DISPUTE SETTLEMENT

DS: European Communities — Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

  

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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by China. 

On 31 July 2009, China requested consultations with the European Communities concerning Article 9(5) of Council Regulation (EC) No. 384/96 (the EC's Basic Anti‑Dumping Regulation) which provides that in case of imports from non-market economy countries, the duty shall be specified for the supplying country concerned and not for each supplier and that an individual duty will only be specified for exporters that demonstrate that they fulfil the criteria listed in that provision. 

According to China, Article 9(5) of the Basic Anti-Dumping Regulation is inconsistent, as such, with the European Communities' obligations under:

  • Article XVI:4 of the WTO Agreement;
     
  • Articles I:1, VI:1, and X:3(a) of the GATT 1994; and
     
  • Articles 6.10, 9.2, 9.3, 9.4, 12.2.2 and 18.4 of the Anti-Dumping Agreement.

China also requests consultations regarding Council Regulation (EC) No 91/2009 imposing definitive anti-dumping duties on imports of certain iron or steel fasteners originating in the People's Republic of China. 

China considers that the imposition of definitive anti-dumping duties on imports of certain iron or steel fasteners originating in the People's Republic of China is inconsistent with the European Communities' obligations under:

  • Articles VI and X:3(a) of the GATT 1994;
     
  • Articles 1, 2.1, 2.2. 2.4, 2.6, 3.1, 3.2, 3.4, 3.5, 4.1, 5.4, 6.1, 6.2, 6.4, 6.5, 6.10, 9.2, 9.4 and 17.6(i) of the Anti-Dumping Agreement;  as well as
     
  • Part I, paragraph 15 of China's Protocol of Accession.
      
  • In addition, China also refers to Articles 9.3 and 12.2.2 of the Anti-Dumping Agreement. 

China claims that the European Communities acted inconsistently with various procedural obligations in the Anti‑Dumping Agreement.  China also claims that the European Communities has acted inconsistently with its obligations under the Anti-Dumping Agreement, the GATT 1994, and the Protocol of Accession through the application of Article 9(5) of the Basic Anti-Dumping Regulation in this investigation as well as decisions and determinations made in the investigation relating to, inter alia, the scope of the like product, the extent of the domestic industry, the conduct of the injury analysis and the lack of price comparability adjustments made in the calculation of the anti-dumping margin.

 

Panel and Appellate Body proceedings

On 12 October 2009, China requested the establishment of a panel which the DSB established on 23 October 2009.  Brazil, Canada, Chile, Colombia, India, Japan, Norway, Chinese Taipei, Thailand, Turkey and the United States reserved their third-party rights.  On 30 November 2009, the European Communities requested the Director-General to determine the composition of the panel which he did on 9 December 2009.  On 1 April 2010, the Chairman of the panel informed the DSB that the panel expected to complete its work in September 2010.

On 3 December 2010, the panel report was circulated to Members.

  • The Panel found that Article 9(5) of the Basic Regulation was inconsistent with Articles 6.10, 9.2 and 18.4 of the AD Agreement, Article I:1 of the GATT 1994 and Article XVI:4 of the WTO Agreement because, with respect to producers from non-market economy countries, the individual treatment test embodied in this provision conditioned the calculation of individual dumping margins and the imposition of individual duties on the fulfilment of certain criteria.
       
  • The Panel also found that the application of Article 9(5) of the Basic Regulation in the fasteners investigation was inconsistent with AD Agreement Articles 6.10 and 9.2.  The Panel also found that the EU investigating authorities acted inconsistently with AD Agreement Articles 3.1 and 3.2 with respect to the consideration of the volume of dumped imports; AD Agreement Articles 3.1 and 3.5 with respect to the causation analysis; AD Agreement Articles 6.4 and 6.2 with respect to aspects of the normal value determination; AD Agreement Article 6.5.1 with respect to non-confidential versions of questionnaire responses of two European producers and AD Agreement Article 6.5 with respect to confidential treatment of information in the questionnaire response of an Indian producer; and AD Agreement Article 6.5 with respect to the confidential treatment of the Eurostat data on total EU production of fasteners.
     
  • The Panel rejected China's claims with respect to the standing determination; definition of domestic industry; product under consideration; dumping determination; price undercutting determination; treatment of imports from non-sampled producers; consideration of the consequent impact of dumped imports on the domestic industry; non-disclosure of the identity of the complainants and the supporters of the complaint; confidential treatment of the Eurostat data on total EU production of fasteners; procedural aspects of the domestic industry definition; and the amount of time provided for responses to requests for information.
     
  • The Panel found that China's claims concerning the definition of like product; alleged non-disclosure of aspects of the normal value determination; and the procedural aspects of the domestic industry definition were not within its terms of reference and declined to make findings on these claims.  Further, it applied judicial economy with respect to some of China's claims regarding the Basic Regulation and the Definitive Regulation.
     
  • The Panel recommended that the DSB request the European Union to bring its measures into conformity with its obligations under the WTO Agreement. The Panel declined to make a suggestion on how the DSB recommendations and rulings may be implemented by the European Union.

On 10 January 2011, the European Union and China requested the DSB to adopt a draft decision extending the 60-day time period stipulated in Article 16.4 of the DSU, to 25 March 2011.  At its meeting on 25 January 2011, the DSB agreed that, upon a request by the European Union and China, the DSB, shall no later than 25 March 2011, adopt the panel report, unless the DSB decides by consensus not to do so or the European Union or China notifies the DSB of its decision to appeal pursuant to Article 16.4 of the DSU.

On 25 March 2011, the European Union notified the DSB of its decision to appeal to the Appellate Body certain issues of law covered in the panel report and certain legal interpretations developed by the Panel.  On 30 March 2011, China notified the DSB of its decision to appeal to the Appellate Body certain issues of law covered in the panel report and certain legal interpretations developed by the Panel. On 24 May 2011, the Chair of the Appellate Body notified the DSB that due to the time required for completion of the Appellate Body report, the Appellate Body would not be able to circulate its report within 60 days.  The Appellate Body estimated that the report would be circulated to Members by mid-July 2011.

On 15 July 2011, the Appellate Body report was circulated to Members.

The European Union appealed certain of the Panel's findings under Articles 6.2, 6.4, 6.5, 6.5.1, 6.10, 9.2, and 18.4 of the Anti-Dumping Agreement, Article I:1 of the GATT 1994, and Article XVI:4 of the WTO Agreement.  China cross-appealed certain other findings of the Panel under Articles 2.4, 3.1, 4.1, 6.1.1, 6.2, 6.4, 6.5, and 6.5.1 of the Anti-Dumping Agreement.

The Appellate Body upheld the Panel's findings that Article 9(5) of the European Union's Basic Anti‑Dumping Regulation (the “Basic AD Regulation”) was inconsistent “as such”, and “as applied” in the fasteners investigation, with Articles 6.10 and 9.2 of the Anti-Dumping Agreement because it conditions the determination of individual dumping margins, and the imposition of individual anti‑dumping duties, on the fulfilment of an “Individual Treatment Test”.  Under Article 9(5) of the Basic AD Regulation, an exporter or producer from a WTO Member designated as a non-market economy country (“NME”) under EU law, like China, will receive a country-wide dumping margin and a country-wide anti-dumping duty unless it can demonstrate that its export activities are sufficiently independent from the State to warrant individual treatment.  The European Union argued that country-wide margins and duties were justified because, in NME countries, the State itself can be considered the country's single exporter.  The Appellate Body agreed with the Panel that Article 6.10 of the Anti‑Dumping Agreement requires an investigating authority to calculate individual dumping margins for each foreign exporter or producer, and that Article 9(5) of the Basic AD Regulation does not fall under any applicable exception to this rule.  Similarly, the Appellate Body agreed with the Panel that Article 9.2 requires the imposition of an anti-dumping duty on each foreign exporter or producer named in an investigation, and that no exception to this rule applied to Article 9(5) of the Basic AD Regulation.  Moreover, the Appellate Body did not consider that the purpose of Article 9(5) of the Basic AD Regulation was to identify a single State exporter on whom to impose a single anti‑dumping duty. 

Under Article 4.1 of the Anti-Dumping Agreement, the Appellate Body found that the European Union acted inconsistently with its obligations because the domestic industry defined by the European Commission did not constitute producers whose production represented a “major proportion” of the total domestic production within the meaning of Article 4.1.  The Appellate Body found that the Commission failed to ensure that the domestic industry definition would not introduce a material risk of distortion to the injury analysis by defining the domestic industry as comprising producers accounting for 27 per cent of total estimated EU production of fasteners, and by including only those producers who were willing to be part of the sample for purposes of the Commission's injury determination.

The Appellate Body upheld the Panel's findings under Articles 6.2 and 6.4 of the Anti-Dumping Agreement that the European Union failed to disclose in a timely manner information regarding product categorizations that was necessary for the presentation of the Chinese producers' case in the dumping determination and for the defence of their interests.  The Appellate Body also found that the European Union's failure to disclose such information was inconsistent with its obligation under Article 2.4 of the Anti-Dumping Agreement to indicate to the parties to the investigation what information was necessary to ensure a fair comparison for purposes of the dumping determination.

Finally, the Appellate Body made several findings regarding procedural aspects of the fasteners investigation.  The Appellate Body upheld the Panel's finding that the European Union did not act inconsistently with its obligations under Article 6.1.1 of the Anti-Dumping Agreement when it allowed Chinese exporters and producers less than 30 days to reply to the Market Economy Treatment and/or Individual Treatment Claim Form.  The Appellate Body also upheld the Panel's finding that the European Union acted inconsistently with Article 6.5.1 of the Anti-Dumping Agreement by failing to ensure that domestic producers provide appropriate statements of the reasons why confidential information was not susceptible of non-confidential summary, and that the European Union did not act inconsistently with Article 6.5 of the Anti-Dumping Agreement when it treated the identity of the complainants and the supporters of the complaint as confidential information.  The Appellate Body reversed the Panel's finding that the European Union acted inconsistently with its obligations under Article 6.5 when it treated information submitted by the analogue country producer participating in the investigation as confidential without requiring a “good cause” showing, and found instead that China had failed to substantiate this claim before the Panel.

On 28 July 2011, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report.

 

Reasonable period of time

On 18 August 2011, the European Union informed the DSB that it intends to implement the recommendations and rulings of the DSB in a manner that respects its WTO obligation and that it will need a reasonable period of time to do so. On 19 January 2012, China and the European Union agreed that the reasonable period of time for the European Union to implement the DSB's recommendations and rulings shall be 14 months and 2 weeks.  Accordingly, the reasonable period of time expired on 12 October 2012.

 

Compliance proceedings

On 30 October 2013, China requested consultations with the European Union pursuant to Articles 4 and  21.5 of the DSU. On 5 December 2013, China requested the establishment of a compliance panel. At its meeting on 18 December 2013, the DSB agreed to refer the matter to the original panel if possible. Japan and the United States reserved their third-party rights. On 17 March 2014, China requested the Director-General to determine the composition of the compliance panel. On 27 March 2014, the Director-General composed the compliance panel. On 14 July 2014, the Chair of the compliance panel informed the DSB that it expects to issue its final report to the parties in May 2015, in accordance with the timetable adopted after consultation with the parties.

On 7 August 2015, the compliance panel report was circulated to Members.

This compliance dispute concerns measures taken by the European Union (EU) to implement the DSB's recommendations and rulings in European Communities —Definitive Anti-Dumping Measures on Certain Iron or Steel Fasteners from China, as set forth in the Council Implementing Regulation (EU) No 924/2012 of 4 October 2012 amending Regulation (EC) No 91/2009 imposing definitive antidumping duty on Chinese imports of that subject product (“review regulation”). The review regulation explained the determinations made by the European Commission (the Commission) and concluded that the injurious dumping determined in the original investigation was confirmed and that the definitive duties on the product should continue, at revised rates.

In this dispute, China's claims exclusively pertained to the conduct of the review investigation by the Commission which China considered had not fully and correctly implemented the DSB recommendations and rulings and was inconsistent with the various provisions of the Anti-Dumping Agreement (AD Agreement).    

China's claim with respect to the treatment of certain information as confidential

China claimed that the Commission acted inconsistently with Article 6.5 of the AD Agreement by treating as confidential the information submitted by an analogue country producer regarding the list and characteristics of its products. China asserted that this information was neither by nature confidential nor was it submitted on a confidential basis and that no good cause was shown for its confidential treatment. It also claimed that, should the Panel disagree with that assertion, the EU violated Article 6.5.1 of the AD Agreement by failing to require that producer to provide a non-confidential summary of that information. The Panel found that the Commission failed to act consistently with Article 6.5 of the AD Agreement by treating as confidential the information submitted by that producer and that accordingly, it need not make a finding with respect to China's claim under Article 6.5.1 of the AD Agreement.    

China's claim regarding interested parties' rights to have access to information and defend their interests

China claimed that by failing to provide the Chinese producers with the information regarding the list and characteristics of the products sold by the analogue country producer and which were used in the determination of the normal value, the EU violated its obligations under Article 6.4 of the AD Agreement. It argued that by failing to provide such an opportunity, the EU also violated Article 6.2 of the AD Agreement. First, China contended that the violation of Article 6.4 also led to a violation of Article 6.2. Second, China maintained that, even if there was no violation of Article 6.4, the EU has in any case violated Article 6.2 by not allowing the Chinese producers to access information needed for the defence of their interests. China also claimed that the EU violated Article 6.1.2 of the AD Agreement as it did not provide the Chinese producers with prompt access to such information. The Panel concluded that the Commission violated Article 6.4 of the AD Agreement by failing to provide the Chinese producers with timely opportunities to see the information on the list and characteristics of the products, which was not confidential and was relevant to the presentation of the Chinese producers' cases and used by the Commission.  The Panel also found that by not allowing the Chinese producers to have access to the information on the file regarding the list and characteristics of the products, the Commission also violated Article 6.2. In addition, the Panel found that China has not shown that the EU violated Article 6.1.2 of the AD Agreement by not making the analogue country's producer's information promptly available to the Chinese producers.

China's claim with respect to the Commission's failure to provide information to enable Chinese exporters to request adjustments

China argued that by failing to provide the Chinese producers/exporters with the information concerning the characteristics of the products sold by the analogue country producer, the Commission violated Article 2.4 of the AD Agreement. It also submitted that the Commission imposed an undue burden on the Chinese producers by rejecting their requests for adjustments on the grounds that they were not based on evidence. The Panel concluded that the Commission violated Article 2.4 of the AD Agreement by failing to provide the Chinese producers with information regarding the characteristics of the analogue country producer's products that were used in determining normal values in the review investigation.  

China's claim with respect to failure to ensure that price comparisons were made on the basis of same types of fasteners

China submitted that the EU acted inconsistently with Article 2.4 of the AD Agreement by failing to ensure that the export price of standard fasteners sold by Chinese producers to the EU was compared to the normal value of standard fasteners sold by the analogue country producer, in the calculation of the dumping margins for the Chinese producers.  China also requested the Panel to exercise its fact-seeking power under Article 13 of the DSU to request the EU to provide a copy of the analogue country producer's information used to distinguish between standard and special fasteners and to verify the accuracy of the split made by that producer. The Panel rejected China's claim under Article 2.4 of the AD Agreement and considered making a request under Article 13 of the DSU unnecessary in its evaluation of China's claim.

China's claim with respect to the Commission's failure to make adjustments for differences that affect price comparability

China asserted that the EU acted inconsistently with Article 2.4 of the AD Agreement by failing to make adjustments for certain factors that affected price comparability. Specifically, China took issue with three differences that allegedly affected price comparability and that were not taken into acco8nt by the Commission: (i) differences in taxation, (ii) differences in physical characteristics, and (iii) certain other differences. The Panel rejected China's argument that the Commission violated Article 2.4 of the AD Agreement.  

China's claim with respect to the Commission's failure to take into account all comparable export transactions

China argued that, in calculating the dumping margins in the review investigation, the Commission left out the export transactions for which there was no match in the analogue country producer's sales. China contended that by failing to take into account all comparable export transactions, the Commission acted inconsistently with the obligation to conduct a fair comparison between the normal value and the export price as required by Article 2.4 of the AD Agreement. It further submitted that the comparison made by the Commission resulted in a presumption of dumping for those export transactions that were not used in the dumping determination and thus, such comparison must be considered as failing to meet the requirement of a fair comparison. The Panel concluded that the Commission violated Article 2.4.2 of the AD Agreement by not taking into consideration, in its dumping determinations, Chinese producers' export models that did not match any of the models sold by the analogue country producer. The Panel exercised judicial economy with respect to the consequential claim under Article 2.4 of the AD Agreement.

China's claim with respect to the definition of domestic industry

China recalled that, in the original investigation, the Commission excluded from the domestic industry European producers that did not express willingness to be part of the injury sample.  In the original dispute, the Appellate Body found that excluding domestic producers from the definition of domestic industry on the basis of this self-selection gave rise to a material risk of distortion in defining that industry, and that the original panel had erred in finding that the Commission's domestic industry definition was not inconsistent with Article 4.1 of the AD Agreement. Finally, China contended that the EU acted inconsistently with Article 3.1 of the AD Agreement because the Commission's injury determination in the review investigation was based on a wrongly-defined domestic industry.

The Panel found that by defining the domestic industry on the basis of domestic producers that came forward in response to a notice of initiation which stated that only those producers willing to be included in the injury sample would be considered introduced a material risk of distortion to the IA's injury analysis that would necessarily render the resulting injury determination inconsistent with the obligation to make an objective injury analysis based on positive evidence laid down in Article 3.1 of the AD Agreement. It also concluded that the Commission's injury determination, based on the data obtained from a wrongly-defined domestic industry, was inconsistent with Article 3.1 of the AD Agreement.

On 9 September 2015, the European Union notified the DSB of its decision to appeal to the Appellate Body certain issues of law covered in the panel report and certain legal interpretations developed by the Panel. On 14 September 2015, China notified the DSB of its decision to cross-appeal.

On 6 November 2015, upon expiry of the 60-day period provided for in Article 17.5 of the DSU, the Appellate Body informed the DSB that the Appellate Body report in this appeal will be circulated to WTO Members on 18 January 2016.

On 18 January 2016, the compliance Appellate Body report was circulated to Members.

Terms of reference issues

  • The Appellate Body dismissed the European Union's claims on appeal that the Panel erred in finding that China's claims under Articles 6.5, 6.5.1, 6.4, 6.2, 6.1.2, 2.4, 4.1, and 3.1 of the Anti-Dumping Agreement fell within its terms of reference under Article 21.5 of the DSU.
     
  • The Appellate Body found that the claims under Articles 6.5 and 6.5.1 raised by China in the compliance proceedings were not the same claims China had raised under these provisions and that were dismissed in the original proceedings. Moreover, the Appellate Body found that the claims raised by China in these compliance proceedings under Articles 6.4, 6.2, 6.1.2, 2.4, 4.1, and 3.1 were not claims that China could have raised, but did not raise, in the original proceedings. Accordingly, the Appellate Body upheld the Panel's finding that China's claims under Articles 6.5, 6.5.1, 6.4, 6.2, 6.1.2, 2.4, 4.1, and 3.1 were within the Panel's terms of reference.

Articles 6.5 and 6.5.1 of the Anti-Dumping Agreement

  • Article 6.5 of the Anti‑Dumping Agreement requires that, upon “good cause” shown, investigating authorities treat as confidential information that is “by nature confidential”, or that has been provided by parties to an investigation on a confidential basis. The Appellate Body considered that, in the light of the circumstances of this case, where substantiation of the particular “good cause” alleged by the analogue country producer, Pooja Forge, was lacking in its request for confidential treatment and in the Commission's published reports and related supporting documents, it was not for the Panel to examine, ab initio, Pooja Forge's request for confidential treatment, in the light of the nature of the information at issue and the particular “good cause” alleged. Thus, the Appellate Body found that the Panel did not err in finding that Pooja Forge had not shown “good cause” to justify the confidential treatment of its information. The Appellate Body agreed with the Panel that the European Union had acted inconsistently with Article 6.5 because the Commission had failed to conduct an objective assessment of whether Pooja Forge had shown “good cause” for the confidential treatment of the information at issue. The Appellate Body thus upheld the Panel's overall conclusion that the European Union acted inconsistently with Article 6.5 in the review investigation.

Articles 6.4 and 6.2 of the Anti-Dumping Agreement

  • Article 6.4 of the Anti-Dumping Agreement requires investigating authorities to provide “timely opportunities” for interested parties to see information that is: (i) relevant to the presentation of their cases; (ii) not confidential as defined in Article 6.5; and (iii) used by the authorities in an anti-dumping investigation. In this regard, the Appellate Body found that the Panel did not err in finding that, for the purposes of its analysis under Article 6.4, the information at issue was not to be regarded as “confidential” because the Commission accorded confidential treatment to that information without assessing whether Pooja Forge had shown “good cause” for such treatment within the meaning of Article 6.5. The Appellate Body further found that the Panel did not err in finding that the information at issue was “relevant” to the presentation of the Chinese producers' cases and was “used” by the Commission in the review investigation within the meaning of Article 6.4.
     
  • The Appellate Body found that the Panel did not err in finding that, as a consequence of acting inconsistently with Article 6.4, the European Union also acted inconsistently with Article 6.2 of the Anti-Dumping Agreement in the review investigation. The Appellate Body, thus, upheld the Panel's overall finding that the European Union acted inconsistently with Articles 6.4 and 6.2 in the review investigation.

Article 6.1.2 of the Anti-Dumping Agreement

  • Article 6.1.2 of the Anti-Dumping Agreement requires that evidence presented in writing by one interested party be made available promptly to other interested parties participating in an investigation, subject to the requirement to protect confidential information. The Appellate Body reversed the Panel's finding that the analogue country producer, Pooja Forge was not an “interested party” in the review investigation within the meaning of Article 6.11 of the Anti-Dumping Agreement and that the obligation under Article 6.1.2 of that Agreement, therefore, did not apply to information submitted by Pooja Forge. The Appellate Body found, instead, that, in the circumstances of this case, Pooja Forge was an “interested party” in the review investigation and that, because the Commission failed to disclose the information provided by Pooja Forge concerning the list and characteristics of its products to the Chinese producers, the European Union acted inconsistently with Article 6.1.2.

Last sentence of Article 2.4 of the Anti-Dumping Agreement

  • The last sentence of Article 2.4 of the Anti-Dumping Agreement requires investigating authorities to indicate to the parties in question what information is required to ensure a fair comparison between export price and normal value. The Appellate Body upheld the Panel's finding that the European Union acted inconsistently with that provision because the Commission failed to provide the Chinese producers with information regarding the characteristics of Pooja Forge's products that were used in determining normal values for the Chinese producers. The Appellate Body recalled its finding in the original proceedings that in, situations where the normal value is determined on the basis of data of analogue country producers, foreign producers under investigation will not be in a position to request adjustments, unless they are informed of the specific products with regard to which the normal value is determined.

Article 2.4 of the Anti-Dumping Agreement — Fair comparison

  • Article 2.4 of the Anti-Dumping Agreement requires investigating authorities to make a fair comparison between export price and normal value, and to make due allowance for differences which affect price comparability. The Appellate Body found that the Panel erred in concluding that the Commission, solely because the analogue country methodology was used in the review investigation, was not required to consider making adjustments for differences in: (i) taxation; and (ii) costs relating to access to raw materials, use of self-generated electricity, efficiency in raw-material consumption, efficiency in electricity consumption, and productivity per employee. The Appellate Body considered that an investigating authority has to take steps to achieve clarity as to the adjustment claimed, and determine whether, on its merits, the adjustment is warranted because it reflects a difference affecting price comparability or whether it would lead to adjusting back to costs or prices that were found to be distorted in the exporting country.
     
  • On the basis of the foregoing, the Appellate Body reversed the Panel's finding that the European Union did not act inconsistently with Article 2.4 because the Commission's determination did not reflect an adequate examination of whether the Chinese producers' requests for adjustments for differences in taxation and the other costs at issue were warranted or whether they would have the effect of reintroducing distorted costs or prices in the normal value component of the comparison. Instead, the Appellate Body found that the European Union acted inconsistently with Article 2.4 with respect to these two types of differences.

Article 2.4.2 of the Anti-Dumping Agreement

  • Article 2.4.2 of the Anti-Dumping Agreement requires investigating authorities using the weighted average-to-weighted average methodology to establish margins of dumping on the basis of the comparison of “all comparable export transactions”. The Appellate Body recalled that when making the dumping calculations based on the weighted average-to-weighted average methodology, the Commission excluded the transactions of certain models of fasteners exported by the Chinese producers that did not match with models of fasteners produced by the analogue country producer, Pooja Forge. The Appellate Body agreed with the Panel that this approach was inconsistent with the requirements of Article 2.4.2 of the Anti-Dumping Agreement to establish dumping margins on the basis of a comparison of “all comparable export transactions”. The Appellate Body considered that Article 2.4.2 requires a comparison of all models of the investigated producers that fall within the definition of like product. The Appellate Body, therefore, upheld the Panel's finding that the European Union acted inconsistently with this provision.

Articles 4.1 and 3.1 of the Anti-Dumping Agreement

  • Article 4.1 of the Anti-Dumping Agreement requires investigating authorities to define the “domestic industry” on the basis of the domestic producers as a whole of the like products under investigation, or those whose collective output constitutes a “major proportion” of the total domestic production. The Appellate Body found that by relying on the original Notice of Initiation, which stated that only those producers willing to be included in the injury sample would be considered as cooperating and thus part of the domestic industry, the Commission introduced a material risk of distortion in the industry definition and in the injury determination. The Appellate Body, therefore, upheld the Panel's finding that the European Union acted inconsistently with Article 4.1 of the Anti‑Dumping Agreement.
  • The Appellate Body further found that a domestic industry definition based on a self-selection that introduces a material risk of distortion to the investigating authority's injury analysis would necessarily render the resulting injury determination inconsistent with the obligation to make an objective injury analysis based on positive evidence as laid down in Article 3.1 of the Anti-Dumping Agreement. The Appellate Body, therefore, upheld the Panel's finding that the Commission's injury determination was inconsistent with this provision.

At its meeting on 12 February 2016, the DSB adopted the Article 21.5 Appellate Body report and panel report, as modified by the Appellate Body report.

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