\n934\n14.50 In China's view, a double remedy arises in all instances of concurrent imposition of\ncountervailing duties and of anti-dumping duties cal culated pursuant to a methodology relying on\nsurrogate values.935 This, in China's view, results from th e overlapping rationales and effects of NME\nmethodologies and of countervailing duties: China explains that the rationale for using an NME\nmethodology in an anti-dumping investigation su bsumes the rationale for imposing countervailing\nduties and that these are two different approaches fo r remedying the fact that a producer's costs and\nprices were not determined by market forces. China argues that when it uses its NME methodology,\nthe USDOC places the producer in the position of ha ving unsubsidized, market-determined costs of\nproduction,936 and calculates a dumping margin based on the difference between this market-\ndetermined cost of production and the producer's expor t price. China explains that in doing so, the\nUSDOC necessarily captures any trade-distorting effects of alleged subsidies in the anti-dumping\nmargin. Thus, having brought the producer's costs of production \"to the market\", and having\ncalculated a duty on this basis, the USDOC's NM E methodology necessarily offsets any benefit that\nthe producer obtained by receiving financial c ontributions from the government on terms more\nfavourable than those available in the market. When the USDOC simulta neously calculates the\namount of subsidization in a parallel countervailing duty investigation – again by placing the producer\nin the position of having market-determined costs of production – it is repeating the same exercise\nundertaken in the anti-dumping NME calculation. T hus, China explains, the same subsidy is offset\ntwice.\n14.51 China notes the United States' arguments that the use of an NME methodology may not\nconstitute a complete remedy for the subsidies. Consistent with the explanation above, China argues\nthat the existence of a double remedy occurs entirely on the cost side of the equation. Accordingly,\nChina rejects the United States' contention that the existence of a double remedy is a factual question\nand depends, in particular, on whether subsidies pass through, pro rata , to U.S. prices.\n937 C h i n a\nprovides a number of examples from the investigations at issue (with respect to subsidies in the form\nof the provision of inputs), as well as theoretical examples which it considers support its arguments in\nthis respect.938 China also rejects the United States' ar gument that the existence of a double remedy\n\n933 China second written submission, paras. 214 and 227, response to Panel question 74 (first meeting).\nChina adds that in these investigations, the USDOC did not consider the existence of a double remedy to be\n\"theoretical\", required any \"evidence\" or \"presumptions\" about the effects of subsidies on a producer's costs or\nprices, or suggest that it had no legal obligation to avoid the double remedy that it had identified. (China second\nwritten submission, para. 215). See Section XIV.C.5, infra , (Panel's consideration of China's claims under\nArticle I:1 of the GATT 1994), for a more detailed review of China's arguments in this respect.\n935 Id., para. 374.\n936 China argues that in calculating a constructed normal value, the USDOC seeks to ensure that the\nsurrogate values that it uses are, in fact, market-determined values and avoids the use of any surrogate value that\nmay itself be subsidized. (China first written submission para. 371 and footnote 315, inter alia referring to\nOmnibus Trade and Competitiveness Act of 1988, Exhibit CHI-123).\n937 Id., paras. 330, 372 and 391-392; oral statement at the first meeting of the Panel, para. 81; second\nwritten submission, paras. 219, 233-238, response to Pa nel question 73 (first meeting). China considers that\nwhether subsidies pass through, pro rata , to U.S. prices, is entirely irrele vant. But China argues that even\nassuming that the United States were correct and that the existence of a double remedy depends on the effects of\nsubsidies on export prices, the only lawful basis on which an investigating authority could impose\ncountervailing duties would be to presume that the subs idies had precisely that effect. (China second written\nsubmission, para. 289 et seq.).\n938 China first written submission, para. 395; oral stat ement at the first meeting of the Panel, para. 81;\nsecond written submission, paras. 222-225, response to Pa nel question 73 (first meeting); response to Panel\nquestion 26 (second meeting); Exhibit CHI-142 (\"Further Examples of Offsetting the Same 'Subsidies' Twice\");\n\ncan be ascertained from a \"mathematical\" comparis on between the dumping and countervailing duty\nmargins. China's response to the Un ited States' argument in this r espect is that the use of an NME\nmethodology necessarily offsets any competitive advantage that the producer obtained from\ncountervailable subsidies, but that this does not mean that an anti-dumping margin determined\npursuant to an NME methodology is mathematica lly comparable to a countervailing duty margin\ncalculated in respect of the same product, because: (i) the use of an NME methodology is meant to\naddress a broader set of distortions (e.g. non-speci fic subsidies); and (ii) the dumping margin is\ndependent on the level of the producer's export price, a variable that plays no role in the\ncountervailing duty calculation. Further, for China, the fact that, in a given instance, the USDOC\ncould theoretically arrive at a zero dumping margin does not alter the fact that in using an NME\nmethodology, it necessarily offset the benefit of any countervailable subsidies along the way.\n939\n14.52 Overall, China considers that the theories put forward by the United States demonstrate that\nthe United States does not deny the existence of double remedies but rather, considers that the\nexistence of double remedies is solely a matt er of degree that depends on certain factual\ncircumstances.940 Yet, China notes, in the investigations at issue, the USDOC did not take any steps\nto determine the extent of the double remedy that may have arisen. 941 In any event, China considers\nthat it has demonstrated, at a minimum, that ther e was at least \"some overlap\" between the method by\nwhich the USDOC determined normal value in the an ti-dumping investigations and the subsidies that\nwere identified and countervailed by the USDOC in the parallel countervailing duty investigations.942\n14.53 Finally, China draws the Panel's attention to the 2009 decision of the U.S. Court of\nInternational Trade (\"CIT\") in GPX International Tire v. United States , a judicial review of the\ndetermination in the OTR investigation at issue in the present dispute. In GPX, the CIT held that the\nUSDOC is obligated to avoid o ffsetting the same subsidies twic e when it uses its NME methodology\nin conjunction with countervailing duties. 943 China notes that the CIT observed that the USDOC\naddresses subsidization of NME producers \"t hrough the NME AD methodology\" and that it is\nfundamentally incompatible with the purposes of the countervailing duty laws to offset the same\nsubsidies twice; China also cites the CIT's conclusion that the USDOC has an obligation to investigate\nand to avoid double remedies. China posits that in GPX, the CIT rejected U.S. arguments that are\nsimilar to those the United States makes before this Panel.944\n\nand Exhibit CHI-170 (examples, in scenarios in which subsidies \"pass through\" or do not \"pass through\" to\nexport prices).\n939 China response to Panel question 93 (a)-(b) (first meeting).\n940 See, e.g., China's second written submission, para. 305. China also argues that the United States has\nimplicitly acknowledged before the Panel the potential for at least some degree of overlap between the two\nremedies. In particular, China notes the United States ' statements that the use of an NME methodology to\ndetermine normal value may not constitute a complete re medy for any subsidies received by the producer, and\nthat it will \"not necessarily capture the full amount\" of any subsidies. China argues that th ese statements are\nconsistent with the USDOC's statement, in CFS Paper that \"a possibility of double counting results from\nsimultaneous antidumping and CVD investigations\" of impo rts from NME countries and with the statement by\nthe GAO that anti-dumping duties determined in accorda nce with the U.S. NME methodology \"offset much of\nthe value of both export subsidies and domestic subsidies\". (China response to Panel Question 92 (first\nmeeting)).\n941 China oral statement at the first meeting of the Panel, para. 82; second written submission,\npara. 305.\n942 China response to Panel question 92 (first meeting).\n943 China oral statement at the second meeting of the Panel, paras. 56-73.\n944 Id.\n\n(ii) United States\n14.54 The United States asks the Panel to reject Chin a's argument that a double remedy results from\nthe imposition of countervailing duties concurren tly with the imposition of anti-dumping duties\ncalculated under the U.S. NME methodology. In pa rticular, the United States contests what in its\nview is an argument of China that every calculation of a dumping margin using the NME\nmethodology will be artificially inflated by the full amount of subsidies that are remedied by\ncountervailing duties determined and imposed simultaneously on the subject goods. The\nUnited States argues that China has not provided evidence to support its arguments in this respect.945\n14.55 The United States proffers that the theory adva nced by China suggests that surrogate values\nused to determine normal value under the U.S. NME methodology are the mathematical equivalent of\nwhat actual production costs would be if China we re a market economy plus the precise amount of\nsubsidization. The United States challenges wh at it sees as the theoretical premises and the\nassumptions underlying China's theory. The Unite d States argues that it cannot be assumed that\nreplacement of actual (subsidized) values of f actor inputs with surrogate values under the NME\nmethodology results in an increase in the normal value by an amount that is equal to or greater than\nthe amount of the subsidy. The United States argue s that it cannot be assumed that the normal value\narrived at using the NME calculation is, in every instance, completely insulated from any of the\neffects of the countervailed subsidy. The United States posits that the subsidy could actually lower\nthe normal value, for instance by increasing a reci pient's efficiency and reducing the quantity of\nfactors used in production, or affect the surroga te (third-country) prices and/or profit and expense\nratios.946 The United States further submits that another fundamental premise for China's arguments\nis that subsidies reduce costs of production, pro rata; the United States contends that this would be a\nnecessary basis for arguing that normal values determined using the NME methodology are invariably\ninflated by an amount that fully remedies the subs idy. The United States considers it far from clear\nthat most subsidies achieve anything close to pro rata reductions in cost.947\n14.56 The United States characterizes as \"self-serving\" the illustrations offered by China using the\ninvestigations at issue in the current dispute, a nd asks the Panel not to consider that these establish\nthat double remedies were imposed in these investig ations. The United States disagrees with China's\nsuggestion that similarities between the surrogate values used in the anti-dumping calculations and the\nbenchmarks used in the countervailing duty investig ations prove that the resulting duties remedy the\nsame economic \"distortion\". In addition, the Un ited States submits counter-examples to demonstrate\nthat in some instances, the surr ogate values used by the USDOC in its dumping margin calculation\nwere in fact lower than both the producer's actual costs and the benchmarks used by the USDOC in its\ncalculation of the amount of the subsidy.948\n14.57 Further, the United States argues that China incorrectly equates the normal value with the\nanti-dumping remedy, and notes that normal values are only one side of the anti-dumping equation. 949\nThe United States argues that even if it is assumed that a subsidy lowers the recipient's costs of\nproduction, it may not pass-through to prices.950\n\n945 United States first written submission, paras. 445-4 62; opening statement at the first meeting of the\nPanel, para. 56; response to Panel question 73 (first meeting).\n946 United States first written submission, paras. 451-454 and footnote 612; response to Panel\nquestion 71 (first meeting); second written submission, paras. 203-207; response to Panel question 27 (second\nmeeting).\n947 United States first written submission, paras. 455-459.\n948 United States comments on China's response to Panel question 26 (second meeting).\n949 United States second written submission, paras. 198-202.\n950 United States response to Panel questions 71 (a) and 72 (first meeting).\n\n14.58 The United States urges the Panel to reject the argument made by China that there are\n\"overlapping rationales\" for (i) the use of NME me thodologies in anti-dumping investigations and (ii)\nthe imposition of countervailing duties. In the view of the United States, China mischaracterizes the\nrelevant rationales and incorrectly assumes that subsidization is among the market distortions that the\nNME methodology is \"meant to counteract\". The United States argues that under the GATT, the AD\nAgreement, and China's Protocol of Accession, subsidization is not re levant to the application of the\nNME methodology. The United States submits in this regard that the USDOC does not and cannot\nensure that the NME constructed normal value is \"subs idy-free\", and that in some instances, including\nin the investigations at issue, the surr ogate value exceeds the producer's actual costs.\n951 T h e\nUnited States further submits that the effects of subsidies on costs or prices is not, under the covered\nagreements, relevant to the calculation of the amount of countervailing duties. On the contrary, under\nArticle VI:3 of the GATT and Article 19.2 of the SCM Agreement, countervailing duties may be\nimposed for the full amount of the subsidy found to exist, irrespective of the effects these subsidies.952\n14.59 Finally, the United States argues that even if it is accepted at face value, the GAO Report does\nnot support China's argument that double remedies are inherent in the concurrent application of\ncountervailing duties to offset domestic subsidie s and of anti-dumping duties calculated under an\nNME methodology. Rather, the United States argu es, \"the report agrees with Commerce's stated\nposition [that] the concurrent imposition of AD and CV duties c ould create some potential for\noverlapping rationales\". 953 The United States also asks the Pa nel not to rely on, or consider\ndispositive or even persuasive, the Opinion of the CIT in the GPX case. The United States argues that\nthis decision represents the Court's ruling on U.S. law and results from other considerations than those\nfocussed on by China in the current dispute. Th e United States notes that the CIT concludes that\nsome degree of double counting is likely and dir ects the USDOC to investig ate the issue and report\nback to the Court. Further, the United States considers the CIT ruling to be in error and notes that it is\nnot final as it may be appealed.954\n(b) Main arguments of the Third Parties\n(i) Argentina\n14.60 Argentina argues that China incorrectly assumes that the use of an NME methodology in an\nanti-dumping investigation necessarily addresses any po tential subsidization. On the contrary,\nArgentina argues, using analogue country prices a nd costs to mirror market economy conditions does\nnot mean that such costs and prices have been adjust ed from subsidization. Further, Argentina is of\nthe view that the purpose of the NME methodology is to provide an alternative to obtain undistorted\nprices in circumstances where there are distortions in the economy, rather than to offset subsidies, and\nthat even assuming arguendo that subsidies are the quintessence of distortions as China contends, they\nare not the only category of distortions affecting a market. As a consequence, Argentina argues, the\nconcurrent application of anti-dumping duties cal culated under a surrogate country methodology and\nof countervailing duties does not, in itself, imply the situation of duplication alleged by China.955\n\n951 United States second written submission, paras. 180-190; opening statement at the second meeting\nof the Panel, para. 80.\n952 United States second written submission, paras. 191-195; response to Panel question 71(b) (first\nmeeting).\n953 United States response to Panel question 80 (first meeting). The United States emphasizes that the\nGAO stated that \"it appears that some double counting [...] could occur [...]\". (Id.). (emphasis added by the\nUnited States).\n954 United States opening statement at the second meeting of the Panel, paras. 85-88; response to Panel\nQuestion 32 (second meeting).\n955 Argentina third-party submission, para. 33; third-party oral statement, paras. 6-9.\n\n(ii) Australia\n14.61 Australia submits that anti-dumping and countervailing duties are distinct trade remedies with\ndifferent purposes and effects. Australia considers that the use of a surrogate market in an anti-\ndumping investigation and the calculation of an NM E normal value do not relate to an assessment of\nwhether a subsidy exists or a calculation of the amount of that subsidy, and notes that an anti-dumping\ninvestigation entails a price comparison between the normal value and the export price.956\n(iii) Brazil\n14.62 Brazil argues that the potential effects on pricing practices of subsidies to the \"manufacture or\nproduction\" of a product are normally much less direct than is the case for export subsidies and that it\nis therefore inappropriate to apply the logic behind Article VI:5 to domestic subsidies.957\n(iv) European Communities\n14.63 The European Communities expresses concern wi th China's allegation that there is an\n\"inherent\" double remedy in cases where normal value is established on the basis of a surrogate\ncountry and with China's apparent assumption that domestic subsidies inevitably affect prices,\nincluding export prices. The European Communitie s also posits that there may be cases where export\nsubsidies have no measurable impact on export price, or have no discernable impact on prices at all.\n958\n(v) Japan\n14.64 Japan considers that in certain situations, the dumping margin calculation captures not only\nthe dumping behaviour of exporters, but also the effe cts of governmental financial contributions; if in\nsuch a situation, the importing Member also im poses a countervailing duty, it would counteract the\neffects of the financial contribution by the governme nt twice. Japan argues that a double remedy may\nor may not occur in situations other than situa tions of export subsidiza tion, depending on the method\nused in the calculation of the margin of dumping in a given case. For example, if a subsidy is\nconferred on inputs and the final product is sold both in the home and export markets, both the home\nmarket price and the export price would be lowered by the same amount due to the effects of the\nsubsidy, and in such a case, a double remedy ma y occur if the dumping margin is calculated by\nadjusting the home market price upward for the per-unit amount of the subsidy without an adjustment\nof the actual export price. Japan also considers that a double remedy unavoidably occurs in the case\nof export subsidies.\n959\n(vi) Mexico\n14.65 Mexico considers that China's argument th at the application of a surrogate country\nmethodology in an anti-dumping investigation yields a normal value free from distortions is without\nfoundation. Mexico is of the view that an NME methodology does not offset the effect of subsidies\ngranted in the exporting country. Further, Mexico argues that even assuming arguendo that the\nnormal value determined on the basis of a surrogate country would reflect unsubsidized prices, these\nprices would be those in the surrogate country, not in China itself.960\n\n956 Australia third-party submission, para. 42; third-party response to Panel questions 14 and 17.\n958 European Communities third-party submission, paras. 53 and 56.\n959 Japan third-party submission, paras. 4-7; third-party oral statement, paras. 2-4.\n960 Mexico third-party submission, paras. 32-34; third-party oral statement paras. 6-8; response to Panel\nquestions 21 and 23.\n\n(vii) Norway\n14.66 Norway considers that the choice of the methodology and the costs elements that go into the\ncalculation of the normal value can have an important bearing on the issue of subsidization. Where\nthe normal value is constructed on the basis of th e producer's actual data for the inputs (i.e.,\nsubsidized input prices), the constructed normal value will be lower than for non-subsidized\nproduction. In such cases, simultaneous anti-dumpi ng and countervailing duties may be applied. If,\non the other hand, the constructed normal value is calculated not with subsidized prices, but with\n\"non-distorted\" or \"benchmark\" prices (including prices from a surrogate county) for the (otherwise\nsubsidized) inputs, then the effect of any subsidy is \"extinguished\" in the constructed normal value\ncalculation and applying an anti-dumping duty up to the maximum permitted by the AD Agreement\nwill provide a remedy for the subsidization at the same time. Norway notes that China argues, and the\nUnited States does not appear to dispute, that in calculating the constructed normal value based on a\nthird country market benchmark, the USDOC avoids the use of any surrogate value that may itself be\nsubsidized. Thus, Norway submits, it appears th at the USDOC used a market-economy cost of\nproduction free from any dumping or subsidy distortion in the dumping margin calculation. Norway\nsubmits that by applying the full anti-dumping duty up to this third-country market benchmark, all\neffects of the subsidization were extinguished.\n961\n(c) Assessment by the Panel\n14.67 As we explain in more detail in the followi ng paragraphs, we have no difficulty accepting the\ngeneral proposition that the use of an NME methodology likely provides some form of remedy against\nsubsidisation, and therefore, that the simulta neous imposition of anti-dumping duties calculated under\nan NME methodology and of countervailing duties likely results in any subsidy granted in respect of\nthe good at issue being offset more than once.\n14.68 An \"NME methodology\" is a methodology for the calculation of dumping margins under\nwhich the export price is compared to a normal valu e that is based on \"surrogate\" costs or prices from\na third country. The rationale behind the use of such an NME methodology is that prices and costs of\nproduction in the exporting country are distorted as a result of government intervention in the\neconomy and therefore do not reflect market economy conditions. 962 In such a situation, it is\nconsidered that neither the sales prices of the NME producer on its domestic market nor a normal\nvalue constructed on the basis of that producer's actual costs of production would offer a reliable\nsource of comparison to calculate a margin of dumping. This is why the normal value is determined\non the basis of costs or prices prevailing in a thir d country where market economy conditions prevail,\nand hence where prices and costs are regarded as \"undistorted\". In practice, the investigating\nauthority typically \"constructs\" the normal value on the basis of costs of production in the third\ncountry market economy, an approach which the U.S. NME methodology generally follows.\n963\n14.69 It follows from this description of NM E methodologies that, conceptually, the dumping\nmargin calculated under an NME methodology – i.e. , the difference between the constructed normal\nvalue and the export price – reflects not only price discrimination by the investigated producer\nbetween the domestic and export markets (\"dumping\"), but also, in addition, the economic distortions\nthat affect the producer's costs of production. Sp ecific domestic subsidies granted to the producer of\nthe good in question, in respect of that good – i.e., the same subsidies which are countervailed in the\ncontext of a countervailing duty investigation – are one of these economic distortions that are\n\n961 Norway third-party submission, paras. 43-47.\n962 See second Ad Note to Article VI:1; Section 15(a) of China's Protocol of Accession.\n963 See our description of the U.S. NME methodology, para. 14.2, supra.\n\n\"captured\" in the NME dumping margin calculation. 964 Expressed differently, the dumping margin\ncalculated under an NME methodology generally is higher than would be the case otherwise because\nit results from a comparison of the export price to market-determined, and hence unsubsidized, costs\nof production, rather than to the producer's actual, subsidized (or distorted) costs of production.965\n14.70 To the extent that part of the dumping margin found to exist resulted from subsidies provided\nin respect of the exported good, the anti-dumping duties calculated under an NME methodology will\nremedy both dumping and subsidization. In this sen se, it can be said that if countervailing duties are\nsimultaneously applied to imports of the same good, the subsidy is likely to be \"offset\" more than\nonce, i.e., once through the anti-dumping duty, and again at least partially through the countervailing\nduty. For this reason, we consider that the concurrent imposition of anti-dumping duties calculated\nunder an NME methodology and of countervailing duties creates the potential for imposition of a\n\"double remedy\", as China defines this term.\n14.71 We do not understand the United States to di spute the basic notion that double remedies may\nresult from the concurrent use of its anti-dum ping and countervailing duty laws on imports from\nChina. In fact, as China points out, the US DOC itself has recognized the potential for double\nremedies to arise in such circumstances. 966 Rather, the United States in its arguments before us\nfocuses on whether a double remedy can be demonstrated on the facts of each specific instance of\nconcurrent imposition.\n967 One of the United States' arguments in this respect is that the existence of a\n\"double remedy\" depends on export prices (because , the United States argues, the normal value is\nonly one half of the dumping margin equation) and in particular, on whether the subsidy leads to a\nreduction in the export price.968\n\n964 That other distortions are also captured – for instance non-specific subsidies – is irrelevant; what\nmatters is that those same distortions which are count ervailed under Part V of the SCM Agreement are also\ncaptured by the NME dumping margin calculation.\n965 It is noteworthy that the U.S. NME methodology takes into account the quantities of factors of\nproduction actually used by the investigated producer in the production of the investigated good (e.g. x tonne of\ninput). The USDOC then us es surrogate values (e.g. y dollar or renminbi/tonne of input) to calculate the costs\nfor each of the various factors used in the production of the investigated good by that investigated producer.\nThat the U.S. NME methodology factors in the investigated producer's actual use of factors of production does\nnot, in our view, fundamentally alter the conclusion that using surrogate, market economy values presumptively\nputs the producer in the position of having unsubsidized costs of production.\n966 See, e.g., the USDOC statement that:\n\n\"Since the possibility of double counting resulting from simultaneous anti-dumping and\ncountervailing duty investigations is dependent on the specific facts arising in such\ninvestigations, to the extent that the parties to these pro ceedings provide evidence on the\nrecord of these investigations, Commerce will have to respond to these concerns in the course\nof our investigations\". (USDOC – Office of Public Affairs, \"Commerce Applies Anti-Subsidy\nLaw to China\", (30 March 2007), Exhibit CHI-135).\n\n We also note that in response to a ques tion from the Panel, the United States states\nthat the GAO Report \"agrees with Commerce's stated position [that] the concurrent\nimposition of AD and CV duties could create some potential for overlapping remedies .\"\n(United States response to Panel question 80 (a) (first meeting)). (emphasis added).\n\n967 The USDOC seems to have taken a similar approach in the CFS Paper case. ( Coated Free Sheet\nPaper from the People's Republic of China: Prelimin ary Determination of Sales at Less Than Fair Value and\nPostponement of Final Determination, CHI-137, p. 30760).\n968 We note the United States' insist ence that China must demonstrate that each countervailed subsidy\n\"passes through\", in full ( pro rata ) to the export price, and that a double remedy for the full amount of the\nsubsidy results from every instance of double imposition. The parties' arguments concerning whether a subsidy\n\n14.72 Taking both sides of the dumping margin equati on into consideration does not alter the\nconclusion that double remedies are likely to r esult from the concurrent imposition of anti-dumping\nduties calculated under an NME methodology and of countervailing duties. Viewed from this\nperspective, the use of an NME methodology l eads to an asymmetric dumping margin comparison\nbetween an unsubsidized normal value and a subsidized export price.\n969 Thus, once again, the\ndifference between the two finds its source not only in price discrimination (dumping), but also in the\nsubsidies that were granted to the investigated producer. This was, in essence, the reasoning\nunderlying the conclusions of the U.S. Govern ment Accountability Office (GAO) in its 2005 report\non the implications for the United States of appl ying countervailing duty laws to China. The GAO\nexplained that when an anti-dumping duty is calculated under the U.S. NME methodology,\n\"the normal value of the product [...] is based not on Chinese prices (which might be\nartificially low as a result of domestic subsidies) but on information from a country\nwhere prices are determined by free markets. Thus, when the normal value is\ncompared with the export price, the difference will, at least in theory, reflect the price\nadvantages that the exporting company h as obtained from both export and domestic\nsubsidies\".\n970\nThe GAO Report concludes, on this basis, that econom ic theory suggests that there is a substantial\npotential for domestic subsidies to be \"double c ounted\" in the event th at the USDOC applied\ncountervailing duties to NME country products while continuing to use surrogate country values to\ncalculate anti-dumping duties on those same products. 971 The decision of the U.S. Court of\nInternational Trade in GPX is based on a similar theoretical foundation – in fact, the Court cites to the\nGAO Report in support of its finding that withou t some type of adjustment being made, the\nconcurrent imposition of anti-dumpi ng duties and of countervailing duties with respect to Chinese\nproducts could very well result in a double remedy.972\n\n\"passes through\" to the export price concerns the question whether the subsidy leads to a reduction of the export\nprice, in totality ( pro rata) or in part. The United States explains that a pro rata \"pass through\" of the subsidy\nwould be where one dollar or renminbi of subsidy reduces the export price by one dollar/renminbi, or where a\nten dollar/renminbi subsidy bestowed upon a producer of ten widgets and expensed in one year would lower the\nprice of each widget by one dollar/re nminbi. (United States response to Panel question 73 (first meeting),\nfootnote 173). Because the term \"pass through\" of subsidies is generally u nderstood to refer to another concept\n(see, for instance, Section XII.D.2, supra) and to better reflect the meaning of the parties' arguments, in\ndiscussing this argument, we use the concept of the reduc tion in the export price that results from the subsidy,\nrather than the terms \"pass through\" used by the parties. Also, we note that the United States argues that the\nUSDOC only discussed the issue of \"pass through\" in its determinations in the investigations at issue because of\nChina's arguments before the USDOC. (United States fi rst written submission, footnote 607; response to Panel\nquestion 73 (first meeting)). Whether or not the question of the \"pass through\" of subsidies was first raised by\nChina or by the USDOC, it is clear to us that the United States views this question as relevant to the existence of\na double remedy.\n969 See Brian D. Kelly, \"The Law and Economics of Simultaneous Countervailing Duty and Anti-\nDumping Proceedings\", 3 Global Trade and Customs Journal , (2008), p. 41, Exhibit CHI-138, p. 48. We note\nthat this \"theory\" assumes that domestic subsidies lower both domestic prices and export prices.\n970 Exhibit CHI-121, p. 28. (footnotes omitted).\n971 Id., pp. 27-28.\n972 Exhibit CHI-169, p. 17, citing to the excerpt of the GAO Report cited above. Certain statements of\nthe USDOC in market economy anti-dumping investigations illustrate why a similar \"double remedy\" arises in\nthe context of export subsidies, and why it generally does not in the context of domestic subsidies granted by\nmarket economies: in Cold-Rolled Corrosion-Resistant Carbon Steel Flat Products from Korea (quoted in LEU\nfrom France ), the USDOC wrote that \"domestic subsidies presumably lower the price of the subject\nmerchandise both in the home and th e U.S. markets, and therefore have no effect on the measurement of any\ndumping that might also occur\". The USDOC contrasted this situation with that of export subsidies, which,\n\"benefit only exported merchandise\" and therefore brings about \"the potential for double remedies\". ( Notice of\n\n14.73 The United States puts forward a number of scenarios under which it is plausible that the\nsubsidy would not have a one-for-one impact on th e producer's costs of production or on export\nprices. The United States also points out that the imposition of countervailing duties is not\nconditioned upon a demonstration of the price effects of the subsidy\n973; in other words, that a Member\nis allowed to countervail subsidies that have no effects on the price of subsidized imports. 974\n14.74 All else being equal, one would expect a domest ic subsidy to lower the recipient's production\ncosts, allowing that producer to lower its prices in both the domestic and export markets. 975 It would,\nin our view, be a rare case in which a subsidy bestowed upon the producer of an exported good has no\neffect at all on either the producer's costs of production or – assuming they are relevant – export\nprices, such that no portion of that subsidy wo uld be subject to a double remedy where both anti-\ndumping duties based on an NME methodology, and countervailing duties, were imposed on imports\nof a given product.\n14.75 In sum, the United States' arguments raise the qu estion of the extent of a double remedy in\nspecific factual circumstances – whether a complete double remedy necessarily results from all\ninstances of concurrent imposition of anti-dumping duties calculated under an NME methodology and\nof countervailing duties. They do not, however, invalidate the general proposition that at least some\ndouble remedy will likely arise from the concurrent impositi on of countervailing duties and anti-\ndumping duties calculated under an NME methodology. If anything, the arguments put forward by\nthe United States reinforce the idea that ascertaining the precise extent of double remedy in specific\ninvestigations would be a complex task, a fact which is highlighted by both the GAO, in its 2005\nReport, and by the CIT in GPX.\n976\n14.76 Because in the next section of our findings, we concl ude that China has not established that\nthe imposition of \"double remedies\" is inconsistent with the provisions it cites, i.e., Articles 10, 19.3,\n19.4 and 32.1 of the SCM Agreement and Article VI:3 of the GATT, or with Article I:1 of the same\nAgreement, we do not need to examine further the extent to which the concurrent imposition of anti-\ndumping duties determined under the USDOC's NME methodology and of countervailing duties\nresulted in the imposition of \"double remedies\" in the f our investigations at issue. For this reason, we\ndo not decide whether China has conc lusively established that, in the investigations at issue, double\nremedies resulted from the concurrent imposition of anti-dumping duties calculated under the U.S.\nNME methodology and of countervailing duties. We therefore also do not consider the specific\n\nFinal Results of Antidumping Duty Administrative Review: Low Enriched Uranium From France (\"LEU from\nFrance\"), Exhibit CHI-124, p. 46506). In LEU from France , the USDOC reached a similar conclusion, and\nstated in passing that \"domestic subsidies are assumed not to affect dumping margins, because they lower prices\nin both the U.S. market and the domestic market of the exporting country equally\". While the question is not\nbefore us, it would seem that a double remedy could aris e in investigations involving market economy imports,\ndepending on the costs that are used to calculate the normal value: A double remedy may arise when the normal\nvalue of a market economy producer is constructed using costs that do not reflect the subsidies that this producer\nreceived.\n973 United States second written submission, para. 192.\n974 The United States also contests the notion that surrogate values ar e necessarily \"unsubsidized\". It\nnotes in this respect that in some instances in the inves tigations at issue, the surrogate value was inferior to the\nproducers' actual costs. (United States response to Panel question 27 (second meeting); comments on China's\nresponse to Panel question 26 (second meeting). That this would be the case does not, in our view, undermine\nthe conclusions we reach above: what we conclude is not that the totality of every dumping margin calculated\nunder an NME methodology results from subsidization but, rather that where a margin of dumping is found to\nexist under such a methodology, it likely reflects not only dumping, but also subsidization.\n975 The USDOC itself seems to have made this assumption in the past. See footnote 972, supra.\n976 Exhibits CHI-121, p. 48; CHI-169, pp. 17-19. We note that the GAO indicated that the experts it\nconsulted agreed that in theory, the double remedy would be significant. (Exhibit CHI-169, p. 28).\n\nexamples submitted by China from these investigations in order to determine whether they support its\narguments.\n3. Claims under Article VI of the GATT 1994 an d Articles 10, 19.3, 19.4 and 32.1 of the\nSCM Agreement\n(a) Main arguments of the Parties\n(i) China\n14.77 China argues that by virtue of the collective operation of Article VI:3 of the GATT and\nArticles 10 of the SCM Agreement, read in light of Articles 19.1, 19.3, and 19.4 of the SCM\nAgreement, the United States has an affirmative legal ob ligation to (i) ensure that it does not impose\ncountervailing duties to offset subsidies that it simultaneously offsets through the methods by which it\ncalculates anti-dumping duties; (ii) take \"all necessary steps\" to ensure that this does not occur; and\n(iii) ensure that investigating authorities investig ate and make a determination as to the \"precise\namount of a subsidy attributed to the imported prod ucts under investigation\", taking into account that\nusing simultaneously an NME anti-dumping methodol ogy has the effect of offsetting the same\nsubsidies.\n977 China submits that in the investigations at issue, the USDOC failed to investigate and\navoid the imposition of double remedies, did not take any steps to determine \"whether, and in what\namount\" the use of market-determined costs of pro duction in the parallel anti-dumping investigations\nhad the effect of offsetting the same subsid ies that it identified in the countervailing duty\ninvestigations978, and therefore, did not \"ascertain the precise amount of a subsidy attributed to the\nimported products under investigation\".979\n14.78 China makes an analogy with panel and Appe llate Body jurisprudence on extinction of\nsubsidies in the context of privatization (US – Countervailing Measures on Certain EC Products), and\non pass-through of subsidies to downstream producers (US − Softwood Lumber IV) and argues that, as\nin these cases, the calculation of a dumping marg in pursuant to the U.S. NME methodology is an\nevent that calls into question whether any subsidy re mains to offset. China further considers that, like\na situation of \"privatization\" at arm's length for fair market value, using an NME methodology to\ncalculate anti-dumping duties places the investigat ed producer in a position of having market-\ndetermined costs of production, such that there remains no benefit to be countervailed.980\n\n977 China second written submission, paras. 243-247; response to Panel question 76 (first meeting).\nChina notes that in US – Countervailing Measures on Certain EC Products , the Appellate Body held that these\nprovisions define \"the obligation of Members to limit countervailing duties to the amount and duration of the\nsubsidy found to exist by the investigating authority\". China further argues that as with arm's-length sales of\nsubsidized input products, the use of an anti-dumping methodology, which has the effect of offsetting subsidies,\ncalls into question whether there remains a \"subsidy\" to \"offset\" through the imposition of countervailing duties\nand that in such circumstance it is the obligation of the investigating authority to \"establish[] whether, and in\nwhat amount\" there is still a su bsidy to offset in respect of the importe d product. On this, China cites to the\nAppellate Body Report in US – Softwood Lumber IV . (China response to Panel question 76 (first meeting),\nciting to Appellate Body Reports on US – Countervailing Measures on Certain EC Products , para. 139 and US\n– Softwood Lumber IV, para. 141).\n978 China second written submission, paras. 248-250.\n979 China response to Panel question 76 (first meeti ng); second written submission, paras. 245 and 249.\nChina argues that given that the United States will already have offset the entire amount of the subsidy found to\nexist through the application of countervailing duties, the United States acts inconsistently with its obligations\nunder the covered agreements to the extent that the simultaneous imposition of anti-dumping duties determined\nin accordance with its NME me thodology offsets any portion\n of these subsidies. (China response to Panel\nquestion 92 (first meeting)).\n980 China second written submission, paras. 233-238.\n\n14.79 China considers that the imposition of double remedies is inconsistent with Article 19.4 of the\nSCM Agreement because any countervailing duty im posed in addition to the anti-dumping duty is in\n\"excess of the subsidy found to exist\" given that the United States has already offset the subsidy\nthrough the NME anti-dumping methodology. 981 Further, China rejects th e United States' argument\nthat the \"amount of the subsidy\" in Article 19.4 is not the amount that should have been properly\ndetermined under WTO rules.982\n14.80 China also claims that the imposition of double remedies in the investigations at issue was\ninconsistent with the obligation, under Article 19.3 of the SCM Ag reement, to impose countervailing\nduties \"in the appropriate amounts\". 983 Citing the panel report in EC – Salmon (Norway) , China\nargues that the \"appropriateness\" of the amount in Ar ticle 19.3 must be determined in light of the\npurpose of the duty. Given that the purpose of countervailing duties is to \"offset\" subsidies, China\nargues that it is not \"appropriate\" to impose c ountervailing duties to offset subsidies that the\ninvestigating authority offsets through the method by which it calculates anti-dumping duties in\nrespect of the same products.\n984\n14.81 China also rejects the United States' suggestion that its claims under Articles 19.3 and 19.4\nare about whether \"the sum\" of the anti-dumping and countervailing duties is in excess of the\n\"appropriate amounts\" or that anti-dumping duties are \"actually CVDs in disguise\" as the\nUnited States asserts. Rather, China submits, its cl aims are that the countervailing duties imposed by\nthe USDOC are not \"in the appropriate amounts\" si nce they are in excess of the subsidy found to\nexist.\n985 In addition, referring the Panel to prior decisions on the WTO-consistency of U.S. original\ninvestigations in which the panel and/or the Appella te Body made findings under Articles VI:3 of the\nGATT and 19.3 and 19.4 of the SCM Agreement or referred to these provisions, China rejects the\nUnited States' argument that the use of the term \"levy\" indicates that these provisions do not apply to\nU.S. original investigations determinations.\n986\n14.82 China also rejects the United States' characterization of its position as being that the importing\nMember must choose between the use of countervailing duties and the use of an NME methodology.\nChina considers that the United States is free to engage in the concurrent application of countervailing\nand anti-dumping duties determined in accordance w ith an NME methodology, and that the question\nbefore the Panel is not a questi on of \"concurrent application\" per se, but rather a question of whether\nthe United States may impose countervailing duties without accounting for the fact that it offsets the\nsame subsidies through the manner in which it calculates anti-dumping duties.\n987 In other words, the\nUSDOC is free to impose both remedies simultaneously, as long as it takes steps to ensure that no\ndouble remedy ensues. China adds that in GPX, the U.S. Court of International Trade held that the\nUSDOC may choose either to forego the imposition of countervailing duties on products to which it\napplies the NME methodology, or \"adopt additional policies and procedures to adapt its NME AD and\n\n981 China's first written submission, paras. 375-379; second written submission, paras. 255-257, citing\nto the Panel Report on US – Countervailing Measures on Certain EC Products , para. 8.1(a), and Appellate\nBody Report on US – Countervailing Measures on Certain EC Products, para. 161(a).\n982 China second written submission, footnote 218; response to Panel question 86 (first meeting).\n983 China first written submission, paras. 380-384.\n984 China second written submission, paras. 251-254; response to Panel question 89 (first meeting),\nciting to Panel Report on EC – Salmon (Norway), paras. 7.704-7.705.\n985 China second written submission, paras. 253-254 and 258.\n986 China response to Panel question 52 (first meeting).\n987 China oral statement at the first meeting of the Panel, paras. 75-76; second written submission,\nparas. 208-209 and 212; response to Panel question 69; oral statement at the second meeting of the Panel,\nparas. 68-69.\n\nCVD methodologies to account for the imposition of countervailing duty remedies on merchandise\nfrom the PRC\".\n988\n14.83 China also considers that the United Stat es' position on the WTO-consistency of double\nremedies is based on a complete disregard for the object and purpose of the SCM Agreement. China\nnotes that the Appellate Body has observed that the object and pur pose of the SCM Agreement is \"to\nstrengthen and improve GATT disciplines relating to the use of both subsidies and countervailing\nmeasures\" and that Part V of the SCM Agreement, in particular, is meant to impose disciplines on the\nuse of countervailing duties. China considers that for a Member to obtain twice the remedy to which\nit is entitled is no discipline at all.\n989\n14.84 China rejects the United States' suggestion th at the drafters of the GATT, of the SCM\nAgreement and of China's Protocol of Accession in tended to allow the imposition of double remedies\nresulting from the concurrent use of NME methodologies and of countervailing duties. In this respect,\nChina argues that the fact that Article VI:5 of the GATT 1994 addresses one particular circumstance\nin which a double remedy could arise does not mean that (i) there are no other circumstances in which\na double remedy could arise (as the USDOC has in fact recognized), or (ii) all these other forms of\ndouble remedies are therefore permissi ble. Nor does China believe that the absence of an express\nprovision in the SCM Agreement and/or the GATT relating to the imposition of double remedies in\nthe case of domestic subsidies means that double reme dies are permissible. China notes that there are\nmany issues – e.g. the WTO jurisprudence on \"privati zation\" (effect of a privatization of state-owned\nassets on previously-conferred subsidies) and \"pass-th rough\" (treatment of subsidies conferred upon\nupstream inputs) – relating to subsidies and counter vailing duties that the covered agreements do not\nexpressly address. This has not prevented panels and the Appellate Body from finding that the\ncovered agreements nonetheless impose disciplines on a Member's actions in respect of those issues.\n14.85 Further, China considers that the fact that Article 15 of the Tokyo Round Subsidies Code was\nnot replicated in the SCM Agreement cannot be interpreted to mean that double remedies arising from\nthe use of an NME methodology in conjunction with countervailing duties are permissible. China\nargues in this regard that the circumstances surrounding the Uruguay Round negotiations strongly\nsuggest that issues relating to these double remedies we re no longer considered relevant at the time:\nduring the Uruguay Round, (i) no Contracting Party had a practice of applying an NME methodology\nconcurrently with the application of countervaili ng duties to the same product; (ii) the United States –\nby far the largest user of countervailing duties – had taken a clear position at the beginning of the\nUruguay Round that it would not apply countervailing duties to imports of NMEs; (iii) towards the\nend of the Uruguay Round, the USDOC's position was that it could apply countervailing duties to\nimports from NME countries, but only if it were to find that the industry in question was a \"market-\noriented industry\"; (iv) under U.S. practice, the fo rmer Soviet bloc countries (which were in a process\nof transition to market economies) were subject to the NME methodology, but not countervailing\nduties, until the United States classified them as market economies. Against this backdrop, China\nconsiders that it is likely that the drafters of the SCM Agreement no longer considered the subject-\nmatter of Article 15 of the Tokyo Round Subsidies Code to be relevant. 990\n(ii) United States\n14.86 The United States takes the position that th e covered agreements do not prohibit the\nimposition of double remedies in respect of domestic subsidies.\n\n988 China oral statement at the second meeting of the Panel, para. 68.\n989 Id., paras. 64-65.\n990 China second written submission, para. 211; response to Panel questions 69 and 70 (first meeting).\n\n14.87 The United States argues that anti-dumping a nd countervailing duties are two distinct\ninstruments, meant to address different kinds of harm , and that where the criteria for the imposition of\neach remedy are satisfied, duties may be imposed up to a level prescribed by the respective\nagreement.\n991 The sole limitation in this respect is , the United States submits, the one found in\nArticle VI:5 of the GATT 1994, which appli es only in the case of export subsidization. 992 T h e\nUnited States infers from the absence of any similar provision with respect to domestic subsidies that\nMembers did not agree that any other circumstances warranted a restriction on the concurrent\napplication of the AD and CVD instruments. The United States also attaches significance to the fact\nthat Article 15 of the Tokyo Round Subsidies C ode (which provided that, for imports from NMEs,\nMembers could resort to either anti-dumping or to countervailing duties) was not carried forward in\nthe SCM Agreement.\n The United States further reads Article 15 as an indication that the parties to\nthe Code considered that no other provision in the GATT 1947 contained a similar requirement\nprohibiting the concurrent application of anti-dumpi ng and countervailing duties to NMEs, and infers\nfrom the non-inclusion of a similar provision in the SCM Agreement that a prohibition on the\nconcurrent use of anti-dumping and count ervailing duties to NMEs no longer exists. 993 T h e\nUnited States, repeating an argument made by Argentina, also notes that the Tokyo Round Code\ncontained provisions that were virtually identi cal to Articles 19.3 and 19.4 of the SCM Agreement;\nhad these provisions prohibited the imposition of double remedies, as China contends, there would\nhave been no need to include in the same Code an express prohibition on concurrent anti-dumping\nand countervailing duty investigations. 994 Finally, the United States submits that China's Protocol of\nAccession makes clear, at Section 15, that Member s contemplated the concurrent application of\ncountervailing duties and of anti-dumping measures ca lculated on the basis of surrogate values,\nwithout any limitation on the use of countervailin g duties in such circumstances, and without any\nlimitation on the concurrent application of both remedies.\n14.88 Related to this, the United States argues th at the logic of China's argument necessarily\nimposes upon Members a choice between imposing anti-dumping duties on the basis of an NME\nmethodology and imposing countervailing duties; in other words, that China is in fact challenging the\nconcurrent application of countervailing duties a nd of anti-dumping duties calculated using the NME\nmethodology. The United States submits in this resp ect that while China suggests that the concurrent\napplication of anti-dumping and countervailing duties would still be permissible where the\ninvestigating authority takes \"steps\" to ensure th at the NME normal value does not offset the same\nsubsidies twice, China also considers that the NME normal value \"necessarily\" fully offsets the same\nsubsidies \"in all cases\".995\n\n991 United States first written submission, paras. 389-394.\n992 United States first written submission, paras. 388 and 395-409; opening statement at the first\nmeeting of the Panel, para. 50 and 55; second written s ubmission, para. 208; response to Panel questions 75, 84\nand 85 (first meeting). The United States also finds it not able that the inclusion in the GATT, in 1955, of the\nsecond Ad Note to Article VI:1 (which recognizes that, in certain cases, surrogate pr ices would be used to\nconstruct the normal value) was not accompanied by a broadening of Article VI:5. The United States indicates\nthat it was an NME Contracting Part y, Czechoslovakia, that proposed an amendment to the GATT 1947 which\nresulted in the second Ad Note to Article VI. The United States notes that subsidies were not mentioned as one\nof the reasons for the amendment; rather, the focus wa s on finding appropriate pr ice comparisons where the\ninternal prices and costs of an NME were unreliable due to the State fixing prices or to State monopolization.\n(United States comments on China's response to Panel question 26(b)).\n993 United States first written submission, paras. 403-409, citing to Appellate Body Report on US –\nUnderwear, pp. 14-15, DSR 1997:I, at 11.\n994 United States second written submission, para. 218; response to Panel question 28 (second meeting),\nreferring to Articles 4.2 and 4.3 of the Tokyo Round Subsidies Code.\n995 United States second written submission, paras. 177-179; opening statement at the second meeting\nof the Panel, paras. 51-55.\n\n14.89 Responding to China's argument that at the time of the Uruguay Round, the concurrent\napplication of anti-dumping and countervailing measures in respect of NMEs was no longer\n\"relevant\", the United States argues that regardless of their specific reason for doing so, the fact\nremains that Members did not include Article 15 of the Tokyo Round Subsidies Code in the SCM\nAgreement.\n996 The United States further indicates that Ch ina's accession was negotiated against the\nbackdrop of this provision, and that China's Prot ocol of Accession affirms Members' unqualified right\nto apply anti-dumping and countervailing duties in th e context of domestic subsidies while treating\nChina as an NME.997\n14.90 Turning to China's arguments in support of its claims of violation, the United States submits\nthat China's reliance on the privatization and pass-through jurisprudence is misplaced. The\nUnited States notes China's argument that this ju risprudence concerned situations that the SCM\nAgreement did not explicitly address, and that pa nels and the Appellate Body nevertheless recognized\nthe applicability of GATT and SCM provisions to those situations. By contrast, the United States\nsubmits, the covered agreements are anything but silent on the issue before this Panel, that of the\nconcurrent application of countervailing duties a nd of anti-dumping duties determined under an NME\nmethodology.\n998\n14.91 The United States also notes that the provisions cited by China (primarily Articles 19.3 and\n19.4 of the SCM Agreement) only impose disciplines with respect to countervailing duties and that\nChina does not claim that the c ountervailing duties imposed by the USDOC in the investigations at\nissue exceeded the amounts of the subsidies found to exist or that the USDOC did not properly\ncalculate the subsidies amount. Rather, in the view of the United States, China's claim under\nArticle 19.4 is that the amount of the subsidy is exceeded by the sum of the anti-dumping duty in each\nanti-dumping investigation and of the countervailin g duty in each corresponding countervailing duty\ninvestigation, and as a result, China erroneously implies that an anti-dumping duty calculated under\nthe NME methodology must be understood to constitut e a countervailing duty within the meaning of\nthe SCM Agreement, whereas those anti-dumping duti es are not \"levied for the purpose of offsetting\nany subsidy\".\n999 According to the United States, the fact that part of the methodology used to\ncalculate the normal value rejects home market pr ices and costs due to broad distortions in a non-\nmarket economy does not somehow transform the anti-dumping duty itself into a countervailing\nduty.1000\n\n996 United States opening statement at the first meeting of the Panel, para. 53; second written\nsubmission, paras. 210-211; response to Panel questions 70 and 75 (first meeting).\n997 United States opening statement at the first meeting of the Panel, para. 54; second written\nsubmission, para. 212. The United St ates also notes that during the pe riod of China's accession negotiations,\nimports from China were the subject of 30 anti-dumping investigations conducted under the NME methodology,\nyet China's Protocol of Accession and Working Party Report do not reflect any concerns China may have had in\nrespect of that methodology, and in particular, any concerns China may have had that the methodology\naddressed not only price discrimination, but also subsidization. The United States also infers from\nparagraph 151(a) of the Working Party Report that China sought to ensure that Members that had not yet\ndeveloped NME methodologies would do so along the lines of the U.S. NME methodology. (United States\nopening statement at the second meeting of the Panel, para. 58).\n998 United States opening statement at the second meeting of the Panel, paras. 60-61.\n999 United States opening statement at the first meet ing of the Panel, paras. 58 and 60-61; second\nwritten submission, paras. 216-217.\n1000 The United States also argues that if China's view that the NME methodology is designed to offset\nsubsidization is accepted, th en any anti-dumping duty calculated pursuant to the NME methodology would fall\nsquarely within the definition of \"countervailing duty\" contained in footnote 36 to the SCM Agreement. Thus,\nthe United States adds, as required by Article 10 of the SCM Agreement, such an anti-dumping duty could \"only\nbe imposed pursuant to [an] investigation[] initiated a nd conducted in accordance with [the SCM Agreement]\",\nand that this would be the case whether or not a concurrent countervailing duty case were ongoing.\n(United States opening statement at the second meeting of the Panel, para. 77).\n\n14.92 The United States further argues that Article 19.4 is limited to the question of whether the\ncountervailing duties levied correspond to the am ount of the subsidy found to exist by the\ninvestigating authority and does not govern whet her that amount was properly determined in\naccordance with WTO rules (i.e., the amount that should have been found had the investigating\nauthority complied with other WTO rules). 1001 For similar reasons – because China does not contest\nthe fact that the duties imposed pursuant to the four countervailing duty investigations at issue in this\ndispute do not exceed the amount of the subsidy bestowed upon each exporter – the United States\nsubmits that China's claim under Article 19.3 ha s no merit. The United States argues that the\n\"appropriateness\" of the amounts of counterva iling duties under Article 19.3 relates to the\nsubsidization rate calculated for each \"source[] found to be subsidized and causing injury\" and that\nChina does not allege that the countervailing dut y amounts are not those that the USDOC found for\n\"each source\".1002\n14.93 In addition to these arguments, the United States takes the view that the reference to \"levy\" in\nArticle VI:3 of the GATT and in Articles 19.3 and 19.4 of the SCM Agreement, in conjunction with\nfootnote 51 of the SCM Agreement, means that th ese provisions impose no disciplines with respect to\noriginal investigations. This is because, in the view of the United States, under the U.S. retrospective\nduty assessment system, duties are not actually collect ed until an administrative review is conducted\nor the deadline for such review lapses.1003\n14.94 Finally, the United States submits that the Opini on of the U.S. Court of International Trade in\nGPX should have no bearing on the Panel's considerati on of this dispute because it is an opinion of a\nU.S. court interpreting U.S. law, whereas this dispute concerns the interpretation of the WTO\nagreements, including provisions from China's Protocol of Accession, that do not appear in U.S. law.\nIn addition, the United States notes that the Court's decision in GPX is still subject to appeal.1004\n(b) Main arguments of the Third Parties\n(i) Argentina\n14.95 Argentina considers that Article VI:5 of th e GATT 1994, the sole WTO provision expressly\nlimiting the simultaneous imposition of both anti-dum ping and countervailing duties, is limited to\nsituations of \"export subsidization\", and that the concurrent application of both remedies in the case of\nactionable subsidies is therefore WTO-consistent. In Argentina's view, had the drafters intended to\nprohibit the simultaneous imposition of anti-dumping and countervailing duties for situations other\nthan export subsidization, they would have done so explicitly, as they did in Article VI:5. Argentina\nalso notes that China's Protocol of Accession r ecognizes not only the use of an NME methodology in\nanti-dumping investigations involving imports of Chin ese origin but also that Chinese imports can be\nsubject to countervailing duty investigations, and submits that to exempt China from the simultaneous\nimposition of anti-dumping and countervailing duties would give it preferential treatment compared to\nother Members. Argentina considers that neither of the provisions on which China bases it claims,\nArticles 19.3 and 19.4, address, directly or indir ectly, the issue of simultaneous imposition of anti-\ndumping and countervailing duties or of double remedies. Argentina also notes that the wording of\nArticles 19.4 is identical to the wording of Article 4.2 of the Tokyo Round Subsidies Code, and that\nArticle 19.3 is almost identical to Article 4.3 of the Tokyo Round Subsidies Code. Thus, Argentina\n\n1001 See, e.g., United States response to Panel questions 86 and 87 (first meeting).\n1002 United States first written submission, paras. 424-427; opening statement at the second meeting of\nthe Panel, paras. 64-65.\n1003 See, e.g., United States second written submission, para. 215; response to Panel question 87 (first\nmeeting).\n1004 See above, para.14.59, for the United States' argument to the effect that the GPX decision is in error\nand that, even on its own terms, it does not support the position taken by China in the present dispute.\n\nargues, had the Tokyo Round Subsidies Code prohib ited the concurrent imposition of anti-dumping\nduties calculated under an NME methodology and of countervailing duties, Article 15.1 of the Tokyo\nRound Code would have been devoid of meaning.\n1005\n(ii) Australia\n14.96 Australia considers that anti-dumping and countervailing duties are two distinct trade\nremedies and that nothing in Article VI of the GATT or elsewhere in the WTO Agreements prevents\nconcurrent anti-dumping and countervailing duty investigations of the same product; in fact, Australia\nsubmits, the text of Article VI:5 reinforces the right of Members to do both. In Australia's view, the\ncalculation of the normal value in an anti-dumping inv estigation is an inquiry that is separate from\nthat the determination of the existence and amount of a subsidy in a countervailing duty investigation.\nAustralia also invites the Panel to clarify the mean ing of the terms \"situation of export subsidization\"\nin Article VI:5, which it considers to be unclear. Australia argues that it cannot be assumed that these\nterms agreed to in 1947 can be equated with any me aning attributed to the categories of subsidies as\nagreed to in the SCM Agreement in 1994 and that it is therefore conceivable that the expression\n\"situation of export subsidisation\" also cover cer tain situations in whic h a domestic subsidy is\nprovided to a good which is exported. Likewise, Au stralia submits that it is not clear whether the\nterms \"same situation\" of dumping or export subsidi zation in Article VI:5 refer to the existence of\nsubsidization or dumping or to the injurious effects.1006\n(iii) Brazil\n14.97 Brazil argues that nothing in the AD and SC M Agreements suggests that parallel anti-\ndumping and countervailing measures cannot be imposed , and notes that neither agreement contains\nany cross-reference conditioning the imposition of one remedy on the satisfaction of requirements\nestablished in relation to the other. Brazil consid ers that Article VI:5 of the GATT 1994 contains the\nsole limitation on the concurrent application of an ti-dumping and countervailing measures. Further,\nBrazil submits, this provision shows that Members were well aware that if they intended to impose\nany restrictions or conditions on the parallel application of anti-dumping and countervailing measures,\nthey had to do so explicitly. Brazil considers that the existence of an explicit ban with respect to\nexport subsidies can be read contrario sensu to allow for the concomitant application of both duties in\nall other situations. Brazil also considers that th e fact that Article 15 of the Tokyo Round Subsides\nCode was not replicated in the SCM Agreement unde rscores the intention of its drafters not to\nprohibit the combined imposition of anti-dumping and countervailing duties on imports from\nMembers, irrespective of their status as market or non-market economies. Brazil is of the view that\nthe legal permissibility for the parallel applica tion of anti-dumping and countervailing measures, and\nits underlying logic, apply indistinctly to inves tigations conducted in relation to market economy\nMembers and non-market economy Members. Accepting the argument that methodological\nchallenges arising from price comparability diffi culties in non-market economy Members somehow\nconstrain the parallel application of anti-dumping and countervailing measures in relation to them\nwould result in discrimination against \"market economy\" Members.\n1007\n(iv) Canada\n14.98 Canada agrees with the United States that th e concurrent use of the NME methodology and\ncountervailing duties is permissible under the SCM Ag reement. Canada's view is that when an\nimported product is both dumpe d and subsidized, the importing Member may impose both anti-\ndumping duties equal to the margin of dumping a nd countervailing duties equal to the amount of the\n\n1005 Argentina third-party submission, paras. 8-29; third-party oral statement, paras. 3-5.\n1006 Australia third-party submission, paras. 41-51; third-party response to Panel questions 19 and 23.\n1007 Brazil third-party submission, paras. 14-18; third-party oral statement, paras. 8-9.\n\nsubsidy. Canada submits that th is right is confirmed – and circum scribed – by Article VI:5 of the\nGATT 1994, such that (read a contrario ), this provision confirms the ability of WTO Members to\nimpose concurrent anti-dumping and countervaili ng duties in circumstances other than export\nsubsidization. Canada further argues that if WT O Members had intended to prohibit the concurrent\napplication of anti-dumping duties calculated on th e basis of subparagraph 15(a)(ii) of China's\nProtocol of Accession and countervailing duties, they c ould have stated that intention in the Protocol\nas they had done earlier in the Tokyo Round Subsidi es Code; instead, Sections 15(a) and 15(b) of\nChina's Protocol of Accession enable an impor ting WTO Member to impose anti-dumping duties\ncalculated on the basis of out-of-country prices or costs, and countervailing duties. Finally, Canada\nrejects China's theory that the anti-dumping duty, by itself, compensates for both the dumping and the\nsubsidization. Canada considers that duties in the amount of the subsidy would not violate\nArticle 19.3 and 19.4 and that the amount of a concurrent anti-dumping duty has no bearing on the\namount of a countervailing duty, except as provided for in Article VI:5 , which is not the case here.1008\n(v) European Communities\n14.99 The European Communities considers that an ti-dumping and countervailing duties are two\nseparate remedies to counter two different types of unfair trade practices under two distinct WTO\nagreements and that the only WTO provision expr essly limiting the right of Members to impose both\ntypes of duty is Article VI:5 of GATT 1994. The European Commun ities agrees with the\nUnited States that by choosing not to include a provision similar to Article 15 of the Tokyo Round\nSubsidies Code in the SCM Agreement, WTO Memb ers recognised Article VI:5 as the only provision\nlimiting the simultaneous imposition of both types of remedies. The European Communities also\nagrees with the United States that nothing in Chin a's Protocol of Accession expressly limits such a\nsimultaneous imposition. Further, the European Communities considers that there can be no breach\nof Article 19.4 if the duty imposed does not exceed the amount of subsidy properly established under\nthe rules of the SCM Agreement and that just because a measure taken under another agreement (in\nthis case, an anti-dumping duty) may be alleged to in some way offset subsidisation does not create a\nviolation of Article 19.4. The European Communiti es further agrees with the United States that the\nlimited scope of Article VI:5 is explained by the fact that, where the normal value is based on sales, a\nneutral subsidy may reasonably be considered to press down equally on both sides of the dumping\ncalculation, and therefore the dumping calculation w ould remain unaffected by the subsidy analysis.\nFinally, the European Communiti es considers that the SCM Agreement does not require the showing\nof any causal link between subsidies and exports a nd/or that subsidies have caused export prices to\ndecrease; the inquiry is limited to the effects of the subsidised imports on prices in the importing\ncountry.\n1009\n(vi) India\n14.100 India considers anti-dumping and countervailing duties to be two separate remedies to counter\ntwo different types of situations of trade distortion. India considers that the provision which expressly\nlimits the right of WTO Members to impose both typ es of duty is Article VI:5 of GATT 1994. India\nconsiders that the legal permissibility for the pa rallel application of an ti-dumping and countervailing\nmeasures, and its underlying logic, apply to invest igations conducted both in relation to market\neconomy Members and non-market economy Members.1010\n\n1008 Canada third-party submission, paras. 42-56; third-party response to Panel questions 12 and 14-16.\n1009 European Communities third-party oral statemen t, paras. 2-10; third-party response to Panel\nquestion 15.\n1010 India third-party oral statement. (this statement contains no paragraph numbering).\n\n(vii) Japan\n14.101 Japan submits that although Article VI:5 of GATT 1994 does not prohibit the simultaneous\nimposition of anti-dumping and countervailing duties in situations other than \"export subsidization\",\nthis provision is the expression of an underlying principle that an importing Member may not impose\na double remedy against the same subsidy, a princi ple to which Members should give due regard.\nJapan submits that Article VI:5 provides no explicit requirement on the prohibition of double\nremedies in situations other than export subsidization because a double remedy may or may not occur,\ndepending on the method used in the calculation of the margin of dumping in a given case. With\nrespect to the legal bases for China' s claims, Japan considers that Article 19.4 is irrelevant to how an\nanti-dumping duty would be determined in the separate anti-dumping investigation in accordance with\nthe provisions of the AD Agreement. With respect to Article 19.3, Japan notes that this provision\naccords the importing Member the discretion to impose a countervailing duty deemed as appropriate\nto the extent that the duty does not exceed the am ount of the subsidy found to exist, and that no\nfurther obligations are placed on the authorities' determination of the \"appropriate amount\".\n1011\n(viii) Mexico\n14.102 Mexico takes the view that when counterva iling duties target domestic subsidies, the\nsimultaneous application of anti-dumping and counterva iling duties is consistent with the rules of the\nWTO.1012 Mexico argues that when the negotiators of the WTO Agreements considered it necessary\nto prohibit the simultaneous application of different mechanisms, they did so expressly. In this\nrespect, Mexico notes in particular that a provi sion similar to Article 15 of the Tokyo Round\nSubsidies Code was not included in the SCM Agreement. Mexico also notes that Section 15 of\nChina's Protocol of Accession recognizes the su rrogate country methodology and acknowledges that\nChinese imports may be subject to countervailing duty i nvestigations. Mexico argues that if China, in\nnegotiating its accession, had succeeded in negotiati ng a prohibition on the si multaneous application\nof anti-dumping and countervailing duties on its produc ts, this would have been specified in the\nProtocol. Mexico considers that neither Article 19.3 nor Article 19.4 of the SCM Agreement provides\na basis for China's claim. Finally, Mexico argu es that exempting China from the parallel imposition\nof anti-dumping duties and countervailing duties would give China preferential treatment relative to\nall other Members.\n1013\n(ix) Norway\n14.103 Norway considers that where the normal value is constructed on the basis of \"non-distorted\"\nor \"benchmark\" prices (including prices from a su rrogate county) for the (otherwise subsidized)\ninputs, then the effect of any subsidy is \"exti nguished\" in the constructed normal value calculation\nand that in such cases, applying an anti-dumping duty up to the maximum permitted under the AD\nAgreement will provide a remedy for the subsidization at the same time. Norway argues that applying\na countervailing duty in such cases will be neith er appropriate under Article 19.3 of the SCM\nAgreement nor permissible under Article 19.4 of the SCM Agreement.1014\n\n1011 Japan third-party submission, paras. 3-14; third-party oral statement, para. 5.\n1012 Mexico considers that it is for interested parties to explain and demonstrate the reasons why a\n\"double remedy\" could arise in contexts other than that of \"export subsidies\".\n1013 Mexico third-party submission, paras. 12-31; third-party oral statement, paras. 2-5; third-party\nresponse to Panel questions 19-21.\n1014 Norway third-party submission, paras. 38-47. As noted above, para.14.66, Norway argues that in\nthe investigations at issue, the USDOC appears to have used a market-economy cost of production free from any\ndistortion and therefore that by applying the full anti-dump ing duty up to this third-country market benchmark,\nall effects of the subsidization would have been extinguished, such that applying a countervailing duty in such\n\n(c) Assessment by the Panel\n(i) Introduction\n14.104 We understand the essence of China's argument to be that the imposition of anti-dumping\nduties calculated under the U.S. NME methodology in the four anti-dumping investigations at issue\neffectively \"offset\" any subsidy provided in respect of the goods concerned, such that there remained\nno subsidy left to countervail. Thus, China's argu ment goes, when the Unite d States simultaneously\nimposed countervailing duties on the same products , it levied duties in excess of the amount of\nsubsidy \"found to exist\", contrary to Article 19.4 of the SCM Agreement, and acted inconsistently\nwith its obligation to levy duties \"in the appropr iate amounts\" pursuant to Article 19.3 of the SCM\nAgreement. In addition, China cl aims that the USDOC failed to ta ke \"all necessary steps\" to ensure\nthat it imposed countervailing duties for the purpose of offsetting subsidies that continued to exist,\nthereby acting inconsistently with the requirements of Article VI of the GATT 1994 and of Article 10\nof the SCM Agreement.\n14.105 The USDOC's treatment of the issue of double remedi es in the investigations at issue is not in\ndebate. The parties agree that where interested parties raised \"double remedy\" arguments in the\ninvestigations at issue, the USDOC rejected them and that the USDOC did not take into consideration\nthe anti-dumping duties imposed on the same product s when it imposed countervailing duties in the\nfour countervailing duty investigations at issue: it imposed countervailing duties corresponding to the\nfull amount of subsidies found to have been conferred on each investigated producer.\n1015\n(ii) Claim under Article 19.4 of the SCM Agreement\n14.106 We first consider China's claim under Article 19. 4 of the SCM Agreement. China's argument\nin this respect is that the United States levied countervailing duties \"in excess of the amount of\nsubsidy found to exist\" as a result of each of the countervailing duty orders at issue because it had\nalready offset the subsidies at issue as a result of the concurrent imposition of anti-dumping duties\ncalculated under the U.S. NME methodology.\n14.107 We begin our analysis by considering the text of Article 19.4 of the SCM Agreement:\n\"No countervailing duty shall be levied 51 on any imported product in excess of the\namount of the subsidy found to exist, calcula ted in terms of subs idization per unit of\nthe subsidized and exported product.\n\ncases will be neither appropria te under Article 19.3 of the SCM Agreement, nor permissible under Article 19.4\nof the SCM Agreement.\n1015 See above, para.14.6, and corresponding footnotes for a summary of the USDOC's treatment of the\nissue of double remedy in the anti-dumping and countervailing duty investigations at issue.\n1016 Panel Report on US – Lead and Bismuth II, para. 6.52.\n\n14.109 The parties disagree as to whether Article 19.4 is at all applicable to the situation before us:\nThe United States argues that, by virtue of the use in Article 19.4 of the term \"levy\" and of the\ndefinition of this term in footnote 51 as \"the de finitive or final legal asse ssment or collection of\nduties\", Article 19.4 imposes obligations only with r espect to the final collection of duties. The\nUnited States notes that no such final collection of duties has taken place as a result of the\ninvestigations at issue. China rejects this interp retation. The parties also disagree as to whether the\nterms \"found to exist\" in Article 19.4 refer to the amount of subsidy calculated by the investigating\nauthority, regardless of whether that amount was cal culated consistently with the SCM Agreement.\nThe distinction is important because China does not argue that the countervailing duties imposed in\neach of the investigations at issue, in and of themselves, exceeded the amount of the subsidy\ncalculated by the USDOC.\n1017\n14.110 But a more fundamental disagreement between the parties is whether a subsidy existed in the\nfirst place, thereby allowing the USDOC to impos e countervailing duties. China argues that the\nUSDOC's use of its NME methodology in the paralle l anti-dumping investigations had the effect of\noffsetting subsidies, such that there remained no subsidy to \"o ffset\" through the imposition of\ncountervailing duties.\n14.111 China likens the concurrent imposition of an anti-dumping duty determined in accordance\nwith an NME methodology to the factual situations examined in prior panel and Appellate Body\nreports in which it was found that a subsidy granted to a state-owned producer may be extinguished\nby its arm's length acquisition for a fair market value in a context of privatization ( US –\nCountervailing Measures on Certain EC Products )\n1018; or in which it was found that the benefit of a\nsubsidy in respect of inputs may not \"pass through\" to producers of downstream products processed\nfrom that input where the downstream producer purchases the input for a fair market value in an arms'\nlength transaction (US − Softwood Lumber IV ).1019 In each case, the Appellate Body found that these\nsituations called into question whether a subsidy ha d been received by the investigated producer.\nConsequently, the Appellate Body found that the inve stigating authority had an obligation to establish\nwhether and in what amount a subsidy existed in respect of the imported product. China sees the\nimposition of anti-dumping duties calculated under the U.S. NME methodology as a further situation\nof extinction of subsidy that was not explicitly dealt with under the SCM Agreement.\n14.112 On its face, the terms of Article 19.4 of the SCM Agreement establish a limit to the amount of\nduties that may be \"levied\", and this limit is depe ndent only upon \"the amount of the subsidy found to\nexist\". Thus, by its own terms, Article 19.4 of the SCM Agreement is oblivious to any potential\nconcurrent imposition of anti-dumping duties. He nce, that an anti-dumping duty calculated under a\nmethodology may have the effect of \"offsetting\" a subsidy in totality or in part has no effect on the\nexistence of the subsidy which, under Article 1 of the SCM Agreement, depends on the existence of a\nfinancial contribution and of a benefit; nor would it have an effect on the amount of the subsidy\nwhich, under Article 14 of the SCM Agreement, must be determined by reference to the\nmarketplace.\n1020 In sum, the narrowly-crafted discipline contained in Article 19.4 of the SCM\nAgreement does not address situations of \"double remedies\".\n\n1017 China challenges the USDOC's benefit calculations, but these are separate claims of violations. See\nSection X, supra.\n1018 China second written submission, para. 233, citing to Appellate Body Report on US –\nCountervailing Measures on Certain EC Products, para. 102.\n1019 China response to Panel question 76, citing to Appellate Body Report on US – Softwood Lumber\nIV, para. 141.\n1020 Indeed, it is obvious that the mere issuance of an anti-dumping order cannot have the effect of\nchanging the position of the recipient in the marketplace.\n\n14.113 Further, we do not consider that there is a pe rtinent analogy to be made between the facts of\nthe present dispute and those in the pass-through and privatization decisions cited by China. These\ndecisions recognize that certain events related to th e life of a subsidy may extinguish it or at least call\ninto question whether it benefits the manufacture, production or export of the investigated product.\nBy contrast, the arguments that China makes before us pertain to the effects of parallel anti-dumping\nduties (i.e., remedies) that are imposed concurrently with the countervailing duties, which effects\nderive from the calculations that lead to the imposition of these remedies. Again, we consider that the\nfact that an anti-dumping duty calculated under a me thodology may have the effect of \"offsetting\" a\nsubsidy in totality or in part in no way means th at it extinguishes that subsidy. Likewise, China's\nargument that the use of an NME methodology is tantamount to a \"privatization\" of the producer1021 is\ninapposite. China's argument concerns a calculation, more specifically, the use by an investigating\nauthority of figures replicating the situation the pro ducer would be in but for government distortions,\nin calculating a margin of dumping. This situat ion bears no analogy to the real world events\nexamined in the privatization jurisprudence cited by China.\n14.114 It further appears that through its arguments , China seeks to draw an analogy between the\nsituation before us and a situation in which more than one countervailing duty is imposed with respect\nto a given subsidy or group of subsidies. It may very well be that in such a situation of multiple\ncountervailing duty investigations on a given imported product, Artic le 19.4 of the SCM Agreement\nwould preclude the cumulative levying of duties in excess of the amount of the subsidy found to exist\nin each of the investigations. But this is not the s ituation before us. By its terms, Article 19.4 only\nimposes disciplines with respect to the levying of countervailing duties , which the covered\nagreements define as special duties levied \"for the purpose of offsetting\" subsidies pursuant to\ninvestigations initiated and conduc ted in accordance with the prov isions of the SCM Agreement. 1022\nThe facts that anti-dumping duties are calculated under an NME methodology and thus may be\naffected by subsidization, and/or that, as a result, the duties may effectively \"offset\" subsidies granted\nin respect of the product, change neither the purpose, nor the nature of these duties as anti-dumping,\nas opposed to countervailing, duties.\n14.115 In sum, notwithstanding China's efforts to demons trate otherwise, the terms of Article 19.4 of\nthe SCM Agreement do not provide the necessary le gal basis for its \"double remedy\" claim. Our\ninterpretation of Article 19.4 is confirmed by the c ontext to Article 19.4 provided by other relevant\nprovisions of the covered agreements. This context confirms that the common intention of the parties\nto the SCM Agreement was not to address or prohi bit, in Article 19.4, the imposition of \"double\nremedies\" in respect of domestic subsidies.\n14.116 We note, first that the anti-dumping and count ervailing duty instruments are provided for and\naddressed under two distinct agreements and are, with the notable exception of Article VI:5,\naddressed under distinct paragraphs of Article VI of the GATT 1994. Article VI:5, which precisely\naddresses the issue of double remedies, is the only provision under which any limitations are\nexplicitly imposed on the concurrent use of the two remedies. It reads:\n\"No product of the territory of any contracting party imported into the territory of any\nother contracting party shall be subject to both anti-dumping and countervailing\nduties to compensate for the same situation of dumping or export subsidization\".\n14.117 Thus, by its very terms, Article VI:5 of th e GATT 1994 is limited to \"situation[s] of [...]\nexport subsidization\". In our view, these terms ar e self-explanatory in their intention to limit the\nscope of the prohibition in Article VI:5 to situations involving export subsidies, to the exclusion of\nsituations in which domestic subsidies are granted on exported goods. Such a narrow reading of the\n\n1021 See, e.g., China second written submission, paras. 233-235.\n1022 Article 10 and footnote 36 of the SCM Agreement; Article VI:3 of the GATT 1994.\n\nterms \"situation of [...] export s ubsidization\" is supported by the context to Article VI:5, and in\nparticular by the distincti on made between domestic vs. export subsidies in Article VI:3 of the\nGATT 1994, which deals with countervailing duties, and by the separate treatment accorded to export\nsubsidies under Article XVI of the GATT 1994. Th ese provisions demonstrate that the drafters\nintended to make a distinction between subsidi es granted with respect to the production or\nmanufacture of goods (i.e., domestic subsidies) and subsidies granted in respect of the export of goods\n(i.e., export subsidies). Further, we consider that this interpretation is confirmed by the principle of\neffet utile: since only imported goods are subject to anti-dumping or countervailing duties, reading\nArticle VI:5 as encompassing situations in which domestic subsidies grante d to exported goods are\ncountervailed would effectively read the term \"export\" out of the relevant sentence of that provision.\nFinally, we note the use of terms equivalent to the expression \"export subsidies\" in both the French\nand the Spanish texts of Article VI:5.\n1023\n14.118 Not only is Article VI:5 limited to potential doubl e remedies in respect of export subsidies,\nbut the explicit terms in which the drafters addressed the issue in that provision makes it all the more\nunlikely that they sought to prohibit the imposition of double remedies in respect of other types of\nsubsidies through Article 19.4 of the SCM Agreement given, again, that Article 19.4 on its face makes\nno reference to that issue.1024\n14.119 We also consider it significant that the pr edecessor to the SCM Agreement – the Tokyo\nRound Subsidies Code – contained a provision that explicitly addressed the concurrent use of NME\nmethodologies in anti-dumping investigations, and of countervailing duties, in respect of imports from\nNMEs. Where imports from non-market economies we re at issue, Article 15 of that Code imposed\nupon the importing Member a choice between the use of anti-dumping measures or of countervailing\nduties. At the very least 1025, the existence of a provision explicitly addressing the issue of the\nconcurrent imposition of anti-dumping and counterv ailing duties on NME imports in the predecessor\nto the SCM Agreement would seem, once again, to lend support to our interpretation of Article 19.4\nof the SCM Agreement as not addressing or encompassing the question of the permissibility of double\nremedies.1026\n\n1023 The French text reads \"à une même situation résultant du dumping ou de subventions à\nl'exportation\", whereas the Spanish text reads: \"una misma situación resultante del dumping o de las\nsubvenciones a la exportación\" (our emphasis).\n1024 This is a further difference between the present dispute and the privatization and pass-through\njurisprudence relied upon by China: neither of these two issues is addressed explicitly under any of the\nprovisions of the covered agreements.\n1025 The parties have not identified any documentary evidence from the Uruguay Round negotiations\nthat would cast light on why Article 15 of the Tokyo Round Subsidies Code was not carried forward in the SCM\nAgreement.\n1026 We consider it likely that the rationale for the inclusion of Article 15 of the Tokyo Round Subsidies\nCode was the potential for double remedies to result from the concurrent imposition of NME methodologies in\ncalculating anti-dumping duties and of countervailing duties, or at least the recognition that the use of an NME\nmethodology would capture price differences resulting fr om subsidies granted on the product subject to anti-\ndumping duties. Furthermore, we note the argument of Argentina, Mexico and the United States that Article 15\nof the Tokyo Round Subsidies Code would have been redundant had double remedies been prohibited under the\nprovisions of the Code imposing a limit on the amount of countervailing duties (i.e., the precursors to\nArticles 19.3 and 19.4 of the SCM Agreement).\n\n14.120 In sum, these two elements from the context 1027 to Article 19.4 of the SCM Agreement\nsuggest that the Contracting Parties to the GATT, now WTO Members, were aware of the fact that\ncertain difficulties, e.g. double remedies, could arise from the concurrent imposition of anti-dumping\nand countervailing duties, and that where they wanted to address issues arising from the concurrent\nimposition of anti-dumping and counterva iling duties, they did so in explicit terms. This makes it all\nthe more unlikely that the terms of Article 19.4 of the SCM Agreement reflect an implicit intent on\nthe part of the drafters to prohibit the impos ition of double remedies with respect to domestic\nsubsidies.\n14.121 Finally we note that by contrast, China's Protocol of Accession contains no provision\nexplicitly addressing the issue of double remedies ev en though it appears to allow for the use of\ncountervailing duties while China remains an NME.\n1028 We do not need to decide whether, as the\nUnited States argues, China effectively seeks to impose a choice between the use of NME\nmethodologies and of countervailing duties where imports from NMEs are concerned. 1029 I n o u r\nview, the relevant question is that of the drafters' intent, not the intent behind China's arguments. In\naddition, the thrust of the United States' argu ments on double remedies would suggest that the\nUnited States itself does not consider the issue to be so clear cut: the practical import of the\nUnited States' arguments is that the existence of double remedies is an evidentiary one, and therefore\nthat the overlap between the two remedies may only be partial. In any event, we need not decide\nwhether the text of Section 15, viewed in isolati on, allows the concurrent imposition of anti-dumping\nduties and countervailing duties in all circumstances without any limitation , thereby imposing no\nconstraint on the imposition of double remedies. Rather, we merely note the absence of any provision\naddressing the question of \"double remedy\" in China's Protocol of Accession. In our view, such an\nabsence again suggests that the drafters of Arti cle 19.4 of the SCM Agreement did not intend this\nprovision to address the issue of double remedies.\n14.122 Finally, we note China's argument that for a Member to obtain twice the remedy would\nfrustrate the object and purpose of the SCM Agreem ent which, the Appellate Body indicated, is \"to\nstrengthen and improve GATT disciplines relating to the use of both subsidies and countervailing\nmeasures\". We view China's argument as implyi ng that it is the object and purpose of the SCM\nAgreement to impose disciplines not only with respect to the use of countervailing duties, but also of\nanti-dumping duties. As explained above, we are of the view that the object and purpose of Part V of\nthe SCM Agreement is limited to imposition of disciplines with respect to the former.\n\n1027 The fact that a provision addre ssing the issue in dispute was former ly in place but disappeared in a\nsuccessor agreement would seem to fall more properly un der the heading of \"context \" to the treaty provision\nbeing interpreted (and therefore fall under Article 31 of the Vienna Convention) rath er than under the category\nof \"supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of\nits conclusion\". This is how the Appellate Body characterized the \"prior existence and demise\" of a provision of\na predecessor agreement in US – Underwear , where the Appellate Body charac terized this as an \"another\nelement of the context\" of the provision that it was interpreting. (Appellate Body Report on US – Underwear, p.\n16 DSR 1997:I, at 11).\n1028 China concedes that its Protocol of Accession permits the concurrent imposition of anti-dumping\nduties calculated under an NME methodology and of countervailing duties. (China response to Panel\nquestions 77 and 85 (first meeting)).\n1029 See United States opening statement at the first meeting of the Panel, para. 38:\n\n\"China said that it 'does not contend that the United States must 'choose' between the use of\ncountervailing duties and the use of an NME methodology,' only that when applying both, 'it must do so in a\nmanner that takes into account the fact that it offsets the same alleged subsidies through the manner in which it\ncalculates antidumping duties.' This is simply a distin ction without a difference. … the logic of China's\nargument necessarily suggests th at the United States must choose between the use of countervailing duties and\nthe use of an NME methodology\". (emphasis original).\n\n14.123 For these reasons, we find that China has failed to establish that the USDOC's use of its NME\nmethodology in the anti-dumping determinations at i ssue, concurrently with its determination of\nsubsidization and the imposition of countervaili ng duties on the same products in the four\ncountervailing duty determinations at issue, wa s inconsistent with Article 19.4 of the SCM\nAgreement. In light of this finding, we do not need to address the other arguments of the parties with\nrespect to the scope of application of Article 19. 4 of the SCM Agreement, notably the United States'\nargument that this provision, as well as Articles VI:3 of the GATT 1994 and Article 19.3 of the SCM\nAgreement, cannot form the basis of a claim with resp ect to the investigations at issue since no duties\nwere actually levied as a result of these investigations.\n(iii) China's claim under Article 19.3 of the SCM Agreement\n14.124 Article 19.3 of the SCM Agreement provides, in relevant parts:\n\"When a countervailing duty is imposed in respect of any product, such\ncountervailing duty shall be levied, in the appropriate amounts in each case , on a\nnon-discriminatory basis on imports of such product from all sources found to be\nsubsidized and causing injury, except as to imports from those sources which have\nrenounced any subsidies in question or fro m which undertakings under the terms of\nthis Agreement have been accepted. [...]\". (emphasis added)\n14.125 On its face, Article 19.3 of the SCM Agreement imposes upon the authorities of the importing\nMember the obligation to levy duties (i) on a non-discriminatory basis on imports from all sources\nfound to be subsidized and causing injury and (ii) in \"the appropriate amounts\" in each case.\n14.126 China's arguments raise the question of the m eaning to be given to the terms \"appropriate\namounts\" in this provision. Similar to its arguments under Article 19.4 of the SCM Agreement, China\nsubmits that the imposition of anti-dumping du ties calculated under an NME methodology is a\nrelevant consideration in assessing the appropriateness of the amount of duties levied. China relies on\nthe interpretation of Article 19.3 by the panel in EC – Salmon (Norway) . Specifically, China notes\nthat the EC – Salmon (Norway) panel found that the \"appropriate\" amount of a duty is the amount that\nis \"proper\" or \"fitting\" in light of the purpose of the duty.\n1030 China argues, that, applying the same\nreasoning, the \"appropriate\" amount of a counter vailing duty can be no greater than the amount\nnecessary to offset the subsidy 1031, such that the countervailing duty measures at issue are not \"in the\nappropriate amounts\" because they offset alleged subsidies that the United States has also offset\nthrough the manner in which it calculates anti-dumping duties under its NME methodology. 1032 China\nalso considers that it is not \"appropriate\" to of fset a subsidy that the investigating authority\nsimultaneously offsets through the manner in which it calculates anti-dumping duties in respect of the\nsame products\".1033\n14.127 The panel in EC – Salmon (Norway) considered a claim under Article 9.2 of the AD\nAgreement – which, aside from its reference to anti-dumping duties rather than to countervailing\nduties, is worded in terms that are virtually identical to those of Article 19.3 of the SCM\n\n1030 China second written submission, para. 254, citing to Panel Report on EC – Salmon (Norway) ,\nparas. 7.704-7.705.\n1031 China argues, on the basis of Article VI:3 and foot note 36 to the SCM Agreement, that the purpose\nof a countervailing duty is to \"offset\" the amount of any subsidy bestowed upon the product. (China first\nwritten submission, para. 383).\n1032 Id., paras. 380-384.\n\nAgreement.1034 In light of dictionary definitions of the te rm \"appropriate\", the panel considered that it\nwas reasonable to interpret this term in Artic le 9.2 of the AD Agreement to mean that the\n\"appropriate\" amount of the duty is one which is \"proper\" or \"fitting\" in the context of an anti-\ndumping investigation, and that what is \"proper\" or \"fitting\" should be determined in relation to the\nobject and purpose of the collection and imposition of anti-dumping duties. Consequently, the panel,\nin light of Article VI:2 of the GATT 1994 and of Article 9.1 of the AD Agreement, determined that\nthe \"appropriate\" amount of anti-dumping duty must be an amount that results in offsetting or\npreventing dumping, when all other requirements for the imposition of anti-dumping duties have been\nfulfilled. On this basis, and because dumping is de fined in the agreements as the introduction of a\nproduct into the commerce of another country at a price which is \"less than its normal value\", the\npanel found that an anti-dumping duty may only be collected when the price of the imported product\nis less than its normal value, adding that \"norma l value constitutes a point of reference for\ndetermining when anti-dumping duties may or may not be imposed and collected\".1035\n14.128 We fail to see how the EC – Salmon (Norway) panel's interpretation of the terms \"appropriate\namounts\" could support China's claim under Article 19.3 of the SCM Agreement. We recall that\ncountervailing duties are special duties that are coll ected for the purpose of \"offsetting\" subsidies.\nThis suggests that, applying the reasoning of the EC – Salmon (Norway) panel, countervailing duties\nare collected in the appropriate amounts insofar as the amount collected does not exceed the amount\nof subsidy found to exist. We further recall our conclusions above that the manner in which the\ndumping margin is calculated – through an NME methodology or otherwise – has no impact on the\nexistence of subsidies, which may be found to \"exi st\" in a parallel countervailing duty investigation;\nand that the fact that a \"double remedy\" may result from the imposition of anti-dumping duties does\nnot transform these duties into countervailing duties under the covered agreements. For these reasons,\nthe imposition of anti-dumping duties calculated under an NME methodology has no impact on\nwhether the amount of the concurrent countervailing duty collected is \"appropriate\" or not.\n14.129 Furthermore, we recall our conclusion that the context of Article 19.4 of the SCM Agreement\nconfirms our interpretation that that provision does not address the issue of double remedies. The\nsame considerations likewise suggest that it w as not the intention of the drafters to the SCM\nAgreement to address the question of double remedies in Article 19.3 of the SCM Agreement.\n14.130 We therefore find that China has failed to establish that the USDOC's use of its NME\nmethodology in the anti-dumping determinations at i ssue in this dispute, concurrently with its\ndetermination of subsidization and the imposition of countervailing duties on the same products in the\nfour countervailing duty determinations at issue, was inconsistent with Article 19.3 of the SCM\nAgreement. Given these findings, we need not addr ess the United States' argument that Article 19.3\nof the SCM Agreement finds no application in th e present case given that no duties were actually\nlevied as a result of the determinations at issue.\n(iv) China's claims under Article 10 of the SCM Agreement and Article VI:3 of the GATT 1994\n14.131 China argues that the United States had, under Articles 10 of the SCM Agreement and VI:3 of\nthe GATT 1994, an affirmative legal obligation to (i) ensure that it did not impose countervailing\nduties to offset subsidies that it simultaneously offset through the methods by which it calculated anti-\ndumping duties; (ii) take \"all necessary steps\" to ensure that this did not occur; and (iii) ensure that the\nUSDOC investigated and made a determination as to the \"precise amount of a subsidy attributed to\nthe imported products under investigation\", taking into account that using simultaneously an anti-\n\n1034 The one notable difference between the terms of Article 9.2 of the AD Agreement and those of\nArticle 19.3 of the SCM Agreement is that the former us es the term \"collected\" whereas the latter uses the term\n\"levied\".\n1035 Panel Report on EC – Salmon (Norway), paras. 7.704-7.705.\n\ndumping methodology had the effect of offsetting the same subsidies.\n1036 China considers that in the\ninvestigations at issue, the USDOC failed to meet these obligations. Ch ina notes in particular that the\nUSDOC did not take any steps to determine \"whether, and in what amount\" the use of market-\ndetermined costs of production in the parallel anti- dumping investigations had the effect of offsetting\nthe same subsidies that it identified in the countervailing duty investigations\n1037, and therefore, did not\n\"ascertain the precise amount of a subsidy attributed to the imported products under investigation\".1038\n14.132 Article 10 of the SCM Agreement and footnote 36 thereto provide:\n\"Application of Article VI of GATT 1994\nMembers shall take all necessary steps to ensure that the imposition of a\ncountervailing duty36 on any product of the territory of any Member imported into the\nterritory of another Member is in accordance with the provisions of Article VI of\nGATT 1994 and the terms of this Agreemen t. Countervailing duties may only be\nimposed pursuant to investigations initi ated and conducted in accordance with the\nprovisions of this Agreement and the Ag reement on Agriculture. [footnotes omitted\nin part]\nGATT 1994\".\n14.133 Article VI: 3 of the GATT 1994 provides that:\n\"No countervailing duty shall be levied on any product of the territory of any\ncontracting party imported into the territory of another contracting party in excess of\nan amount equal to the estimated bounty or s ubsidy determined to have been granted,\ndirectly or indirectly, on the manufacture, production or export of such product in the\ncountry of origin or exportation, including any special subsidy to the transportation of\na particular product. The term \"counterva iling duty\" shall be understood to mean a\nspecial duty levied for the purpose of offsetting any bounty or subsidy bestowed,\ndirectly, or indirectly, upon the manufacture, production or export of any\nmerchandise.\"\n14.134 China does not make clear whether it intends its claims to pertain to the collective operation\nof Articles 10 of the SCM Agreement and VI:3 of the GATT 1994, and whether it intends them to be\n\n1036 China second written submission, paras. 243-247, response to Panel question 76. China argues,\nreferring to the findings of the Appellate Body in US – Countervailing Measures on Certain EC Products and in\nUS – Softwood Lumber IV , that, collectively, Articles 10, 19.1, 19.3 , 19.4 of the SCM Agreement and 21.1 of\nthe SCM Agreement and Article VI:3 of the GATT 1994 impose upon investigating authorities an affirmative\nlegal obligation to take \"all necessary steps\" to ensure that they limit counterva iling duties to the amount and\nduration of the subsidy.\n1037 China notes that the USDOC stated unequivocally that \"it has no authority under U.S. law to\nexamine in the context of a countervailing duty investigation whether the use of an NME methodology in a\nparallel anti-dumping investigation has the effect of offsetting the same alleged subsidies\".\n1038 China second written submission, paras. 245 and 248-250; response to Panel question 76 (first\nmeeting). We address here China's claims as pres ented in its second written submission and subsequent\nsubmissions. In its first written submission, China presented its claims under Articles VI:3 of the GATT and 10\nof the SCM Agreement and under Article 32.1 of the SCM Agreement as purely consequential to its claims of\nviolation under Articles 19.3 and 19.4 of the SCM Agreement. (China first written submission, para. 385).\n\nin the nature of consequential claims as one woul d expect to be the case for a claim under Article 10\nof the SCM Agreement. In any case, implicit in Ch ina's arguments is a claim that the levying of\ncountervailing duties in an amount exceeding the amount of the subsidy \"determined to have been\ngranted\" is inconsistent with Article VI:3 of the GATT 1994. For this reason, we first consider\nwhether China has established a violation of Ar ticle VI:3 of the GATT 1994 before considering\nwhether China has established a violation of Article 10 of the SCM Agreement, taken in isolation, or a\nviolation of Article VI:3 of the GATT 1994 and Article 10 of the SCM Agreement collectively.\n14.135 Of relevance to China's claims, Article VI:3 of the GATT 1994 provides that countervailing\nduties are to be levied in amounts not exceeding th e \"subsidy determined to have been granted\".\nThus, the pertinent obligation under Article VI:3 is very similar to that under Article 19.4 of the SCM\nAgreement. Similar to Article 19.4, Article VI:3 is limited in scope: it only establishes a limit with\nrespect to the imposition of countervailing duties.\n14.136 For the same reasons that we have found that China has not established a violation of\nArticle 19.4 of the SCM Agreement, we also c onsider that China has not established that the\nUnited States imposed duties in excess of the subs idy \"determined to have been granted\" in the\ninvestigations at issue inconsistently with Article VI:3 of the GATT 1994.\n14.137 Turning to the second provision cited by China, we note that Article 10 of the SCM\nAgreement establishes that countervailing duti es may only be imposed in accordance with the\nprocedural and substantive obliga tions contained in the SCM Agreement, indicating that a claim of\nviolation of Article 10 of the SCM Agreement must necessarily be consequential to a claim of\nviolation of other provisions of the covered ag reements. We also note China's argument that\nArticle VI:3 of the GATT and Article 10 of the SCM Agreement imposed on the USDOC an\nobligation to investigate the amount of subsidy that remained to be offset due to the concurrent\nimposition of anti-dumping duties calculated under an NME methodology.1039\n14.138 We have already concluded that China has fa iled to establish that the imposition of anti-\ndumping duties calculated under an NME methodology is an event that affects the existence of a\nsubsidy or the amount of subsidy conferred on a product in the cont ext of a concurrent countervailing\nduty investigation. As a consequence, we also find that the USDOC was under no obligation to\ninvestigate whether the use of an NME methodolog y in a parallel anti-dumping investigation had the\n\"effect\" of offsetting the same alleged subsidies. China advances no other argument in support of its\nclaims under Articles 10 of the SCM Agreement and VI:3 of the GATT. Hence, we find that China\nhas not demonstrated that the United States acted in consistently with Articles VI:3 of the GATT 1994\nand 10 of the SCM Agreement as a result of the concurrent imposition of anti-dumping duties\ncalculated under the U.S. NME methodology and of countervailing duties in the investigations at\nissue.\n1040\n(v) China's claim under Article 32.1 of the SCM Agreement\n14.139 China makes it clear that its claim under Article 32.1 of the SCM Agreement is purely\nconsequential to its claims under Articles 10, 19.3 and 19.4 of the SCM Agreement and Article VI:3\nof the GATT of the 1994. 1041 As we have found that China has failed to establish a violation of these\nprovisions, we also find that China failed to establis h that the United States acted inconsistently with\nArticle 32.1 of the SCM Agreement.\n\n1039 China second written submission, paras. 248-250.\n1040 Given these findings, we need not address the United States' argument that Article VI:3 does not\napply to the measures at issue given that no duties were actually levied as a result of these measures.\n\n14.140 In addition, we note that our findings set forth in sections (ii)-(iv) concerning China's double\nremedy claims of necessity are limited to the provisi ons cited by China in that regard. We have no\nmandate to, and thus do not, consider whether a ny other provisions of the WTO Agreement might\nprohibit any double remedies of the type referred to by China.\n4. Claims under Articles 12.1 and 12.8 of the SCM Agreement\n14.141 We now examine China's claims in respect of Articles 12.1 and 12.8 of the SCM Agreement.\nWe do so under the assumption that China intends these claims to be independent of its other claims\nof violation.\n(a) Main arguments of the Parties\n(i) China\n14.142 China claims that, in the investigations at issu e, the USDOC did not provide interested parties\nwith \"notice of the information which [it] require [d]\" to evaluate the existence of a double remedy,\nand therefore acted inconsistently with its obliga tions under Article 12.1 of the SCM Agreement. In\nsupport of this argument, China submits that the Un ited States, in response to certain Panel questions,\n\"appears to suggest that the USDOC might have ta ken steps to avoid imposing double remedies in the\ninvestigations at issue, had the interested par ties presented supporting evidence that a double remedy\nwould occur\". China further argues that the USDOC did not inform interested parties of the essential\nfacts under consideration that would \"form the ba sis\" for its determination in respect of double\nremedies and, as a result, acted inconsistently with Article 12.8 of the SCM Agreement.\n1042\n(ii) United States\n14.143 The United States argues that China's claims mu st fail because (i) they are premised on the\nexistence of an inherent double remedy in the co ncurrent application of countervailing duties and\nNME anti-dumping duties; and (ii) even if a double re medy could be shown to exist, the USDOC did\nnot \"require\" information to \"evaluate the exis tence of a double remedy\" as China argues and such\ninformation did not form part of the \"essential facts under consideration\" that the USDOC was\nrequired to disclose. In addition, the United States argues that providing a continuing opportunity for\ndemonstration of an alleged double remedy is an a ppropriate position for an investigating authority,\neven where there is no basis for the claim and the investigating authority does not consider and has\nnot found that such a double remedy exists. The Un ited States adds that it is for interested parties\nwho seek to alter the application of counterva iling and anti-dumping duties to explain, with\nsupporting evidence, why their proposed course of action is appropriate.1043\n(b) Assessment by the Panel\n14.144 Article 12.1 of the SCM Agreement provides:\n\"Interested Members and all interested pa rties in a countervailing duty investigation\nshall be given notice of the information which the authorities require and ample\nopportunity to present in writing all evidence which they consider relevant in respect\nof the investigation in question\".\n14.145 Article 12.8 of the SCM Agreement provides:\n\n1042 China second written submission, paras. 268-270.\n1043 United States opening statement at the second meeting of the Panel, paras. 66-69.\n\n\"The authorities shall, before a final dete rmination is made, inform all interested\nMembers and interested parties of the essen tial facts under consideration which form\nthe basis for the decision whether to appl y definitive measures. Such disclosure\nshould take place in sufficient time for the parties to defend their interests\".\n14.146 China claims a violation of the obligation unde r Article 12.1 of the SCM Agreement for the\ninvestigating authorities to give notice \"of the information which the authorities require\". (emphasis\nadded) Thus, to succeed in its claim, China must demonstrate that the USDOC \"required\" the\nsubmission of certain evidence in order to demonstr ate that a double remedy existed. China's sole\nallegation in this respect is that the United States, in response to certain Panel questions, \"appears to\nsuggest that the USDOC might have taken st eps to avoid imposing double remedies in the\ninvestigations at issue, had the interested par ties presented supporting evidence that a double remedy\nwould occur\". China has not explained why th e responses provided by the delegation of the\nimporting Member to panel questions should be re levant in determining what information the\nauthority \"required\" in the investigation. 1044 Thus, we are not convinced that the USDOC \" required\"\nthe submission of any information with respect to double remedies in the investigations at issue.\n14.147 In any event, it seems that China effectively seeks a finding that would require the USDOC to\nadopt a set of criteria under which to assess the o ccurrence of double remedies, in the event that it\nconsidered that it possesses the legal authority to take action to avoid such an occurrence. We recall\nthat we have already found that the USDOC is not, under the provisions cited by China, under a legal\nobligation to avoid the imposition of double remedi es. While it is certainly desirable that\ninvestigating authorities adopt clear positions on certain legal issues that have the potential to arise in\nthe investigations they conduct, we are not c onvinced that Article 12.1 of the SCM Agreement\nrequires them to do so with respect to any and all such issues. We have sympathy for the\nUnited States' argument that it is for interested parties who seek to convince an investigating authority\nto modify its application of its trade remedy laws (especially where that application has not been\nshown to be WTO-inconsistent) to bring relevant evidence to the investigating authority.\n14.148 Turning to Article 12.8 of the SCM Agreement, we note that this provision, on its face, relates\nto the obligation for the investigating authority to ma ke a disclosure, prior to the issuance of a final\ndetermination, \"of the essential facts under consideration which form the basis for the decision\nwhether to apply definitive measures\". (emphasis adde d) In other terms, Article 12.8 pertains to the\ndisclosure that an investigating authority must make prior to the issuance of its final determination, in\nwhich it must set out the essential facts on which that determination is based. While China's treatment\nof its Article 12.8 claim in its submissions is too succinct to achieve any certainty in this respect, it\nseems that China's argument is not that the US DOC failed to disclose the evidence on which its\ndeterminations were based, but ra ther that it failed to indicate what evidence the USDOC would have\naccepted – if any – to establish the existence of a double remedy. Again, China seems to seek a\nfinding that pertains to the legal framework th at the USDOC would apply to the issue of double\nremedies, but does not explain how the terms of Article 12.8 of the SCM Agreement can\naccommodate such a claim.\n14.149 For these reasons, we find that China has fail ed to establish that the United States acted\ninconsistently with its obligations under Articles 12.1 and 12.8 of the SCM Agreement.\n5. Claims under Article I:1 of the GATT 1994\n14.150 The last claim of China in respect of \"double remedies\" is its claim under Article I:1 of the\nGATT, which embodies the \"most favoured-nation\" (MFN) principle.\n\n1044 China devotes less than half a page of its submissions (paras. 268-270 of its second written\nsubmission) to its arguments in support of its Articles 12.1 and 12.8 claims.\n\n(a) Main arguments of the Parties\n(i) China\n14.151 China claims that in the four sets of anti- dumping and countervailing dut y investigations at\nissue, the United States denied imports from Ch ina MFN treatment under Article I:1 of the GATT\n1994 by failing to extend to these imports the sa me unconditional entitlement to the avoidance of\ndouble remedies that it extends to imports from market economy countries. In these investigations,\nChina argues, the USDOC either did not avoid the imposition of a double remedy, or imposed a\ncondition upon the avoidance of a double remedy th at it does not impose upon products originating in\nthe territory of other Members.\n1045\n14.152 China directs the Panel to a number of USDOC determinations and U.S. court decisions\nwhich, it argues, demonstrate that the USDOC has re peatedly recognized that the manner in which it\ncalculates anti-dumping duties can offset subsidies (including domestic subsidies) and that in\ncircumstances where a potential for double remedies arose, the USDOC took steps to ensure that no\ndouble remedy would occur.\n14.153 China argues, first, citing to the USDOC determination in LEU from France, that the USDOC\nrefuses to deduct countervailing duties from the export price in calculating margins of dumping in\nanti-dumping investigations involving market economy countries. China adds that the USDOC has\nrecognized that to make such a deduction wo uld impermissibly coll ect countervailing duties\ntwice.\n1046, 1047\n14.154 Second, China argues, since at least 1986 and its determination in Tool Steel from Germany ,\nthe USDOC has considered that it would be inappropr iate to add subsidies to producers' costs of\nproduction (i.e., to the actual expenses recorded in producers' books and records) in calculating the\nmargin of dumping, because doing so would effectively collect countervailing duties twice, thereby\nblurring the distinction between anti-dumping and countervailing duties. China argues that making\nsuch an addition would be equiva lent to deducting subsidies from the export price and that from the\nstandpoint of a potential double remedy, the USDOC 's NME methodology has the same effect as\nadding subsidies to a producer's costs in a market economy investigation: both approaches place the\nproducer in the position of having market-determined costs of production.\n1048 China notes that in Tool\nSteel from Germany , the USDOC decided that it would use the producer's actual costs, even if they\nreflected the effect of subsidies. This determina tion was appealed to the U.S. Court of International\nTrade in Al Tech Speciality Steel Corp . In this decision, China argu es, the Court found considerable\nsupport in U.S. law for the plaintiff's argument that the costs used to determine constructed normal\nvalue should be based on unsubsidized costs. Ch ina indicates that while the Court considered it a\nclose issue, it was ultimately persuaded by th e USDOC's argument that adding subsidies to the\nproducer's costs would improperly \"blur[] the di stinction between anti dumping and countervailing\nduty law\". China adds that the USDOC has also recognized (in its determination in Certain Steel\n\n1045 China first written submission, paras. 403-427.\n1046 China first written submission, paras. 405-406; second written submission, para. 214; response to\nPanel question 74 (first meeting). China also quotes the USDOC as saying, in LEU from France that \"in the\nmost general terms, the [Tariff Act of 1930] stands for the proposition that dumping margins should not be\ncalculated so as to double-collect CVDs\".\n1047 Similarly, China submits, the USDOC has recognized that the deduction of safeguard duties from\nthe export price in anti-dumping investigations would re sult in an unwarranted double remedy. China cites to\nthe USDOC determination in Steel Wire Rod from Korea and the decision of the Federal Court of Appeals,\nFederal Circuit, in Wheatland Tube Co. v United States. (China first written submission, footnote 332).\n1048 Id., para. 409; second written submission, paras. 21 4 and 227; response to Panel question 74 (first\nmeeting).\n\nProducts from the Netherlands )1049, that using a producer's unsubsidized costs to determine\nconstructed normal value would have the effect of offsetting the subsidies through both anti-dumping\nand countervailing duties, and that in numerous ot her anti-dumping investigations of imports from\nmarket economy countries, the USDOC has allowe d respondents to deduct subsidies from their\nreported costs of production, where these reported co sts did not accurately reflect the cost-reducing\neffects of the subsidies ( Certain Pasta from Italy, Live Swine from Canada , Red Raspberries from\nCanada).1050 China argues that in determining the constructed normal value based on costs that do not\nreflect the subsidies found to be received by the producer, the USDOC's NME methodology is\nindistinguishable from adding subsidies to the producer's costs in a market economy investigation, or\nfrom using the producer's reported costs when those co sts do not reflect the subsidies received by the\nproducer.\n1051\n14.155 China submits that by, on the one hand, maintain ing a consistent set of policies and practices\nto avoid the imposition of a double remedy when establishing margins of dumping for producers from\nmarket economy countries, without precondition a nd without imposing any evidentiary burden on\nrespondents (i.e., \"unconditionally\") and, on the other hand, refusing to avoid imposing double\nremedies and/or requiring that respondents dem onstrate the existence of a double remedy (e.g. by\nshowing that domestic subsidies pass through, pro rata, to export prices) when imports from China\nwere concerned, the United States acted incons istently with the MFN obligation contained in\nArticle I:1 of the GATT 1994. Referring to the terms of that provision, China argues that:\n(i) anti-dumping and countervailing duties are \"charges of any kind imposed on\nor in connection with importation\";\n(ii) the methods by which the United States calculates such duties (including its\npolicies and practices to avoid the imposition of a double remedy, as well as\nthe assumptions and burdens of proofs a pplied in evaluating the issue) are\neither \"methods of levying such charges\", \"rules or formalities in connection\nwith importation\", or both\n1052;\n(iii) the USDOC's policy of avoiding the imposition of a double remedy is an\n\"advantage, favour [or] privilege\" that the United States extends to these\nimports.1053\n14.156 In response to an argument of the United St ates, China argues that it does not need to\nestablish that products from China are disadvantaged as compared to \"like products\" from other\nMembers in order to succeed in its \"as applied\" claims under Article I:1. China submits in this respect\nthat prior WTO panels have recognized that a vi olation of Article I:1 occurs when an importing\nMember applies a discriminatory standard that rela tes only to the origin of the product at issue, and\nnot to its characteristics, without having to demonstrate the presence of \"like products\".\n1054\n\n1049 China second written submission, paras. 214 and 227; response to Panel question 74 (first meeting).\n1050 China response to Panel question 74 (first meeting).\n1051 China response to Panel question 26 (second meeting).\n1052 China cites to the GATT panel in US – MFN Footwear , which considered that \"the rules and\nformalities applicable to countervailing duties [...] ar e rules and formalities imposed in connection with\nimportation, within the meaning of Article I:1\". (China first written submission, footnote 337, citing to GATT\nPanel Report on US – MFN Footwear, para. 6.8).\n1053 See, generally, China first written submission, paras. 413-427; second written submission,\nparas. 271-277.\n1054 China response to Panel question 94, citing to Panel Reports on US – Certain EC Products ,\n\n14.157 Finally, China rejects the United States' argume nt that the difference in treatment could be\njustified by its Protocol of Accession since nothi ng in the Protocol allows Members to impose double\nremedies.\n1055 Likewise, China rejects the suggestion th at it is seeking \"special treatment\" from the\nUnited States with respect to the concurrent imposition of anti- dumping and countervailing duties,\nindicating that it is only asking the United States to apply to imports from China the same standard\nthat it has applied to imports from other Members in other circumstances in which the problem of\ndouble remedies has had the potential to arise.1056\n(ii) United States\n14.158 The United States argues that the USDOC treats imports from China no differently than it\ntreats imports from other Members with respect to its refusal to deduct subsidies from the export price\nand its refusal to add subsidies to costs of produc tion. The United States indicates that the USDOC\ndoes not make such adjustments in investiga tions against Chinese products, including in the\ninvestigations at issue. 1057 The United States considers that China has not demonstrated otherwise,\nwhich in its view may explain why China formul ates its claim under Article I:1 more generally as\npertaining to the United States' \"avoidance of the imposition of a double remedy\". In any case, the\nUnited States argues, referring to China's argu ment that the USDOC's NME methodology has the\nsame effect as adding subsidies to a producer's co st of production, having the \"same effect\" is\ndifferent from actually making the adjustment at issue.1058\n14.159 The United States makes the following comment s with respect to the specific USDOC\ndeterminations and U.S. court cases cited by China in support of its assertion that the USDOC avoids\nimposing double remedies in anti-dumping investigati ons on imports from market economies: First,\nthe United States considers that the analogy draw n by China between the present dispute and the\nUSDOC determinations in LEU from France , Tool Steel from Germany and Certain Steel Products\nfrom the Netherlands is inapposite, as these determinations were not based on subsidies being\ncaptured by the normal value, but involved the lite ral counting of countervailing duties twice – once\nin the actual levying of countervailing duties and once by either adding the countervailing duties to\ncost or subtracting countervailing duties from export price. 1059 The United States argues that these\nmathematical certainties cannot be compared to China's theoretical arguments about overlapping\neconomic distortions or overlapping rationales. Specifically, with respect to LEU from France , the\nUnited States explains that the USDOC considered that subtracting the CVDs from the export price\nhad exactly the same effect as would have adding the same CVDs to the dumping margin after it had\nbeen calculated. Therefore, the requested adju stment would have literally collected the CVDs\ntwice.1060 In Tool Steel from Germany, the USDOC refused to add subsidies to the normal value. Had\nit added them, the dumping margin would have automatically increased by the amount of the\ncountervailable subsidies found in the compani on countervailing duty case, thus indisputably\ncollecting countervailing duties twice. The Unite d States argues that the crux of the USDOC's\ndetermination in that case was that subsidies ar e not costs; the USDOC's determination does not\ncontain any discussion of the issue of double remedies. 1061 With respect to Certain Steel from the\nNetherlands, the United States submits that the USDOC's determination was not based on assertions\nabout the alleged effects of subsidies on normal va lue, but was simply an instance in which the\n\n1055 China second written submission, paras. 211 and 2 74; response to Panel questions 77 and 85 (first\nmeeting); oral statement at the second meeting of the Panel, para. 70.\n1057 United States second written submission, paras. 219-220.\n1058 United States first written submission, footnote 597.\n1059 See, e.g., United States comments on China's response to Panel question 33.\n1060 United States second written submission, footnote 350; response to Panel question 79; comments\non China's response to Panel question 32 (second meeting).\n1061 United States second written submission, footnote 350; response to Panel question 79 (first\nmeeting).\n\nUSDOC reduced the respondent's cost of capital by the amount of capital received from the\ngovernment as a grant. Thus, the producer's ac tual cost of capital was the reduced amount. 1062\nFurther, the United States argues that the USDOC de termination cited to by China is a preliminary\ndetermination – the anti-dumping a nd countervailing duty investigations were terminated before the\nUSDOC issued a final determination – and therefor e cannot be considered a final opinion on the\nmatter.1063\n14.160 The United States finally notes that in Live Swine from Canada , the USDOC included\ngovernment grants as offsets to respondents' reporte d general and administrative (G&A) costs. The\nUnited States argues that rather than being d esigned to \"deduct subsidies from cost\" to avoid\noffsetting any advantage from subsidization, th is approach reflects the USDOC's long-standing\npractice of treating as an offset to cost any income that is received as a result of producing the subject\nmerchandise, irrespective of source, and that is duly recorded in the respondents' books. The\nUnited States adds that the USDOC routinely ap plies similar offsets to both G&A expenses and\nfinancial expenses and that this is merely an aspect of the calculation of the dumping margin, rather\nthan a tool to \"deduct subsidies from cost\" to avoi d offsetting any advantage from subsidization, as is\nevidenced by the fact that the US DOC applies such offsets independently of whether there is a\nparallel countervailing duty investiga tion or, in event of such parallel investigation, even if this\ninvestigation does not result in the imposition of countervailing duties.1064\n14.161 The United States also notes that a number of WTO rules explicitly recognize that, in the\ncontext of anti-dumping and countervailing duty proceedings, a Member may – and in some\ncircumstances must – accord differential treatme nt to products from certain Members. Such\ndifferential treatment takes the form , for example, of the level of duties, the method of calculating\nnormal value in anti-dumping investigations, or the method of determining the benefit in\ncountervailing duty investigations. 1065 The United States argues that given the explicit authorization\nfor such actions, where they conform to the require ments of these other WTO provisions, they are not\ninconsistent with Article I:1 of the GATT 1994, as any other approach would render every application\nof certain provisions of the covered agreements or of China's Protocol of Accession an MFN\nviolation. The United States also submits that, because of the nature of China's economy,\ninvestigations involving Chinese products pose methodological challenges which do not arise with\nrespect to market economies, and which require i nvestigating authorities to develop mechanisms to\nallow them to make the necessary determinations, as recognized in China's Protocol of Accession.\n1066\nIn any case, the United States argues that Article I: 1 is inapposite because of the explicit recognition\nof Members' right to use the NME methodology in r espect of China in its Protocol of Accession, with\nno corresponding prohibition on the concurrent a pplication of countervailing duties, which the\nUnited States reads as reflecting the judgment of Members that no double remedy results from the\napplication of that methodology in conjunction with countervailing duties. 1067 I n s u m , f o r t h e\nUnited States, China's MFN complaint focuses on th e application of the NME methodology, yet the\n\n1062 United States second written submission, footnote 350.\n1063 United States comments on China's response to Panel question 33 (second meeting).\n1064 Id. The United States notes that Live Swine from Canada is an example of an investigation where\nthe USDOC applied such an offset to costs even where the fina l determination in the corresponding\ncountervailing duty investigation was negative.\n1065 The United States refers the following provisions as examples: Articles VI:2 and VI:3 of the\nGATT 1994; the second Ad Note to Article VI:1 of the GATT 1994; Ar ticle 2.2 of the AD Agreement; Article\n14(d) of the SCM Agreement; Article 27.10 of the SCM Agreement; paragraphs 15 (a) and (b) of China's\nProtocol of Accession.\n1066 United States first written submission, paras. 438-442.\n1067 Id., paras. 443-444.\n\napplication of that methodology is expressly author ized by paragraph 15(a) of China's Protocol of\nAccession and hence, does not violate Article I:1 of the GATT 1994.\n1068\n14.162 Finally, the United States considers that Chin a has failed to substantiate its claim of\ninconsistency with Article I:1 of the GATT because it does not identify the \"like products\" to which\nthe alleged advantage is applied.1069\n(b) Main arguments of the Third Parties\n(i) Canada\n14.163 Canada considers that neither the use of th e NME methodology nor the concurrent imposition\nof anti-dumping duties calculated using that methodology and of countervailing duties on Chinese\nproducts is inconsistent with Article I:1 of the GATT 1994. Like the United States, Canada notes that\nthe calculation of the normal value using the NME methodology is specifically allowed under China's\nProtocol of Accession.\n1070\n(c) Assessment by the Panel\n14.164 We now consider whether, notwithstanding our findings above that China has not established\nthe inconsistency of the determinations at issue with Article VI:3 of the GATT 1994 and Articles 10,\n12.1, 12.8, 19.3, 19.4 and 32.1 of the SCM Ag reement, those determinations contravened the\nobligations of the United States under Article I:1 of the GATT.1071\n14.165 Article I:1 of the GATT 1994 embodies the \"Most-Favoured Nation\" (MFN) principle, \"a\ncornerstone of the GATT and [...] one of the pillars of the WTO trading system\". 1072 The object and\npurpose of Article I:1 is, inter alia, \"to prohibit discrimination among li ke products originating in or\ndestined for different countries\".1073 Article I:1 of the GATT provides as follows:\n\"With respect to customs duties and charges of any kind imposed on or in connection\nwith importation or exportation or imposed on the international transfer of payments\nfor imports or exports, and with respect to the method of levying such duties and\ncharges, and with respect to all rules a nd formalities in connection with importation\nand exportation, and with respect to all matte rs referred to in pa ragraphs 2 and 4 of\nArticle III, any advantage, favour, privilege or immunity granted by any contracting\nparty to any product originating in or destined for any other country shall be accorded\nimmediately and unconditionally to the like pr oduct originating in or destined for the\nterritories of all other contracting parties\".\n\n1068 United States opening statement at the first meeting of the Panel, para. 59; second written\nsubmission, para. 219.\n1069 United States first written submission, para. 431. The United States notes in this respect that the\npanel in US – MFN Footwear did not consider Brazil's \"as applied\" claims in that case since Brazil had not\nestablished the \"like products\" condition. (United States response to Panel question 94 (first meeting), citing to\nGATT Panel Report on US – MFN Footwear, paras. 6.11-6.12).\n1070 Canada third-party oral statement, paras. 29-30.\n1071 China claims a violation of Article I:1 of the GA TT 1994 \"separate and apart\" from the violations\nof the covered agreements discussed above. (China first written submission, para. 403).\n1072 Appellate Body Report on Canada – Autos, para. 69.\n1073 Id., para. 84.\n\n14.166 By its terms, three elements must be demonstrated to establish a violation of Article I:1: there\nmust be an \"advantage \", (of the type covered by that provisi on) which is not accorded to all \"like\nproducts\" of all WTO Members, \"unconditionally\".1074\n14.167 Thus, to succeed in its Article I:1 claim, China n eeds to establish, first, that the United States\ngrants an \"advantage, favour, privilege or immuni ty\" of the type covered by Article I:1 of the\nGATT 1994 to products originating in other Members which it did not accord to the investigated\nproducts from China in the investigations at issu e. The scope of Article I:1 of the GATT 1994 has\nbeen interpreted broadly by GATT panels as well as by the Appellate Body and WTO panels. Of\nparticular relevance to the present dispute, the GATT panel in US – MFN Footwear considered that\nrules and formalities applicable in the context of countervailing duty investigations were \"rules and\nformalities in connection with importation\", within the meaning of Article I:1. At issue in US − MFN\nFootwear were certain procedural advantages pertai ning to the revocation of countervailing duty\norders conferred upon certain cat egories of imported products. 1075 Before us, the United States does\nnot contest that advantages pertaining to the admini stration of countervailing duty laws fall within the\nscope of Article I:1 of the GATT 1994, and we see no reason to depart from the approach adopted by\nthe US − MFN Footwear GATT panel. Further, for the same reasons, we determine that rules and\nformalities applicable in the context of anti-dumpi ng investigations also fall within the scope of\nArticle I:1 of the GATT 1994.\n14.168 In the present dispute, China identifies as th e relevant \"advantage\" under Article I:1 the\nUSDOC \"policies and practices to avoid the impos ition of a double remedy for the same act of\nsubsidisation\" whenever \"there is a risk that th e calculation of an anti-dumping margin could result in\nthe imposition of [such] a double remedy\". 1076 China argues that it is likewise an \"advantage, favour\n[or] privilege\" to permit investigated market economy producers to avoid the potential imposition of a\ndouble remedy without any requirement to produce \"evidence\" concerning the existence or extent of a\ndouble remedy in general, or in a particular instance. 1077 China argues that in the four sets of anti-\ndumping and countervailing duty investigations at issue (i) the USDOC did not take any steps to\navoid the imposition of double remedies and that it do es not in any event have the authority to take\nsuch steps, or (ii) alternatively, that the US DOC imposed a condition – the presentation of evidence\ndemonstrating the existence of a double remedy and in particular, evidence that the subsidies at issue\nhad the effect of reducing the export price – upon the avoidance of a double remedy for the same\nalleged acts of subsidization that it does not impose upon products originating in the territory of other\nMembers.\n1078\n14.169 As support for its argument, China refers to a number of USDOC determinations (and U.S.\ncourt decisions reviewing these determinations) in which the USDOC made or refused to make\ncertain adjustments. China argues that in th ese determinations in which a potential double remedy\narose, the USDOC did not consider the existence of a double remedy to be \"theoretical\" or to require\nany evidence or presumptions about the effects of subsidies on a producer's costs or prices. 1079\nRather, China argues, in each of these circum stances, the USDOC took all necessary steps to\n\n1074 Panel Report on Indonesia – Autos , para. 14.138, citing to Appellate Body Report on EC –\nBananas III.\n1075 GATT Panel Report, US – MFN Footwear, para. 6.9.\n1076 For instance, in its first written submission, China states: \"In every circumstance in which the issue\nhas arisen the United States has consistently taken th e position that it will avoid the imposition of a double\nremedy through the manner in which it calculates anti-dumping and countervailing duties\". (China first written\n1077 Id., para. 420. (emphasis added).\n1078 Id., para. 427.\n1079 For some of the prior determinations, China also argues that with respect to the imposition of\ndouble remedies, making (or not making) the adjustments at issue \"has the same eff ect\" as the calculation of a\ndumping margin under the NME methodology.\n\ninvestigate and ensure that the manner in whic h it calculated anti-dumping duties did not have the\neffect of offsetting subsidies that it simultaneous ly offset through the imposition of countervailing\nduties.\n1080\n14.170 The first step in our analysis is to examin e the USDOC determinations and court decisions\ncited by China to determine whether they support these allegations.1081\n14.171 First, China cites to the USDOC determination in LEU from France, an administrative review\nin an anti-dumping investigation. In LEU from France, U.S. interested parties requested the USDOC,\nin calculating the margin of dumping, to deduct from the export price an amount corresponding to\ncountervailing duties that had already been imposed on the same product. The USDOC, consistent\nwith its established practice, rejected this request. The USDOC reasoned that (i) countervailing duties\nare neither \"import duties\" nor \"selling expenses\" under the U.S. Tariff Act, such that the Act does not\nrequire that they be deducted from the export price, and (ii) that deducting countervailing duties from\nthe export price \"effectively would collect the CVDs a second time\". The USDOC added in this\nrespect that \"in the most general terms, the US Tariff Act stands for the proposition that dumping\nmargins should not be calculated so as to double-collect CVDs\".\n1082 We note that in Steel Wire Rod\nfrom Korea , also cited by China, the USDOC examined the similar question of whether U.S. anti-\ndumping law requires the deduction of safeguard duti es from the export price, and reached the same\nconclusion, i.e., that it does not.1083\n14.172 China also refers us to Tool Steel from Germany , a 1986 USDOC anti-dumping\ndetermination.1084 In this determination, the USDOC rejected a request of U.S. interested parties that\nin computing the cost of production and constructed value of an investigated producer, it include an\namount for subsidies which the producer had received from the German federal and state\ngovernments. The USDOC took the position that it woul d be inappropriate to add the subsidies to the\nproducer's actual expenses, in other words, that it was appropriate to calculate the costs of production\non the basis of producers' reported costs of produc tion, even if those costs reflected the subsidies\nreceived. The USDOC's determination makes no refe rence to the issue of double remedy: the sole\nrationale provided for the USDOC's decision is that \"the purpose of [U.S. anti-dumping law] is to\ndetermine whether a company is selling at less than the cost of production, based on actual costs\".\nThe USDOC determination in Tool Steel was appealed to the U.S. Court of International Trade ( Al\n\n1081 In certain instances, China submitted only excerpts from the relevant determinations and we had to\nretrieve the full text of the relevant decisions in order to properly understand the context in which the USDOC\ndecisions or statements cited by China were made. We re call that China bears the burd en of proof in respect of\nfactual assertions it makes, and therefor e that it is, in the first place, Chin a's responsibility to provide the Panel\nwith sufficient explanations and evidence to allow the Panel to make the required factual findings.\n1082 The USDOC seems to have derived this \"rationale\" from the amendments the U.S. Congress made\nto the Tariff Act to prevent the imposition of double remedi es with respect to export su bsidies in the context of\nconcurrent anti-dumping and countervailing duty investigations. The USDOC also noted prior U.S. court\ndecisions that relied on the same rationale for not deducting countervailing duties from U.S. prices in calculating\nmargins of dumping.\n1083 Stainless Steel Wire Rod from the Republic of Korea: Final Results of Antidumping Duty\nAdministrative Review (\"Steel Wire Rod from Korea\"), Exhibit CHI-125, p. 19160. The Court of Appeals for\nthe Federal Circuit upheld the USDOC's interpretation of the statute as not requiring the deduction of safeguard\nduties from the export price in Wheatland Tube Co. v United States . In its findings, the Court, inter alia, finds\n\"reasonable\" the USDOC's conclusion that deducting safeguard duties from the export price would improperly\nlead it to collect a double remedy. ( Wheatland Tube Company and Allied Rube & Counduit Corporation. v\nUnited States (\"Wheatland Tube\"), Exhibit CHI-126, p. 1366). China's discussion of these two decisions is\nlimited to a sentence in footnote 332 of its first written submission.\n1084 Tool Steel From the Federal Republic of Ge rmany; Correction to Early Determination of\nAntidumping Duty, Exhibit CHI-127, pp. 10071-10072.\n\nTech Specialty Steel Corp. v. US )1085, which upheld it. The Court found that the USDOC's\ninterpretation of the U.S. Tariff Act was not unr easonable: the Court noted that administrative\npractice and judicial precedent were inconsistent on th e issue but ultimately, it considered that to add\nsubsidies to a producer's costs of production woul d improperly blur the distinction between anti-\ndumping and countervailing duty remedies by allo wing the USDOC to counteract subsidization\nwithout complying with the requirements of the countervailing duty statute.1086\n14.173 China also cites to the USDOC's preliminary determination in Certain Steel Products from\nthe Netherlands .1087 In this determination, \"to avoid possible double-counting\", the USDOC\nsubtracted from a respondent's production cost s the amount of subsidies received from the\ngovernment in the form of a grant, which had been preliminarily determined to be a subsidy in a\nparallel countervailing duty case. The USDOC added that it considered this result to be consistent\nwith past practice and with a prior ruling of the U.S. Court of International Trade (in Connors Steel),\nbut provided no further explanations in this resp ect. The USDOC invited comments on its treatment\nof this issue, but ultimately, the investigations were rescinded prior to the issuance of the USDOC's\nfinal determination. 1088 Finally, China refers to the USDOC determinations in Certain Pasta from\nItaly, Live Swine from Canada , and Red Raspberries from Canada 1089, as examples of instances in\nwhich the USDOC allowed investigated producers to reduce their reported costs of production by the\namount of subsidies received. The USDOC's de terminations in these three cases contain no\ndiscussion of the issue of double remedies; rather, the adjustments were seemingly made in\napplication of the USDOC's normal practice of allowing, as offsets to producers' G&A costs,\ndeduction of subsidies \"attributable directly\" to the production of the subject merchandise.\n14.174 China characterizes these different cases as all pertaining to a single situation or issue, the\navoidance of a double remedy in respect of a particular act of subsidization. We disagree. We see the\ndeterminations cited by China as pertaining to three distinct factual situations, and we do not consider\nthat they stand for the proposition that as a factual matter the United States takes all necessary steps to\navoid the imposition of double remedies in situations in which such double remedies are likely to\narise, or that it maintains a policy or practice of taking such steps.\n14.175 The first situation, that in LEU from France a nd Steel Wire Rod from Korea, pertains to the\nadjustments that should be made to the export price to arrive at an ex-factory price as a basis from\nwhich to calculate a dumping margin. Specifically , in these investigations, the USDOC considered\nwhether other trade remedies (countervailing duties and safeguards, respectively) that already applied\nto the product at issue were normal \"customs duti es\" (which would be deducted from the export price\nin the course of the ex-factory calculation) or othe rwise were relevant to the determination of the\nexport price. The USDOC's conclusion was that making a deduction for these remedies would not be\nappropriate as it would result directly and literally in collecting those other trade remedies twice. That\nthese past investigations do not pertain at all to th e issue of double remedies raised by China in this\nclaim is confirmed by the fact that the USDOC applied the same approach to the deduction of\n\n1085 Al Tech Specialty Steel Corp. v. US (\"Al Tech\"), 651 F. Supp. 1421 (Ct. Int’l Trade, 1986) (no\nexhibit provided by China).\n1086 U.S. interested parties had argued that not taking subsidies into account would allow foreign\nproducers to evade anti-dumping disciplines.\n1087 Preliminary Determination of Sales Not Less Than Fair Value: Certain Steel Products from the\nNetherlands, Exhibit CHI-156.\n1088 Certain Steel Products From Belgium, France, the Federal Republic of Germany, Italy,\nLuxembourg, the Netherlands and the United Kingdom; Termination of Countervailing Duty and Antidumping\nInvestigations, Exhibit US-177, p. 49059.\n1089 Notice of Final Determination of Sales at Less Than Fair Value: Certain Pasta from Italy , Exhibit\nCHI-157; Issues and Decision Memorandum for the Final De termination in the Antiduping Duty Investigation\nof Live Swine from Canada, Exhibit CHI-158; and Red Raspberries from Canada; Final Determination of Sales\nat less Than Fair Value, Exhibit CHI-159.\n\nsafeguard duties as it did with respect to countervail ing duties. Instead, the determinations cited by\nChina stand for the narrower proposition that in performing dumping calculations, the USDOC does\nnot deduct existing countervailing duties or safeguard duties from export price. Further, we note that\nChina does not allege that the USDOC made de ductions for existing duties in the anti-dumping\ninvestigations at issue in this dispute and thus treated imports from China differently than it treats\nimports from market economies.\n14.176 The other determinations cited by China pert ain to the question of the basis upon which the\nUSDOC calculates costs of production in anti-dumpi ng investigations on market economy imports:\nThe concern of the Court in Al Tech and – to the extent that it can be discerned from its determination\n– that of USDOC in Tool Steel from Germany , seems to have been primarily that a producer's actual\ncosts should serve as the basis of dumping calculations – even if they reflect subsidization – and that\nany subsidization allegations should be addressed not by an anti-dumping investigation but rather by a\ncountervailing duty investigation. Not only is the issue of double remedy per se not raised, but the\nCourt's concerns about the nature of the remedi es at issue and the need to avoid using the anti-\ndumping statute to address questions of subsidization would be equally applicable in the absence of a\nparallel countervailing duty investigation; in fact, there is no reference in either decision to the\nUSDOC conducting a concurrent countervailing duty inv estigation in that case, or to a countervailing\nduty measure already being in place.\n14.177 The remaining determinations address the same issue, on the basis of the same underlying\npremise (the calculation of the normal value on the basis of actual costs), as in the USDOC\ndetermination in Tool Steel and the court decision in Al Tech , but pertain to a different factual\nsituation, i.e., where a producer's reported costs of production do not reflect the subsidies that it has\nreceived. The only case in which avoidance of a double remedy was mentioned by the USDOC,\nCertain Steel Products from the Netherlands , is a preliminary determina tion and never resulted in the\nimposition of a measure or collection of any duties.\n1090 In the other cases (in which measures were\nimposed) referred to by China in which deductions of subsidies from costs were allowed, those\nallowances were treated as \"offsets\", a type of ad justment used in certain instances in U.S. anti-\ndumping calculations. China has not demonstrated that this type of adjustment, pertaining to a known\namount of subsidy received by an investigated firm , is related to the question of avoidance of double\nremedies. Hence, we conclude from these determinations that where the USDOC has allowed the\ndeduction of subsidies received by a firm from its reported costs of production, and imposed measures\non the basis of a methodology that allowed such de ductions, it did so on another basis than to avoid\nthe imposition of a double remedy.\n14.178 In sum, the USDOC determina tions and court decisions in Tool Steel from Germany/Al Tech,\nCertain Steel Products from the Netherlands , Certain Pasta from Italy, Live Swine from Canada , and\nRed Raspberries from Canada are all instances of application, in two different factual circumstances,\nof a USDOC policy to use a producer's actual costs in the calculation of costs of production and of\nconstructed normal values in anti-dumping investig ations of market economy imports. A similar\nsituation does not present itself in the context of USDOC anti-dumping investigations involving\nimports from China: For imports from China, the USDOC uses surrogate costs which, by definition,\nare not the producer's actual costs. Hence, the issue of adjusting reported costs to ensure that they\nrepresent actual costs simply does not arise. Further, the USDOC methodology follows, in this\nrespect, the second Ad Note to Article VI:1 of the GATT 1994 (incorporated by reference in the AD\nAgreement through Article 2.7) and Section 15(a) of China's Protocol of Accession, which recognize\nthat market-economy and NME imports are in diffe rent factual situations and for this reason,\nexplicitly allow the use of different methodologies – based on surrogate costs and prices – to calculate\ndumping margins in respect of NME imports.\n\n1090 See, e.g., Exhibit CHI-156, p.3.\n\n14.179 For the foregoing reasons, we consider that none of the cases cited by China establishes as a\nfactual matter that the USDOC takes all necessary steps to avoid the risk of imposing a double remedy\nin respect of a single act of subsidization whenever such a risk exists, or that the United States\nmaintains a policy or practice of taking such steps. Rather, as explained above, these determinations\nestablish narrower points: that in calculating dumping margins: (i) the USDOC does not deduct\ncountervailing duties or safeguard duties from the export price; and (ii) in the case of market economy\ninvestigations, the USDOC constructs normal value and calculates costs of production on the basis of\na producer's actual costs of production.\n14.180 Further, even if the determinations cited by China were considered relevant in establishing the\nexistence of the policy or practice alleged by China, it is significant that in all of the instances cited by\nChina, the existence of double remedies was a matte r of mathematical equivalency. In those\ninvestigations, there was no question as to the amounts of subsidies received by the investigated firms.\nThat is, there was clear, verified record evidence of those amounts. By contrast, while we have found\nabove that the use of a surrogate value in principle reflects the use of unsubsidized costs, we also have\nindicated that the precise extent to which the NME calculation captures any subsidization is a factual\nissue which it could be difficult to ascertain. Fo r these reasons, we consider misleading China's\ncharacterization of one aspect of the alleged \"advantage\" at issue as being that the USDOC does not,\nin the case of investigations on imports from market economies, require any evidence of the existence\nof a double remedy.\n14.181 For the foregoing reasons, we consider that China fails to establish as a factual matter that, in\nthe context of certain anti-dumping investigations of market economy imports, the USDOC has taken\nsteps to ensure that it does not offset, through the calculation of anti-dumping duties, the same\nsubsidies that it simultaneously offsets through th e imposition of countervailing duties, or that the\nUSDOC has done so without requiring evidence of the existence of a double remedy. As a\nconsequence, China also fails to establish that the USDOC maintains a consistent \"policy\" or\n\"practice\" of taking all necessary steps to avoid the imposition of double remedies in circumstances in\nwhich there is a risk that one would arise. T hus, we find that China has failed to establish the\nexistence of the \"advantage, favour, privilege, or immunity\" which it alleges.\n1091\n14.182 The foregoing reasons suffice, in our view, to find that China has not established that the\nUnited States acted inconsistently with the MFN obligation contained in Article I:1 of the GATT 1994\nwhen, as a result of the investigations at issue, it concurrently imposed anti-dumping duties calculated\nunder the U.S. NME methodology and countervailing duties.1092\n\n1091 In addition, we note that the \"advantage\" alleged by China is not the specific course of action (e.g.\nadjustment or non-adjustment) taken by the USDOC in a specific instance. That is, China is asserting\ndiscrimination in terms of the effects of certain behaviours (making adjustment \"x\" in anti-dumping calculation\nresults in a double remedy), rather than asserting discrimination in respect of the behaviours themselves\n(USDOC makes adjustment \"x\" in market-economy calculations but not in NME calculations). In this sense,\nChina's claim would seem to depart from the typical claim of violation under Article I:1 of the GATT. In light\nof our findings above, we need not determine whether the terms of Article I:1 of the GATT 1994 are broad\nenough to allow a claim of this nature.\n1092 Given these findings, we do not consider whether China had to demonstrate discrimination as\nbetween \"like products\" in the context of its \"as applied\" claims under Article I:1 of the GATT 1994.\n\nXV. CHINA'S CLAIM PERTAINING TO THE USDOC'S FAILURE TO PROVIDE AT\nLEAST 30 DAYS TO REPLY TO THE NEW ALLEGATIONS AND\nSUPPLEMENTAL QUESTIONNAIRES\nA. C\nLAIM OF CHINA\n15.1 China claims that the USDOC failed to give China and other interested parties at least 30 days\nto respond to the \"supplemental\" and \"new allega tions\" questionnaires issued by the USDOC in the\nfour countervailing duty investigations at issue, contrary to Article 12.1.1 of the SCM Agreement.1093\nB. MAIN ARGUMENTS OF THE PARTIES\n1. China\n15.2 China submits that the term \"questionnaires\" in Article 12.1.1 of the SCM Agreement refers\nnot only to the first questionnaire issued in a countervailing duty investigation, but to \"all\"\nquestionnaires, without qualification. Therefore, China claims, the United St ates acted inconsistently\nwith this provision by failing to give China and inv estigated producers at least 30 days to reply to the\n\"supplemental\" and \"new allegations\" questionnaires i ssued by the USDOC in the four investigations\nat issue.1094\n15.3 China considers its interpretation of Article 12. 1.1 to be the only one consistent with the\nordinary meaning of that provision, read in the c ontext of Article 12 as a whole. China submits that\nthe ordinary meaning of the word \"questionnaire\" is \"[a] formulated serie s of questions by which\ninformation is sought from a selected group, usually for statistical analysis; a document containing\nthese\", and asserts that both the \"supplemental\" and \"new allegations\" questionnaires qualify as\n\"questionnaires\" under the ordinary meaning of this term. 1095 China adds that the term\n\"questionnaires\" in the plural form in Article 12. 1.1 should be given its ordinary meaning. If the\ndrafters had intended to refer to the issuance of a single questionnaire, they would have so indicated\nexplicitly by using phrases such as \"a questionnaire\" or \"the initial questionnaire\". China therefore\ncontends that the minimum 30 days for reply appli es to all questionnaires used in an investigation. 1096\nChina further considers that read in context, Ar ticle 12.1.1 gives content to the \"ample opportunity\"\nrequirement in Article 12.1 by requiring that interest ed parties be given at least 30 days to reply to\nquestionnaires, and that given that it has no caveats, this entitlement applies to all questionnaires used\nin a countervailing duty investigation. This right , China argues, constitutes one of the due process\nrights in Article 12 of the SCM Agreement that the Appellate Body has held \"are enjoyed by\ninterested parties throughout an investigation\".1097\n15.4 On this basis, China submits that the reasoning of the unappealed panel report in Egypt – Steel\nRebar, which concluded that in anti-dumping investiga tions the only questionnaire to which the 30-\n\n1093 Paragraph B.1(g)(ii) of the \"as applied\" claims in China request for establishment of the Panel;\nChina first written submission, para. 468 (m); second written submission, para. 315 (m).\n1094 China first written submission, paras. 444 and 447.\n1095 Id., para. 445. China argues that \"questionnaires\" in Article 12.1.1 should be interpreted in\naccordance with this ordinary meaning su ch that if a document represents \"a formulated series of questions by\nwhich information is sought\", then it is a questionnaire, and if it is used in a countervailing duty investigation,\nthen the 30-day requirement under Article 12.1.1 must be provided. China submits that the inquiry under\nArticle 12.1.1 is whether (i ) the document received by an interested party is a questionnaire; and (ii) whether\nthis questionnaire was used in a countervailing duty inves tigation. (China response to Panel question 107 (first\nmeeting) and question 36 (second meeting)).\n1097 Id., paras. 448-449, citing to Appellate Body Report on Mexico – Anti Dumping Measures on Rice,\npara. 292.\n\nday requirement applies is the initial questionnaire, is not persuasive and therefore should not be\nfollowed in the present dispute. More specifically, China argues, inter alia, that that panel did not\nhave the benefit of the Appellate Body's decisi ons which collectively have emphasized that the\nprocedural and due process obliga tions under Article 12 apply \"through out an investigation\", and that\nthe panel's interpretation disregarded the ordinary meaning of the term \"questionnaires\", as well as the\nbalance that the AD and SCM Agreements seek to achieve.1098\n15.5 According to China, its interpretation of Ar ticle 12.1.1 of the SCM Agreement is also\nconsistent with the balance that Article 12 of the SCM Agreement strikes between, on the one hand,\nthe due process rights of interested parties and, on th e other hand, the right of investigating authorities\nto proceed expeditiously. A different interpretati on of Article 12.1.1, Chin a alleges, would give\ninvestigating authorities an \"unfettered discretion\" as, inter alia , in the name of completing their\ninvestigations expeditiously, they could issue any number of extensive questionnaires with short\nperiods for reply, for example, the far less than 30 days granted by the USDOC for replies to the\nvarious supplemental and new allegatio ns questionnaires issued in the investigations at issue in the\npresent dispute. 1099 In China's view, the 30-day period to respond to all questionnaires used in an\ninvestigation ensures that investigating authoriti es comply with their deadlines for completing the\ninvestigations without imposing unrealistic and inappropriate burdens on questionnaire recipients.1100\n15.6 China submits that even accepting arguendo that the 30-day requirement in Article 12.1.1\napplies only to the \"full initial questionnaire\", the US DOC failed to give at least 30 days to respond to\nthe \"first\" new allegations questionnaires issued in the investigations. China argues that the \"first\"\nnew allegation questionnaires issued by the USDOC in the investigations at issue qualify as the first\nquestionnaire in the newly initiated \"investigations \" with respect to new subsidy allegations.\nAccording to China, the USDOC opens up an entirel y new avenue of inquiry when it initiates an\ninvestigation into new subsidy allegations, and the questionnaires it uses neither supplement a\nprevious inquiry nor are related in any way to prio r questionnaires. China explains that therefore\n\"new allegations questionnair es\" are indistinguishable fro m \"full initial questionnaires\". 1101 C h i n a\nadds that the similarity between those questionnaires lies in the nature of the questions and the level of\ndetail required from respondents.1102\n2. United States\n15.7 The United States considers that there is no obligation under Article 12.1.1 of the SCM\nAgreement to provide the minimum 30-day period for reply to supplemental and new allegations\n\n1098 China first written submission, para. 451; response to Panel question 107 (first meeting).\n1099 China first written submission, paras. 450 and 452 . China points, in particular, to the LWS and\nOTR countervailing duty investigations, where the new allegations questionnaires issued by the USDOC\ncontained questions about twelve and ten new subsidy programmes, respectively. As regards supplemental\nquestionnaires, China indicates that these were not only quite extensive but also did not include mere \"follow-\nup\" inquiries. (China first written submission, paras. 453-456).\n1100 Id., paras. 450. According to China, providing the minimum 30-day period for reply to all\nquestionnaires would not prevent investigating authorities from finishing their investigations within the\ntimeframes allowed under the SCM Agreement, but rather, doing so would ensure that investigating authorities\nconsider carefully the information th ey require and draft their questionnaires accordingly. For instance, if\nallowing 30 days for reply to new allegations questionnaires would impede the USDOC's completion of its\ninvestigations, the United States should reconsider its policy of allowing petitioners to file new subsidy\nallegations during the course of the investigations. (Id.; response to Panel question 36 (second meeting)).\n1101 For example, China submits that in virtually every case, the new allegations questionnaires\nincluded the so called Appendix 1, i.e., a list of \"Stand ard Questions\", which respondents must fill out with\nrespect to the subsidy programmes initiated at the outset of the investigation. (China first written submission,\nfootnote 364; second written submission, paras. 311-313).\n1102 China response to Panel question 105 (first meeting).\n\nquestionnaires. According to the United States, \"questionnaires\" in Article 12.1.1, for which\ninvestigating authorities must provide at least 30 days for reply, refers to the questionnaire issued at\nthe outset of an investigation, and not to subsequent requests for information.\n1103\n15.8 First, the United States submits that the ordinary meaning of the word \"questionnaire\" is \"[a]\nformulated series of questions by which informatio n is sought from a selected group, usu[ally] for\nstatistical analysis\", and that this meaning enco mpasses only \"formal requests for information\" by an\ninvestigating authority in the form of a \"series of questions\". Second, the Un ited States argues that\nthe context of Article 12.1.1, namely paragraphs 6 and 7 of Annex VI to the SCM Agreement,\nclarifies that a \"questionnaire\" in the sense of Artic le 12.1.1 only refers to the questionnaire issued at\nthe outset of an investigation, and not to every s ubsequent request for information by investigating\nauthorities, even if such subsequent requests take th e form of a \"series of questions\". According to\nthe United States, paragraphs 6 and 7 of Annex VI cl early show that not every request for information\nconstitutes a \"questionnaire\" to which the minimum 30-day requirement for response applies, and that\nby referring to the term \"the questionnaire\" in th e singular in Annex VI, Members contemplated the\nexistence of only one document to be consider ed \"the questionnaire\" for purposes of the SCM\nAgreement.1104 According to the United States, the exp licit reference to \"the questionnaire\" in\nAnnex VI further supports its view that the term \" questionnaires\" in the plural form in Article 12.1.1\nrefers to the recipients in the plural; that is, Me mbers, foreign producers, exporters. While it agrees\nwith China that Members could have used words lik e \"the initial questionnaire\" instead of the term\n\"questionnaires\", it further argues that had the draf ters of the Agreement intended the interpretation\nadvanced by China, they could have done so by sa ying \"[a]ny exporter, foreign producer or interested\nMember receiving questionnaires\".1105\n15.9 In the view of the United States, the single doc ument referred to in Annex VI could only be\nthe questionnaire issued at the outset of an investig ation. Given that this questionnaire requires more\nextensive information than subsequent requests for information, it is thus logical that the 30-day\nrequirement for reply in Article 12.1.1 only refers to the questionnaire issued at the outset of the\ninvestigation.1106 The United States also notes that if all re quests for information were subject to the\n30-day requirement under Article 12.1.1, investig ating authorities would be prevented from seeking\nsupplemental information from interested parties 1107; from completing investigations within the\ntimeframes established in Article 11.11 1108; and/or from granting any extensions of time for replies as\nencouraged by Article 12.1.1.1109\n\n1103 United States first written submission, paras. 47 5 and 482; second written submission, para. 226;\nresponse to Panel question 36 (second meeting). The Un ited States argues that the Government of China and\nrespondents were given at least 30 days to reply to the questionnaire that the USDOC issued at the outset of the\ninvestigations at issue, and ther efore, the USDOC complied with Article 12.1.1 of the SCM Agreement.\n(United States first written submission, para. 484).\n1104 Id., paras. 476-478; response to Panel question 36 (second meeting).\n1105 United States first written submission, para. 486.\n1106 Id., para. 479. The United States notes in this rega rd that in each of the investigations at issue, the\nquestionnaire issued by the USDOC at the outset of the investigations posed far more questions than any\nsubsequent request for information. (Id., footnote 632).\n1107 In particular, the United States observes that subsequent requests for information are (i) one means\nby which investigating authorities \"give notice of the information\" that they require and (ii) a mechanism by\nwhich interested parties are provided with the \"opportun ity\" to submit evidence, and that China's interpretation\nwould therefore prevent investigating authorities from ma king such requests for information, thereby denying\ninterested parties some of the very \"notice\" and \"oppor tunity\" mandated in Article 12.1 of the SCM Agreement.\n(Id., paras. 475 and 488).\n1108 According to the United States, meeting the ti meframes imposed by the SCM Agreement becomes\neven more difficult when a re spondent fails to answer questions posed in the initial questionnaire; for instance,\nif a 30-day period would have been required for each of the follow-up requests for additional information made\n\n15.10 The United States also considers that China's interpretation of Article 12.1.1 ignores the other\nprovisions of the SCM Agreement that ensure th e due process rights of interested parties in\nproceedings before investigating authorities. In particular, the United States observes that\nArticle 12.1, which provides that interested par ties \"be given notice of the information which the\nauthorities require and ample opportunity to present in writing all evidence which they consider\nrelevant\", ensures that subsequent requests fo r information are not subject to unreasonable time\nconstraints that would prevent interested par ties from adequately defending their interests. 1110 T h e\nUnited States argues that in light of this, its interpretation of Article 12.1.1 would not give\ninvestigating authorities some sort of \"unfettered discretion\" as China contends, but rather, would give\ninterested parties a meaningful amount of time to reply to the most comprehensive questionnaire\nissued in an investigation, i.e., the questionnaire at the outset of the investigation, while providing\ninterested parties with sufficient opportunities to be informed of the additional information needed in\nan investigation and therefore to be better positioned to provide relevant evidence.1111\n15.11 Lastly, the United States rejects China's argument that new allegations questionnaires are\nindistinguishable from initial questionnaires. Ac cording to the United St ates, China's contention\noverlooks the conceptual difference between the two types of questionnaires, i.e., an initial\nquestionnaire is issued at the outset of an inves tigation and includes not only questions about specific\nprogrammes but also general (non-programme specific) questions, while a new allegation\nquestionnaire is issued in the course of an investig ation and includes questions only with respect to a\nspecific programme (or programmes). In any case, the United States contends that China has not\ndemonstrated that these questionnaires are indistinguishable.1112\nC. MAIN ARGUMENTS OF THE THIRD PARTIES\n1. Argentina\n15.12 Argentina agrees with China that the minimum 30-day period for reply in Article 12.1.1 of the\nSCM Agreement applies to all \"questionnaires\" i ssued in an investigation, including the \"new\nallegation\" questionnaires. According to Argentina, this interpretation is consistent with the due\nprocess principle of \"ample opportunity\" in Article 12.1 of the Agreement.1113\n\nin the course of the investigations at issue, the USDOC would have required between 240 and 540 days only for\nthe collection of most of the relevant factual information with respect to subsidization. In this light, China's\ninterpretation of Article 12.1.1 would compel investigatin g authorities to resort to facts available, rather than\ngiving interested parties multiple opportunities to provide information that they have failed to submit in previous\nquestionnaires. (United States first written submission, paras. 480-481; response to Panel question 36 (second\nmeeting); comments on China's response to Panel question 36 (second meeting)).\n1109 United States first written submission, para. 484. The United States finds support for its\ninterpretation in the Panel Report in the Egypt –Steel Rebar case in which the panel arrived at the same\nconclusion with regard to the term \"questionnaires\" in Article 6.1.1 of the AD Agreement by noting, inter alia,\nthe use of the term \"the questionnaire\" in Annex I to the AD Agreement and the practical difficulties that would\nresult if Article 6.1.1 were to cover requests for information other than the questionnaire issued at the outset of\nan investigation. (Id., para. 483, citing to Panel Report on Egypt – Steel Rebar, paras. 7.276-7.277).\n1110 According to the United States, had China considered that it was denied such an opportunity in\nrespect of the new allegations questionnaires, it could have raised that claim.\n1111 United States first written submission, para. 489; second written submission paras. 234-235;\ncomments on China's response to Panel question 36 (second meeting).\n1112 In particular, the United States argues that China's reliance on questions from only two of the four\ninvestigations at issue as well as its narrow focus on the \"nature\" and \"level of detail\" of questions do not show\nthat new allegations and initial questionnaires are indis tinguishable. (United States first written submission,\nfootnote 633; second written submission paras. 228-233; comments on China's response to Panel question 36\n(second meeting)).\n1113 Argentina third-party submission, paras. 63-64.\n\n2. Canada\n15.13 Canada, recalling the findings of the panel in Egypt – Steel Rebar , considers that the 30-day\nrequirement in Article 12.1.1 of the SCM Agreement only applies to the initial questionnaire issued in\nan investigation. Canada considers that this inte rpretation is supported by the context of Articles 12.1\nand 12.1.1 of the Agreement. Canada notes, inter alia, the implications for respondents of a broader\ninterpretation of Article 12.1.1: investigating au thorities required to respect the timeframes imposed\nby Articles 11.11 and 12.12 might refrain from ask ing follow-up questions or pursuing new lines of\nquestioning, and rely instead on facts available. Ca nada is also of the view that while the \"ample\nopportunity\" requirement in Article 12.1 applies throughout the course of an investigation,\nArticle 12.1.1 deals only with one particular instan ce during the investigation (i.e., the issuance of the\ninitial questionnaire) where \"ample\" means at least 30 days, and that other questions arising during\nthe investigation are subject to the general \"ample opportunity\" requirement.\n1114\n3. European Communities\n15.14 The European Communities considers that Artic le 12.1.1 of the SCM Agreement should be\ninterpreted in light of the chapeau provided by Ar ticle 12.1, and notes, in this regard, that the\nAppellate Body has highlighted that interested parties must be afforded \"ample opportunity\" for\npresentation of evidence, but that it does not imply that interested parties have \"indefinite\" rights so as\nenable them to submit relevant evidence as and when they choose. Therefore, the European\nCommunities is of the view that Article 12.1 requir es an \"adequate balance\" between the rights given\nto interested parties, on the one hand, and the obligation for the authorities to conclude their\ninvestigations in a timely manner, on the other ha nd. According to the Eu ropean Communities, this\nanalysis should be made on a case-by-case basis a nd on reasonable grounds, i.e., deadlines to reply to\nquestions should be proportionate to the amount and complexity of the information requested.1115\nD. ASSESSMENT BY THE PANEL\n15.15 This claim by China raises two main issues. The first is the meaning of the term\n\"questionnaires\" in Article 12.1.1, to which the 30-day minimum period for reply applies. The second\nis whether the \"supplemental\" and/or \"new allegation\" questionnaires issued in the four countervailing\nduty investigations before the Panel are \"questionn aires\" in the sense of Article 12.1.1, and thus\nshould have been subject to that provision's 30-day minimum reply period. We take these issues up in\nturn.\n1. Interpretation of the term \"questionnai res\" in Article 12.1.1 of the SCM Agreement\n15.16 Concerning the meaning of the term \"ques tionnaires\" in Article 12.1.1 of the SCM\nAgreement, we note at the outset that China does not dispute that the United States complied with its\nobligation under Article12.1.1 to give to the Govern ment of China and investigated producers at least\n30 days to respond to the initial questionnair es used in the investigations at issue. 1116 Rather, what\nChina challenges is that the United States failed to provide China and investigated producers at least\n30 days to reply to the so-called \"supplemental\" and \"new allegation\" questionnaires issued during the\ncourse of the investigations.\n15.17 For the purpose of this dispute, we understand the parties to be referring to the following\nterms in accordance with the following meanings: (i) \"initial \" questionnaire or \"questionnaire issued\nat the outset of an investigation\" as the firs t comprehensive questionnaire issued once the\n\n1114 Canada third-party submission, paras. 65-70.\n1115 European Communities third-party submission, paras. 65-69.\n\ninvestigation has been initiated; (ii) \"supplemental \" questionnaire as a questionnaire containing\nfollow-up inquiries to questions posed in a pr ior questionnaire; and (iii) \"new allegation \"\nquestionnaire as the first questionnaire issued in respect of each new subsidy allegation filed during\nthe course of an investigation.1117\n15.18 For China the term \"questionnaires\", and thus the 30-day rule, in Article 12.1.1 applies not\nonly to the initial questionnaire issued at the outset of an investigation, but to \"all\" questionnaires,\nincluding supplemental and new alle gations questionnaires. For the United States, on the other hand,\nthe 30-day rule applies only to the comprehensive questionnaire issued at the outset of an\ninvestigation and not to any subsequent requests for information, even if these are in the form of a\nformulated series of questions.\n15.19 We first consider the relevant text of Article 12.1 of the SCM Agreement:\n\"12.1 Interested Members and all inte rested parties in a countervailing duty\ninvestigation shall be given notice of the information which the authorities require\nand ample opportunity to present in writing a ll evidence which they consider relevant\nin respect of the investigation in question.\n12.1.1 Exporters, foreign producers or interested Members\nreceiving questionnaires used in a co untervailing duty investigation\nshall be given at least 30 days for reply.\n40 Due consideration should\nbe given to any request for an extension of the 30-day period and,\nupon cause shown, such an extension should be granted whenever\npracticable\".\nAgreement mean that not every \"formal request for information in the form of a series of questions\" is\na \"questionnaire\" in the sense of Article 12.1.1.\n\n1117 We note that under U.S. law, the applicant or other domestic interested party in a countervailing\nduty investigation may file a \"new subsidy allegation\" no later than 40 days before the scheduled date of the\npreliminary determination. (Exhibit CHI-130).\n1118 The parties refer to The New Shorter Oxford English Dictionary , L. Brown (ed.) (Clarendon Press,\n1993), Vol. II, p. 2447. (Exhibits CHI-134 and US-95).\n\n15.22 We note that the above dictionary definitio n of \"questionnaire\" contains no limits or\nqualifications, such that on its face it would encompass any\n request for information in the form of a\nformulated series of questions. This definition on its own thus w ould not exclude \"supplemental\" and\n\"new allegation\" questionnaires. In our view, howeve r, this definition by itself is not sufficient to\nascertain the meaning of \"questionnaires\" as used in Article 12.1.1 of the SCM Agreement. In\ngeneral, we consider that dictionary definitions, while useful, are not dispositive of the meaning of\nterms that appear in the WTO Agreements. 1119 Rather, the meaning of such terms can only be\ndiscerned by reference to their context and in the light of the object and purpose of the agreement in\nquestion.\n1120 We thus now turn to this further analysis.\n15.23 A number of provisions of the SCM Agreement, starting with Article 12 including its overall\nstructure, provide relevant context for interpreting the term \"questionnaires\" in Article 12.1.1 of the\nSCM Agreement. In the first place, Article 12, en titled \"Evidence\", contains a series of evidentiary\nrules, including as to the requesting, receipt and ha ndling of evidence by investigating authorities, the\nparticular subject of Article 12.1 of the SCM Agreem ent. In this regard, the chapeau of Article 12.1\nestablishes two overarching re quirements: that interested Member s and parties be given (i) \"notice\"\nof the information required of them by the auth orities; and (ii) \"ample opportunity to present in\nwriting all evidence which they consider relevant\". Neither of these requirements is circumscribed in\nany way, in terms of form or time period. In particular, the notice requirement places no limits on\nhow, precisely, an investigating authority must requ est the information it requires, and thus seems to\nenvisage different possible types of information requests. The ample opportunity requirement also\ncontains no specific limits, and indeed extends beyond responses to requests from investigating\nauthorities, to encompass the provision of informati on by an interested Member or party at its own\ninitiative. Where an information request from an inv estigating authority is concerned, in our view the\nword \"ample\" must be understood to mean \"ample\" in the light of the specific nature and scope of that\nrequest, something that by its very nature can only be determined on a case-by-case basis.\n15.24 Turning to Article 12.1.1, in our view, the te rm \"questionnaires\" in that provision represents\none specific case within the overarching \"notice\" re quirement in the chapeau. Similarly, the 30-day\nrule for response to questionnaires represents one specific case within the overarching \"ample\nopportunity\" requirement. That is, in the particular case of \"questionnaires\" the \"ample opportunity\"\nis explicitly defined as the \"minimum of 30 days\", with an additional mandatory period of one week\nfor questionnaires to exporters, per footnote 40, accompanied by a general encouragement for the\ngranting of extensions of these periods upon cause show n. Thus, while the chapeau of Article 12.1 in\nconjunction with Article 12.1.1 do not directly address the meaning of the term \"questionnaires\" in\nArticle 12.1.1, in our view the fact that the \" questionnaires\" subject to the specific 30-day \"ample\nopportunity\" rule are only one of the possible means of providing notice to interested parties of the\ninformation required suggests that not every re quest for information falls within the term\n\"questionnaires\" in Article 12.1.1 of the SCM Agreement.\n15.25 Footnote 40 to Article 12.1.1 of the SCM Agre ement provides further indications in this\ndirection. As noted, this footnote lengthens the 30-day rule by one week for questionnaires to\nexporters, providing generally th at \"the time-limit for exporters\n shall be counted from the date of\nreceipt of the questionnaire, which for this purpose shall be deemed to have been received one week\n\n1119 See, e.g., Appellate Body Report on US – Offset Act (Byrd Amendment) , para. 248; cited with\napproval in Appellate Body Report on China – Publications and Audiovisual Products, para. 348.\n1120 We recall that Article 31(1) of the Vienna Convention provides in relevant part that:\n\n\"A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be\ngiven to the terms of the treaty in their context and in the light of its object and purpose\".\n\nSee also Appellate Body Report on China – Publications and Audiovisual Products, para. 348.\n\nfrom the date on which it was sent to the respondent\". Most relevant to our inquiry is the formulation\nin the singular of the reference to \"the questionnaire\" for \"exporters\". That is, this provision seems to\nenvisage one particular kind of questionnaire destined to all of the exporters. The formulation in\nArticle 12.1.1 of \"exporters, foreign producers or interested Members receiving questionnaires\" seems\nto be an extended version of the formulation in fo otnote 40, suggesting that the term \"questionnaires\"\n(plural) in this Article refers to the different ki nds of questionnaires sent to the different kinds of\nrecipients referred to (exporters, foreign producers, and interested Members). In other words, this\nphrase in Article 12.1.1 could be seen as a collective reference to the questionnaire for the exporters,\nthe questionnaire for the foreign producers, and th e questionnaire for the interested Members. This\nview finds further support in the use of the definite article \"the\" before \"questionnaire\" in footnote 40.\nHad the drafters intended the term \"questionnair es\" in Article 12.1.1 to refer to any and all\ninformation requests in the form of a series of qu estions, one might more naturally expect either a\nplural formulation, or an indefinite formulation such as \"any\" or \"a\" \"questionnaire\", in footnote 40.\n15.26 The same singular, definite formulation (\"the qu estionnaire\") appears in the other references\nto \"questionnaire\" in the provisions of the SC M Agreement pertaining to countervailing measures 1121,\ni.e., paragraphs 6 and 7 of Annex VI. In particular, paragraph 6 re fers to \"[v]isits to explain the\nquestionnaire\". Paragraph 7 provides that a veri fication visit \"should be carried out after the response\nto the questionnaire has been received\". These provisions do not refer to the term \"questionnaire\" as\n\"a questionnaire\" or \"any questionnaire\" or \"ques tionnaires\" in the abstract, although any of these\nformulations would have been grammatically correct.\n15.27 To us, these contextual elements suggest that the term \"questionnaires\" in Article 12.1.1 refers\nto one kind of document in an investigation th at constitutes \"the\" questionnaire for each kind of\nquestionnaire recipient referred to (exporters, foreign producers, and interested Members). This, in\nturn, suggests that not every formulated series of questions from an investigating authority during the\ncourse of an investigation is subject to the 30-day minimum period for reply required by\nArticle 12.1.1 of the Agreement.\n15.28 We now consider which particular documents constitute the \"questionnaires\" to which the 30-\nday rule applies. In our view, the same contextu al elements discussed above aid in answering this\nquestion. In particular, the reference in para graph 6 of Annex VI to \"visits to explain the\nquestionnaire\" suggests that such a questionnaire is a substantial information request (to warrant a\npossible on-the-spot visit by the investigating author ity to a foreign country purely for the purpose of\nexplaining it). This provision further suggests that the questionnaire is sent to the respondent entity\nrelatively early in the investigation (logically, an explanatory visit would only take place upon or after\nreceipt of the questionnaire, and to be useful pr esumably it would need to take place well in advance\nof the due date for the response, and well in adva nce of any verification visit as referred to in\nparagraph 7). The provision in pa ragraph 7 of Annex VI that, because the main purpose of the on-the\nspot investigation is to \"verify information provi ded or obtain further details\" normally that visit\nshould take place \"after the\n response to the questionnaire has been received\", provides a further\nindication both that \"the questionnaire\" is a substa ntial and significant enough information request to\nwarrant a verification visit, and that it is sent ear ly in the investigation. The reference to the\nverification visit in the singular (\"the on-the-spot investigation\"), and the advance notice and\nagreement requirements related to such a visit, refe rred to in Article 12.6 of the SCM Agreement, and\nparagraphs 2, 3, 4, 5, and 7 of Annex VI, indicat e, similarly, that the verification visit itself is\nsubstantial and significant, not something that can be done lightly, or that is likely to occur frequently\n\n1121 The \"questionnaire\" referred to in Article 25 of the SCM Agreement is the \"questionnaire on\nsubsidies\" to be used by Members to notify their subs idies to the SCM Committee, and thus is not related to\ncountervailing measures.\n\nover the course of an investigation.\n1122 These textual signals of the weightiness of a verification visit\nprovide a further indication that \"the response to the questionnaire\" which paragraph 7 identifies as a\nmain focus of the visit also is substantial and si gnificant, as otherwise such a visit would not be\nwarranted.\n15.29 While the SCM Agreement does not explicitly indicate which document constitutes the\nsubstantial and significant information request referred to in the SCM Agreement as \"the\nquestionnaire\", we consider that the above elements taken together suggest that this is the initial\ncomprehensive countervailing duty questionnaire issued to an interested Member and each of the\ndifferent kinds of interested parties by an inves tigating authority at or following the initiation of an\ninvestigation, which questionnaire seeks information as to all relevant issues pertaining to the main\nquestions that will need to be decided (subsidizati on of the product, injury and causation). Of course,\nas discussed above, the Agreement recognizes th at there will be variations in the initial\ncomprehensive questionnaires sent to the different kinds of questionnaire recipients (including\nexporters, foreign producers, and interested Member s), reflecting these parties' different natures,\nactivities and roles. Furthermore, depending on how a Member organizes its own conduct of\ncountervailing duty investigations, there may be separate initial comp rehensive questionnaires\ncovering the subsidy-related issues and the injury and causation-related issues, and we consider that\nthe initial comprehensive document or set of docum ents covering all of these issues are encompassed\nby the term \"questionnaires\" in Article 12.1.1.\n1123\n15.30 Furthermore, we recall that Members are require d under the chapeau of Article 12.1 to give\ninterested parties notice of the information required for the conduct of the investigation, and Members\nalso are generally required (as set forth in the va rious provisions of the SC M Agreement) to conduct\ntheir investigations and reach their determinations on the basis of verified \"evidence\", and within a\nmaximum overall timeframe. The amount and comple xity of the information needed to conduct a\ncountervailing duty investigation in accordance with the multilateral rules, and the need for that\ninformation ultimately to be subject to some sort of verification process (through a visit or otherwise)\nbefore it can be relied upon 1124, implies the use of a comprehensive questionnaire (or set of such\nquestionnaires for the different kinds of questionnaire respondents)1125 at the outset of an investigation\nas the basis for gathering the necessary information.1126\n\n1122 We do not mean to imply that the SCM Agreement prohibits multiple verification visits to a given\nentity during the course of an investig ation, but rather to emphasize that due to the weightiness of the exercise\nan investigating authority would be unlikely to conduct multiple visits.\n1123 This would likely be the case, for example, where separate agencies are responsible for the\nsubsidization and injury/causation sides of an investigation.\n1124 While the SCM Agreement does not require verification visits as such, Article 12.5 requires that\ninvestigating authorities \"shall during the course of an in vestigation satisfy themselves as to the accuracy of the\ninformation supplied by interested Members or interested parties upon which their findings are based\".\n1125 We emphasize that it is the comprehensive nature of the questionnaire(s) issued at the outset of an\ninvestigation and not necessarily its exact timing that we find determina tive here. In particular, different\nMembers may circulate other kinds of \"questionnaires\" with a very narrow focus (aimed, for example, at\ndetermining whether sampling will be necessary) at the very outset of an investigation. Such narrow requests\nfor information would not, in our view, fall within the meaning of the term \"questionnaires\" in Article 12.1.1.\n1126 We note that the use of a questionnaire at the very outset of an investigation is more explicitly\nprovided for in the AD Agreement (in paragraph 1 of Annex II, concerning \"Best Information Available\"): \"As\nsoon as possible after the initiation of the investigation, the investigating authorities should specify in detail the\ninformation required from any interested party and the manner in which that information should be structured by\nthe interested party in its response\". We recognize th at the SCM Agreement contains no analog to Annex II of\nthe AD Agreement, but recall the statement by the Appellate Body in Mexico – Anti Dumping Measures on Rice\nthat conditions relative to the use of facts available si milar to those in Annex II to the AD Agreement apply\nunder the SCM Agreement. While the issue decided by the Appellate Body was different from the one before\nus, we consider the general indication in Annex II of th e AD Agreement that at the very outset the investigating\n\n15.31 Our reading of the term \"questionnaires\" based on the text and context of Article 12.1.1 is\nidentical to that reached by the panel in Egypt – Steel Rebar in respect of the same term,\n\"questionnaires\", in Article 6.1.1 of the AD Agr eement (the analog to Article 12.1.1 of the SCM\nAgreement).1127 In that case, the panel rejected Turkey's claim that follow-up questions to the original\nquestionnaire responses and requests for new inform ation constituted \"questionnaires\" within the\nmeaning of Article 6.1.1 of the AD Agreement. The panel found strong contextual support in\nparagraphs 6 and 7 of Annex I of the AD Agreement for concluding that the term \"questionnaires\" in\nArticle 6.1.1 refers only to the original questionnair e sent to interested parties at the outset of an\ninvestigation.1128 The panel also noted that if only some, but not all, other requests for information\nwere considered \"questionnaires\", investigating authorities would be unable to determine which of\ntheir further requests for information were subject to the 30-day rule in Article 6.1.1. On the other\nhand, the panel considered that if all requests for information were to be considered \"questionnaires\"\nin the sense of Article 6.1.1, it could be impossible for an investigation to be completed within the\nmaximum time limits imposed by the Agreement.1129\n15.32 We consider that the last two points made by the panel in Egypt – Steel Rebar (with which we\nagree) speak to the object and purpose of the provision, and more generally, of the countervailing duty\nrules (the counterpart to the anti-dumping rules that were the subject of that dispute). Starting with\nthe first point, we note that the SCM Agreement c ontains no guidance as to how to determine which\nrequests for information other than the initial comp rehensive questionnaire or set of questionnaires\nwould be subject to the 30-day rule in Article 12.1. 1 of the SCM Agreement. Thus, to treat some but\nnot all such further requests for information (i.e., other than the initial comprehensive questionnaire or\nset of questionnaires) as subject to the 30-day rule in Article 12.1.1 would introduce enormous\nprocedural uncertainty for both investigating author ities and interested parties and Members. This\nwould be inconsistent with the Agreement's ge neral emphasis on due process, in Article 12 and\nelsewhere.\n1130 As for the second point, if all requests for information by investigating authorities were\n\nauthority should present to interest parties its deta iled request for information is equally pertinent to\ncountervailing duty investigations, and is important for due process. (Appellate Body Report on Mexico – Anti\nDumping Measures on Rice , paras. 290-295).\n1127 In light of the almost identical wording of Article 6.1.1 of the AD Agreement with Article 12.1.1 of\nthe SCM Agreement, we consider that the Egypt – Steel Rebar panel's reasoning is fully applicable to the issue\nbefore us.\n1128 Panel Report on Egypt – Steel Rebar, paras. 7.275-7.276.\n1129 The Egypt – Steel Rebar panel stated:\n\n\"If any requests for information other than the initial questionnaire were to be considered\n'questionnaires' in the sense of Article 6.1.1, a number of operational and logistical problems\nwould arise in respect of other obligations under the AD Agreement. First, there is no basis in\nthe AD Agreement on which to determine that so me, but not all, information requests other\nthan the initial questionnaire also would constitute 'questionnaires'. Thus, even if an\ninvestigating authority was not obligated to provide the minimum time-period in Article 6.1.1\nin respect of every request for information, it would not be able to determine from the\nAgreement which of its requests were and were not subject to that time-period. On the other\nhand, if all requests for information in an inves tigation were 'questionnaires' in the sense of\nArticle 6.1.1, this could make it impossible for an investigation to be completed within the\nmaximum one year (or exceptionally, 18 months) allowed by the AD Agreement in\nArticle 5.10. Moreover, a 30- or 37-day deadline for requests for information made in the\ncontext of an on-the-spot verification -- i.e., the 'obtain[ing of] further details' explicitly\nreferred to in Article 6.7 [...] as one of the purposes of such verifications -- obviously would\nbe completely illogical as well as unworkable.\" (Id., at para. 7.277).\n\n1130 See, for example, Appellate Body Report in Mexico – Anti Dumping Measures on Rice : \"[...]\nArticle 12 of the SCM Agreement as a whole 'set[s] out evidentiary rules that apply throughout the course of the\n\n\"questionnaires\" within the meaning of Article 12.1.1, and thus subject to the 30-day minimum\nresponse period, investigating authorities often would find themselves having to choose between\nseeking the most accurate and complete informat ion, so as to ensure a sound basis for their\ndeterminations at the risk of exceeding the allo wed timeframe in Article 11.11 for completing their\ninvestigations, on the one hand, or completing their investigations within the allowed timeframe, but\non the basis of poor quality and/or incomplete in formation, on the other hand. Neither alternative\nwould be in the interest of investigating authorities or interested Members and parties.\n1131\n15.33 In this regard, we recall that in consider ing similar questions, the Appellate Body has\nconsistently taken into account the balance of the du e process rights of interested parties contained in\nArticle 12 of the SCM Agreement against the need of investigating authorities to control the conduct\nof the investigation and to carry out the multiple steps required to reach a timely completion of the\ninvestigation. For example, in Mexico – Anti-dumping Measures on Rice, the Appellate Body stated\nthat:\n\"[T]he due process rights in Article 6 of the AD Agreement [the analogous provision\nto Article 12 of the SCM Agreement]—which include the right to 30 days for reply to\na questionnaire—'cannot extend indefin itely' but, instead, are limited by the\ninvestigating authority's need 'to 'control th e conduct' of its inquiry and to 'carry out\nthe multiple steps' required to reach a timely completion' of the proceeding\".1132\n15.34 We note the specific elements of the balance stru ck in Article 12 in this regard. From the\npoint of view of the investigating authority, first, an interpretation of the term \"questionnaires\" in\nArticle 12.1.1 as going beyond the initial comprehensive questionnaire or set of questionnaires in an\ninvestigation is difficult to reconcile with the ex tension requirement under the second sentence of that\nprovision.1133 In particular, if a minimum 30-day period applied to all requests for information, any\nextensions of this time-limit pursuant to Article 12.1.1 would compromise the possibility to complete\nan investigation within the required timeframes. Si milarly, as noted, pursuant to Article 12.5 of the\nSCM Agreement investigating authorities must \" satisfy themselves as to the accuracy of the\ninformation supplied\" upon whic h their findings will be based. One means by which investigating\nauthorities may satisfy this \"accuracy\" requirement is by requesting clarifications and/or additional\ninformation. If all such requests were questionnair es within the meaning of Article 12.1.1, and thus\nsubject to the 30-day rule, this again would impede the timely completion of the investigation.\nFurthermore, applying the 30-day rule to all re quests for information would be at odds with\nArticle 12.12 of the SCM Agreement, which gene rally provides that the procedures set out in\nArticle 12 are not intended to prevent investiga ting authorities from \"proceeding expeditiously\" to\nreach a preliminary or final determination.\n\n[...] investigation, and provide[s] also for due process rights that are enjoyed by 'interested parties' throughout\n[...] an investigation'\". (Appellate Body Report on Mexico – Anti Dumping Measures on Rice, para. 292).\n1131 The United States emphasises this point, arguing that meeting the timeframes imposed by\nArticle 11.11 becomes even more difficult where respondents fail to answer questions posed in the initial\nquestionnaire; for instance, if the 30-day rule would have applied to each of the follow-up requests for\nadditional information made in the investigations at issue, the USDOC would have required between 240 and\n540 days only for the collection of most of the relevant factual information with respect to subsidization, and\ngiven the subsequent phases of the proceeding, the USDOC w ould have been unlikely to meet the timeframes\nestablished in Article 11.11. (United States first wr itten submission, paras. 480-481) China does not contest\nthis.\n1132 Appellate Body Report on Mexico – Antidumping Measures on Rice , para. 282 (quoting Appellate\nBody Report on US – Oil Country Tubular Goods Sunset Reviews , para. 242, in turn quoting Appellate Body\nReport on US – Hot Rolled Steel, para. 73., in turn quoting Panel Report on US – Hot Rolled Steel, para. 7.54).\n1133 The second sentence of Article 12.1.1 states, \"Due consideration should be given to any request for\nan extension of the 30-day period and, upon cause shown, such an extension should be granted whenever\npracticable\".\n\n15.35 On the other hand, we do not see that interpreti ng the term \"questionnaires\" in Article 12.1.1,\nas the initial comprehensive (set of) questionnaire(s) in an investigation, would leave the interested\nMembers and parties with inadequate due pro cess protections against unreasonable and overly\nburdensome information requests with unduly short dead lines, and the resultant risk of resort to facts\navailable, as China argues. In particular, the pro cedural rules for collecting and handling evidence in\nArticle 12 contain a number of provisions preventin g investigating authorities from behaving in such\na manner. First, Article 12.7 of the SCM Agr eement, governing the use of \"facts available\" by\ninvestigating authorities, addresses China's con cern by precluding investigating authorities from\nresorting to facts available where, inter alia , information is provided \"w ithin a reasonable period\".\nThus, even if information is submitted after a dead line, but within a reasonable period, investigating\nauthorities are not entitled to apply facts available. 1134 In addition, the \"ample opportunity\"\nrequirement in Article 12.1 of the Agreement ensu res that requests for information that are not\nquestionnaires, and thus are not subject to th e 30-day rule, nevertheless are protected from\nunreasonable deadlines that would prevent the s ubmitters of the information from adequately\ndefending their interests. 1135 Furthermore, we note that pursuant to Article 12.11 of the Agreement,\ninvestigating authorities are required to take \" due account\" of any difficulties experienced by\ninterested parties in supplying information requested . Therefore, we do not see that an interpretation\nof \"questionnaires\" in Article 12.1.1 as the initial comprehensive questionnaire or set of\nquestionnaires in an investigation would deprive respondents of due process rights or would give\ninvestigating authorities unfettered license in regard to information requests. More generally, as\nnoted, it is in the ultimate due process interests of respondent parties in countervailing duty\ninvestigations that the investigating authorities ha ve the possibility, within the timeframes and other\nconstraints imposed by the SCM Agreement, to obt ain the information necessary for them to render\nwell-founded determinations.\n15.36 Thus, in our view, interpreting the term \" questionnaires\" in Article 12.1.1 of the SCM\nAgreement as referring only to the comprehensive (set of) questionnaire(s) issued at the outset of the\ninvestigation is supported by the object and purpose of the countervailing duty provisions, in that it\neffectively strikes the balance that Article 12 requires between, on the one hand, the due process\nrights of interested parties and, on the other hand , the right of investigating authorities to obtain the\ninformation they need to conduct their inves tigations in the manner prescribed in the SCM\nAgreement.\n15.37 For the foregoing reasons, we conclude that the term \"questionnaires\", as used in\nArticle 12.1.1 of the SCM Agreement, refers to the initial comprehensive questionnaire (or set of\nquestionnaires)1136 issued by an investigating authorit y at or following the initiation of a\n\n1134 In this regard, we note that the Appellate Body in US – Hot-Rolled Steel held that while\ninvestigating authorities may impose deadlines for the submission of information in order to allow the timely\ncompletion of the investigations, investigating authorities are not entitled, under Article 6.8 of the AD\nAgreement (the analogous provision of Article 12.7 of the SCM Agreement), to reject information provided by\ninterested parties for the \"sole reason\" that it was submitted beyond the deadlines for responses to\nquestionnaires. According to the Appellate Body, investigating authorities must consider whether, in light of all\nthe facts and circumstances of the cas e, the information was however submi tted within a reasonable period of\ntime. The Appellate Body went on to explain that the determination of whether information is submitted within\na reasonable period of time must be defined on a case-by -case basis, \"consistently with the notions of flexibility\nand balance that are inherent in the concept of 'r easonableness'\" and in light of the specific facts and\ncircumstances of each case. (Appellate Body Report on US – Hot-Rolled Steel, paras. 84 and 89).\n1135 We recall that China has made no claim pursuant to Article 12.1 that the USDOC failed to give it\n\"ample opportunity\" to provide its responses to the supplemental and new allegations questionnaires that are the\nsubject of this claim.\n1136 Whether in one or several documents, as issued to each interested Member, and to each kind of\ninterested party. We note here the definition of \"inter ested parties\" in Article 12.9 : an exporter or foreign\nproducer or the importer of a product subject to investigation, or a trade or business association a majority of the\n\ncountervailing duty investigation covering the spectrum of issues on which the investigating authority\nwill have to make determinations in relation to subsidization of the investigated product, injury and\ncausation.\n2. The questionnaires and subsequent requests for information issued by the USDOC\n1137\n15.38 Having interpreted the term \"questionnair es\" in Article 12.1.1 as referring to the\ncomprehensive questionnaire(s) issued at or followi ng the initiation of the investigation, the question\nbecomes whether any or all of the \"supplemental\" or \"new allegation\" questionnaires issued by the\nUSDOC in the investigations at issue before us c onstituted \"questionnaires\" of this type. We thus\nnow examine the evidence concerning the nature of these questionnaires.\n15.39 We recall that the \"supplemental\" and \"n ew allegation\" questionnaires are the only\ninformation requests subject to this claim, i.e., that there is no claim concerning the amount of time\nallowed for responses to the initial questionnaires issued at the outset of each investigation, or in\nrespect of any other information requests that may ha ve been made. We also note that the parties do\nnot disagree that the USDOC allowed less than 30 da ys for responses to all of the \"supplemental\" and\n\"new allegation\" questionnaires.\n15.40 In all of the investigations at issue, the questionnaire issued to the Government of China by\nthe USDOC at the outset of the investigations included the following questions: (i) \"general\nquestions\" including on the tariff classification of the products concerned, and their official\ndescriptions, as well as requests for Annual reports of the People's Bank of China; (ii) \"program-\nspecific questions\", requesting specific informati on with respect to individual alleged subsidy\nprogrammes; (iii) \"Appendix 1\", containing a standard series of questions to be answered for each\nalleged subsidy programme, incl uding: description, purpose and date of establishment of the\nprogramme; identification of authorities administerin g the programme; relevant laws, regulations and\nreports; application process and eligibility criteria; id entification of applicants and beneficiaries; and\n(iv) \"Appendix 2\", containing a standard informat ion request to be answered for each programme\ninvolving \"grants\", including the date of approval and disbursement of the grant(s) and the amount of\nthe grant(s) approved and actually authorized.\n1138\n15.41 The questionnaires issued to the exporters and/or producers (\"Chinese respondents\") by the\nUSDOC at the outset of the investigations incl uded the following requests for information: (i)\n\"Affiliated Companies\", requesting information on affiliations among firms in the industry;\n(ii) \"general questions\", requesting information on, inter alia, ownership, legal structure and financial\ndata of the firm(s) concerned; process of produc tion of the product(s) concerned, marketing and\n\nmembers of which are producers, exporters or importers of such product; and a producer of the like product in\nthe importing Member or a trade and bu siness association a majority of th e members of which produce the like\nproduct in the territory of the importing Member.\n1137 We note here that in U.S. countervailing duty investigations, the USDOC's questionnaires address\nonly the issues related to subsidization, and do not addres s injury or causation. These latter issues are handled\nby a separate agency which issues its own questionnai res on these matters. China has raised no claims\nconcerning injury or causation in respect of any of the investigations before us.\n1138 CWP Initial Questionnaire to the Government of China; Initial Questionnaire to Respondent\nProducers; First Supplemental Questionnaire to the Government of China; and First Supplemental Questionnaire\nto Kingland (Exhibit US-104); LWS Initial Counterva iling Duty Questionnaire to the Government of China;\nInitial Questionnaire to Respondent Producers; and First Supplemental Questionnaire to the Government of\nChina (Exhibit US-105); LW R Initial Questionnaire to the Government of China; Initial Questionnaire to\nRespondent Producers; First Supplemental Questionnaire to the Government of China; and First Supplemental\nQuestionnaire to Aifudi (Exhibit US-106); OTR Initial Questionnaire to the Government of China; Initial\nQuestionnaire to Respondent Producers; First Supplement al Questionnaire to the Go vernment of China; and\nFirst Supplemental Questionnaire to TUTRIC (Exhibit US-107).\n\nchannels of distribution; sales and export data; ( iii) \"program-specific questions\", requesting specific\ninformation with respect to individual alleged subsidy programmes; (iv) \"Appendix 1\", containing a\nstandard series of questions to be answered for each alleged subsidy programme, including:\napplication and approval process; eligibility criteria; benefits received; identification of merchandise\nbenefited; and (v) \"Appendix 2\", containing a standa rd information request to be answered for each\nprogramme involving \"grants\", including the am ount authorized and received from all grants\nauthorized, date of approval and receipt of the grant.1139\n15.42 In each investigation, in addition to these initial questionnaires, the USDOC issued both\n\"supplemental\" questionnaires and \"new allegation\" questionnaires. Concerning the supplemental\nquestionnaires issued to the Government of Ch ina and the Chinese respondents in all of the\ninvestigations1140, the record evidence shows that the questions they contained were in the nature of\nfollow-up to the initial questionnaire responses, i.e ., requests for additional information related to\nquestions previously posed, clarifications, e xplanations, details, conf irmations, provision of\ndocumentation and/or translations, responses to qu estions that had not been answered or been\nanswered incompletely, and sources for the information provided.1141\n15.43 Concerning the new allegation questionnaires, we note that these mainly contained the same\nstandard information requests as in Appendices 1 and/ or 2 of the questionnaires issued at the outset of\nthe investigations. 1142 For a limited number of subsidy programmes, however, the new allegation\nquestionnaires omitted the Appendix 1 and 2 information requests and contained only questions\nrelated to the specific programmes concerned.1143\n15.44 We recall our finding above that the term \"qu estionnaires\" to which the 30-day rule applies\npursuant to Article 12.1.1 of the SCM Agreement refers to the (set of) initial comprehensive\nquestionnaire(s) issued by an investigating author ity at or following the initiation of a countervailing\nduty investigation. As discussed, the fact that su ch initial questionnaires by nature are comprehensive\nis a main reason why, in our view, the SCM Ag reement establishes a specified minimum period to\nrespond to them.\n15.45 Considering the \"supplemental\" questionnaires from this perspective, in our view, the record\nevidence demonstrates that these were not compre hensive questionnaires covering the spectrum of\nissues on which the USDOC needed information, but instead were requests for information generated\nby and directly related to the responses provided by the various interested parties to the initial\nquestionnaires including, in a number of instances, restatements of questions not answered or only\n\n1139 Exhibits US-104-107.\n1140 In each investigation, the USDOC issued a series of three to five supplemental questionnaires.\nBefore us, the parties have provided evidence only in respect of the first supplemental questionnaire in each\ninvestigation. The United States submits, and China does not contest, that the second and subsequent\nsupplemental questionnaires contained considerably fewer questions and covered fewer programmes than did\nthe first.\n1141 Exhibits US-104-107.\n1142 See, e.g., CWP First New Allegations Questionnaire to the Government of China (Exhibit US-130);\nCWP First New Allegations Questionnaire to King land (Exhibit US-131); CWP First New Allegations\nQuestionnaire to Shuangjie (Exhibit US-132); CWP Se cond New Allegations Questionnaire to East Pipe\n(Exhibit US-133); CWP Second New Allegations Questionn aire to the Government of China (Exhibit US-134);\nLWR First New Allegations Questionnaire to the Government of China (Exhibit US-136); LWR First New\nAllegations Questionnaire to East Pipe (Exhibit US-1 37); LWS First New Allegations Questionnaire to the\nGovernment of China (Exhibit US-139); LWS First Ne w Allegations Questionnaire to SSJ (Exhibit US-141);\nLWS First New Allegations Questionnaire to Aifudi (Exhibit US-143); OTR First New Allegations\nQuestionnaire to GTC (Exhibit US-144); OTR First Ne w Allegations Questionnaire to TUTRIC (Exhibit US-\n145); OTR First New Allegations Questionnaire to the Government of China (Exhibit US-146).\n1143 See, e.g., CWP Second New Allegations Questionnaire to Kingland (Exhibit US-135).\n\npartially answered in the initial questionnaire respon se. Thus, we find that none of the supplemental\nquestionnaires was a \"questionnaire\" in the sense of Article 12.1.1 subject to the 30-day rule for\nresponse.\n15.46 Concerning the \"new allegation\" questionna ires, China argues that even accepting, arguendo,\nthat the 30-day rule in Article 12.1.1 applies only to the \"full initial questionnaire\", the \"first\" round of\nnew allegation questionnaires issued by the USDOC in the investigations at issue qualifies as the\ninitial questionnaire in the newly initiated \"investiga tions\" with respect to new subsidy allegations.\nChina submits in this regard that the \"first new allegation questi onnaires\" are indistinguishable from\nthe \"full initial questionnaires\" issued at the outset of the investigation, because they neither\nsupplement nor are related in any way to the initia l questionnaires or other prior questionnaires; and\nbecause the nature of the questions and the le vel of detail requested in the new allegation\nquestionnaires are similar to those of the questions in the initial questionnaires.\n1144\n15.47 In our view this is a closer question than that in respect of the supplemental questionnaires.\nAs the parties both recognize, the new allegation questionnaires concern newly-alleged subsidies,\nwhich were not referred to in the application for the investigation or in the initial questionnaires. As\nsuch, the kinds of information requested in the ne w allegation questionnaires, regarding these alleged\nsubsidies, is essentially the same as that regarding the alleged subsidies referred to in the initial\nquestionnaires. In other words, the kinds of in formation requested concerning the alleged subsidy\nprogrammes are indistinguishable as between the initial and new allegation questionnaires.1145\n15.48 That said, the new allegation questionnaires did not include the full range of questions\ncontained in the initial questionnaires (i.e., they contained no questions about the product under\ninvestigation, about company aff iliations, ownership, legal struct ure and financial data, production\nprocesses, marketing, channels of distribution, sal es and export data, etc.). To the contrary, the\nquestions were limited to standardized informa tion requests and/or programme-specific questions\nconcerning the newly-alleged subsidies.1146 While these newly-alleged subsidies were unrelated to the\nalleged subsidies covered by the initial questionnaires, all of the newly-alleged subsidies, like those\ncovered by the initial questionnaires, were alleged to be benefiting the same products that were the\nsubjects of the ongoing investigations. This indicates to us that these questionnaires, which pertained\n\n1144 See, e.g., China first written submission, footnote 364; second written submission, paras. 311-313;\nresponse to Panel question 105 (first meeting).\n1145 In fact, as we noted in para. 15.43, supra, the majority of \"new allegation\" questionnaires mainly\ncontained the same standard information requests as in Appendix 1 and/or Appendix 2 of the questionnaires\nissued by the USDOC at the outset of the investigations.\n1146 Furthermore, our examination of the evidence on the record in dicates that the new allegation\nquestionnaires were far less extensive than the questionnaire issued by the USDOC at the outset of the\ninvestigations. For instance, the United States submits, and China does not argue to the contrary, that: (i) in the\nCWP investigation, the initial questionnaire covered 28 su bsidy programmes, containing at least 93 questions\nfor the Government of China and at least 85 questions for the respondent producer, while the first new allegation\nquestionnaire issued to these respondents covered only 1 subsidy programme and contained fewer questions\nthan the initial questionnaire; (ii) in the LWR investigation, the initial questionnaire covered 27 subsidy\nprogrammes, containing at least 81 questions for the Government of China and 87 questions for the respondent\nconcerned, while the new allegation questionnaire issued to all these respondents covered only 1 programme\nand contained fewer questions than the initial questio nnaire; (iii) in the LWS investigation, the initial\nquestionnaire covered 23 subsidy programmes, containing 66 questions for the Government of China and 63\nquestions for the respondent concerned, while the new allegation questionnaire issued to all these respondents\ncovered between 7-12 subsidy programmes and contained fewer questions than the initial questionnaire; and (iv)\nin the OTR investigation, the initial questionnaire covered 21 subsidy programmes, containing 76 questions for\nthe Government of China and 81 questions for the respondent concerned, while the first new allegation\nquestionnaire issued to all these respondents covered 8-10 programmes and contained fewer questions than the\ninitial questionnaires. (United States first written s ubmission, footnote 632; second written submission,\nfootnotes 411 and 413-415).\n\nto the same allegedly subsidized products as, but whose scope was considerably more limited than,\nthe initial questionnaires, did not pertain to entirel y new countervailing duty inv estigations, but rather\nto the ongoing investigations, and thus did not consti tute \"questionnaires\" to which the 30-day rule of\nArticle 12.1.1 applies. We note in this regard th at China raises no claim, and we make no finding, as\nto the WTO-consistency of adding new subsidy allegations to an investigation subsequent to initiation\nand the issuance of the initial (set of) questionnaire(s).\n15.49 For the foregoing reasons, we find that China has not established that the USDOC acted\ninconsistently with the obligations of the United States under Article 12.1.1 of the SCM Agreement in\nproviding less than 30 days for responses to the \"s upplemental\" questionnaires and \"new allegation\"\nquestionnaires in the four countervailing duty investigations at issue in the present dispute.\nXVI. CHINA'S CLAIM PERTAINING TO THE USDOC'S APPLICATION OF \"FACTS\nAVAILABLE\"\nA. CLAIMS OF CHINA\n16.1 In respect of the provision of goods (HRS) thr ough transactions involving trading companies,\nChina claims that the USDOC's use of facts available in the LWR and CWP countervailing duty\ninvestigations to determine the be nefit allegedly conferre d on investigated producers with respect to\nthese transactions was inconsistent with Articles 12.1 and 12.7 of the SCM Agreement.1147\nB. MAIN ARGUMENTS OF THE PARTIES\n1. China\n16.2 China argues that the USDOC failed to give inv estigated producers notice of the information\nthat was necessary for the subsidy calculations at i ssue, because it did not ask investigated producers\nabout the amount and origin of the HRS they pu rchased from trading companies that had been\nproduced by SOEs. Moreover, China contends, th e USDOC did not give the investigated producers\nthe opportunity to present any evidence that they would have considered relevant to the investigations,\nin particular, the opportunity to demonstrate that they had purchased greater percentages of privately-\nproduced HRS from trading companies than the per centages determined by the USDOC. Therefore,\nChina submits, the USDOC failed to comply with the \"procedural and due process obligations\" under\nArticle 12.1 of the SCM Agreement. China furthe r submits that the USDOC's failure to request\ninvestigated producers to provide such information, and the USDOC's resort instead to facts available\nand adverse inferences, unfairly penalized investigated producers, contrary to Article 12.1 of the SCM\nAgreement.1148\n16.3 China also considers that the United States' us e of facts available was inconsistent with\nArticle 12.7 of the SCM Agreement. According to China, this provision limits the use of facts\navailable to situations in which a party \"refuses access to, or otherwise does not provide\" necessary\ninformation and, as observed by previous panels, in vestigating authorities are required to request the\n\"necessary information\" before resorting to facts available. 1149 China submits that the investigated\n\n1147 Paragraph B.1(g)(viii) of the \"as applied\" claims in China request for establishment of the Panel;\nChina first written submission, para. 468 (n); second written submission, para. 315 (n).\n1148 China first written submission, paras. 461-463, citing to Panel Report on Argentina – Ceramic\nTitles, para. 6.54.\n1149 Id., para. 464, citing to Panel Report on EC – Countervailing Measures on DRAM Chips ,\n\nproducers neither refused access to nor otherwise failed to provide information pertaining to the origin\nof the HRS they purchased from trading companies.\n1150\n16.4 In China's view, the United States has essentia lly conceded that the USDOC's use of facts\navailable was, in fact, inconsistent with Articles 12.1 and 12.7 of the SCM Agreement.1151\n2. United States\n16.5 The United States submits that the USDOC resort ed to the use of facts available because,\nuntil a very late stage of the investigations, the USDOC was not presented evidence that indicated the\nneed for information about the amount of HRS produced by SOEs that investigated producers had\npurchased from trading companies.\n1152 Thus, in order to determin e the benefit conferred on the\ninvestigated producers with respect to these tran sactions, the USDOC relied on evidence from the\nrecords of the underlying investigations; specifica lly, the USDOC relied on information submitted by\nChina. The United States adds that, before any de finitive countervailing duty is levied, investigated\nproducers would be provided the opportunity, in an assessment review, to present evidence with\nrespect to the amount of the HRS they purchased from trading companies that was produced by SOEs.\nIn response to questioning from the Panel, the Unite d States clarified that it does not claim that the\nalleged violations of Articles 12.1 and 12.7 of the SCM Agreement would be \"cured\" by this\nsubsequent collection of additional information. Rather, the United States indicates, should the Panel\nfind that it acted inconsistently with Articles 12.1 and 12.7 of the SCM Agreement, it \"would\ndetermine during implementation how to bring its m easures into conformity with those obligations\nand take any appropriate action accordingly\".1153\nC. ASSESSMENT BY THE PANEL\n16.6 The United States does not explicitly assert that th e USDOC's resort to facts available in the\ninvestigations at issue was WTO-consistent. Nor does the United States directly contest China's claim\nthat the USDOC's use of facts available was inc onsistent with Articles 12.1 and 12.7 of the SCM\nAgreement. Rather, the United States indicates, the USDOC's basis to rely on facts available was that\nthe USDOC \"was not presented eviden ce that indicated the need for information about the amount of\n[HRS] purchased through trading companies that ca me from SOEs until a very late stage of the\ninvestigations\".1154\n16.7 We start our consideration of this claim by recalling that \"a prima facie case is one which, in\nthe absence of effective refutation by the defending part y, requires a panel, as a matter of law, to rule\nin favour of the complaining party presenting the prima facie case\". 1155 Thus, notwithstanding the\nfact that the United States appears not to contest China's claims, we must, consistent with the\napproach adopted by previous panels, satis fy ourselves that China has established a prima facie case\n\n1150 China first written submission, paras. 464-466. China also argues that Article 6.8 of the AD\nAgreement provides further context for interpreting Article 12.7 of the SCM Agreement.\n1152 The United States further indicates that given the time-limits for completing the investigations, the\nUSDOC could not request investigated producers to provide additional clarifying information with respect to\nthis issue. (United States response to Panel question 109 (first meeting)).\n1153 United States first written submission, paras. 493-494; response to Panel questions 108 and 109\n(first meeting).\n1154 See, e.g., United States response to Panel question 109 (first meeting).\n1155 Appellate Body Report on EC − Hormones, para. 104 (quoting Appellate Body Report on US –\nWool Shirts and Blouses , p. 14). In order to establish a prima facie case, a complaining party must adduce\nevidence sufficient to raise a presumption that what is claimed is true. However, precisely how much and\nprecisely what kind of evidence will be required to estab lish a presumption that a claim is valid will necessarily\nvary from case to case. (Appellate Body Report on US – Wool Shirts and Blouses, p. 14, DSR 1997:I, at 323).\n\nof violation.1156 We will therefore examine the arguments and evidence presented by China, in order\nto determine whether it has established a prima facie case of inconsistency with Articles 12.1 and 12.7\nof the SCM Agreement.\n16.8 We first examine China's claim concerning the in consistency of the United States' use of facts\navailable with Article 12.7 of the SCM Agreement, which governs the use of facts available by an\ninvestigating authority in a countervailing duty investigation, and provides as follows:\n\"In cases in which any interested Member or interested party refuses access to, or\notherwise does not provide, necessary info rmation within a reasonable period or\nsignificantly impedes the investigation, preliminary and final determinations,\naffirmative or negative, may be made on the basis of the facts available\".\n16.9 Thus, pursuant to the plain language of Article 12.7 of the SCM Agreement, recourse to facts\navailable is permissible only under the limited circumstances where an interested Member or\ninterested party: (i) refuses access to necessary info rmation within a reasonable period; (ii) otherwise\nfails to provide such information within a reaso nable period; or (iii) significantly impedes the\ninvestigation. Both parties agree with our reading of Article 12.7 of the SCM Agreement. 1157 Our\ninterpretation is also consistent with that of prior panels and Appellate Body that have considered this\nprovision.1158\n16.10 China argues that, in the LWR and CWP countervailing duty investigations, investigated\nproducers neither refused access to nor otherwise failed to provide information regarding the origin of\nthe HRS they purchased from trading companies, and therefore, the United States' resort to facts\navailable was inconsistent with Article 12.7 of the SCM Agreement.\n16.11 Before addressing China's claim, we will examin e the relevant facts relating to the USDOC's\nresort to facts available in the underlying investigations, as set forth in the USDOC's\ndeterminations.1159\n16.12 In its Issues and Decision Memoranda in both in vestigations, the USDOC explained that, in a\n\"change\" from its preliminary determination, it decided to treat purchases of HRS from privately-\nowned trading companies that in turn purchased HRS from state-owned producers/suppliers as\ncountervailable subsidies. The USDOC also indicated that it did not, during the course of the\ninvestigation, seek information from the responde nts regarding the amount of the HRS they had\npurchased from trading company suppliers that was produced by SOEs, and therefore that it examined\nthe information on the record \"t o determine what information [was ] available to calculate this\namount\".\n1160 In addition, in the LWR investigation, the USDOC added that it would seek this\ninformation in any future administrative review in the event that the investigation resulted in a\ncountervailing duty order.1161\n16.13 In both investigations, the USDOC relied on in formation submitted by the Government of\nChina with respect to the production of HRS by SOE members of China Iron Steel Association\n\n1156 See, e.g., Panel Reports on US – Shrimp (Ecuador) , para. 7.11; US – Stainless Steel (Mexico) ,\npara. 7.52; and US – Anti-Dumping Measures on PET Bags (Thailand), para. 7.7.\n1157 See, e.g., United States response to Panel question 108 (first meeting); China first written\nsubmission, para. 464.\n1158 Appellate Body Reports on Japan – DRAMs (Korea) , para. 235 and Mexico – Anti-Dumping\nMeasures on Rice, para. 291; Panel Reports on Japan – DRAMs (Korea) , para. 7.383 and EC – Countervailing\n1159 We note that the parties do not dispute the facts on the record.\n1160 Exhibits CHI-1, p. 10 and CHI-2, pp. 8-9.\n1161 Exhibit CHI-2, p. 9.\n\n(\"CISA\") to determine the amount of the HRS pur chased by investigated producers through trading\ncompanies. In the CWP countervailing duty investig ation, the USDOC noted that the Government of\nChina had reported that SOE members of CISA accounted for approximately 71 per cent of HRS\nproduction in China in 2006. In the LWR counter vailing duty investigation, China's ownership\ninformation was updated at verification: The Government of China reported that CISA members\naccounted for 70.81 per cent of HRS production in China in 2006. Subsequently, however, the\nUSDOC determined that the ownership categorizati on of HRS producers reported by the Government\nof China had been developed by China's legal c ounsel through public sources and not collected by\nCISA itself as the Government of China had reported. On this basis, the USDOC considered that the\nGovernment of China had not properly disclosed how the reported ownership structures of CISA\nmembers were obtained, and as a consequence, the USDOC determined that the Government of China\ndid not act to the best of its ability. Thus, the US DOC drew an adverse inference with respect to the\nownership of HRS producers in China, and concl uded on that basis that 96.1 per cent of HRS\nproduction in China was by SOEs.\n1162\n16.14 In the CWP investigation, the USDOC relied on this figure to determine the amount of SOE-\nsourced HRS that investigated producers had purchased from private trading companies, and\ntherefore, to calculate the benefit investigat ed producers received from these transactions. 1163, 1164 In\nthe LWR investigation, however, the USDOC deci ded to use the production figure reported by the\nGovernment of China – that is, 70.81 per cent – to calculate the benef it allegedly conferred on\ninvestigated producers from such trading company transactions.1165, 1166\n\n1162 In both investigations, the USDOC, rather than relying on the ownership characterization of CISA's\nproducers provided by the Government of China, instead categorized HRS producers as state-owned where (i)\nthe evidence on the record in dicated that the producer was state-owned or (ii) where the Government of China\nhad failed to provide factual evidence supporting the classification of the company.\n1163 Exhibit CHI-1, p. 11; and Final Determination Calculation Memorandum for Zhejiang Kingland\nPipeline and Technologies Co., Ltd.; Kingland Group Co., Ltd., Beijing Kingland Century Technologies Co.;\nZhejiang Kingland Pipeline Industry Co., Ltd.; and Shanxi Kingland Pipeline Co., Ltd., Exhibit US-75, p. 3.\n1164 The record indicates that, in both investigations, the USDOC also relied on this figure to determine\nthe appropriate benchmark for establishing whether the government provision of HRS conferred a benefit. (See,\ne.g., Exhibits CHI-1, p. 65 and CHI-2, p. 4). We note, however, that China is not challenging this particular use\nof facts available by the USDOC. As we understand it, China is only challenging the USDOC's resort to facts\navailable in order to calculate the proportion of the pr oducers' purchases of HRS from trading companies that\noriginated from SOEs.\n1165 Exhibit CHI-2, pp. 9 and 25-26; Final Determination Calculation Memorandum for Kunshan Lets\nWin Steel Machinery Co., Ltd ., Exhibit US-76, p. 3; and Final Determination Calculation Memorandum for\nZhangjiagang Zhongyuan Pipe Making Co., Ltd.; Jiangsu Qiyuan Group Co., Ltd.; Jiangsu Zhongjia Steel Co.,\nLtd.; Zhangjiagang Zhongxin Steel Product Co., Ltd.; and Zhangjiagang Baoshuiqu Jiaqi International\nBusiness Co., Ltd., Exhibit US-77, p. 5.\n1166 In its determination, the USDOC stated as follows:\n\n\"[...] we agree with the GOC and GWSP that we never asked the respondent companies to\nreport these amounts. Thus, the respondents have not failed to provide requested information\nand no adverse inference is warranted [...] Similarly, [...] we do not find that ZZ Pipe withheld\ninformation [...] Nonetheless, in light of our decision that purchases of SOE-produced HRS\nfrom trading companies provide a countervailable subsidy, we need to quantify the amount of\nsuch HRS [...] As explained above, we are not applying [adverse facts available] to the\nrespondent companies for their purchases through trading companies because we did not ask\nthem to report such information. Instead, we have reviewed other non-adverse information on\nthe record to use as a basis for determining the amount of HRS purchased from trading\ncompanies that was produced by SOEs. [Thus] we are relying on the GOC reported SOE\nproduction figure for CISA memb ers (i.e., 70.81 per cent). Because the GOC supplied this\ninformation, we do not believe that using this amount is adverse to the respondent\ncompanies.\" (Exhibit CHI-2, pp. 25-26).\n\n16.15 Thus, our analysis of the evidence indicates th at the USDOC's basis for resorting to facts\navailable in both investigations was the same: th e USDOC applied facts available for the sole reason\nthat, during the course of the investigations, it did not request information from the investigated\nproducers regarding the amount of SOE-sourced HRS they purchased from trading companies.\nNothing on the record indi cates that the investigated producers re fused access to or failed to provide\ninformation about the amount of the HRS they had purchased from trading companies that was\nproduced by SOEs. To the contrary, it is clear to us that, notwithstanding the fact that this\ninformation was deemed \"necessary\" to determine th e benefit that investigated producers allegedly\nreceived from such trading company transactions\n1167, the USDOC never requested investigated\nproducers to provide the information. Furthermore, there is no indication on the record, nor does the\nUnited States argue, that the USDOC considered that investigated producers \"significantly impede[d]\"\nthe investigations at issue.\n16.16 We have determined above that Article 12.7 of the SCM Agreement limits the circumstances\nunder which an investigating authority may resort to facts available to those where an interested party\n\"refuses access to, or otherwise does not provide, necessary information within a reasonable period or\nsignificantly impedes the investigation\". The SC M Agreement contemplates no other possibilities;\nfor instance, where an investigating authority, until a very late stage of the investigation, learns the\nneed for information which it did not request duri ng the course of the investigation and that is\nnecessary to its final subsidization or injury de terminations. As the USDOC's reliance on facts\navailable in the present instance does not fall within the situations contemplated in Article 12.7, we\nfind that the USDOC's use of facts available in the CWP and LWR investiga tions was inconsistent\nwith Article 12.7 of the SCM Agreement.\n16.17 For the reasons set forth above, we conclude th at the USDOC acted inconsistently with the\nobligations of the United States under Article 12.7 of the SCM Agreement in applying facts available\nto determine the amount of the HRS investigated producers purchased from trading companies that\noriginated from SOEs.\n16.18 In the light of our findings under Article 12.7, it would not be necessary to examine, or to\nmake additional findings concerning, China's allega tion that the USDOC also acted inconsistently\nwith the obligations of the United States under Ar ticle 12.1 of the SCM Agreement by failing to\nrequest information on the amount of HRS purch ased by investigated producers from trading\ncompanies that originated from SOEs, were such a cl aim properly before us. We do not consider this\nto be the case, however, as the only references to Article 12.1 in Ch ina's request for establishment of\n\n We observe that there is no explanation on the record as to why, in contrast to the\nLWR investigation, the USDOC in the CWP investigation calculated the amount of SOE-\nsourced HRS purchased from trading companies by using the figure of HRS production it\nderived from the adverse inference it drew with respect to the ownership of HRS in China. In\nany event, whether the USDOC merely relied on facts available or, in addition, drew adverse\ninferences is not germane to our resolution of China's claim. The e ssence of China's claim\nconcerns the USDOC's application of facts available itself and not which information from the\nrecord the USDOC actually selected as \"facts available\".\n\n1167 It is undisputed that the information regarding the amount of HRS that investigated producers\npurchased from trading companies that was produced by SOEs was deemed \"necessary\" for purposes of\ndetermining the benefits at issue. For instance, in the LWR investigation, the USDOC stated that: \"[…] in light\nof our decision that purchases of SOE-produced HRS fr om trading companies provide a countervailing subsidy,\nwe need to quantify the amount of such HRS \". (Exhibit CHI-2, p. 25). (emphasis added) In its first written\nsubmission, the United States also confirmed that \"such information was necessary to determine the existence of\na benefit conferred on producers of the product subj ect to investigation.\" (United States first written\nsubmission, para. 493. (emphasis added)).\n\nthe Panel concern (i) the alleged \"failure to provide notice to interested parties of the information\nwhich the US authorities required to make a determin ation with respect to whether certain entities are\n'public bodies'\", an entirely separate issue, which Ch ina did not pursue in this dispute; and (ii) the\nalleged \"failure to provide notice to interested parties of the information which the US authorities\nrequired to determine whether the simultaneous a pplication of anti-dumping and countervailing duties\nresults in a double remedy\", addressed supra, at Section XIV.C.4.\nXVII. CONCLUSIONS AND RECOMMENDATIONS\n17.1 For the reasons set out above, we conclude:\n(a) in respect of China's claims concerni ng the USDOC's determin ations of financial\ncontributions in the countervailing duty investigations at issue, that:\n (i) China did not establish that the USDOC acted inconsistently with the\nobligations of the United States under Article 1.1(a)(1) of the SCM\nAgreement in determining in the relevant investigations at issue that SOEs\nand SOCBs constituted \"public bodies\";\n (ii) China did not establish that the USDOC acted inconsistently with the\nobligations of the United States under Article 1.1 of the SCM Agreement by\nfailing to determine, in the LWR, CWP, and OTR investigations, that trading\ncompanies were \"entrusted\" or \"directed\" by the government to make\nfinancial contributions to producers of the investigated products, in the form\nof the provision of goods;\n(b) in respect of China's claims concerning the USDOC's specificity\n determinations in the\ncountervailing duty investigations at issue, that:\n(i) China did not establish that the US DOC acted inconsistently with the\nobligations of the United States under Article 2.1(a) of the SCM Agreement\nby determining in the OTR investigation that lending by SOCBs to the OTR\ntire industry was de jure specific;\n(ii) The USDOC acted inconsistently with the obligations of the United States\nunder Article 2 of the SCM Agreement by determining that the government\nprovision of land-use rights, in the LWS investigation, was regionally-\nspecific;\n(c) in respect of China's claims concerning the USDOC's benefit\n determinations in the\ncountervailing duty investigations at issue, that:\n(i) China did not establish that the US DOC acted inconsistently with the\nobligations of the United States under Articles 10, 14, 19.1, 19.4 or 32.1 of\nthe SCM Agreement or Article VI:3 of the GATT 1994 by failing to conduct\na pass-through analysis in the OTR inv estigation to determine whether any\nsubsidy benefits received by tradi ng companies selling rubber inputs were\npassed through to the OTR producers purchasing those inputs;\n(ii) The USDOC acted inconsistently with the obligations of the United States\nunder Articles 1.1 and 14 of the SCM Agre ement by failing to ensure in the\nOTR investigation that the methodology it used to establish the existence and\namount of benefit to tire producers from their purchases of SOE-produced\n\ninputs from trading companies did not calculate a benefit amount in excess of\nthat conferred by the government provision of those inputs;\n(iii) In the light of our findings in respect of China's claims on facts available\n(paragraph 17.1(f)(ii), infra), we apply judicial economy in respect of China's\nclaims concerning the USDOC's benefit determinations in the LWR and CWP\ninvestigations regarding the provision of HRS by trading companies;\n(iv) China did not establish that the USDOC acted inconsistently with the\nobligations of the United States under Article 14(d) of the SCM Agreement\nby not \"offsetting\" positive benefit amo unts with \"negative\" benefit amounts,\neither across different kinds of rubber or across different months of the period\nof investigation, in the OTR investiga tion; and that China thus also did not\nestablish that the United States also th ereby acted inconsistently with its\nobligations under Articles 10, 19.1, 19.4, or 32.1 of the SCM Agreement, or\nArticle VI:3 of the GATT 1994;\n(v) China's claims in respect of the be nchmarks actually used by the USDOC to\ncalculate the benefit from the provision of loans and land-use rights by China\nin the LWS, OTR and CWP investigations , respectively, fall within our terms\nof reference;\n(vi) China did not establish that the USDOC acted inconsistently with the\nobligations of the United States under Article 14(d) of the SCM Agreement\nby rejecting in-country private prices in China as benchmarks for HRS in the\nCWP and LWR investigations and for BOPP in the LWS investigation;\n(vii) China did not establish that the USDOC acted inconsistently with the\nobligations of the United States under Article 14(b) of the SCM Agreement\nby rejecting interest rates in China as benchmarks for calculating the benefit\nfrom RMB-denominated loans from SOCBs, in the CWP, LWS and OTR\ninvestigations, or that the benchmarks actually used in respect of the RMB-\ndenominated loans were inconsistent with those obligations;\n(viii) The USDOC acted inconsistently with the obligations of the United States\nunder Article 14(b) of the SCM Agreem ent by using average annual interest\nrates as benchmarks for GTC's U.S. do llar-denominated loans from SOCBs in\nthe OTR investigation;\n(ix) China did not establish that the USDOC acted inconsistently with the\nobligations of the United States under Article 14(d) of the SCM Agreement\nby rejecting land-use prices in China as benchmarks for government-provided\nland-use rights in the LWS and OTR inv estigations, or that the benchmarks\nactually used were inconsistent with those obligations;\n(d) In respect of China's claims of consequential violations\n of Articles 10 and 32.1 of the\nSCM Agreement and Article VI:3 of the GATT 1994 in connection with its claims\nreferred to at paragraphs 17.1 (a)(i) and (ii), (b)(i) and (ii), and (c)(ii), (iv), (vi), (vii),\n(viii) and (ix): as indicated at paragraph 13.1, we apply judicial economy.\n(e) in respect of China's double remedy claims, that:\n\n(i) The \"omission\" challenged by China as part of its \"as such\" claims with\nrespect to double remedies falls outside our terms of reference; consequently,\nwe also find that China's \"as such\" claims under Articles 10, 19.3, 19.4 and\n32.1 of the SCM Agreement and Articles VI and I:1 of the GATT 1994\nequally fall outside our terms of reference;\n(ii) China did not establish that the United States acted inconsistently with its\nobligations under Articles 10, 19.3, 19.4, and 32.1 of the SCM Agreement or\nunder Article VI:3 of GATT 1994 by reason of the USDOC's use of its NME\nmethodology in the four anti-dumping investigations at issue and the\nimposition of anti-dumping duties on that basis concurrently with the\nimposition of countervailing duties on the same products in the four\ncountervailing duty investigations at issue;\n(iii) China did not establish that the USDOC acted inconsistently with the\nobligations of the United States under Articles 12.1 and 12.8 of the SCM\nAgreement by failing to give the Govern ment of China and interested parties\n\"notice\" of the information it required to evaluate the existence of a double\nremedy, and to inform them of the essential facts under consideration that\nwould \"form the basis\" for its determination in respect of double remedies, in\nthe four countervailing duty investigations at issue;\n(iv) China did not establish that the United States acted inconsistently with its\nobligations under Article I:1 of GATT 1994 when, as a result of the\ninvestigations at issue, it concurrently imposed anti-dumping duties calculated\nunder the U.S. NME methodology and countervailing duties;\n(f) in respect of China's claims of procedural\n violations in the countervailing duty\ninvestigations at issue, that:\n(i) China did not establish that the US DOC acted inconsistently with the\nobligations of the United States under Article 12.1.1 of the SCM Agreement\nby failing to provide the Government of China and investigated producers at\nleast 30 days to respond to the \"supplemental\" questionnaires and \"new\nallegation\" questionnaires used in the four countervailing duty investigations\nat issue;\n(ii) The USDOC acted inconsistently with the obligations of the United States\nunder Article 12.7 of the SCM Agreement by applying facts available in the\nLWR and CWP investigations to determ ine the amount of HRS investigated\nproducers purchased from trading companies that originated from SOEs; and\n(iii) China's claim of violation of Article 12.1 is outside our te rms of reference as\nit is not included in China's request for establishment of the Panel.\n17.2 Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed\nunder a covered agreement, the action is considered prima facie to cons titute a case of nullification or\nimpairment of benefits under that agreement. Acco rdingly, we conclude that to the extent that the\nUnited States has acted inconsistently with certa in provisions of the SCM Agreement and of the\nGATT 1994, it has nullified or impaired benefits accruing to China under these agreements.\n\n17.3 Pursuant to Article 19.1 of the DSU, having found that the United States has acted\ninconsistently with provisions of the SCM Ag reement and of the GATT 1994 as set out above, we\nrecommend that the United States bring its measures in to conformity with its obligations under those\nAgreements."},"processing_date":{"kind":"string","value":"2026-03-15T15:52:55.935606"}}}],"truncated":false,"partial":false},"paginationData":{"pageIndex":60,"numItemsPerPage":100,"numTotalItems":9414,"offset":6000,"length":100}},"jwt":"eyJhbGciOiJFZERTQSJ9.eyJyZWFkIjp0cnVlLCJwZXJtaXNzaW9ucyI6eyJyZXBvLmNvbnRlbnQucmVhZCI6dHJ1ZX0sImlhdCI6MTc3OTYxMTIwNCwic3ViIjoiL2RhdGFzZXRzL2RlYW4yMjAyOS9XVE9fRG9jcyIsImV4cCI6MTc3OTYxNDgwNCwiaXNzIjoiaHR0cHM6Ly9odWdnaW5nZmFjZS5jbyJ9.TgRHYjNsw8gbIrkxsBVVrBlSjy37WwH507Lu0OtWRZXqQs-IwwBRhcr6t6erUmkhJ60ftKQLOc66VmBY65HfAg","displayUrls":true,"splitSizeSummaries":[{"config":"default","split":"train","numRows":9414,"numBytesParquet":235278256}]},"discussionsStats":{"closed":0,"open":1,"total":1},"fullWidth":true,"hasGatedAccess":true,"hasFullAccess":true,"isEmbedded":false,"savedQueries":{"community":[],"user":[]}}">
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
375 | 375 | DS375_SEQ03_Request_To_Join_Consultations_02.pdf | DS375_SEQ03_Request_To_Join_Consultations_02.pdf | 3 | Request_To_Join_Consultations | Request to Join Consultations Communication from Singapore | NUMBERED | null | 2 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 16 June 2008 | WT/DS375/4 | ['U.S.'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the United States. (See DS376 and DS377)
On 28 May 2008, the United States requested consultations with the European Communities and its member States with respec... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request to Join Consultations
Communication from Singapore
The following communication, dated 11 June 2008, from the delegation of Singapore to the
delegation of the European Communities, the delega tion of the ... | 2026-03-15T15:52:34.980923 | |
375 | 375 | DS375_SEQ04_Request_To_Join_Consultations_03.pdf | DS375_SEQ04_Request_To_Join_Consultations_03.pdf | 4 | Request_To_Join_Consultations | Request to Join Consultations Communication from the Philippines | NUMBERED | null | 3 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 17 June 2008 | WT/DS375/5; WT/DS375/1 | ['U.S.'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the United States. (See DS376 and DS377)
On 28 May 2008, the United States requested consultations with the European Communities and its member States with respec... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request to Join Consultations
Communication from the Philippines
The following communication, dated 11 June 2008, from the delegation of the Philippines to
the delegation of the European Communities, the dele ga... | 2026-03-15T15:52:34.981324 | |
375 | 375 | DS375_SEQ05_Request_To_Join_Consultations_04.pdf | DS375_SEQ05_Request_To_Join_Consultations_04.pdf | 5 | Request_To_Join_Consultations | Request to Join Consultations Communication from Chinese Taipei | NUMBERED | null | 4 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 16 June 2008 | WT/DS375/6 | ['U.S.'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the United States. (See DS376 and DS377)
On 28 May 2008, the United States requested consultations with the European Communities and its member States with respec... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request to Join Consultations
Communication from Chinese Taipei
The following communication, dated 11 June 20 08, from the delegation of Chinese Taipei to
the delegation of the European Communities, the dele gat... | 2026-03-15T15:52:34.981954 | |
375 | 375 | DS375_SEQ06_Request_To_Join_Consultations_05.pdf | DS375_SEQ06_Request_To_Join_Consultations_05.pdf | 6 | Request_To_Join_Consultations | Request to Join Consultations Communication from China | NUMBERED | null | 5 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 16 June 2008 | WT/DS375/7 | ['U.S.'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the United States. (See DS376 and DS377)
On 28 May 2008, the United States requested consultations with the European Communities and its member States with respec... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request to Join Consultations
Communication from China
The following communication, dated 12 June 2008, from the delegation of China to the
delegation of the European Communities, the delega tion of the United S... | 2026-03-15T15:52:34.982347 | |
375 | 375 | DS375_SEQ07_Communication.pdf | DS375_SEQ07_Communication.pdf | 7 | Communication | Communication from the European Union and the United States concerning Article 21.3(c) of the DSU | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 30 November 2010 | WT/DS375/15 | ['U.S.'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the United States. (See DS376 and DS377)
On 28 May 2008, the United States requested consultations with the European Communities and its member States with respec... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the European Union and the United States
concerning Article 21.3(c) of the DSU
The following communication, dated 26 November 2010, from the delegation of the
European Union and the delegation... | 2026-03-15T15:52:34.982967 | |
375 | 375 | DS375_SEQ08_Agreement_Art_21_3.pdf | DS375_SEQ08_Agreement_Art_21_3.pdf | 8 | Agreement_Art_21_3 | Agreement under Article 21.3(b) of the DSU | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 6 January 2011 | WT/DS375/16 | ['U.S.'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the United States. (See DS376 and DS377)
On 28 May 2008, the United States requested consultations with the European Communities and its member States with respec... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Agreement under Article 21.3(b) of the DSU
The following communication, dated 20 Dece mber 2010, from the delegation of the United
States and the delegation of the European Union to the Chairman of the Dispute Se... | 2026-03-15T15:52:34.983408 | |
375 | 375 | DS375_SEQ09_Understanding.pdf | DS375_SEQ09_Understanding.pdf | 9 | Understanding | Understanding between the European Union 1 and the United States Regarding Procedures under Articles 21 and 22 of the DSU | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 11 July 2011 | WT/DS375/17 | ['U.S.'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the United States. (See DS376 and DS377)
On 28 May 2008, the United States requested consultations with the European Communities and its member States with respec... | 3 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Understanding between the European Union
1 and the United States
Regarding Procedures under Articles 21 and 22 of the DSU
The following communication, dated 6 July 2011, from the delegation of the European Union
... | 2026-03-15T15:52:34.984923 | |
375 | 375 | DS375_SEQ10_Request_For_Consultations.pdf | DS375_SEQ10_Request_For_Consultations.pdf | 10 | Request_For_Consultations | Request for Consultations by the United States | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 2 June 2008 | WT/DS375/1; G/L/851 | General Council | ['U.S.'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by the United States. (See DS376 and DS377)
On 28 May 2008, the United States requested consultations with the European Communities and its member States with respec... | 3 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request for Consultations by the United States
The following communication, dated 28 May 2008, from the delegation of the United States
to the delegation of the European Communities and to the Chairman of the Dis... | 2026-03-15T15:52:34.986587 |
375 | 376 | DS376_SEQ01_Request_For_Establishment_Of_Panel.pdf | DS376_SEQ01_Request_For_Establishment_Of_Panel.pdf | 1 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel by the United States, Japan and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 19 August 2008 | WT/DS375/8; WT/DS376/8; WT/DS377/6 | ['Japan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See DS375 and DS377)
On 28 May 2008, Japan requested consultations with the European Communities and its member States with respect to their tariff tre... | 6 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request for the Establishment of a Panel by the United States, Japan and
the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
The following communication, dated 18 Augus t 2008, from the delegations... | 2026-03-15T15:52:35.025251 | |
375 | 377 | DS377_SEQ01_Note_By_Secretariat.pdf | DS377_SEQ01_Note_By_Secretariat.pdf | 1 | Note_By_Secretariat | Constitution of the Panel Established at the Request of the United States, Japan, and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu Note by the Secretariat | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 26 January 2009 | WT/DS375/9; WT/DS376/9; WT/DS377/7; WT/DS376/8; WT/DS377/6 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 2 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Constitution of the Panel Established at the Request of the United States,
Japan, and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
Note by the Secretariat
1. At its meeting on 23 September ... | 2026-03-15T15:52:39.761337 | |
375 | 377 | DS377_SEQ02_Communication_00.pdf | DS377_SEQ02_Communication_00.pdf | 2 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 0 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 23 July 2009 | WT/DS375/10; WT/DS376/10; WT/DS377/8 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the Chairman of the Panel
The following communication, dated 21 July 2 009, addressed to the Chairman of the Dispute
Settlement Body (DSB), is circulated in accordan ce with Article 12.9 of the... | 2026-03-15T15:52:39.761895 | |
375 | 377 | DS377_SEQ03_Communication_01.pdf | DS377_SEQ03_Communication_01.pdf | 3 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 23 December 2009 | WT/DS375/11; WT/DS376/11; WT/DS377/9; WT/DS375/10; WT/DS376/10; WT/DS377/8 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the Chairman of the Panel
The following communication, dated 21 Dece mber 2009, addressed to the Chairman of the
Dispute Settlement Body (DSB), is circulated in accordance with Article 12.9 of ... | 2026-03-15T15:52:39.762167 | |
375 | 377 | DS377_SEQ04_Communication_02.pdf | DS377_SEQ04_Communication_02.pdf | 4 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 2 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 30 April 2010 | WT/DS375/12; WT/DS376/12; WT/DS377/10; WT/DS375/11; WT/DS376/11; WT/DS377/9 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the Chairman of the Panel
The following communication, dated 29 April 2010 , addressed to the Chairman of the Dispute
Settlement Body (DSB), is circulated in accordan ce with Article 12.9 of th... | 2026-03-15T15:52:39.762422 | |
375 | 377 | DS377_SEQ05_Communication_03.pdf | DS377_SEQ05_Communication_03.pdf | 5 | Communication | Communication from the European Union1 | NUMBERED | null | 3 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 15 October 2010 | WT/DS375/14; WT/DS376/14; WT/DS377/12 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the European Union1
The following communication, dated 13 October 2010, from the delegation of the European
Union to the Chairman of the Dispute Settlement Bo dy (DSB), is circulated at the req... | 2026-03-15T15:52:39.763049 | |
375 | 377 | DS377_SEQ06_Status_Report.pdf | DS377_SEQ06_Status_Report.pdf | 6 | Status_Report | Status Report by the European Union1 | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 8 July 2011 | WT/DS375/18; WT/DS376/18; WT/DS377/16 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 2 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Status Report by the European Union1
The following communication, dated 7 July 2011 , from the delegation of the European Union
to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article... | 2026-03-15T15:52:39.763869 | |
375 | 377 | DS377_SEQ07_Executive_Summary_02.pdf | DS377_SEQ07_Executive_Summary_02.pdf | 7 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page A-1 ANNEX A SUBMISSIONS OF THE UNITED STATES CONTENTS PAGE A-1 Executive Summary of the first written submission by the United States | NUMBERED | null | 2 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 40 | ANNEX A
SUBMISSIONS OF THE UNITED STATES
CONTENTS PAGE
A-1 Executive Summary of the first written submission by the
United States
A-2
A-2 Executive Summary of the opening oral statement by the
United States at the first substantive meeting
A-10
A-3 Closing oral statement by the United States at the
first substantive ... | 2026-03-15T15:52:39.786918 | ||
375 | 377 | DS377_SEQ08_Executive_Summary_03.pdf | DS377_SEQ08_Executive_Summary_03.pdf | 8 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page B-1 ANNEX B SUBMISSIONS OF JAPAN CONTENTS PAGE B-1 Executive Summary of the first written submission by Japan B-2 B-2 Executive Summary of the oral statement by Japan at the first substantive meeting | NUMBERED | null | 3 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 34 | ANNEX B
SUBMISSIONS OF JAPAN
CONTENTS PAGE
B-1 Executive Summary of the first written submission by Japan B-2
B-2 Executive Summary of the oral statement by Japan at the first
substantive meeting
B-9
B-3 Executive Summary of the second written submission by Japan B-15
B-4 Executive Summary of the opening oral stateme... | 2026-03-15T15:52:39.804665 | ||
375 | 377 | DS377_SEQ09_Executive_Summary_04.pdf | DS377_SEQ09_Executive_Summary_04.pdf | 9 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page C-1 ANNEX C SUBMISSIONS OF CHINESE TAIPEI CONTENTS PAGE C-1 Executive Summary of the first wr itten submission by Chinese Taipei C-2 C-2 Executive Summary of the oral stat ement by Chinese Taipei at the first substantive meeting | NUMBERED | null | 4 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 40 | ANNEX C
SUBMISSIONS OF CHINESE TAIPEI
CONTENTS PAGE
C-1 Executive Summary of the first wr itten submission by Chinese Taipei C-2
C-2 Executive Summary of the oral stat ement by Chinese Taipei at the first
substantive meeting
C-12
C-3 Closing oral statement by Chinese Taipei at the first substantive
meeting
C-15
C-4 E... | 2026-03-15T15:52:39.826604 | ||
375 | 377 | DS377_SEQ10_Executive_Summary_05.pdf | DS377_SEQ10_Executive_Summary_05.pdf | 10 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page D-1 ANNEX D SUBMISSIONS OF THE EUROPEAN COMMUNITIES CONTENTS PAGE D-1 Executive Summary of the first written submission by the European Communities D-2 | NUMBERED | null | 5 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 44 | ANNEX D
SUBMISSIONS OF THE EUROPEAN COMMUNITIES
CONTENTS PAGE
D-1 Executive Summary of the first written submission by the
European Communities
D-2
D-2 Executive Summary of the oral statement by the
European Communities at the first substantive meeting
D-12
D-3 Executive Summary of the second written submission by th... | 2026-03-15T15:52:39.849338 | ||
375 | 377 | DS377_SEQ11_Executive_Summary_06.pdf | DS377_SEQ11_Executive_Summary_06.pdf | 11 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page E-1 ANNEX E ARGUMENTS OF THE THIRD PARTIES CONTENTS PAGE E-1 Oral statement by Australia at the first substantive meeting E-2 E-2 Executive Summary of the third party submission by China E-6 E-3 Oral statement by China at the first substantive meeting E-8 | NUMBERED | null | 6 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 36 | ANNEX E
ARGUMENTS OF THE THIRD PARTIES
CONTENTS PAGE
E-1 Oral statement by Australia at the first substantive meeting E-2
E-2 Executive Summary of the third party submission by China E-6
E-3 Oral statement by China at the first substantive meeting E-8
E-4 Executive Summary of the third party submission by Costa Rica ... | 2026-03-15T15:52:39.866285 | ||
375 | 377 | DS377_SEQ12_Request_For_Establishment_Of_Panel_07.pdf | DS377_SEQ12_Request_For_Establishment_Of_Panel_07.pdf | 12 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel | NUMBERED | null | 7 | (WT/MIN(96)/16) F-9 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R; WT/DS375/8; WT/DS376/8; WT/DS377/6 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 26 | ANNEX F
JOINT PANEL REQUEST AND MINISTERIAL DECLARATION ON
TRADE IN INFORMATION TECHNOLOGY PRODUCTS (WT/MIN(96)/16)
CONTENTS PAGE
F-1 Request for the Establishment of a Panel by the United States, Japan
and Chinese Taipei (, and ) F-2
F-2 Ministerial Declaration on Trade in Information Technology Products
(WT/MIN(96)... | 2026-03-15T15:52:39.877191 | |
375 | 377 | DS377_SEQ13_Report_Of_Panel.pdf | DS377_SEQ13_Report_Of_Panel.pdf | 13 | Report_Of_Panel | Panel Report Action by the Dispute Settlement Body | PANEL_REPORT | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES - TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 1 October 2010 | WT/DS375/13; WT/DS376/13; WT/DS377/11; WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES - TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Panel Report
Action by the Dispute Settlement Body
At its meeting on 21 September 2010, the Dis pute Settlement Body adopted the Panel report
on (, and ).
COMMUNAUTÉS EUROPÉENNES ET LEURS ÉTATS MEMBRES
- TRAITE... | 2026-03-15T15:52:39.877770 | |
375 | 377 | DS377_SEQ14_Report_Of_Panel_01.pdf | DS377_SEQ14_Report_Of_Panel_01.pdf | 14 | Report_Of_Panel | Panel Report | PANEL_REPORT | null | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 16 August 2010 | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 490 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES –
TARIFF TREATMENT OF CERTAIN INFORMATION
TECHNOLOGY PRODUCTS
Reports of the Panel
Note by the Secretariat:
In the disputes WT/DS375, WT/DS376, and WT/DS377, as explained in paragraph 2.4 of the Panel's Findings,
the Panel decided to issue its Reports in the form of a singl... | 2026-03-15T15:52:40.211845 | |
376 | 376 | DS376_SEQ01_Request_To_Join_Consultations_00.pdf | DS376_SEQ01_Request_To_Join_Consultations_00.pdf | 1 | Request_To_Join_Consultations | Request to Join Consultations Communication from Thailand | NUMBERED | null | 0 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 13 June 2008 | WT/DS376/2 | ['Japan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See DS375 and DS377)
On 28 May 2008, Japan requested consultations with the European Communities and its member States with respect to their tariff tre... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request to Join Consultations
Communication from Thailand
The following communication, dated 10 June 2008, from the delegation of Thailand to the
delegation of the European Communities, the delegati on of Japan ... | 2026-03-15T15:52:40.323620 | |
376 | 376 | DS376_SEQ02_Request_To_Join_Consultations_01.pdf | DS376_SEQ02_Request_To_Join_Consultations_01.pdf | 2 | Request_To_Join_Consultations | Request to Join Consultations Communication from Chinese Taipei | NUMBERED | null | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 16 June 2008 | WT/DS376/3 | ['Japan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See DS375 and DS377)
On 28 May 2008, Japan requested consultations with the European Communities and its member States with respect to their tariff tre... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request to Join Consultations
Communication from Chinese Taipei
The following communication, dated 11 June 20 08, from the delegation of Chinese Taipei to
the delegation of the European Communities, the de legat... | 2026-03-15T15:52:40.324267 | |
376 | 376 | DS376_SEQ03_Request_To_Join_Consultations_02.pdf | DS376_SEQ03_Request_To_Join_Consultations_02.pdf | 3 | Request_To_Join_Consultations | Request to Join Consultations Communication from Singapore | NUMBERED | null | 2 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 16 June 2008 | WT/DS376/4 | ['Japan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See DS375 and DS377)
On 28 May 2008, Japan requested consultations with the European Communities and its member States with respect to their tariff tre... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request to Join Consultations
Communication from Singapore
The following communication, dated 11 June 2008, from the delegation of Singapore to the
delegation of the European Communities, the delegati on of Japa... | 2026-03-15T15:52:40.324694 | |
376 | 376 | DS376_SEQ04_Request_To_Join_Consultations_03.pdf | DS376_SEQ04_Request_To_Join_Consultations_03.pdf | 4 | Request_To_Join_Consultations | Request to Join Consultations Communication from the Philippines | NUMBERED | null | 3 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 17 June 2008 | WT/DS376/5; WT/DS376/1 | ['Japan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See DS375 and DS377)
On 28 May 2008, Japan requested consultations with the European Communities and its member States with respect to their tariff tre... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request to Join Consultations
Communication from the Philippines
The following communication, dated 11 June 2008, from the delegation of the Philippines to
the delegation of the European Communities, the de lega... | 2026-03-15T15:52:40.325054 | |
376 | 376 | DS376_SEQ05_Request_To_Join_Consultations_04.pdf | DS376_SEQ05_Request_To_Join_Consultations_04.pdf | 5 | Request_To_Join_Consultations | Request to Join Consultations Communication from the United States | NUMBERED | null | 4 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 17 June 2008 | WT/DS376/6; WT/DS376/1 | ['Japan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See DS375 and DS377)
On 28 May 2008, Japan requested consultations with the European Communities and its member States with respect to their tariff tre... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request to Join Consultations
Communication from the United States
The following communication, dated 12 June 2008, from the delegation of the United States
to the delegation of the European Communities, the del... | 2026-03-15T15:52:40.325521 | |
376 | 376 | DS376_SEQ06_Request_To_Join_Consultations_05.pdf | DS376_SEQ06_Request_To_Join_Consultations_05.pdf | 6 | Request_To_Join_Consultations | Request to Join Consultations Communication from China | NUMBERED | null | 5 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 16 June 2008 | WT/DS376/7 | ['Japan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See DS375 and DS377)
On 28 May 2008, Japan requested consultations with the European Communities and its member States with respect to their tariff tre... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request to Join Consultations
Communication from China
The following communication, dated 12 June 2008, from the delegation of China to the
delegation of the European Communities, the delegati on of Japan and to... | 2026-03-15T15:52:40.325919 | |
376 | 376 | DS376_SEQ07_Request_For_Establishment_Of_Panel.pdf | DS376_SEQ07_Request_For_Establishment_Of_Panel.pdf | 7 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel by the United States, Japan and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 19 August 2008 | WT/DS375/8; WT/DS376/8; WT/DS377/6 | ['Japan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See DS375 and DS377)
On 28 May 2008, Japan requested consultations with the European Communities and its member States with respect to their tariff tre... | 6 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request for the Establishment of a Panel by the United States, Japan and
the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
The following communication, dated 18 Augus t 2008, from the delegations... | 2026-03-15T15:52:40.329647 | |
376 | 376 | DS376_SEQ08_Communication.pdf | DS376_SEQ08_Communication.pdf | 8 | Communication | Communication from the European Union and Japan concerning Article 21.3(c) of the DSU | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 30 November 2010 | WT/DS376/15 | ['Japan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See DS375 and DS377)
On 28 May 2008, Japan requested consultations with the European Communities and its member States with respect to their tariff tre... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the European Union and Japan
concerning Article 21.3(c) of the DSU
The following communication, dated 26 November 2010, from the delegation of the
European Union and the delegation of Japan to... | 2026-03-15T15:52:40.330307 | |
376 | 376 | DS376_SEQ09_Agreement_Art_21_3.pdf | DS376_SEQ09_Agreement_Art_21_3.pdf | 9 | Agreement_Art_21_3 | Agreement under Article 21.3(b) of the DSU | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 6 January 2011 | WT/DS376/16 | ['Japan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See DS375 and DS377)
On 28 May 2008, Japan requested consultations with the European Communities and its member States with respect to their tariff tre... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Agreement under Article 21.3(b) of the DSU
The following communication, dated 20 Dece mber 2010, from the delegation of Japan and
the delegation of the European Union to the Chairman of the Dispute Settlement Bod... | 2026-03-15T15:52:40.330802 | |
376 | 376 | DS376_SEQ10_Understanding.pdf | DS376_SEQ10_Understanding.pdf | 10 | Understanding | Understanding between the European Union 1 and Japan Regarding Procedures under Articles 21 and 22 of the DSU | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 11 July 2011 | WT/DS376/17 | ['Japan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See DS375 and DS377)
On 28 May 2008, Japan requested consultations with the European Communities and its member States with respect to their tariff tre... | 3 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Understanding between the European Union
1 and Japan
Regarding Procedures under Articles 21 and 22 of the DSU
The following communication, dated 6 July 2011, from the delegation of the European Union
and the dele... | 2026-03-15T15:52:40.332347 | |
376 | 376 | DS376_SEQ11_Request_For_Consultations.pdf | DS376_SEQ11_Request_For_Consultations.pdf | 11 | Request_For_Consultations | Request for Consultations by Japan | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 2 June 2008 | WT/DS376/1; G/L/852 | General Council | ['Japan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See DS375 and DS377)
On 28 May 2008, Japan requested consultations with the European Communities and its member States with respect to their tariff tre... | 5 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request for Consultations by Japan
The following communication, dated 28 May 2008, from the delegation of Japan to the
delegation of the European Communities and to th e Chairman of the Dispute Settlement Body, i... | 2026-03-15T15:52:40.335085 |
376 | 377 | DS377_SEQ01_Note_By_Secretariat.pdf | DS377_SEQ01_Note_By_Secretariat.pdf | 1 | Note_By_Secretariat | Constitution of the Panel Established at the Request of the United States, Japan, and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu Note by the Secretariat | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 26 January 2009 | WT/DS375/9; WT/DS376/9; WT/DS377/7; WT/DS376/8; WT/DS377/6 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 2 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Constitution of the Panel Established at the Request of the United States,
Japan, and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
Note by the Secretariat
1. At its meeting on 23 September ... | 2026-03-15T15:52:45.112053 | |
376 | 377 | DS377_SEQ02_Communication_00.pdf | DS377_SEQ02_Communication_00.pdf | 2 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 0 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 23 July 2009 | WT/DS375/10; WT/DS376/10; WT/DS377/8 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the Chairman of the Panel
The following communication, dated 21 July 2 009, addressed to the Chairman of the Dispute
Settlement Body (DSB), is circulated in accordan ce with Article 12.9 of the... | 2026-03-15T15:52:45.112597 | |
376 | 377 | DS377_SEQ03_Communication_01.pdf | DS377_SEQ03_Communication_01.pdf | 3 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 23 December 2009 | WT/DS375/11; WT/DS376/11; WT/DS377/9; WT/DS375/10; WT/DS376/10; WT/DS377/8 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the Chairman of the Panel
The following communication, dated 21 Dece mber 2009, addressed to the Chairman of the
Dispute Settlement Body (DSB), is circulated in accordance with Article 12.9 of ... | 2026-03-15T15:52:45.112872 | |
376 | 377 | DS377_SEQ04_Communication_02.pdf | DS377_SEQ04_Communication_02.pdf | 4 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 2 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 30 April 2010 | WT/DS375/12; WT/DS376/12; WT/DS377/10; WT/DS375/11; WT/DS376/11; WT/DS377/9 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the Chairman of the Panel
The following communication, dated 29 April 2010 , addressed to the Chairman of the Dispute
Settlement Body (DSB), is circulated in accordan ce with Article 12.9 of th... | 2026-03-15T15:52:45.113175 | |
376 | 377 | DS377_SEQ05_Communication_03.pdf | DS377_SEQ05_Communication_03.pdf | 5 | Communication | Communication from the European Union1 | NUMBERED | null | 3 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 15 October 2010 | WT/DS375/14; WT/DS376/14; WT/DS377/12 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the European Union1
The following communication, dated 13 October 2010, from the delegation of the European
Union to the Chairman of the Dispute Settlement Bo dy (DSB), is circulated at the req... | 2026-03-15T15:52:45.113882 | |
376 | 377 | DS377_SEQ06_Status_Report.pdf | DS377_SEQ06_Status_Report.pdf | 6 | Status_Report | Status Report by the European Union1 | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 8 July 2011 | WT/DS375/18; WT/DS376/18; WT/DS377/16 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 2 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Status Report by the European Union1
The following communication, dated 7 July 2011 , from the delegation of the European Union
to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article... | 2026-03-15T15:52:45.114728 | |
376 | 377 | DS377_SEQ07_Executive_Summary_02.pdf | DS377_SEQ07_Executive_Summary_02.pdf | 7 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page A-1 ANNEX A SUBMISSIONS OF THE UNITED STATES CONTENTS PAGE A-1 Executive Summary of the first written submission by the United States | NUMBERED | null | 2 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 40 | ANNEX A
SUBMISSIONS OF THE UNITED STATES
CONTENTS PAGE
A-1 Executive Summary of the first written submission by the
United States
A-2
A-2 Executive Summary of the opening oral statement by the
United States at the first substantive meeting
A-10
A-3 Closing oral statement by the United States at the
first substantive ... | 2026-03-15T15:52:45.138447 | ||
376 | 377 | DS377_SEQ08_Executive_Summary_03.pdf | DS377_SEQ08_Executive_Summary_03.pdf | 8 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page B-1 ANNEX B SUBMISSIONS OF JAPAN CONTENTS PAGE B-1 Executive Summary of the first written submission by Japan B-2 B-2 Executive Summary of the oral statement by Japan at the first substantive meeting | NUMBERED | null | 3 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 34 | ANNEX B
SUBMISSIONS OF JAPAN
CONTENTS PAGE
B-1 Executive Summary of the first written submission by Japan B-2
B-2 Executive Summary of the oral statement by Japan at the first
substantive meeting
B-9
B-3 Executive Summary of the second written submission by Japan B-15
B-4 Executive Summary of the opening oral stateme... | 2026-03-15T15:52:45.156547 | ||
376 | 377 | DS377_SEQ09_Executive_Summary_04.pdf | DS377_SEQ09_Executive_Summary_04.pdf | 9 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page C-1 ANNEX C SUBMISSIONS OF CHINESE TAIPEI CONTENTS PAGE C-1 Executive Summary of the first wr itten submission by Chinese Taipei C-2 C-2 Executive Summary of the oral stat ement by Chinese Taipei at the first substantive meeting | NUMBERED | null | 4 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 40 | ANNEX C
SUBMISSIONS OF CHINESE TAIPEI
CONTENTS PAGE
C-1 Executive Summary of the first wr itten submission by Chinese Taipei C-2
C-2 Executive Summary of the oral stat ement by Chinese Taipei at the first
substantive meeting
C-12
C-3 Closing oral statement by Chinese Taipei at the first substantive
meeting
C-15
C-4 E... | 2026-03-15T15:52:45.178286 | ||
376 | 377 | DS377_SEQ10_Executive_Summary_05.pdf | DS377_SEQ10_Executive_Summary_05.pdf | 10 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page D-1 ANNEX D SUBMISSIONS OF THE EUROPEAN COMMUNITIES CONTENTS PAGE D-1 Executive Summary of the first written submission by the European Communities D-2 | NUMBERED | null | 5 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 44 | ANNEX D
SUBMISSIONS OF THE EUROPEAN COMMUNITIES
CONTENTS PAGE
D-1 Executive Summary of the first written submission by the
European Communities
D-2
D-2 Executive Summary of the oral statement by the
European Communities at the first substantive meeting
D-12
D-3 Executive Summary of the second written submission by th... | 2026-03-15T15:52:45.201129 | ||
376 | 377 | DS377_SEQ11_Executive_Summary_06.pdf | DS377_SEQ11_Executive_Summary_06.pdf | 11 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page E-1 ANNEX E ARGUMENTS OF THE THIRD PARTIES CONTENTS PAGE E-1 Oral statement by Australia at the first substantive meeting E-2 E-2 Executive Summary of the third party submission by China E-6 E-3 Oral statement by China at the first substantive meeting E-8 | NUMBERED | null | 6 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 36 | ANNEX E
ARGUMENTS OF THE THIRD PARTIES
CONTENTS PAGE
E-1 Oral statement by Australia at the first substantive meeting E-2
E-2 Executive Summary of the third party submission by China E-6
E-3 Oral statement by China at the first substantive meeting E-8
E-4 Executive Summary of the third party submission by Costa Rica ... | 2026-03-15T15:52:45.218053 | ||
376 | 377 | DS377_SEQ12_Request_For_Establishment_Of_Panel_07.pdf | DS377_SEQ12_Request_For_Establishment_Of_Panel_07.pdf | 12 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel | NUMBERED | null | 7 | (WT/MIN(96)/16) F-9 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R; WT/DS375/8; WT/DS376/8; WT/DS377/6 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 26 | ANNEX F
JOINT PANEL REQUEST AND MINISTERIAL DECLARATION ON
TRADE IN INFORMATION TECHNOLOGY PRODUCTS (WT/MIN(96)/16)
CONTENTS PAGE
F-1 Request for the Establishment of a Panel by the United States, Japan
and Chinese Taipei (, and ) F-2
F-2 Ministerial Declaration on Trade in Information Technology Products
(WT/MIN(96)... | 2026-03-15T15:52:45.228859 | |
376 | 377 | DS377_SEQ13_Report_Of_Panel.pdf | DS377_SEQ13_Report_Of_Panel.pdf | 13 | Report_Of_Panel | Panel Report Action by the Dispute Settlement Body | PANEL_REPORT | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES - TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 1 October 2010 | WT/DS375/13; WT/DS376/13; WT/DS377/11; WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES - TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Panel Report
Action by the Dispute Settlement Body
At its meeting on 21 September 2010, the Dis pute Settlement Body adopted the Panel report
on (, and ).
COMMUNAUTÉS EUROPÉENNES ET LEURS ÉTATS MEMBRES
- TRAITE... | 2026-03-15T15:52:45.229340 | |
376 | 377 | DS377_SEQ14_Report_Of_Panel_01.pdf | DS377_SEQ14_Report_Of_Panel_01.pdf | 14 | Report_Of_Panel | Panel Report | PANEL_REPORT | null | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 16 August 2010 | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 490 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES –
TARIFF TREATMENT OF CERTAIN INFORMATION
TECHNOLOGY PRODUCTS
Reports of the Panel
Note by the Secretariat:
In the disputes WT/DS375, WT/DS376, and WT/DS377, as explained in paragraph 2.4 of the Panel's Findings,
the Panel decided to issue its Reports in the form of a singl... | 2026-03-15T15:52:45.563611 | |
377 | 376 | DS376_SEQ01_Request_For_Establishment_Of_Panel.pdf | DS376_SEQ01_Request_For_Establishment_Of_Panel.pdf | 1 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel by the United States, Japan and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 19 August 2008 | WT/DS375/8; WT/DS376/8; WT/DS377/6 | ['Japan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'South Korea', 'Philippines', 'Singapore', 'Taiwan', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Japan. (See DS375 and DS377)
On 28 May 2008, Japan requested consultations with the European Communities and its member States with respect to their tariff tre... | 6 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request for the Establishment of a Panel by the United States, Japan and
the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
The following communication, dated 18 Augus t 2008, from the delegations... | 2026-03-15T15:52:45.603436 | |
377 | 377 | DS377_SEQ01_Request_To_Join_Consultations_00.pdf | DS377_SEQ01_Request_To_Join_Consultations_00.pdf | 1 | Request_To_Join_Consultations | Request to Join Consultations Communication from the United States | NUMBERED | null | 0 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 24 June 2008 | WT/DS377/2; WT/DS377/1 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request to Join Consultations
Communication from the United States
The following communication, dated 20 June 2008, from the delegation of the United States
to the delegation of the European Communities, the del... | 2026-03-15T15:52:50.453878 | |
377 | 377 | DS377_SEQ02_Request_To_Join_Consultations_01.pdf | DS377_SEQ02_Request_To_Join_Consultations_01.pdf | 2 | Request_To_Join_Consultations | Request to Join Consultations Communication from China | NUMBERED | null | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 26 June 2008 | WT/DS377/3 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request to Join Consultations
Communication from China
The following communication, dated 24 June 2008, from the delegation of China to the
delegation of the European Communities, the delegation of Chinese Taipe... | 2026-03-15T15:52:50.454339 | |
377 | 377 | DS377_SEQ03_Request_To_Join_Consultations_02.pdf | DS377_SEQ03_Request_To_Join_Consultations_02.pdf | 3 | Request_To_Join_Consultations | Request to Join Consultations Communication from Japan | NUMBERED | null | 2 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 30 June 2008 | WT/DS377/4 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request to Join Consultations
Communication from Japan
The following communication, dated 26 June 2008, from the delegation of Japan to the
delegation of the European Communities, the delegation of Chinese Taipe... | 2026-03-15T15:52:50.454871 | |
377 | 377 | DS377_SEQ04_Request_To_Join_Consultations_03.pdf | DS377_SEQ04_Request_To_Join_Consultations_03.pdf | 4 | Request_To_Join_Consultations | Acceptance by the European Communities of the Requests to Join Consultations China, Japan and the United States notified the Dispute Settlement Body (DSB) of their desire to be joined in the consultations requested by Chinese Taipei, pursuant to Article 4.11 of the DSU. The delegation of the European Communiti es infor... | NUMBERED | null | 3 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 3 July 2008 | WT/DS377/5 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Acceptance by the European Communities of the Requests to Join Consultations
China, Japan and the United States notified the Dispute Settlement Body (DSB) of their desire
to be joined in the consultations request... | 2026-03-15T15:52:50.455445 | |
377 | 377 | DS377_SEQ05_Note_By_Secretariat.pdf | DS377_SEQ05_Note_By_Secretariat.pdf | 5 | Note_By_Secretariat | Constitution of the Panel Established at the Request of the United States, Japan, and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu Note by the Secretariat | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 26 January 2009 | WT/DS375/9; WT/DS376/9; WT/DS377/7; WT/DS376/8; WT/DS377/6 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 2 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Constitution of the Panel Established at the Request of the United States,
Japan, and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
Note by the Secretariat
1. At its meeting on 23 September ... | 2026-03-15T15:52:50.456433 | |
377 | 377 | DS377_SEQ06_Communication_00.pdf | DS377_SEQ06_Communication_00.pdf | 6 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 0 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 23 July 2009 | WT/DS375/10; WT/DS376/10; WT/DS377/8 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the Chairman of the Panel
The following communication, dated 21 July 2 009, addressed to the Chairman of the Dispute
Settlement Body (DSB), is circulated in accordan ce with Article 12.9 of the... | 2026-03-15T15:52:50.456923 | |
377 | 377 | DS377_SEQ07_Communication_01.pdf | DS377_SEQ07_Communication_01.pdf | 7 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 23 December 2009 | WT/DS375/11; WT/DS376/11; WT/DS377/9; WT/DS375/10; WT/DS376/10; WT/DS377/8 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the Chairman of the Panel
The following communication, dated 21 Dece mber 2009, addressed to the Chairman of the
Dispute Settlement Body (DSB), is circulated in accordance with Article 12.9 of ... | 2026-03-15T15:52:50.457192 | |
377 | 377 | DS377_SEQ08_Communication_02.pdf | DS377_SEQ08_Communication_02.pdf | 8 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 2 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 30 April 2010 | WT/DS375/12; WT/DS376/12; WT/DS377/10; WT/DS375/11; WT/DS376/11; WT/DS377/9 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the Chairman of the Panel
The following communication, dated 29 April 2010 , addressed to the Chairman of the Dispute
Settlement Body (DSB), is circulated in accordan ce with Article 12.9 of th... | 2026-03-15T15:52:50.457446 | |
377 | 377 | DS377_SEQ09_Communication_03.pdf | DS377_SEQ09_Communication_03.pdf | 9 | Communication | Communication from the European Union1 | NUMBERED | null | 3 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 15 October 2010 | WT/DS375/14; WT/DS376/14; WT/DS377/12 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the European Union1
The following communication, dated 13 October 2010, from the delegation of the European
Union to the Chairman of the Dispute Settlement Bo dy (DSB), is circulated at the req... | 2026-03-15T15:52:50.458064 | |
377 | 377 | DS377_SEQ10_Communication_04.pdf | DS377_SEQ10_Communication_04.pdf | 10 | Communication | Communication from the European Union and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu concerning Article 21.3(c) of the DSU | NUMBERED | null | 4 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 30 November 2010 | WT/DS377/13 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Communication from the European Union and the Separate Customs Territory of
Taiwan, Penghu, Kinmen and Matsu concerning Article 21.3(c) of the DSU
The following communication, dated 26 November 2010, from the de... | 2026-03-15T15:52:50.458697 | |
377 | 377 | DS377_SEQ11_Agreement_Art_21_3.pdf | DS377_SEQ11_Agreement_Art_21_3.pdf | 11 | Agreement_Art_21_3 | Agreement under Article 21.3(b) of the DSU | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 6 January 2011 | WT/DS377/14 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Agreement under Article 21.3(b) of the DSU
The following communication, dated 20 Decembe r 2010, from the delegation of the Separate
Customs Territory of Taiwan, Penghu, Kinmen and Matsu and the delegation of the... | 2026-03-15T15:52:50.459176 | |
377 | 377 | DS377_SEQ12_Understanding.pdf | DS377_SEQ12_Understanding.pdf | 12 | Understanding | Understanding between the European Union 1 and Chinese Taipei Regarding Procedures under Articles 21 and 22 of the DSU | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 11 July 2011 | WT/DS377/15 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 3 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Understanding between the European Union
1 and Chinese Taipei
Regarding Procedures under Articles 21 and 22 of the DSU
The following communication, dated 6 July 2011, from the delegation of the European Union
and... | 2026-03-15T15:52:50.460832 | |
377 | 377 | DS377_SEQ13_Status_Report.pdf | DS377_SEQ13_Status_Report.pdf | 13 | Status_Report | Status Report by the European Union1 | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 8 July 2011 | WT/DS375/18; WT/DS376/18; WT/DS377/16 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 2 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Status Report by the European Union1
The following communication, dated 7 July 2011 , from the delegation of the European Union
to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article... | 2026-03-15T15:52:50.461642 | |
377 | 377 | DS377_SEQ14_Request_For_Consultations.pdf | DS377_SEQ14_Request_For_Consultations.pdf | 14 | Request_For_Consultations | Request for Consultations by Chinese Taipei | NUMBERED | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 16 June 2008 | WT/DS377/1; G/L/853 | General Council | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 3 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Request for Consultations by Chinese Taipei
The following communication, dated 12 June 20 08, from the delegation of Chinese Taipei to
the delegation of the European Communities and to the Chairman of the Dispute... | 2026-03-15T15:52:50.463713 |
377 | 377 | DS377_SEQ15_Executive_Summary_02.pdf | DS377_SEQ15_Executive_Summary_02.pdf | 15 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page A-1 ANNEX A SUBMISSIONS OF THE UNITED STATES CONTENTS PAGE A-1 Executive Summary of the first written submission by the United States | NUMBERED | null | 2 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 40 | ANNEX A
SUBMISSIONS OF THE UNITED STATES
CONTENTS PAGE
A-1 Executive Summary of the first written submission by the
United States
A-2
A-2 Executive Summary of the opening oral statement by the
United States at the first substantive meeting
A-10
A-3 Closing oral statement by the United States at the
first substantive ... | 2026-03-15T15:52:50.487161 | ||
377 | 377 | DS377_SEQ16_Executive_Summary_03.pdf | DS377_SEQ16_Executive_Summary_03.pdf | 16 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page B-1 ANNEX B SUBMISSIONS OF JAPAN CONTENTS PAGE B-1 Executive Summary of the first written submission by Japan B-2 B-2 Executive Summary of the oral statement by Japan at the first substantive meeting | NUMBERED | null | 3 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 34 | ANNEX B
SUBMISSIONS OF JAPAN
CONTENTS PAGE
B-1 Executive Summary of the first written submission by Japan B-2
B-2 Executive Summary of the oral statement by Japan at the first
substantive meeting
B-9
B-3 Executive Summary of the second written submission by Japan B-15
B-4 Executive Summary of the opening oral stateme... | 2026-03-15T15:52:50.505272 | ||
377 | 377 | DS377_SEQ17_Executive_Summary_04.pdf | DS377_SEQ17_Executive_Summary_04.pdf | 17 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page C-1 ANNEX C SUBMISSIONS OF CHINESE TAIPEI CONTENTS PAGE C-1 Executive Summary of the first wr itten submission by Chinese Taipei C-2 C-2 Executive Summary of the oral stat ement by Chinese Taipei at the first substantive meeting | NUMBERED | null | 4 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 40 | ANNEX C
SUBMISSIONS OF CHINESE TAIPEI
CONTENTS PAGE
C-1 Executive Summary of the first wr itten submission by Chinese Taipei C-2
C-2 Executive Summary of the oral stat ement by Chinese Taipei at the first
substantive meeting
C-12
C-3 Closing oral statement by Chinese Taipei at the first substantive
meeting
C-15
C-4 E... | 2026-03-15T15:52:50.526519 | ||
377 | 377 | DS377_SEQ18_Executive_Summary_05.pdf | DS377_SEQ18_Executive_Summary_05.pdf | 18 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page D-1 ANNEX D SUBMISSIONS OF THE EUROPEAN COMMUNITIES CONTENTS PAGE D-1 Executive Summary of the first written submission by the European Communities D-2 | NUMBERED | null | 5 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 44 | ANNEX D
SUBMISSIONS OF THE EUROPEAN COMMUNITIES
CONTENTS PAGE
D-1 Executive Summary of the first written submission by the
European Communities
D-2
D-2 Executive Summary of the oral statement by the
European Communities at the first substantive meeting
D-12
D-3 Executive Summary of the second written submission by th... | 2026-03-15T15:52:50.549199 | ||
377 | 377 | DS377_SEQ19_Executive_Summary_06.pdf | DS377_SEQ19_Executive_Summary_06.pdf | 19 | Executive_Summary | WT/DS375/R WT/DS376/R WT/DS377/R Page E-1 ANNEX E ARGUMENTS OF THE THIRD PARTIES CONTENTS PAGE E-1 Oral statement by Australia at the first substantive meeting E-2 E-2 Executive Summary of the third party submission by China E-6 E-3 Oral statement by China at the first substantive meeting E-8 | NUMBERED | null | 6 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 36 | ANNEX E
ARGUMENTS OF THE THIRD PARTIES
CONTENTS PAGE
E-1 Oral statement by Australia at the first substantive meeting E-2
E-2 Executive Summary of the third party submission by China E-6
E-3 Oral statement by China at the first substantive meeting E-8
E-4 Executive Summary of the third party submission by Costa Rica ... | 2026-03-15T15:52:50.565811 | ||
377 | 377 | DS377_SEQ20_Request_For_Establishment_Of_Panel_07.pdf | DS377_SEQ20_Request_For_Establishment_Of_Panel_07.pdf | 20 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel | NUMBERED | null | 7 | (WT/MIN(96)/16) F-9 | null | WT/DS375/R; WT/DS376/R; WT/DS377/R; WT/DS375/8; WT/DS376/8; WT/DS377/6 | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 26 | ANNEX F
JOINT PANEL REQUEST AND MINISTERIAL DECLARATION ON
TRADE IN INFORMATION TECHNOLOGY PRODUCTS (WT/MIN(96)/16)
CONTENTS PAGE
F-1 Request for the Establishment of a Panel by the United States, Japan
and Chinese Taipei (, and ) F-2
F-2 Ministerial Declaration on Trade in Information Technology Products
(WT/MIN(96)... | 2026-03-15T15:52:50.576268 | |
377 | 377 | DS377_SEQ21_Report_Of_Panel.pdf | DS377_SEQ21_Report_Of_Panel.pdf | 21 | Report_Of_Panel | Panel Report Action by the Dispute Settlement Body | PANEL_REPORT | null | null | EUROPEAN COMMUNITIES AND ITS MEMBER STATES - TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 1 October 2010 | WT/DS375/13; WT/DS376/13; WT/DS377/11; WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES - TARIFF TREATMENT
OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS
Panel Report
Action by the Dispute Settlement Body
At its meeting on 21 September 2010, the Dis pute Settlement Body adopted the Panel report
on (, and ).
COMMUNAUTÉS EUROPÉENNES ET LEURS ÉTATS MEMBRES
- TRAITE... | 2026-03-15T15:52:50.576735 | |
377 | 377 | DS377_SEQ22_Report_Of_Panel_01.pdf | DS377_SEQ22_Report_Of_Panel_01.pdf | 22 | Report_Of_Panel | Panel Report | PANEL_REPORT | null | 1 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES – TARIFF TREATMENT OF CERTAIN INFORMATION TECHNOLOGY PRODUCTS | 16 August 2010 | WT/DS375/R; WT/DS376/R; WT/DS377/R | ['Taiwan'] | ['EU'] | ['Australia', 'Brazil', 'China', 'Costa Rica', 'Hong Kong', 'India', 'Japan', 'South Korea', 'Philippines', 'Singapore', 'Thailand', 'Turkey', 'U.S.', 'Vietnam'] | Panel | Art. II:1, X:1, X:2, XXIII GATT 1994 | The summary below was up-to-date at
15 July 2011
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Chinese Taipei. (See DS375 and DS376)
On 12 June 2008, Chinese Taipei requested consultations with the European Communities and its member States with respect to t... | 490 | EUROPEAN COMMUNITIES AND ITS MEMBER STATES –
TARIFF TREATMENT OF CERTAIN INFORMATION
TECHNOLOGY PRODUCTS
Reports of the Panel
Note by the Secretariat:
In the disputes WT/DS375, WT/DS376, and WT/DS377, as explained in paragraph 2.4 of the Panel's Findings,
the Panel decided to issue its Reports in the form of a singl... | 2026-03-15T15:52:50.907196 | |
378 | 337 | DS337_SEQ01_Communication_Add.pdf | DS337_SEQ01_Communication_Add.pdf | 1 | Communication | Joint Communication from China and Canada | NUMBERED | Add | null | CHINA – MEASURES AFFECTING FINANCIAL INFORMATION SERVICES AND FOREIGN FINANCIAL INFORMATION SUPPLIERS | 9 December 2008 | WT/DS378/3; S/L/337 | General Agreement on Trade in Services (GATS) | ['Norway'] | ['EU'] | ['Canada', 'China', 'Hong Kong', 'Japan', 'South Korea', 'U.S.'] | Panel | Art. 5, 5.1, 5.2, 5.3, 5.4, 2, 2.1, 2.6, 6.10, 2.2, 2.2.1, 2.2.2, 2.2.1.1, 6.8, Annex II, 3, 3.1, 3.2, 3.4, 3.5, 3.6 Anti-dumpingArt. VI:1 GATT 1994Art. 4.1, 9, 9.1, 9.2, 9.3, 9.4 Anti-dumpingArt. VI GATT 1994Art. 6.2, 6.4, 6.5.1, 6.7, Annex I, 6.9, 12.2, 12.2.2 Anti-dumping | The summary below was up-to-date at
24 February 2010
See also: One-page summary of key findings of this dispute
Consultations
Complaint by Norway.
On 17 March 2006, Norway requested consultations with the European Communities concerning Council Regulation (EC) No. 85/2006 of 17 January 2006 imposing a definitive... | 4 | CHINA – MEASURES AFFECTING FINANCIAL INFORMATION SERVICES AND
FOREIGN FINANCIAL INFORMATION SUPPLIERS
Joint Communication from China and Canada
The following communication, dated 4 December 2008, from the delegation of China and the
delegation of Canada, is circulated at the request of those delegations.
The Govern... | 2026-03-15T15:52:50.923900 |
378 | 378 | DS378_SEQ01_Request_For_Consultations.pdf | DS378_SEQ01_Request_For_Consultations.pdf | 1 | Request_For_Consultations | Request for Consultations by Canada | NUMBERED | null | null | CHINA - MEASURES AFFECTING FINANCIAL INFORMATION SERVICES AND FOREIGN FINANCIAL INFORMATION SUPPLIERS | 23 June 2008 | WT/DS378/1; S/L/337 | General Agreement on Trade in Services (GATS) | ['Canada'] | ['China'] | [] | Consultation | Art. XVI, XVII, XVIII Services (GATS)Part I, para. 1.2 Protocol of Accession | The summary below was up-to-date at
24 February 2010
Consultations
Complaint by Canada.
On 20 June 2008, Canada requested consultations with China with respect to measures affecting financial information services and foreign financial information service suppliers in China.
Canada makes claims against a number of Chine... | 3 | CHINA - MEASURES AFFECTING FINANCIAL INFORMATION SERVICES AND
FOREIGN FINANCIAL INFORMATION SUPPLIERS
Request for Consultations by Canada
The following communication, dated 20 June 2008, from the delegation of Canada to the
delegation of China and to the Chairman of the Dis pute Settlement Body, is ci rculated in ac... | 2026-03-15T15:52:50.944285 |
378 | 378 | DS378_SEQ02_Request_To_Join_Consultations.pdf | DS378_SEQ02_Request_To_Join_Consultations.pdf | 2 | Request_To_Join_Consultations | Request to Join Consultations Communication from the United States | NUMBERED | null | null | CHINA – MEASURES AFFECTING FINANCIAL INFORMATION SERVICES AND FOREIGN FINANCIAL INFORMATION SUPPLIERS | 4 July 2008 | WT/DS378/2; WT/DS378/1 | ['Canada'] | ['China'] | [] | Consultation | Art. XVI, XVII, XVIII Services (GATS)Part I, para. 1.2 Protocol of Accession | The summary below was up-to-date at
24 February 2010
Consultations
Complaint by Canada.
On 20 June 2008, Canada requested consultations with China with respect to measures affecting financial information services and foreign financial information service suppliers in China.
Canada makes claims against a number of Chine... | 1 | CHINA – MEASURES AFFECTING FINANCIAL INFORMATION SERVICES
AND FOREIGN FINANCIAL INFORMATION SUPPLIERS
Request to Join Consultations
Communication from the United States
The following communication, dated 2 July 2008, from the delegation of the United States to
the delegation of China, the delegation of Canada and t... | 2026-03-15T15:52:50.944782 | |
379 | 379 | DS379_SEQ01_Request_For_Consultations_01.pdf | DS379_SEQ01_Request_For_Consultations_01.pdf | 1 | Request_For_Consultations | Request for Consultations by China | NUMBERED | null | 1 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 22 September 2008 | WT/DS379/1; G/L/854; G/SCM/D78/1; G/ADP/D74/1 | Anti-Dumping Practices (ADP); General Council; Subsidies and Countervailing Measures (SCM) | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 6 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Request for Consultations by China
The following communication, dated 19 Septem ber 2008, from the delegation of China to the
delegation of the United States and to the Chairman of the Dispute Settlement Body, is circula... | 2026-03-15T15:52:55.597303 |
379 | 379 | DS379_SEQ02_Request_For_Establishment_Of_Panel.pdf | DS379_SEQ02_Request_For_Establishment_Of_Panel.pdf | 2 | Request_For_Establishment_Of_Panel | Request for the Establishment of a Panel by China | NUMBERED | null | null | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 12 December 2008 | WT/DS379/2 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 8 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Request for the Establishment of a Panel by China
The following communication, dated 9 December 2008, from the delegation of China to the
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of ... | 2026-03-15T15:52:55.601987 | |
379 | 379 | DS379_SEQ03_Note_By_Secretariat.pdf | DS379_SEQ03_Note_By_Secretariat.pdf | 3 | Note_By_Secretariat | Constitution of the Panel Established at the Request of China Note by the Secretariat | NUMBERED | null | null | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 11 March 2009 | WT/DS379/3; WT/DS379/2; WT/DS379/2 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 1 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Constitution of the Panel Established at the Request of China
Note by the Secretariat
1. At its meeting on 20 January 2009, the Disput e Settlement Body ("DSB") established a Panel
pursuant to the request of China in doc... | 2026-03-15T15:52:55.602652 | |
379 | 379 | DS379_SEQ04_Communication_00.pdf | DS379_SEQ04_Communication_00.pdf | 4 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 0 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 20 November 2009 | WT/DS379/4 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 1 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Communication from the Chairman of the Panel
The following communication, dated 17 Nove mber 2009, addressed to the Chairman of the
Dispute Settlement Body (DSB), is circulated in accordance with Article 12.9 of the Disp... | 2026-03-15T15:52:55.603160 | |
379 | 379 | DS379_SEQ05_Communication_01.pdf | DS379_SEQ05_Communication_01.pdf | 5 | Communication | Communication from the Chairman of the Panel | NUMBERED | null | 1 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 29 March 2010 | WT/DS379/5 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 1 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Communication from the Chairman of the Panel
The following communication, dated 25 Marc h 2010, addressed to the Chairman of the
Dispute Settlement Body (DSB), is circulated in accordance with Article 12.9 of the Dispute... | 2026-03-15T15:52:55.603647 | |
379 | 379 | DS379_SEQ06_Notification_Of_Appeal.pdf | DS379_SEQ06_Notification_Of_Appeal.pdf | 6 | Notification_Of_Appeal | Notification of an Appeal by China under Article 16.4 and Article 17 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), and under Rule 20(1) of the Working Procedures for Appellate Review | NUMBERED | null | null | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 6 December 2010 | WT/DS379/6 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 4 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND
COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA
Notification of an Appeal by China
under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 20(1) of the Working Procedures for Appellate Re... | 2026-03-15T15:52:55.606123 | |
379 | 379 | DS379_SEQ07_Communication_02.pdf | DS379_SEQ07_Communication_02.pdf | 7 | Communication | Communication from the United States and China | NUMBERED | null | 2 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 8 February 2011 | WT/DS379/7 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 1 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Communication from the United States and China
The following communication, dated 17 Dece mber 2010, from the delegation of the United
States and the delegation of China to the Presiding Member of the Appellate Body Divi... | 2026-03-15T15:52:55.606727 | |
379 | 379 | DS379_SEQ08_Communication_03.pdf | DS379_SEQ08_Communication_03.pdf | 8 | Communication | Communication from the Appellate Body | NUMBERED | null | 3 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 16 March 2011 | WT/DS379/8; WT/DS379/AB/R. | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 1 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND
COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA
Communication from the Appellate Body
The following communication, dated 11 March 2011, from the Chairman of the Appellate
Body addressed to the Chairman of the Dispute Settlement Body, is circulated in accordance with
A... | 2026-03-15T15:52:55.607072 | |
379 | 379 | DS379_SEQ09_Communication_04.pdf | DS379_SEQ09_Communication_04.pdf | 9 | Communication | Communication from China and the United States concerning Article 21.3(c) of the DSU | NUMBERED | null | 4 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 13 May 2011 | WT/DS379/10 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 1 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Communication from China and the United States concerning
Article 21.3(c) of the DSU
The following communication, dated 10 May 2011, from the delegation of China and the
delegation of the United States to the Chairman o... | 2026-03-15T15:52:55.607709 | |
379 | 379 | DS379_SEQ10_Agreement_Art_21_3_00.pdf | DS379_SEQ10_Agreement_Art_21_3_00.pdf | 10 | Agreement_Art_21_3 | Agreement under Article 21.3(b) of the DSU | NUMBERED | null | 0 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 8 July 2011 | WT/DS379/11 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 1 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Agreement under Article 21.3(b) of the DSU
The following communication, dated 5 July 2011, from the delegation of China and the
delegation of the United States to the Chairperson of the Dispute Settlement Body, is circul... | 2026-03-15T15:52:55.608124 | |
379 | 379 | DS379_SEQ11_Status_Report.pdf | DS379_SEQ11_Status_Report.pdf | 11 | Status_Report | Status Report by the United States | NUMBERED | null | null | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 10 January 2012 | WT/DS379/12 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 1 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Status Report by the United States
The following communication, dated 9 January 2012, from the delegation of the United States
to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 21.6 of ... | 2026-03-15T15:52:55.608763 | |
379 | 379 | DS379_SEQ12_Status_Report_Add.pdf | DS379_SEQ12_Status_Report_Add.pdf | 12 | Status_Report | Status Report by the United States Addendum | NUMBERED | Add | null | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 10 February 2012 | WT/DS379/12/Add.1 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 2 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Status Report by the United States
Addendum
The following communication, dated 9 February 2012, from the delegation of the
United States to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Artic... | 2026-03-15T15:52:55.609448 | |
379 | 379 | DS379_SEQ13_Status_Report_Add2.pdf | DS379_SEQ13_Status_Report_Add2.pdf | 13 | Status_Report | Status Report by the United States Addendum | NUMBERED | Add | null | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 13 March 2012 | WT/DS379/12/Add.2 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 2 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Status Report by the United States
Addendum
The following communication, dated 12 March 2012, from the delegation of the United States
to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article... | 2026-03-15T15:52:55.610098 | |
379 | 379 | DS379_SEQ14_Status_Report_Add3.pdf | DS379_SEQ14_Status_Report_Add3.pdf | 14 | Status_Report | Status Report by the United States Addendum | NUMBERED | Add | null | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 13 April 2012 | WT/DS379/12/Add.3 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 2 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Status Report by the United States
Addendum
The following communication, dated 12 April 2 012, from the delegation of the United States
to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Articl... | 2026-03-15T15:52:55.611003 | |
379 | 379 | DS379_SEQ15_Status_Report_Add4.pdf | DS379_SEQ15_Status_Report_Add4.pdf | 15 | Status_Report | Status Report by the United States Addendum | NUMBERED | Add | null | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 14 May 2012 | WT/DS379/12/Add.4 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 2 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Status Report by the United States
Addendum
The following communication, dated 11 May 2012, from the delegation of the United States
to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 2... | 2026-03-15T15:52:55.611887 | |
379 | 379 | DS379_SEQ16_Status_Report_Add5.pdf | DS379_SEQ16_Status_Report_Add5.pdf | 16 | Status_Report | Status Report by the United States Addendum | NUMBERED | Add | null | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 15 June 2012 | WT/DS379/12/Add.5 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 2 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Status Report by the United States
Addendum
The following communication, dated 14 June 2012, from the delegation of the United States
to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article ... | 2026-03-15T15:52:55.612893 | |
379 | 379 | DS379_SEQ17_Status_Report_Add6.pdf | DS379_SEQ17_Status_Report_Add6.pdf | 17 | Status_Report | Status Report by the United States Addendum | NUMBERED | Add | null | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 13 July 2012 | WT/DS379/12/Add.6 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 2 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Status Report by the United States
Addendum
The following communication, dated 12 July 2 012, from the delegation of the United States
to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article... | 2026-03-15T15:52:55.613943 | |
379 | 379 | DS379_SEQ18_Status_Report_Add7.pdf | DS379_SEQ18_Status_Report_Add7.pdf | 18 | Status_Report | Status Report by the United States Addendum | NUMBERED | Add | null | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 21 August 2012 | WT/DS379/12/Add.7 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 2 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Status Report by the United States
Addendum
The following communication, dated 20 August 2012, from the delegation of the
United States to the Chairperson of the Dispute Settlement Body, is circulated pursuant to Articl... | 2026-03-15T15:52:55.615037 | |
379 | 379 | DS379_SEQ19_Agreement_Art_21_3_01.pdf | DS379_SEQ19_Agreement_Art_21_3_01.pdf | 19 | Agreement_Art_21_3 | Modification of the Agreement under Article 21.3(b) of the DSU | NUMBERED | null | 1 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 19 January 2012 | WT/DS379/13 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 1 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Modification of the Agreement under Article 21.3(b) of the DSU
The following communication, dated 17 January 2012, from the delegation of China and the
delegation of the United States to the Chairperson of the Dispute Se... | 2026-03-15T15:52:55.615566 | |
379 | 379 | DS379_SEQ20_Understanding.pdf | DS379_SEQ20_Understanding.pdf | 20 | Understanding | Understanding between China and the United States Regarding Procedures under Articles 21 and 22 of the DSU | NUMBERED | null | null | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 16 May 2012 | WT/DS379/14 | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 3 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Understanding between China and the United States
Regarding Procedures under Articles 21 and 22 of the DSU
The following communication, dated 11 May 2012, from the delegation of China and the
delegation of the United Sta... | 2026-03-15T15:52:55.616972 | |
379 | 379 | DS379_SEQ21_Executive_Summary_02.pdf | DS379_SEQ21_Executive_Summary_02.pdf | 21 | Executive_Summary | WT/DS379/R Page A-1 ANNEX A EXECUTIVE SUMMARIES OF FIRST WRITTEN SUBMISSIONS OF THE PARTIES Contents Page Annex A-1 Executive Summary of the First Written Submission of China A-2 | NUMBERED | null | 2 | null | WT/DS379/R | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 32 | ANNEX A
EXECUTIVE SUMMARIES OF FIRST WRITTEN
SUBMISSIONS OF THE PARTIES
Contents Page
Annex A-1 Executive Summary of the First Written Submission of China A-2
Annex A-2 Executive Summary of the First Written Submission of the
United States
A-11
Annex A-3 Response of China to the U.S. Request for Preliminary Rulings A... | 2026-03-15T15:52:55.637252 | ||
379 | 379 | DS379_SEQ22_Executive_Summary_03.pdf | DS379_SEQ22_Executive_Summary_03.pdf | 22 | Executive_Summary | WT/DS379/R Page B-1 ANNEX B THIRD PARTY SUBMISSIONS Contents Page Annex B-1 Executive Summary of the Third Party Submission of Argentina B-2 Annex B-2 Executive Summary of the Third Party Submission of Australia B-7 Annex B-3 Executive Summary of the Third Party Submission of Brazil B-13 | NUMBERED | null | 3 | null | WT/DS379/R | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 76 | ANNEX B
THIRD PARTY SUBMISSIONS
Contents Page
Annex B-1 Executive Summary of the Third Party Submission of Argentina B-2
Annex B-2 Executive Summary of the Third Party Submission of Australia B-7
Annex B-3 Executive Summary of the Third Party Submission of Brazil B-13
Annex B-4 Executive Summary of the Third Party Su... | 2026-03-15T15:52:55.677280 | ||
379 | 379 | DS379_SEQ23_Submission_04.pdf | DS379_SEQ23_Submission_04.pdf | 23 | Submission | WT/DS379/R Page C-1 ANNEX C EXECUTIVE SUMMARIES OF SECOND WRITTEN SUBMISSIONS OF THE PARTIES Contents Page | NUMBERED | null | 4 | null | WT/DS379/R | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 22 | ANNEX C
EXECUTIVE SUMMARIES OF SECOND WRITTEN
SUBMISSIONS OF THE PARTIES
Contents Page
Annex C-1 Executive Summary of the Second Written Submission of China C-2
Annex C-2 Executive Summary of the Second Written Submission of the
United States
C-12
ANNEX C-1
EXECUTIVE SUMMARY OF THE SECOND
WRITTEN SUBMISSION OF CHIN... | 2026-03-15T15:52:55.689890 | ||
379 | 379 | DS379_SEQ24_Executive_Summary_05.pdf | DS379_SEQ24_Executive_Summary_05.pdf | 24 | Executive_Summary | WT/DS379/R Page D-1 ANNEX D ORAL STATEMENTS OF THE PARTIES, FIRST AND SECOND PANEL MEETINGS Contents Page Annex D-1 Executive Summary of the Oral Statement of China – First Meeting D-2 Annex D-2 Executive Summary of the Open ing Statement of the United States | NUMBERED | null | 5 | null | WT/DS379/R | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 28 | ANNEX D
ORAL STATEMENTS OF THE PARTIES, FIRST AND
SECOND PANEL MEETINGS
Contents Page
Annex D-1 Executive Summary of the Oral Statement of China – First Meeting D-2
Annex D-2 Executive Summary of the Open ing Statement of the United States
– First Meeting D-7
Annex D-3 Oral Statement of the United States regarding th... | 2026-03-15T15:52:55.706211 | ||
379 | 379 | DS379_SEQ25_Request_For_Establishment_Of_Panel_07.pdf | DS379_SEQ25_Request_For_Establishment_Of_Panel_07.pdf | 25 | Request_For_Establishment_Of_Panel | WT/DS379/R Page F-1 ANNEX F REQUEST FOR THE ESTABLISHMENT OF A PANEL Contents Page Annex F-1 Request for the Establishment of a Panel by China F-2 | NUMBERED | null | 7 | null | WT/DS379/R | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 10 | ANNEX F
REQUEST FOR THE ESTABLISHMENT
OF A PANEL
Contents Page
Annex F-1 Request for the Establishment of a Panel by China F-2
ANNEX F-1
REQUEST FOR THE ESTABLISHMENT
OF A PANEL
UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING
DUTIES ON CERTAIN PRODUCTS FROM CHINA
Request for the Establishment of a Pane... | 2026-03-15T15:52:55.710535 | ||
379 | 379 | DS379_SEQ26_Report_Of_Panel_01.pdf | DS379_SEQ26_Report_Of_Panel_01.pdf | 26 | Report_Of_Panel | Report of the Panel | PANEL_REPORT | null | 1 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND COUNTERVAILING DUTIES ON CERTAIN PRODUCTS FROM CHINA | 22 October 2010 | WT/DS379/R | ['China'] | ['U.S.'] | ['Argentina', 'Australia', 'Bahrain', 'Brazil', 'Canada', 'EU', 'India', 'Japan', 'Kuwait, the State of', 'Mexico', 'Norway', 'Saudi Arabia', 'Taiwan', 'Turkey'] | Appellate Body | Art. I, VI GATT 1994Art. 1, 2, 10, 12, 13, 14, 19, 32 Subsidies and Countervailing Measures (SCM)Art. 1, 2, 6, 9, 18, Annex II Anti-dumpingArt. 15 Protocol of Accession | The summary below was up-to-date at
12 October 2012
See also: One-page summary of key findings of this dispute
Consultations
Complaint by China.
On 19 September 2008, China requested consultations concerning the definitive anti-dumping and countervailing duties imposed by the United States pursuant to the fina... | 304 | UNITED STATES – DEFINITIVE ANTI-DUMPING AND
COUNTERVAILING DUTIES ON CERTAIN PRODUCTS
FROM CHINA
Report of the Panel
I. INTRODUCTION
A. COMPLAINT OF CHINA
1.1 On 19 September 2008, China requested consu ltations with the United States pursuant to
Article 4 of the Understanding on Rules and Procedures Governing the Se... | 2026-03-15T15:52:55.935606 |
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